The fundamental goal of energy management is to produce goods and provide services with the least cost and least environmental effect. The term energy management means many things to many people. 

One definition of energy management is: “The judicious and effective use of energy to maximize profits (minimize costs) and enhance competitive positions”.

Another comprehensive definition is: “The strategy of adjusting and optimizing energy, using systems and procedures so as to reduce energy requirements per unit of output while holding constant or reducing total costs of producing the output from these systems”.

The objective of Energy Management is to achieve and maintain optimum energy procurement and utilisation, throughout the organization and: 

• ƒ To minimise energy costs / waste without affecting production & quality 
• ƒ To minimise environmental effects. 

Energy Audit: Types And Methodology

Energy Audit is the key to a systematic approach for decision-making in the area of energy management.  It attempts to balance the total energy inputs with its use, and serves to identify all the energy streams in a facility.  It quantifies energy usage according to its discrete functions. Industrial energy audit is an effective tool in defining and pursuing comprehensive energy management programme. 

As per  the Energy Conservation Act, 2001, Energy Audit is defined as “the verification, monitoring and analysis of use of energy including submission of technical report containing recommendations for improving energy efficiency with cost benefit analysis and an action plan to reduce energy consumption”.  

Need for Energy Audit 

In any industry, the three top operating expenses are often found to be energy (both electrical and thermal), labour and materials. If one were  to relate to the manageability of the cost or potential cost savings in each of the above components, energy would invariably emerge as a top ranker, and thus energy management function constitutes a strategic area for cost reduction. Energy Audit will help to understand more about the ways energy and fuel are used in any industry, and help in identifying the areas where waste can occur and where scope for improvement exists. 

    The  Energy  Audit  would  give  a  positive orientation to the energy cost reduction, preventive maintenance and quality control programmes which are vital for production and utility activities. Such an audit programme will help to keep focus on variations which occur in the energy costs, availability and reliability of supply of energy, decide on appropriate energy mix, identify energy conservation technologies, retrofit for energy conservation equipment etc. In general, Energy Audit is the translation  of conservation ideas into realities, by lending technically feasible solutions with economic and other organizational considerations within a specified time frame.   

    The primary objective of Energy Audit is to determine ways to reduce energy consumption per unit of product output or to lower operating costs. Energy Audit provides a “ benchmark” (Reference point) for managing energy in the organization and also provides the basis for planning a more effective use of energy throughout the organization.