Energy is one of the most fundamental parts of our universe. Energy has come to be known as a `strategic commodity’ and any uncertainty about its supply can threaten the functioning of the entire economy, particularly in developing economies. India’s substantial and sustained economic growth is placing enormous demand on its energy resources.
The total installed capacity in India is 281,423 MW (as on Nov 2015) as shown in figure 1. The major energy source contributor is still coal. The growth rate of installed capacity was 4.55% which was less in comparison to the previous year (2014-15). The growth rate of renewable energy sources was approximately 13% out of which the wind energy begs the major share (65%) followed by biomass and small hydro power shown in figure 2. Tamil Nadu had the highest installed capacity of grid connected renewable power (8070.26 MW) followed by Maharashtra (5630.20 MW) and Gujarat (4430.20 MW), mainly on account of wind power.
Fig1: Installed capacity of energy
Fig 2: Renewable energy contribution…
India’s energy consumption is growing faster than that of world’s energy. However the domestic energy supplies are not growing at the same pace owing to host of factors including fuel unavailability, delays in clearances, project delays and inadequate innovative technologies. This has resulted in increased reliance on energy imports. At present, Indian industries are facing many challenges major being rising inflation, unreliable grid power and increasing energy costs. The energy costs contribute near about 10-20% of the total cost of the product. Reduction in the energy cost by energy management can be key solution in optimizing cost and enhancing competitiveness.
Measures for energy management
(a) Supply Side Measures
(i) Increased Use of renewable energy sources
In recent times, renewable energy has gained a lot of attention as an alternative energy source. For many organizations, investing in renewable energy is not only, for long term advantages on savings but also for sustainability perspective.
In case of power, renewable energy and open access procurement of power are increasingly becoming favorable options for companies who are looking beyond grid power for meeting their energy needs.
This is evident by the increasing share of renewable as a percentage of installed capacity. As already stated, the cost competiveness of wind energy has already been established in some states like Tamil Nadu, Gujarat, Maharashtra, Rajasthan and Karnataka.
The solar power installed capacity has shown substantial growth in India in the last three years with over 2000 MW installed until October 2015. Over 70 per cent of these installed units are concentrated in Gujarat and Rajasthan. Solar power costs have seen a sharp decline in the last few years. The solar module prices have reduced by around 75 per cent over the past five years owing to innovation contributing to lower manufacturing and processing costs. The solar power prices in India, based on the auction prices conducted by different states in the last three years, have decreased by more than 45 per cent. This makes it competitive with the prevailing marginal power tariffs for certain consumer categories in some states – especially the highest slab residential, industrial and commercial category of power consumers. The retail tariffs of these segments are already upwards of INR 7-8 per unit at the margin and would be even higher if one were to take a levelized view (long-term cost).
Fig. 3(a): Roof top soloar system
Fig. 3(b): Wind Power Plant…
With solar prices approaching grid parity, solar power is expected to make significant contributions to incremental demand. This has been realized by many companies and they are exploring the solar rooftop option (factoring the likely parity and the ‘green energy’ aspects of solar power). One important benefit of solar rooftop power over other sources of power is that power can be generated at the point of consumption and hence, avoids the significant network and distribution losses. The advantages of solar rooftop power are:
– reduces the dependency on grid power and provides long term reliable power source
– can mitigate requirement of expensive fuels like diesel to some extent
• Additional Generation Based Incentives (GBI) in for domestic consumers
• Low gestation time
Most of the states allow consumers with high power requirement to go for open access procurement of power. In this arrangement, industrial and commercial consumers can meet entire or a part of their power demand from other sources such as power exchanges, captives and IPPs. This option can be cost effective in states where power supply is intermittent and consumers use diesel generators, grid power prices are high and open access charges and cross subsidy surcharge are not so high.
b. Demand side measures
The low reliability in energy supply cause steep increase in fuel prices and increase in power demand charges, which in turn pursue organization to take measures on demand side.
Demand side measures refer to interventions deployed to reduce consumption or manage peak energy demand. Thus, demand side measures help organizations to deliver same or better output with lower energy consumption. These measures typically include enhancing process efficiency, equipment rightsizing, reducing wastage and managing the peak demand.
i. Demand Side Management
In a manufacturing facility, for a given production capacity, the processes, technology and equipments are key determinants of the energy requirement. In most of the cases, equipment and technology in plants would be old and obsolete. There is less emphasis on energy efficiency of the processes or equipment as long as the plant is meeting its production targets. To evaluate and implement demand side measures, management needs to be aware of energy consumption of specific processes and equipments and their efficiencies. A robust energy audit is necessary to help understand these aspects. In an Energy Audit process, the auditor identifies the energy systems and measures the energy input and output for each system. Additionally, heat loss and equipment condition are also assessed either through observation or through usage of advanced monitoring equipments.
Measurements can be extended to certain specific duration to unearth patterns in energy consumption. Such patterns can provide pertinent insights on deviations in energy consumption and can also point to behaviors leading to more than required energy consumption. An Energy Audit report will typically provide understanding on energy consumption, utilization and wastage of energy systems and mostly will also contain impact of improvements in it. Thereafter, the management needs to evaluate energy efficiency interventions on the basis of aspects such as new technologies available, change in processes, replacement of equipments, resizing of equipments, process timings and relook at the layout. Important aspects are assessment of initial investment, energy savings, and returns over lifecycle and risk to business continuity in order to prioritize the implementation of interventions.
In case of buildings, lighting and cooling/heating equipment account for majority of the energy consumptions. Energy saving in lighting is the easiest to achieve through installation of energy saving devices such as CFL and LED lights.
However, interventions for reducing energy consumption in heating and cooling equipment require an approach similar to the one deployed for manufacturing facilities. The approach includes assessment of energy efficiency, condition of the equipment and fine tuning of temperature control devices. It may also include changing staff behavior to adopt best practices for maintaining building temperature.
ii. Peak Demand Management
Peak demand describes a period in which power demand is higher than the average demand. Some states have implemented time-of-day tariff for industrial category consumers. Thus, it becomes important to manage energy demand during these periods. Comprehensive evaluation of energy consumption and criticality of each of the energy intensive operations are needed to manage the peak demand at the plant and can result in cost reduction. Employee training Change in employee behavior is one of the most important aspect in achieving energy efficiency goals. Sensitizing employees with energy efficiency practices can help them in proactively embracing the practices, and help organizations in soliciting required support and commitment in implementing energy efficiency initiatives. Organizations should also incentivize employees for highlighting suggestions related to energy efficiency improvement and implementing them. By encouraging energy efficient practices, an employer can not only differentiate itself as a responsible employer but also can enhance its brand image among clients /consumers.
Measures by the government
The government should frame a policy to implement the energy efficiency solutions in the country. The integrated energy policy (2008) of government commented that a unit of energy saved is greater than a unit of energy produced since it saves on losses related to production, transportation and distribution. The law of energy conservation (2010) should be enforced strictly to save energy. Further, government should provide energy efficient targets to the core production sectors annually.
Conclusion
Globally, the energy demand is very acute and to meet the requirement, every nation has to take energy efficient measures to stand before the world. Further, for India to sustain internationally optimal utilization of energy is must as we stand third in the world in Co2 emitting list. For industries, enhancing energy efficiency could be a very effective way of reducing their energy cost and contributing to the national goal of reducing carbon emissions. Thus, besides evaluating the impact of energy efficiency measures only in monetary terms, organizations need to include environmental benefits.
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