Energy Management and Conservation

Energy management is a process by which a sector or an organisation can effectively manage how much energy they produce and how to control, monitor and conserve as much energy as they can while also generating enough energy to meet the demand of the customers...

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For the past few decades, energy generation has been shifted to alternative energy sources like renewable energy forms such as solar, wind and biomass energy etc instead of the conventional fossil fuel sources. Apart from the growth in the energy sector, there has been an equivalent increase in businesses and organisations, which has brought tremendous competition in the market in terms of increasing environmental standards and reducing global warming, carbon foot print and green house gas emissions. Energy management is a process by which a sector or an organisation can effectively manage how much energy they produce and how to control, monitor and conserve as much energy as they can while also generating enough energy to meet the demand of the customers. Apart from protection of climate and conservation of resources, another important factor when dealing with energy conservation is cost savings. The cost should be reduced in a manner such that the work processes are not affected. And thus, profit should be maximised by minimising costs.

Figure 1: China and India account for about half of the world increase in Energy use
Source: EIA, International Energy Outlook 2011

According to a study released by the US Energy Information Administration in the year 2011, China and India were the two countries which were least affected by the worldwide recession. In the year 2008, both these nations accounted for 21% of the total world energy consumption. By 2035, both the countries will account for 31% of world energy use in the IEO2011 Reference case. This is shown in the figure 1.

With these rising statistics, it is essential that we not only reduce energy consumption at private and public organisations, but also at homes, to save energy and thus, protect our environment and reduce carbon emissions as well. In 2016, India stood fourth worldwide, as the largest consumer of energy, the figure being double of that in 2000. It is also expected that nearly 315 million more Indians will move to cities in the upcoming 25 years as the economy will grow and this in turn will lead to a rise in the energy demand.
A large amount of energy and money can be saved in general by employing energy management and the savings in any organisation can follow the profile as shown.

Table.1. Savings through Energy Management

As shown, huge amount of savings and paybacks can be achieved through energy management. It can also help companies by not only improving productivity but also the quality that they offer using energy efficiency techniques and better materials and manufacturing processes. The grouping of better quality, better products, lesser environmental damage, and lesser costs of energy provides bonus to the companies and in turn helps sustaining the environment and conserving the resources too.

Figure 2: India’s Energy Demand
Source: IEA, World Energy Outlook 2015

Principles governing energy management are as follows.

1. Control the costs of the energy function, and not the Btu of energy. Since energy always provides a service, it is converted to a useful function, it is advisable to control the total cost than just the Btu of energy since the total cost is more closely related to the interests of the organisation.
2. The second principle is to control energy functions as a product cost, not as a part of manufacturing or general overhead. The energy functions should be a part of the costing system so that the specific impact of each function can be better judged.
3. The third principle is to control and meter only the main functions – which accounts for only 20% functions which make up 80 percent of the costs.
4. The last principle states that the major effort of an energy management program should be put in to installing controls and achieving results. Each step of the process should be monitored to achieve appropriate results.

Figure 3: Basic Block Diagram of an Energy Management System
Information sourced from ISO 50001

With the depletion of natural resources, switching to better options like smart grids and smart metering helps in reducing the amount of energy consumed and to also further increase the efficiency of these power systems, Energy Management Systems (EMS) are employed. It consists of a series of policy framework, processes and procedures to manage the energy usage. Therefore, EMS helps in maximising profits by reducing costs and enhancing efficiency of the system.

The ISO 50001 released an Energy Management Systems Standard in 2011 for more efficient use of available energy sources, and enhanced competitiveness along with reducing greenhouse gas emissions. This standard is applicable irrespective of the types of energy used. The basic block diagram of an Energy Management System is as shown in Figure 3.

When it comes to India, the nation’s energy intensity per unit GDP is much higher when compared to Asia, USA or Japan, which indicates that energy is being used inefficiently and also that there is scope for conservation. A single unit of energy saved avoids 2.5 to 3 times of capacity augmentation. In India, there is a huge scope for energy conservation in each sector as shown in the Table 2.

Table 2: Sector Wise potential for Energy Conservation

Taking into consideration the potential of energy conservation, the government has launched various plans to start the drive of energy management and conservation. The Government is not only promoting greater use of renewable energy sources such as solar and wind but is also working towards ultra – super critical thermal power plants, which will run on an indigenous technology helping to reduce the carbon footprint. Aimed to be set up in Chennai, it is expected to be completed by 2024. The plant will generate 800 MW at operating temperature of 710 degree Celsius and 310 bar pressure of steam.

Equal efforts are being put into the demand side through various policies like the Energy Conservation Act of 2001. The Bureau of Energy Efficiency (BEE), set up in 2002, works at the central level, to assist the Energy Conservation Act. A large number of initiatives have been taken up by the Ministry of Power in alliance with BEE, like conservation of energy in areas like lighting at homes, commercial offices and buildings, labelling of appliances etc. With the Standards and Labelling programme, launched in 2006, the Bureau provided customers the right choice to save and conserve energy, and save costs too. The main aim is to reduce the amount of energy consumed by the appliance without a compromise in the service. Other programmes include Energy Conservation Building Codes (ECBC) to set minimum energy standards for commercial complexes with a connected load of 100kW.

Figure 5: NMEEE- Four new Initiatives

The Demand Side Management (DSM) Scheme was also initiated for agriculture, Municipal, DISCOMs and Small and Medium Enterprises (SMEs) sector. It is essential to inculcate energy efficiency in the agriculture sector because it still remains one of sectors having a very high contribution to the GDP. Apart from Agriculture, the scheme was also implemented in Urban Local Bodies (ULBs) for substantial savings in power consumption. Capacity Building of DISCOMs was another essential aspect of the scheme to carry out effective energy conservation and management. Energy Efficiency was also implemented in selected 25 SMEs to assess energy use and technology gap. With the initiation of the XII plan, 100 projects in 5 SMEs are up for demonstration.

The implementation of the Energy Conservation Act in the states, carried out by State Designated Agency (SDAs), was set up in 32 states, and the Ministry of Power financed these institutions for strengthening their process of energy conservation.

The National Mission for Enhanced Energy Efficiency (NMEEE) is one out of the eight enlisted missions under the National Action Plan on Climate Change (NAPCC). The main objective is to strengthen energy efficiency for sustainable business models by an appropriate mixture of Energy, Efficiency, Equity and Environment. The four initiatives under NMEEE are:

1. PAT – Perform, Achieve and Trade – mainly to increase the effectiveness of cost in Industries
2. Market Transformation for Energy Efficiency (MTEE) – To accelerate the change to Energy Efficient appliances
3. Energy Efficiency Financing Platform (EEFP) – To assist finances in the demand side management programmes
4. Framework for Energy Efficient Economic Development (FEEED) – Development of fiscal instruments for the promotion of energy efficiency.

Under MTEE, two other programmes – namely Bachat Lamp Yojana and Super Efficient Equipment Programme (SEEP) have also been launched in which over 29 million incandescent bulbs have been replaced by CFLs. Under SEEP, efficiency of ceiling fans has been aimed to be increased by over 50% than the current market average, with average lives of over 15 years. BEE also intends to prepare material on Energy Efficiency which will be included in the NCERT textbooks for grades 6th to 10th in order to promote energy efficiency in schools as well. In this context, the government is promoting the efficient use of energy at homes encouraging the use of LEDs. This scheme was initially called Domestic Efficient Lighting Program and now relaunched as UJALA.


The per capita energy consumption is small compared to the average of other countries which have a high human development index. However, India is bound to achieve the basic quality of life, which will also increase the CO2 emissions. In order to achieve low carbon emissions and keeping in pace with the global scenario, every service, may it be lighting, mobility or cooling, will have to be more energy efficient. And to achieve this, the areas where major savings can be made have to identified and technological interventions to achieve energy efficiency in all sectors will be necessary. Contribution of public and increased awareness, along with holistic policy environments directed by BEE, can incentivise energy efficiency effectively. Today, energy efficiency is yet to appeal to a large section of industries and the lack of benchmarks does not encourage its promotion. The demand for energy in India has been consistently increasing and there is enormous potential within sectors for energy conservation. The various policies in the recent years have been effective in reducing costs of systems, conserving energy. Some technologies might be immature and there may be certain benefits which have gone unnoticed. But despite these drawbacks, India can continue to be a surplus nation with concentration on renewable energy sources, smart technologies and promoting energy efficient solutions with proper energy management and conservation.

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