CHAPTER 2

LITERATURE REVIEW

2.1 LITERATUE REVIEW

Literature referred for this topic was books, articles, government publications,
newspapers, magazines, internet and research papers mostly published in international
journals. Major references for this research work are from the Guide Books for National
level certification examination for Energy Managers and Energy Auditors conducted by
Bureau of Energy Efficiency, Government of India.

As research topic is related with energy management at plant level utilities, energy
management practices adopted by the industries, barriers to energy efficiency in
industries, different books of renown authors from different disciplines like Energy
management, performance assessment of utility equipment, energy efficiency barriers,
energy audits, utility costing were referred. In order to get the complete understanding
of energy management, literature scan was undertaken. To uphold the need of this
study, the gap in the previous studies were identified through the review of literature
which is divided into the following categories.

The research problem is multi angled and required study on the following themes.

a. Energy and its environmental, social and economic benefits

b. Need for Energy Management
c. Energy conservation opportunities in industrial utilities
d. Energy Efficient Technologies
e. Performance Assessment of utility systems and equipment
f. Utility costing
g. Barriers to Energy Efficiency in industries.
h. Energy Management training.

57
2.2 NEED OF THE INDUSTRIAL ENERGY MANAGEMENT AND ITS
ENVIRNMENTAL, SOCIAL AND ECONOMIC BENEFITS

2.2.1 Energy and Environment

The process of energy generation, transport and utilization leads to significant

environmental pollution. In the past decade, concern for the environmental pollution has
increased considerably. The greenhouse effect due to increase in the level of CO2,
methane and other gases are leading to global warming. CO2 level in the atmosphere has
increased from 280 ppm, in 1850 to about 360 ppm at present. The average temperature
of the earth is likely to increase by 1.5 to 4°C in the next 50 years, if emission of
greenhouse gases is not curbed. Global warming may lead to rise in sea levels,
significant change in rain fall patterns, increase in frequency of heat waves, storm and
other unforeseen consequences. The production of CFCs that affect the ozone layer has
been phased out in developed countries. Both developed and developing countries have
agreed to reduce carbon emission.

The extraction, treatment and end-use of most energy resource emits enormous amount
of gases and aerosols, which includes greenhouse gases, nitrogen and sulphur oxides,
metals (mercury, arsenic, nickel and cadmium) soot, dioxins, etc.; these emission have
detrimental effects on the environment. The increasing concentration of greenhouse
gases has in recent time received the most attention due to its prevalent environmental
effect. The Industrial sector contributes directly and indirectly about 37% of the global
greenhouse gas emissions, of which over 80% is from energy use (Worrell, 2011)1.

Consequently, industrial energy use has for a long time been identified as a key area of
mitigating global warming. For this to be achieved, industries must change their energy
culture by investing extensively in energy efficiency measures and practices. Fossil fuel
combustion in industrial equipment (boilers, furnaces, kilns) and in power generation
produces large-volume air pollutants, such as sulphur dioxide, nitrous oxides and
1
Worrell, E. (2011). The Next Frontier to Realize Industrial Energy Efficiency. World Renewable Energy
Congress 2011-Sweden. Retrieved January 11, 2012 from
http://www.wrec2011.com/docs/Keynote_paper-Worrell.pdf

58
particulate matter, all with harmful consequences to human health and the environment
(UNIDO, 2011). 2

By applying the appropriate technology, industrial fossil fuel consumption and the
related negative effects can be reduced. Global industrial production involves massive
extraction and processing of natural resources, which includes fossil fuels, ores, water
and other raw materials. The exploitation of such resource is resulting in a rapid
depletion of the earth‗s natural resources; resource depletion is a particular concern for
primary energy from non-renewable resources, both fossil and nuclear fuels (Ayres,
2010 cited in UNIDO 2011). Exploiting energy resources has accompanying negative
effects like displacement of massive material, waste creation and pollution. The use of
energy for industrial purposes also depletes other natural resources such as water, which
is used for cooling power stations and energy intensive industrial processes (UNIDO,
2011). Thus, improving industrial energy efficiency is an effective means of reducing
and improving both material and water use in industries; consequently, slowing down
natural resources depletion.

Energy conservation avoids wasteful use of energy without much investment. It can be
termed as a new source of energy, which when available, can be readily used without
any further loss or gestation period. It is the cheapest source of energy. In fact, it is the
easiest solution to bridge the gap between demand and supply. Energy saving achieved
through energy efficiency and conservation also avoids capital investment in fuel,
mining, transport, water and land required for power plant, thereby mitigating
environmental pollution.

Improvements in energy efficiency (i.e., reductions in energy per unit of output) are
often suggested as a means of reducing carbon emissions.

2
United Nation Industrialization Development Organization (UNIDO), (2011). Industrial energy
efficiency for sustainable wealth creation: Capturing environmental, economic and social dividends.
Industrial Development Report 2011.

59
2.2.2 Energy and Economics

The profit of a business is expressed as difference between sales revenues and input
costs; the greater the difference the greater the profit margin. In competitive markets,
firms tend to be price takers (UNIDO, 2011); as such firms have little control of the
price of their goods on the market, which also implies that they have little control over
their sales revenue (assuming production capacity is constant). In contrast, firms have a
greater control of their input cost. The input cost of firm mainly includes utility costs
(energy and water), labour cost and raw material cost. Consequently, input costs can be
reduced in the short-term by optimizing production methods, using cheaper inputs and
improving materials and energy use efficiency and in the long-term by introducing new
equipment (UNIDO, 2011). Companies can realize significant profit margins by
implementing energy efficiency by reducing both energy and material resources, when
energy forms a large proportion of their input cost. With the variability of global energy
prices coupled with the rise of energy prices, companies that adopt energy-efficient
technologies stand a greater chance of enhancing their long-term competitiveness and
productivity; this is achieved by reducing the company‗s energy dependency and
increasing security of energy supply. Investment in efficient technologies generally
results in significant energy savings and an improvement in the quality of products. By
implementing energy efficiency, firms can either reduce or avoid emissions and
pollution taxes and levies.

2.2.3 Energy and its Social benefits

Firms and industries that implement energy efficiency cost effectively improve
productivity; increase in productivity is the main factor responsible for both industrial
and economic growth. As such, an improvement in productivity translates into higher
profit margins that can be redistributed as increased wages and also invested to expand
output, benefiting both supplier and consumer (UNIDO, 2011).Improving productivity
(as a consequence of increased industrial energy efficiency) can lead to the development
of new innovations which can create new jobs and also expand employment. The

60
implementation of energy efficiency can also improve the working environment of
firms and the quality of life of the society.

2.3 INDUSTIRAL ENERGY MANAGEMENT

2.3.1 Energy Management

As per Market Research Report by Rockwell Automation (2012) 3, it would be difficult

for companies today to be unaware of energy use in their facilities, i.e. consumption of
water, air, gas, electric, and steam. Energy consumes an increasingly larger share of
operating costs, and extracting, producing, or making anything — from beverages and
chemicals to machinery and raw materials — demands energy for myriad processes:
prototyping, refining, processing, mixing, heat-treating, blending, stamping, painting,
assembling, etc.

Energy is essential for the creation of wealth and improvement of social welfare; this
means that adequate and reliable supply of energy is required to ensure sustainable
development. However, the use and conversion of primary energy most of the time
results in waste and emission; they are harnessed from limited resources which are
considered environmentally unsustainable. The increasing rate of environmental
problems related to energy use has led to a growing interest in issues of sustainable
development thereby leading to a challenge of decoupling of economic growth and
energy use (environmental threats related to energy use). To achieve this requires the
judicious use of resources, technology, appropriate incentives and strategic policy
planning (IAEA, 2005)4.

Energy management represents a significant opportunity for organizations to reduce

their energy use while maintaining or boosting productivity. The industrial and

3
Industrial Energy Management, Market Research Report by Rockwell Automation, January 2012
4
International Atomic Energy Agency (IAEA). (2005). Energy Indicators of Sustainable Development:
Guidelines and Methodologies. Vienna. Retrieved March 2, 2012 from http://www-
pub.iaea.org/MTCD/publications/PDF/Pub1222_web.pdf

61
commercial sectors jointly account for approximately 60% of global energy use. 5
Organizations in these sectors can reduce their energy use 10% to 40% by effectively
implementing an energy management system (EnMS). Systematic energy management
is one of the most effective approaches to improve energy efficiency in industries,
because it equips companies with practices and procedures to continuously make
improvements and capture new opportunities. An energy management system (EnMS)
is a collection of procedures and practices to ensure the systematic tracking, analysis
and planning of energy use in industry. In this paper, EnMSs mean not only standards
such as ISO 50001 or EN16001 but also other frameworks for systematic energy
management defined according to particular specifications. A number of other terms are
useful in understanding this publication. This publication focuses principally on
government programmes that promote and support the adoption of EnMSs. The report,
however, also covers government programmes that promote only certain aspects of
energy management practices. The report was published by U.S. Energy Information
Administration (2013).6

As described by Raphael Wentemi Apeaning (2012) 7, the judicious use of energy by

industries is a key lever for ensuring a sustainable industrial development. The cost
effective application of energy management and energy efficiency measures offers
industries with an effective means of gaining both economic and social dividend, also
reducing the negative environmental effects of energy use. Unfortunately, industries in
developing countries are lagging behind in the adoption of energy efficiency and
management measures; as such missing the benefits of implementation.

The judicious use of energy resources and technology to reduce the negative impacts of
energy use are firmly embodied in two concepts namely ―energy efficiency‖ and

5
Energy Information Administration, International Energy Outlook 2013, DOE/EIA (Washington, DC:
U.S. Energy Information Administration, 2013).
6
International Energy Agency/Institute for Industrial Productivity, Energy Management Policy Pathways
(Paris: International Energy Agency, 2012),
19,www.iea.org/publications/freepublications/publication/policypathwaysindustry.pdf;
7
Raphael Wentemi Apeaning, May 2012, Energy Efficiency and Management in Industries – a case study
of Ghana’s largest industrial area

62
―energy management‖. Energy management refers to 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‖ . (Chakarvarti, 2011)8.

Er.Harpreet Kaur & M/s Kamaldeep Kaur (2012)9 describes that Energy conservation
ultimately leads to economic benefits as the cost of production is reduced. In some
energy- intensive industries like steel, aluminium, cement, fertilizer, pulp and paper.
The cost of energy forms a significant part of the total cost of product. Energy cost as a
percent of total cost of product in the entire industrial sector in India varies from as low
as 0.36% to as high as 65%. Using energy efficient technologies will reduce the
manufacturing cost and lead to production of cheaper and better quality products.

Duke Ghosh and Joyashree Roy (2011)10, describes that it is an established practice in
India for firms to engage ―consultants‖ to study the usage of energy and suggest ways
and means to improve energy efficiency. The study finds that only 14 percent of the
respondent firms have employed an energy consultant and conducted a detailed process
study with a focus on energy usage. Further investigations suggest that the majority of
these firms have either implemented the process to reduce the costs associated with
energy consumption or to ensure uninterrupted power supply. Becoming energy
efficient was definitely not the motivation for these firms to hire consultants to study
their energy usage. It is also important to note that 33 percent of the firms which
appointed a consultant to monitor energy usage did not implement the
recommendation(s) by the consultants. These firms deemed that the recommendations

8
Chakarvarti, K. K. (2011). ISO 50001: Energy Management Systems Standards. New Delhi: Bureau of
Energy Efficiency.
9
Kaur Harpreet & Kamal deep Kaur, May 2012, ―ENERGY CONSERVATION: An effective way of
energy Utilization” IE Volume 2, Issue 5 ISSN: 2249-0558

10
Ghosh Duke and Joyashree Roy, 2011 ―Approach to energy efficiency among micro, small and medium
enterprises in India: Results of a field survey;‖ United Nations Industrial Development Organisation,
Vienna

63
by the consultants were not firm-specific and too expensive to implement. Most of the
firms had not ever hired an energy consultant.

Energy management is defined as: ―The judicious use of energy to maximize profits
(minimize cost) and enhance competitive positions‖. (Cape hart, Turner and Kennedy,
1997) 11 Therefore, any management activity that affects the use of energy falls under
this definition. The primary objective of energy management is to maximize profit and
minimize costs.

As per IEEE (1995) 12, Energy management embodies engineering, design, applications,
utilization, and to some extent the operation and maintenance of electric power systems
to provide the optimal use of electrical energy.

P. O‘Callaghan (1992) 13 writes that the most important step in the energy management
process is the identification and analysis of energy conservation opportunities, thus
making it a technical and management function, the focus being to monitor, record,
analyse, critically examine, alter and control energy flows through systems so that
energy is utilized with maximum efficiency.

Every industrial facility in a particular location is unique in itself; hence a systematic

approach is extremely necessary for reducing the power consumption, without adversely
affecting the productivity, quality of work and working conditions. Thus, for any
process, energy conservation methodologies can be categorized into (i) housekeeping
measures (ii) equipment and process modifications (iii) better equipment utilization and
(iv) reduction of losses in building shell (Lee W. and R. Kenarangui, 2002) 14.

11
Cape hart, Turner and Kennedy. ―Guide to Energy Management‖, 2nd Edition. Fairmont Press Inc.,
1997
12
IEEE Std. 739-1995, IEEE Recommended practice for energy management in industrial and
commercial facilities.
13
P. O‘Callaghan, ―Energy management: A comprehensive guide to reducing costs by efficient energy
use‖, McGraw Hill, London, UK, 1992.
14
Lee W. and R. Kenarangui, ―Energy management for motors, systems, and electrical equipment‖, IEEE
Transactions on Industry Applications, vol. 38, no. 2, Mar./Apr. 2002, pp. 602-607.

64
Thus energy management involves consumption and optimization of energy usage at
various stages in the plant process in the most efficient way.

With the increased use of diminishing type energy resources, they are depleting very
fast than the estimated time. On the other hand, we could hardly generate 5% of total
power generation with renewable energy resources like Solar Power, Wind Power and
Geothermal Power with the available technologies. Therefore, it is strongly required to
restrict use or increase the life of diminishing type of resources. Thus the need to
conserve energy, particularly in industry is strongly felt as the energy cost takes up
substantial share in the overall cost structure of the industrial operation especially in
Generation, Distribution and Uses of utility services like Electrical power, Compressed
Air, Chilled Water, Steam, Water system Etc.

2.3.2 Demand and Supply Gap

Irawati Naik, Prof.S.S.More, Himanshu Naik15 describe that energy is crucial to human
sustenance and development. Due to the increase in the Demand of energy and
deficiency in power generation, day by day the gap between demand and supply of
electric energy is widening. Bridging this gap from the supply side is very difficult and
expensive proposition. Also limited energy resources, scarcity of capital and high
interest costs for the addition of new generation capacity is leading to the increased cost
of electrical energy in India. The only viable way to handle this crisis, apart from
capacity addition, is the efficient use of available energy, which is possible only by
continuously monitoring and controlling the use of electrical energy. Hence energy
management program is a systematic and scientific process to identify the potential for
improvements in energy efficiency, to recommend the ways with or without financial
investment, to achieve estimated saving energy and energy cost. Thus the need to

15
Irawati Naik, Prof. Mrs. S.S. More, Himanshu Naik, ―Scope of Energy Consumption & Energy
Conservation in Indian auto part manufacturing Industry”, ISSN 2222-1727 (Paper) ISSN 2222-2871
(Online)

65
conserve energy, particularly in industry and commerce is strongly felt as the energy
cost takes up substantial share in the overall cost structure of the operation.

Bhansali V.K.16(1995), describes that the gap between supply and demand of energy is
continuously increasing despite huge outlay for energy sector since independence.
Further, the burning of fossil fuel is resulting in greenhouse gases which are detrimental
to the environment. The gap between supply and demand of energy can be bridged with
the help of energy conservation which may be considered as a new source of energy
which is benign and environment friendly. The energy conservation is cost effective
with a short payback period and modest investment. There is a good scope of energy
conservation in various sectors, viz., industry, agriculture, transport and domestic. The
energy audit can unearth huge profits to the industry. The industrial sector has failed to
take full advantage of many financial incentives provided by the government to
encourage energy conservation strategies. The planners have started appreciating the
role and significance of energy conservation in future energy scenario of India.
However, the achievements so far are not satisfactory. It is imperative to develop energy
conservation as a mass movement.

2.3.3 Energy Efficiency

Energy efficiency is the most effective means with which to address concerns over
climate change, rising energy prices, and security of supply while at the same time
supporting economic growth (Price and McKane, 2009)17. The industrial sector presents
the biggest opportunity for savings as it is the primary contributor to global final energy
consumption and energy-related carbon dioxide (CO2) emissions, at 33 percent and 38
percent respectively in 2005 (IEA, 2008)18. Energy efficiency on the other hand is

16
Bhansali V. K. ,1995,Energy conservation in India - challenges and achievements Print ISBN:0-7803-
2081-6
17
Price, L. and McKane, A., (2009). Industrial Energy Efficiency and Climate Change Mitigation:
Policies and Measures to Realize the Potential in the Industrial Sector, Prepared in support of the UN
18
International Energy Agency (IEA) 2008 Worldwide Trends in Energy Use and Efficiency Key Insights
from IEA Indicator Analysis 2008

66
defined as a ratio between an output of performance, service, goods or energy, and an
input of energy (EU, 2006)19.Thus, energy efficiency improvement basically refers to
the reduction of energy input for a given service, goods or output. Notably, these two
concepts advocate for the use of energy resources in a manner that will save energy
(natural resources) and ensure minimal wastage, consequently promoting environmental
sustainability.

The case for industrial energy efficiency is even stronger for developing countries.
Firstly, the industrialization process causes these shares in energy consumption and
energy-related CO2 emissions to be considerably higher than in industrialized countries.
Indeed, in 2005, industry in non-OECD (Organisation for Economic Co-operation and
Development) countries accounted for 38 percent of energy consumption compared to
27 percent in OECD countries, and exceeded 50 percent in some cases (IEA, 2008).
Secondly, and with exceptions, developing countries tend to be more carbon intensive
than their industrialized counterparts due to a higher share of pollutive sources, such as
coal, making up their final energy mix (IEA 2008). To illustrate, carbon intensity
decreased in OECD countries over the period 1990 to 2005, helping to limit growth in
CO2 emissions to 15 percent. In non-OECD countries, however, carbon intensity
continued to increase, contributing to growth in CO2emissions of 39 percent over the
same period (IEA 2008). Furthermore, this trend is expected to continue, with most
growth in industrial sector energy use and CO2 emissions forecast to come from
developing and transition economies (McKane et al, 2007)20.

19
European Union (EU).(2006).Directive 2006/32/EC of The European Parliament and of The Council on
energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC. Retrieved
April 27, 2012 from
http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:114:0064:0085:EN:PDF
20
McKane, A., Price, L., and de la Rue du Can, S., 2007. Policies for Promoting Industrial Energy
Efficiency in Developing Countries and Transition Economies. Vienna: United Nations Industrial
Development Organization (LBNL- 63134).

67
The research paper by Girish Sethi,21 highlights the importance of the small-scale sector
in the Indian economy and the need to improve the energy and environment
performance of units operating in the sector. It draws upon the results of a major
program that TERI (Tata Energy Research Institute) initiated in 1995 in the small-scale
sector with the support of SDC (Swiss Agency for Development and Cooperation). The
program aims at finding solutions to the energy problems of the SSI through technology
up gradation and human and institutional development in some small scale energy
intensive sectors. Three small-scale sectors are presently being covered -foundry, glass
and brick manufacture. In each of the three small scale sectors, demonstration plants
have been/are being built to widely disseminate/popularize energy efficient
technological options to the cluster. In addition to highlighting the work done in
individual cluster/industry, the paper gives details of the benefits that can accrue to the
individual units in terms of improving their energy efficiency and improving
productivity, if the demonstrated technologies are implemented.

2.3.4 Energy efficiency gap

Efficiency is a cost effective means of ensuring energy security by minimizing the unit
resource input per unit output. Efficiency can be subdivided into parts namely economic
and energy efficiency. In the economic sense, efficiency is the measure of improvement
performance or increased deployment of more energy efficiency equipment and
conservation (Sovacool & Brown, 2010)22.Whiles, energy efficiency refers to the
improving the performance of energy equipment and altering consumer attitudes
(Sovacool & Brown, 2009)23.

21
Sethi Girish and Prosanto Pal, Energy Efficiency in Small Scale Industries - An Indian Perspective
Downloaded from
http://www.cosmile.org/papers/general_energyefficiencysmallscaleindustriesperspective.PDF
22
Sovacool, B.K. & Brown, M.A. (2010). Competing Dimensions of Energy Security: An International
Perspective. Annual Review of Environment and Resources (35) , 77–108
23
Sovacool, B.K. & Brown, M.A. (2009).Competing Dimensions of Energy Security: An International
Perspective. Georgia Tech Ivan Allen College School of Public Policy. Work paper 45. Retrieved
December 12, 2011from http://www.spp.gatech.edu/faculty/workingpapers/wp45.pdf.

68
Currently, countries worldwide are faced with challenges which are redefining global
energy consumption. Higher energy prices, increased environmental consciousness and
strict policy instruments and regulations affirm the importance of improving energy
efficiency. Despite the great need to increase energy efficiency across boards, studies
indicate that cost-efficient energy saving measures are not always implemented and this
implies the existence of an efficiency gap. (Rohdin, Thollander & Solding, 2007)24.

The efficiency gap is a phrase widely used in the energy-efficiency literature; it refers to
the difference between levels of investment in energy efficiency that appear to be cost
effective (based on engineering-economic analysis) and the lower levels actually
occurring (Golove & Eto, 1997)25. Technologists and engineers are optimist that
technological improvement is the pathway to improving energy efficiency.
Consequently, this raises the question of why the existence of cost effective
technologies have not bridged the efficiency gap, from an economist perspective the
reason is attributed to market barriers that impede the diffusion of optimal technologies.
The definition of the efficiency gap seems quite easy at first glance, however, the
definition becomes more complex when one attempts to identify or define the optimal
level of investments, processes or technologies to be taken up by an industry or
consumer (The Allen Consulting Group, 2004). Thus determining the size of the energy
efficiency gap requires a clear definition of the optimality level of the investment.

In a research on energy efficiency gap by Jaffe and Stavins (1994) 26 five separate levels
of optimality were identified: the economists ‗economic potential, the technologists'
economic potential, hypothetical potential, the narrow social optimum and the true
social optimum. The energy efficiency gap asserts the existence of barriers to cost
effective energy efficiency investments. Thus, understanding the nature and magnitude

24
Rohdin, P., Thollander P. & Solding, P. (2007).Barriers to and drivers for energy efficiency in the
Swedish foundry industry. Energy Policy 35, p 672–677.
25
Golove, W., H. & Eto, J., H. (1996).Market Barriers to Energy Efficiency: A Critical Reappraisal of
the Rationale for Public Policies to Promote Energy Efficiency. Retrieved March 2, 2012 from
http://eetd.lbl.gov/EA/EMP/reports/38059.pdf
26
Jaffe, A.B., & Stavins, R.N. (1994). The energy efficiency gap: what does it mean? Energy Policy 22
(10), 60-71.

69
of the efficiency gap creates a baseline for understanding the nature of some prevailing
barriers to energy efficiency.

2.3.5 Energy Efficient Technologies in industrial utilities

The energy shortages coupled with increasing energy prices being witnessed in various
states in India is forcing the industries now to look at ways and means for reducing their
energy consumption and adopting technologies that result in lowering their energy
intensity.27

Numerous studies conducted in the field of industrial energy efficiency shows that there
are tremendous saving potential that can be achieved through the effective
implementation of energy management in industries. A study by Caffal (1996)28
revealed that industrial energy management has the potential of saving about 40% of
energy use in an industrial facility. Between the period of 1990-2009 Dow Chemical,
reduced its energy intensity by 38% by implementing an energy management system,
which corresponding to an energy saving of 1,700 trillion Btu (Dow, 2012)29.Toyota
North American Energy Management Organization also reduced energy use per unit by
23% since 2002 by applying an energy management system (Scheihing,
2009)30.However, the viability of such industrial energy saving potentials are dependent
on a variety of factors like technical, economical, institutional and political
(OTA,1993)31; consequently, these factors are either directly or indirectly related to the
energy management of an industrial facility.

27
Naik Irawati , Scope of Energy Consumption & Energy Conservation in Indian auto part manufacturing
Industry, ISSN 2222-1727 (Paper) ISSN 2222-2871 (Online)
28
Caffal, C., 1996. Energy management in industry. Centre for the Analysis and Dissemination of
Demonstrated Energy Technologies (CADDET). Analysis Series 17. Sittard. The Netherlands.
29
Dow. Retrieved March 2, 2012 from http://www.dow.com/energy/perspectives/efficiency.htm
30
Scheihing, P. (2009). Energy Management Standards (EnMS).U.S. Department of Energy. Retrieved
December 12, 2011 from http://www1.eere.energy.gov/manufacturing/pdfs/webcast_2009-
0122_energy_mngmnt_stnds.pdf
31
Energy Efficiency Technologies for Central and Eastern Europe, 1993, Office of Technology
Assessment and Archive, USA.

70
To generate energy savings in production, firms should invest in new energy efficient
plant equipment or in technologies that optimize the energy use of existing equipment.
Moomaw et al (2001)32 assert that the technologies that offer the most scope for energy
savings throughout the broad manufacturing sector are process control and energy
management systems, process integration, and cogeneration of heat and power, while
further savings are achievable through the adoption of high-efficiency electric motors
and electronic adjustable speed drives. They estimate that the widespread adoption of
these general utility measures would result in a 5 percent saving in global primary
energy demand, with potential for further savings coming from industry- or process-
specific measures. A case study on South Africa performed by Winkler et al (2007)
explores the potential impact of energy efficiency measures on total national energy
demand and emissions. Based on available technologies relating to, in order of impact,
compressed air management; variable speed drives; efficient motors; efficient lighting;
load shifting; heating, ventilation, and cooling; and other thermal measures, they
estimate annual energy savings of 3 percent and a 5 percent reduction in total projected
national emissions by 2020.

Energy use in industries is more dependent on operational practices (specifically energy

culture of the industrial facility) than in the commercial and residential sectors (McKane
Williams, Perry& Li, 2007)33. As such, most industrial energy efficiency improvements
is achieved through changes in how energy is managed (or used) in the facility, rather
than through installation of new technologies (McKane, 2009)34. Accordingly, it is then
evident why upgrading the efficiency of technologies alone cannot achieve optimal
savings, but when combined with operational and maintenance practices as well as
management systems can lead to significant savings (Scheihing, 2009).

32
Moomaw et al, 2001,"Technological and Economic Potential of Greenhouse Gas Emissions Reduction.‖
Chapter 3 in Climate Change 2001: Mitigation. Intergovernmental Panel on Climate Change, United
Nations and World Meteorological Organization, Geneva.
33
McKane, A., Williams, R., Perry, W. & Li, T. (2007).Setting the Standard for Industrial Energy
Efficiency. Industrial Management Issues, Paper #070
34
McKane, A. (2009). Status of ISO 50001-Energy Management. Industrial Energy Efficiency
Improvement Project in South Africa.

71
The implementation of energy management system in facility provides an enabling
environment to identify opportunities for and to realize energy savings in a sustainable
manner (Worrell, 2009)35; and also provides industries with the opportunity of
integrating energy efficiency practices to suit existing management systems.
Consequently, energy management is a key lever to realizing a sustainable industrial
energy efficiency worldwide. Several energy management system standards do
currently exist at the national level (e.g. Denmark, Ireland, Sweden, United States,
Spain, South Korea) or are under development (China, Europe via CEN and CENELEC,
South Africa, Brazil) (UNIDO, 2008)36. Currently there exist new international energy
management standards like the ISO 50001 and EN16001 which are designed suitable
for energy management in all types and size of businesses across the worldwide. Both
management systems are built on existing national standards and initiatives and
successful ISO management standards (like ISO 9001 and ISO 14001).

2.3.5.1 Certified Energy Auditor/Manager in the plant

An Energy Manager/Auditor is a vital position in the plant that is accountable for

carrying out energy conservation activities in the plant. He is the central coordinator
between all the other departments in the plant. For effective and efficient energy
management, he requires to carry out various roles and responsibilities.

Energy Efficiency Centre, Federation of Nepalese Chambers of commerce and

Industries (2002)37 suggests that all energy intensive industries should have a dedicated
35
Worrell, E. (2009). Barriers to energy efficiency: International case studies on successful barrier
removal. Retrieved December 12, 2011 from
http://www.unido.org/fileadmin/user_media/Services/Research_and_Statistics/WP142011_Ebook.pdf
36
United Nation Industrialization Development Organization, (UNIDO). (2008). Standards for Energy
Efficiency, Water, Climate Change and their Management. 42nd Meeting of ISO DEVCO. Dubai, United
Arab Emirates. Retrieved December 13, 2011 from
http://www.unido.org/fileadmin/user_media/Services/Energy_and_Climate_Change/Energy_Efficiency/E
nergy_Management_Standards/Background_Paper_to_ISO_DEVCO_Meeting_-_Final__2_.pdf
37
United Nation Industrialization Development Organization, (UNIDO). (2002). Industrial Development
Perspective Plan: Vision 2020 ,Retrieved from
https://www.unido.org/fileadmin/user_media/Publications/Pub_free/Nepal_industrial_development_persp
ective_plan_analytical_report.pdf

72
 energy management cell with an 'Energy Manager' who will be responsible for
overseeing its operations. The energy management cell should provide necessary
structure and formalize the process of energy conservation thereby enhancing its
efficacy with full support from top management. Besides energy manager, the cell
should also have skilled persons in different disciplines. The cell should interact with
manufacturing and other divisions like production, engineering, maintenance, utilities,
and even finance.

This will help in carrying out its activities like planned internal and external energy
audits, conceptualization and implementation of projects in close coordination with
respective departments/divisions. Thus, the cell will become the focal point for effective
energy management in the plant. This dedicated working will also bring to the fore the
energy issues in the minds of personnel working in different areas and will influence
their decision-making.

Energy management is responsibility of all involved in the industrial process but there
must be person(s) specifically designated to oversee the implementation of energy
efficiency proposals. Thus the role of energy manager is equally important as that of the
energy auditor. The energy manager should have up to date technical skills to
understand intricate technicalities of the process and excellent managerial skills in order
to plan, organize, direct and control the various energy requirements. This will ensure
that competency of the energy manager will not be questioned at any point in time and
also, the top management can rest assured that targets set will be easily achieved. The
main responsibilities of the energy manager are:

i. Setting up of an energy management cell with well-defined objectives

ii. Generate ideas for energy management to create / promote awareness
iii. Initiate regular training programmes for constant knowledge updation
iv. Initiate steps for appropriate monitoring and recording practices
v. Set targets that are realistically achievable by all concerned in the process
vi. Proper implementation of the energy audit findings
vii. Ensure that all data related to unit is maintained centrally and easily accessible
viii. Ensure coordination between top, middle and lower management personnel

73
ix. Associate with energy managers of related industries for information exchange
x. Ensure easy information flow through proper communication

An energy manager‘s report for a work area within the plant facility should concentrate
on the findings of the energy audit report, take into account the historical data and set
realistic benchmarks / targets that contribute significantly towards energy efficiency.
The reports Energy Efficiency in Industrial Utilities prepared must be shared will all
concerned especially with energy auditors. This will reassure the energy auditors that
their reports are taken seriously and due importance /credit are attached to the work
done. In short, the energy manager should be the bridge between the top management
and unit personnel38.

2.3.5.2 Energy Auditing with external professional agencies

Energy auditing is nothing but it is the systematic inspection of existing energy systems
to reduce overall energy inputs to the systems. An energy audit is a thorough accounting
of the energy use of industries. Energy Audits are a powerful way to improve the energy
efficiency of a industrial plant. But at the same time, it should not negatively affect on
output. Navale Vijay and Mahesh Narke (2011)39 states that in any industry, energy
requires more expenditure. In potential cost savings, energy is more important than
other areas of cost reduction. So energy management function constitutes a strategic
area for cost reduction. Energy audit helps to understand more about the ways energy
and fuel are used in any industry. Energy audit helps in identifying the areas where
waste can occur and where scope improvement exists. The energy Audit would give a
positive orientation to the energy cost reduction, preventive maintenance and quality
control programs. American council for energy efficient economy identifies that, energy
audits help to identify and prioritize specific areas for efficiency improvement and also
help to address climate change concerns, economic pressures, and employment issues.

38
P. Giridhar Kini and Ramesh C. Bansal (2011). Energy Efficiency in Industrial Utilities, Energy
Management Systems, Dr Giridhar Kini (Ed.), ISBN: 978-953-307-579-2, In Tech, Available from:
http://www.intechopen.com/books/energy-management-systems/energy-efficiency-in-industrial-utilities

39
Navale Vijay and Narke Mahesh (2011),‖Energy Audit & Management‖, Tech Easy Publications Pune,
1st Edition: 2-57 – 2-75.

74
2.3.5.3 Energy Efficient Electrical Motors

Electric motor systems account for about 60 percent of global industrial electricity
consumption. Electric motors drive both core industrial processes, like presses or rolls,
and auxiliary systems, like compressed air generation, ventilation or water pumping.
They are utilized throughout all industrial branches, though the main applications vary.
Studies showed a high potential for energy efficiency improvement in motor systems in
developing as well as in developed countries. Particularly system optimization
approaches that consider the whole motor system's efficiency show great potential.
Many of the energy efficiency investments show payback times of only a few years
only. Still, market failures and barriers like lack of capital, higher initial costs, lack of
attention by plant managers and principal agent dilemmas hamper the investment in energy
efficient motor systems.40

2.3.5.4 Replacing Pneumatic operated tools with electric operated tools

With a typical system efficiency of 10–15 percent, compressed air systems are among
the least efficient industrial motor systems (IEA 2007)41. Efficiency improvements are
practically available everywhere in the system. Hence, replacing compressed air-driven
tools by motor-driven ones can improve energy efficiency considerably. In fact,
compressed air is considered the most expensive energy carrier available at a plant and
its replacement can result in significant economic benefits. (UNIDO, 2011)

2.3.5.5 Compressed Air leak detection

A large improvement potential exists in cases in which compressed air is major energy
consumer. A very small air leakage in compressed air systems can cause several
thousand dollars of additional annual costs. Leak detection and prevention programmes
can avoid these unnecessary expenses and increase energy efficiency. Radgen and

40
United Nations Development Organisation, 2011, Energy efficiency in electric motor systems:
Technical potentials and policy approaches for developing countries
41
IEA, 2007: Tracking Industrial Energy Efficiency and CO2 Emissions, Paris: International Energy
Agency (IEA).

75
Blaustain (2001)42 found a technically and economically feasible savings potential of
about 33 percent of the electricity consumption of all compressed air systems in Europe
– exploitable within a period of 15 years. They identified 11 distinct measures that
improve the energy efficiency of compressed air systems. Among these, the reduction
of air leaks is by far the single most influential measure. Therefore, detection and
rectification of compressed air leakages at periodic intervals is very crucial especially
with ultrasonic leak detector which helps to detect even very minor leakages also.

2.3.5.6 Variable Frequency Drive for electrical motors

Major option to considerably improve motor system efficiency is the application of

frequency converters to adjust motor speed in accordance with the use-energy needed.
These variable speed drives have the highest saving potentials in flow systems, like
pumping or ventilation systems with high output variations. Pumping systems are
traditionally controlled by valves. These reduce output flow while the motor is still
running in full load and thus waste an enormous amount of energy, which is released as
friction. Variable speed drives, in contrast, control motor input frequency and voltage in
order to adjust the motor rotation speed to the requirements. (UNIDO 2011)

2.4 BARRIERS TO ENERGY EFFICIENCY

Some companies improve their energy efficiency and others don‘t. This is because these
companies are faced with a range of financial, cultural, technical and external barriers
that affect their ability to adopt energy efficiency measures. The question is, what are
they and how can we overcome the barriers?

The prospects of increasing energy efficiency are vast; however, they are usually
overlooked since the potential of increasing energy efficiency are shrouded by critical
limiting factors. These limiting factor are referred to as barriers ‗where in this context a
barrier can be defined as: A postulated mechanism that inhibits investments in
technologies that are both energy-efficient and (apparently) economically efficient

42
Radgen, P.; Blaustein, E. (2001): Compressed air systems in the European Union, Stuttgart: LOG_X.

76
(Sorrell et al., 2004; Rohdin & Thollander, 2006; SPRU, 2000)43. In order words a
barrier comprises of all factors that hamper the adoption of cost-effective energy-
efficient technologies or slow down their diffusion in the market (Fleiter, Worrell &
Eichhammer, 2011)44.

Unfortunately, industries in developing countries like India are lagging behind in the
adoption of energy efficiency and management measures and as such missing the
benefits of implementation. Most of these industries are limited by some critical factors,
which mainly stem from a combination of market failures (related to energy-efficient
goods and services), organizational failures and irrational human behaviour. These
factors (barriers) inhibit the adoption or encourage the slow adoption of cost effective
energy efficient technologies. These barriers continue to persist in developing countries
(despite having been known for years) because of the prevalence of lack of information,
poor decision-making and choices, lack of financing and many hidden costs (UNIDO,
2011) The existence of barriers offers justification for intervention from government
authorities and policy makers to bridge the ―efficiency gap‖ by formulating innovative
and comprehensive policies to boost and encourage the energy service market.
Nevertheless, for any particular policy to succeed a sound understanding of the barriers
has to be addressed and a realistic assessment of the likely effectiveness of a policy is
required (Golove &Eto, 1996).45

These barriers always cause hurdles in adopting energy efficient technologies in

industries to improve energy performance of utility systems. But identifying and
overcoming them, it is very well possible to implement efficient technologies.

43
Sorrell, S., O'Malley, E., Schleich, J. & Scott, S. (2004). The Economics of Energy Efficiency - Barriers
to Cost-Effective Investment, Edward Elgar, Cheltenham.
44
Fleiter, T., Worrell, E. & Eichhammer, W. (2011). Barriers to energy efficiency in industrial bottom-up
energy demand models. Renewable and Sustainable Energy Review 15, 3009-3111
45
Golove, W., H. & Eto, J., H. (1996).Market Barriers to Energy Efficiency: A Critical Reappraisal of the
Rationale for Public Policies to Promote Energy Efficiency. Retrieved March 2, 2012 from
http://eetd.lbl.gov/EA/EMP/reports/38059.pdf

77
Soma Bhattacharya and Maureen L.Cropper (2010)46, describes that there is a large
international literature that examines factors affecting the rate of diffusion of energy-
efficient technologies. There are virtually no such studies for India. Such studies would
provide useful information about the impact of changes in energy prices (as might
occur, for example, through electricity tariff reforms), changes in capital costs, energy
efficiency standards, or technology adoption subsidies. All of these changes in energy
markets and policies will continue to have an important influence on energy costs in
India and the country‘s CO2 emissions.

The IEA reports also reveal that market barriers in many forms have hindered energy
efficiency improvements. These barriers include inadequate access to capital, isolation
from technologies and price signals, information asymmetry, and a lack of knowledge
about the costs and benefits of energy efficiency investments (IEA 2007).

Shashi Shekhar, (2012)47Director General, Bureau of energy efficiency, Government of

India, describes that in spite of many efforts and benefits of energy efficiency several
technical financial market and policy barriers have constrained the implementation of
energy efficiency projects. The main barrier to energy conservation is the lack of
awareness by industry managers of the potential gains from improved efficiency.
Another major barrier is the Shortage of widespread educational opportunities in energy
management and conservation and appropriate facilities; lack of trainers and auditors.
BEE also finds that the lack of credit and the inability to obtain financing for projects
are strong deterrents to investments in energy efficiency in India. The lack of effective
national-level coordination and promotion of energy conservation activities have been a
major constraint to achieving energy efficiency.

One of the major objectives of the present study is to identify the potential barriers in
adopting energy efficient technologies in selected industries. This will help energy

46
Bhattacharya Soma and Maureen L. Cropper, April 2010,‖Options for Energy Efficiency in India and
Barriers to Their Adoption‖
47
Shekhar Shashi, 2002, Promotion of Energy Conservation in the country, IIPEC Programme on 22nd
September 2002 at M/s. Shree Cement, Beawar

78
managers and policy makers to take corrective action against respective barriers to
overcome these barriers and implement most energy efficient technologies in industries
to reduce energy consumption. Meghalaya State Designated Agency,48 describes that In
spite of many efforts and benefits of energy efficiency, the various barriers such as
technical, financial, market and policy have constrained the implementation of energy
efficiency projects in India.

Considerable untapped potential exists for curbing wasteful use of energy estimated to
be of the order nearly 30% of the total consumption of commercial energy. The size of
energy efficiency markets growing at 10% annually in India, is estimated to be in the
range of Rs. 200 to Rs. 300 billion.

In spite of many efforts and benefits of energy efficiency, several technical, financial
market and policy barriers have constrained the implementation of energy efficiency
projects. The major barriers are:

2.4.1 Lack of awareness

The main barrier to energy conservation is the lack of awareness among the industry
managers of the potential gains from improved efficiency. Industries as well as
government are yet to take into consideration factors such as tax credits, depreciation
benefits, electricity price escalation, life cycle savings of the investment and the timely
release of money.

2.4.2 Shortage of widespread education and training

The widespread educational opportunities in energy management and conservation are

not available. In addition, the appropriate training facilities, trainers and auditors are
lacking.

48
http://www.msda.nic.in/downloads.html

79
2.4.3 Economic and market distortions

The response to conservation measures is irrational because of inappropriate pricing,

other market distortions and socio-economic factors.

2.4.4 Lack of standardization of Equipments

The slow rate of progress in achieving higher standards of energy consumption in

Equipments and appliances is also adversely affecting the adoption of energy saving
measures.

2.4.5 Lack of financing

The non-availability of sufficient credit facilities and the difficulties in obtaining

required finances for energy saving projects are strong deterrents to investments in
energy efficiency in India.

2.4.6 Lack of effective co-ordination

In India, the lack of effective national-level coordinate and promotion of energy

conservation activities have been major constraint to achieving energy efficiency.

With the background of high energy saving potential and its benefits, the Government
of India has enacted Energy Conservation Act- 2001 to bridge the gap between demand
and supply, reduce environmental emissions through energy saving, and to effectively
overcome the barriers. This Act provides, for the first time, the much-needed framework
and institutional arrangement for embarking or energy efficiency drive.

2.5 EMPIRICAL BARRIERS TO INDUSTRIAL ENERGY EFFICIENCY

Numerous empirical studies have confirmed the existence of barriers to improving

energy efficiency in industries. As shown in literature, the nature of these barriers varies
widely among technologies and technology adopters. Barriers also vary depending on

80
sectors and regional condition (SPRU, 2000); these variations explain the diversity in
empirical approaches to studying barriers to energy efficiency. Most of these empirical
barrier surveys are aimed at explaining the existence of the energy efficiency gap, by
investigating how barriers exist and operate, the contexts in which they arise and the
manner in which different intervention can be used to bridge the efficiency gap (SPRU,
2000). Industries worldwide are faced with energy efficiency barriers ranging from
financial, cultural, technical and external barriers (UNEP, 2006).

In an effort to capture the importance of the social and anthropological aspects of

barriers to industrial energy efficiency, Palm (2009) probed lifestyle categories to
complement industrial energy efficiency barriers. The essence of this research was to
deepen the understanding of why companies (industrial SMEs) do not improve energy
efficiency, by looking into the energy culture of companies, perception of energy use
and finally habits and routines that govern energy use in industries (Palm, 2009).

In a research by Palm and Thollander (2010) a unification of 39 both engineering and

social science was applied to explain barriers to industrial energy efficiency in Europe;
this research is representative of the interdisciplinary nature of barriers to industrial
energy efficiency. A series of industrial energy efficiency barrier studies have been
conducted in Sweden by Rohdin and Thollander (2006), Rohdin, Thollander and
Solding (2007) and Thollander and Ottosson (2008) in different business sector; the
prevailing barriers identified differ from sector to sector.

Based on the four key areas two types of questionnaires were designed; targeting two
separate groups of respondent that is, external stakeholders (Government agencies,
financial institute, Consultants, research institutes and NGOs) and industrial companies.
According to the companies, ―lack of financial incentive from government ranked as
the largest barrier prevailing followed by ―management finds production more
important‖ because energy efficiency does not form part of the core activity of
companies. Ranked in third position, ―Management is concerned with the investment
costs of energy efficiency measures‖ . From external stakeholders‗ perspective
―Management finds production more important‖ ranked as the largest barrier

81
followed by ―Authorities are not strict in enforcing environmental regulations‖ and
―There is a lack of policies, procedures and systems within companies‖ in second and
third positions respectively.

2.5.1 Lack of awareness about Energy Conservation among the employees and
top management.

The lack of awareness of energy efficiency by top management of companies is an

important barrier because without management commitment it is an uphill battle to
improve energy efficiency. This appears to be the root cause of other barriers, such as
the priority for production, lack of investment capital, and limited policies, systems and
reporting processes to manage energy consumption, and hierarchical management
structures.

Perhaps the most important barrier is that management is focused more on maximizing
the production output and turnover rather than on producing safely, more efficiently and
reducing production costs. ―I think the problem is that they are totally focused on
producing their main products in as much volume as technically possible. In one plant,
they charge their furnaces at 115% of their rated capacities, at all times!‖ one consultant
observed, and added: ―What impressed me most was their maintenance people and
systems. If equipment breaks down, tens of people literary show (from somewhere) and
they jump into it and work extremely hard to fix it. On the other hand, I was devastated
to see how they treat operator safety and hygiene. In both plants, safety wear are non-
existent.‖ As a result, it can be difficult to convince management to authorize an energy
assessment or the implementation of energy efficiency options. Not because it is
unimportant, but simply because production output is considered more important.

2.5.2 Limited access to and availability of technical information

A second barrier is about knowledge and information. It covers limited information

and (technical) knowledge at company level and facilitating organizations, but also a
limited access to and availability of knowledge and information.

82
Company information on energy and resources is crucial because only then the
improvements after implementation of options can be measured, and management is
more likely to continue with resource and energy efficiency if quantitative data on
savings are available. For example, management of a Vietnamese fertilizer company
supported the implementation of additional options, because the team could quantify
savings of already implemented options.

2.5.3 Difficulty in obtaining financing for Energy Efficiency Projects.

Almost all companies mentioned the financial limitations of implementing energy

efficiency options. The most common barrier mentioned was the lack of money to
invest in options. Options with a payback period of more than two or three years were
rarely implemented. Some options provide huge savings and a short payback period of
often less than one year, but the option requires a high investment and the company
simply does not have the money at hand. One option is to take out a loan, but interest
rates can be high, and banks often do not have confidence in the creditworthiness of
companies to give them a loan, especially small and medium sized companies (SMEs).
Other companies feel uncomfortable with taking a loan, and these are often family -run
companies that are used to saving money first before investing it.

2.5.4 Lack of Energy management Policies

While companies hold the key to reducing their energy consumption, government
policy certainly has a big influence. Limited policies, poor enforcement and conflicting
economic and environmental policies were identified as the fourth group of barriers.

Lack of effective policies is a key issue, but the situation is different between countries.
For example, India has a specific Energy Conservation Act since 2001 that requires
energy intensive companies, such as pulp and paper, steel, cement and fertilizers, to
appoint an energy manager and carry our regular energy audits (Ministry of Law,
Justice and Company Affairs, 2001). China has specific legislation to promote Cleaner
Production. But most other countries have environmental legislation focused on limiting

83
pollution levels (such as emissions and wastewater) but not on using resources
efficiently.

2.6 GENERATION COST OF UTILITIES

Understanding energy cost is vital factor for awareness creation and saving calculation.
(Umesh Rathore, 2009)49 The provision of an adequate and reliable supply of utilities
(fuel, steam and power) represents a significant operating cost for many industrial
companies. For many industries, the energy/utilities cost is the largest operating expense
after the purchase of raw materials. (Dhole Vikas, Darryl Seillier and Garza, 2002)50

Utility estimates are often complicated because they depend on both inflation and
energy costs. Unlike capital, labour, and other expenses, utility prices do not correlate
simply with conventional inflationary indexes, because basic energy costs vary
erratically, independent of capital and labour. (Gael D. Ulrich and Palligarnai T.
Vasudevan , 2006)51

Most industrial facilities need some form of compressed air, whether for running a
simple air tool or for more complicated tasks such as the operation of pneumatic
controls. A recent survey by the U.S. Department of Energy showed that for a typical
industrial facility, approximately 10% of the electricity consumed is for generating
compressed air. For some facilities, compressed air generation may account for 30% or
more of the electricity consumed. Compressed air is an on-site generated utility. Very
often, the cost of generation is not known; however, some companies use a value of 18-
30 cents per 1,000 cubic feet of air. Determine the cost of compressed air for your plant
by periodically monitoring the compressor operating hours and load duty cycle.

49
Rathore Umesh, ―Energy Management‖, First Edition,2011,S.K.Katria and Sons Publication
50
Dhole Vikas, Darryl Seillier and Kathleen Garza, Utility System Management and Operational
Optimization,2002.Energy technology conference proceedings from the twenty-fourth National
Industrialerence,Houston,TX, April 16-19,2002
51
Gael D. Ulrich and Palligarnai T. Vasudevan, How to Estimate Utility Costs, April 2006

84
2.7 PERFORMANCE ASSESSMENT OF INDUSTRIAL UTILITY EQUIPMENT

Bureau of Energy Efficiency, India(2005)52, describes in its guide books for

certification examination for Energy Managers and Energy Auditors that 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 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.

Air compressors account for significant amount of electricity used in Indian industries.
Air compressors are used in a variety of industries to supply process requirements, to
operate pneumatic tools and equipment, and to meet instrumentation needs. Only 10-
30% of energy reaches the point of end-use, and balance 70-90% of energy of the power
of the prime mover being converted to unusable heat energy and to a lesser extent lost
in form of friction, misuse and noise. The compressed air system is not only an energy
intensive utility but also one of the least energy efficient. Over a period of time, both
performance of compressors and compressed air system reduces drastically. The causes
are many such as poor maintenance, wear and tear etc. All these lead to additional
compressors installations leading to more inefficiency. A periodic performance
assessment is essential to minimize the cost of compressed air.

52
Bureau of Energy efficiency, Government of India, (2005), ―Energy Efficiency in Electrical Utilities‖
Guide book for National Certification Examination for Energy Managers and Energy Auditors

85
Lighting is an essential service in all the industries. The power consumption by the
industrial lighting varies between 2 to 10% of the total power depending on the type of
industry. Innovation and continuous improvement in the field of lighting, has given rise
to tremendous energy saving opportunities in this area. Lighting is an area, which
provides a major scope to achieve energy efficiency at the design stage, by
incorporation of modern energy efficient lamps, luminaries and gears, apart from good
operational practices. The largest potential for electricity savings with variable speed
drives is generally in variable torque applications, for example centrifugal pumps and
fans, where the power requirement changes as the cube of speed. Constant torque loads
are also suitable for VSD application.

Air conditioning and refrigeration consume significant amount of energy in buildings

and in process industries. The energy consumed in air conditioning and refrigeration
systems is sensitive to load changes, seasonal variations, operation and maintenance,
ambient conditions etc. Hence the performance evaluation will have to take into account
to the extent possible all these factors.

The most critical aspect of energy efficiency in a pumping system is matching of pumps
to loads. Hence even if an efficient pump is selected, but if it is a mismatch to the
system then the pump will operate at very poor efficiencies. In addition efficiency drop
can also be expected over time due to deposits in the impellers. Performance assessment
of pumps would reveal the existing operating efficiencies in order to take corrective
action.

Over time, pumps deteriorate and their efficiency can fall by up to 10–15 percent
(ETSU et al.2001). Gudbjerg (2007) mentions possible efficiency losses in centrifugal
water pumps of around 5 percent after the first five years of operation. If the fluid
contains solids or if temperature or speed is increased, deterioration will accelerate. The
drop in efficiency is strongest in the first years of utilization. Besides regular

86
maintenance, coatings, e.g., with glass or resin, can improve long-term durability as
well as the efficiency of the pump (Gudbjerg, Andersen2007)53.

Meghalaya State Designated Agency finds that large safety margins are kept on the
head of the pump that results in a condition in which the pump does not operate at
specified most energy efficient duty point. Large differences are found in the efficiency
of pumps manufactured by organized sector and small-scale manufacturers. Selection
should not be only based upon the initial cost alone, efficiency and running costs should
also be given due weight.

Performance of the boiler, like efficiency and evaporation ratio reduces with time, due
to poor combustion, heat transfer fouling and poor operation and maintenance.
Deterioration of fuel quality and water quality also leads to poor performance of boiler.
Efficiency testing helps us to find out how far the boiler efficiency drifts away from the
best efficiency. Any observed abnormal deviations could therefore be investigated to
pinpoint the problem area for necessary corrective action. Hence it is necessary to find
out the current level of efficiency for performance evaluation, which is a pre requisite
for energy conservation action in industry.

Considering the above background, one can easily got to know that the importance of
performance assessment of utility equipment. One of the major objectives of this study
is to know the status of performance assessment of theses utility equipment in survey
firms. But a standard procedure for assessing the energy performance of these utility
equipment is necessary to get the reliable results. This helps in bench marking of the
desired performance level to compare with periodical results and industrial standards.

2.8 TRAINING PROGRAMS ON ENERGY MANAGEMENT

Employees in the manufacturing plants generally know more about their equipment than
anyone else in the facility because they operate it. They know how to run them more

53
Gudbjerg, E.; Andersen, H. (2007): Using coatings to reduce energy consumption in pumps and
ventilators, ECEEE Summer Study, La Colle sur Loup.

87
efficiently. But there is no mechanism in place for them to have an input, their ideas go
unsolicited.54

Education and awareness are key components of any energy management program as
raising the education/awareness level of the employees can have big dividends. Energy
management programme will operate more effectively and efficiently if the employees
in the organisation understand the complexity of energy, particularly the potential for
economic benefits. With the awareness about the latest technologies, the quantity and
quality of employee suggestions on energy conservation will improve.

In a recent pan‐European survey, the Commission of the European Communities asked

participants: ―How could the community and the Commission in particular, better
stimulate European investment in energy efficiency technologies?‖ Participants
overwhelmingly responded that ―funds would be better spent on demonstrating and
validating the potential of current technology, avoiding the situation in which good
solutions stay in closed boxes without delivering results‖ (Commission 2005;
Kounetasetal 2010:1‐2)55. Survey respondents agreed that neither cost nor technology
was the problem, but rather a lack of information about the available technologies and
their benefits to users.

If the organization wants to save energy, it is important that everyone in the

organization become aware of the energy consumption that they are responsible. Simple
changes in people‘s behavior can quickly lead to significant energy savings but such
changes will only happen if the people are aware of the energy consumption that they
have the power to control. Therefore, one of the important job of any of the organization
to provide some knowledge to the employees using energy. This can be better done
through energy management training programs.

54
William H. Mashburn,2006, Energy Management Handbook, The Fairmont print Inc. Page No.12
55
Commission of the European Communities, 2005. Green Paper on Energy Efficiency or Doing
More with Less, COM (2005) 265 final. Office for the Official Publications, Brussels.

88
Review

Literature review indicates lack of research papers in this area of research pertaining to
the performance assessment of utility equipment expect the guides books of Bureau of
Energy Efficiency, India. In Guide books also a detailed ready to use procedures are not
given. Literature review indicates lack of literature in area of research pertaining to
training on energy management and need assessment of employees. Presented literature
review in description of utilities costing indicates that the absence of articles published
in this area of research. There is a large international literature that examines factors
affecting the rate of diffusion of energy-efficient technologies. There are virtually no
such studies for India especially in industries.

2.9 THEOROTICAL BACKGROUND

56
As described by Swanson, Richard A (2013) , theories are formulated to explain,
predict, and understand phenomena and, in many cases, to challenge and extend existing
knowledge within the limits of critical bounding assumptions. The theoretical
framework is the structure that can hold or support a theory of a research study. The
theoretical framework introduces and describes the theory that explains why the
research problem under study exists.

With respect to energy management in industries, Energy management techniques are

very important upon implementation of which energy can be saved to greater extent.

a. Optimization of equipment operations

Equipment like motors, pumps, fans, compressors, furnaces and machine tools
are designed for certain rated capacity. The performance and efficiency of these
equipment is highest at a point close to the rated capacity deviation from this
capacity can significantly affect performance.

56
Swanson, Richard A, 2013, Theory Building in Applied Disciplines. San Francisco, CA: Berrett-
Koehler Publishers.

89
 For an energy efficient motor, whose efficiency is higher above 60% load, the
efficiency drops considerably, if the motor is loaded only 40% and below.
Similarly, screw compressors have low part load efficiency. Operation beyond
capacities can lead to significant losses. However, for pipelines, working at less
than design flow, friction losses reduce drastically.

b. Reduction of Distribution losses

It must be noted that, due to the excellent quality if insulating material, loss of
electricity due to leakage is negligible. The only significant losses in electrical
equipment are cable losses, distribution transformer losses and losses in motors.
Leakages of water, compressed air, and chilled water/Brine from pipelines are
major areas of concern. Radiation loss from heated surface is another important
loss factor.

c. End-use minimization:
For each energy intensive end-use such as compressed air, chilled water.
Heating and melting, the plant operation must be evaluated to moderate the
quantity and quality. Some examples are reducing the temperature for heat
treatment, lowering compresses air pressure, increasing chilled water
temperature or reducing flow in heat exchangers.

In Pharmaceutical Industries, AHU Filter cleaning activities by compressed are

carried out normally on Holiday where pressure requirement is 3.5 bar against 7
bar in normal working days. During Filter cleaning, compressed air pressure can
be minimized.

d. Analysis of data collected through metering

It is always the best practice to install energy meters, hour meters (time
totalizes) on major equipment/systems (HVAC system, compressed Air System,
Pumping System etc.) Consumption on a shift-wise basis, daily basis, month-
wise and yearly basis. And Co-relation of these consumption patterns with the
production details (shift-wise production, equipment wise production) shall lead

90
 to identify energy saving opportunities. The summation of all sub-meter energy
consumption should be compared with the summation of main plant energy
meter.

e. Periodic Maintenance:
Housekeeping and periodic maintenance of equipment play an important role in
getting desired performance and efficiency. Preventive maintenance schedules
for all equipment/system adhered to these measures can be easily implemented
to achieve energy savings even to the tune of 10% with little or no investment.

f. Selection of energy efficient equipment /process:

While selecting new equipment /process, energy consumption per unit of utility
produced should be checked for its energy effectiveness and most energy
efficient equipment is to be selected though Initial investment is little bit high,
considering energy savings in long run of its operation.

Example: In a process plant, refrigeration compressors had efficiencies ranging

from 1.5 KW/T on to 0.9 KW/ton.

2.9.1 Energy Audit for Energy Efficiency

Energy efficiency is eliminating wastage while using energy. Optimizing the Energy
pattern in generation, distribution and utilization is the key to Energy Efficiency.
Energy Audit is a tool to identify areas where excess energy consumption or Wastage of
energy is taking place. An Energy Audit involves measuring the actual energy used in
the plant, comparing it with an estimate of the minimum energy required to undertake
the process and establishing technically and economically feasible means to achieve the
same. It is an established fact that, a properly executed energy audit can bring forth
potential for savings of the order of 2 to 20% in an average Indian Industry.

91
As per Energy Management Centre Kerala57, Energy Audit is a systematic feedback
system to collect and analyse all relevant data regarding use of energy to avoid any
leakage, wastage or inefficient use of electricity. It also includes careful study of all
electrical system design, electrical equipment and critical examination for efficiency of
various electrical items, to promote the use of low loss, high efficiency devices and
lighting systems.

This therefore, requires collection of relevant data for each product, careful study and
analysis by experienced personnel. The collected data is thoroughly analysed for
various aspects. After detailed Energy Audit, we have to apply the technique of energy
management to reduce all type of losses and ensure maximum energy conservation and
thereby management has become explicit and significant to find the ways to cope up
with the complications of energy.

2.9.2 Types of Energy Audit

Energy Audit can be classified into two types, preliminary and detailed audits.

a. Preliminary Energy Audit

Preliminary Energy Audit is conducted to

i. Ensure top management commitment

Top management commitment is a basic necessity for a successful energy
audit. Without top management commitment, the audit report will become
another document for industry without any good use or purpose. During the
preliminary audit, projecting the potential areas and benefits ensures the
involvement of the top management

57
Energy Audit Manual, Energy Management Centre Kerala, Department of Power, Government of
Kerala. Retrieved from
http://www.keralaenergy.gov.in/EED/SDA/Energy%20Management%20Centre%20Kerala%20-
%20Energy%20audit%20Manual.pdf

92
ii. Formation of Energy Committee
An Energy Committee will be formulated, preferably the chief executive of
the plant as the head of the committee. The committee should comprise
personnel from the engineering department, production department, accounts
department and shop floor level operators.

iii. Assigning Responsibilities

Energy Conservation is a teamwork. It is not only the responsibility of the
auditor, top management or the engineering department alone in a plant. Each
and every department of the plant is a part of the team. The core team of
people formed in the Energy Committee is assigned with specific
responsibilities to perform during the audit and implementation period.

iv. Preparation of Energy File

An energy file will be prepared covering types of energy being used in the
plant like electricity, fuel oils, coal, paddy husk etc.; cost of energy over a
specific period of time, production details of the period, process flow chart,
energy flow chart, major components of process and utilities, energy use
pattern in different areas, equipment, if available, etc.

v. Identification of Potential Areas

During the preliminary audit, the process of the plant is understood and major
areas where potential of energy optimization exists is identified. The
requirement of instrumentation needed in-house and for spot measurement is
evaluated. If any additional on-line instrumentation is required or alteration
needed to facilitate measurement during detailed study is assessed and
conveyed to management.

vi. Evaluation of Time Frame

Approximate time frame required to conduct the detailed energy audit is
evaluated during the preliminary study after examining the different process,
utility components etc.

93
 vii. Specific Problems
Any specific problems being faced by the industry in energy efficiency or
related issues is looked into during the preliminary audit so that the same can
be addressed in detail during the detailed study with possible solutions.

b. Detailed Energy Audit

The detailed energy audit of a facility involves the following steps:-

i. Assessment of Historical Data

The historical data collected during the preliminary audit is assessed during the
detailed audit to verify the energy use pattern of the plant. Any variation in
energy use pattern with respect to product variations, market situations,
atmospheric conditions etc. is confirmed. The specific energy consumption of
the plant is evaluated with respect to electricity and other fuels, department
wise and for the total plant.

ii. Spot Measurement and Evaluation

Spot measurements of various energy use parameters are taken in the next
phase. The collected data is then evaluated with respect to actual
requirements and standard practices. Analytical models and other relevant
features for energy efficiency of the plant are developed.

iii. Techno-Economic Feasibility Evaluation

No suggestion is complete without a proper techno-economic feasibility
calculation. The return on investment to save energy should be within about
two years to be attractive to the industry, other than in specific cases. Returns
on investment calculations are prepared for each proposal with vendor support.

iv. Presentation of Report

All proposals are discussed with the management before finalising the report.
The report is prepared in a simple, easily understandable language and
presented to the management. Necessary calculations, diagrams, charts, vendor

94
 information etc. are presented in the report with detailed description of the
recommendations. As such, the report will act as an energy efficiency guide to
the plant personnel for future use. The report will also contain prioritisation of
implementation with respect to benefits, capital investment etc.; trends of
future targets to be set, possible barriers, methods for monitoring etc.

v. Areas Covered under Detailed Energy Audit

A detailed energy audit of a facility will cover different operational features of
basically the following areas. Performance of installed utility Equipments like
air conditioning/Refrigeration, cooling towers, air compressors, pumps etc.

Electricity tariff and billing

Possibility of elimination of penalties etc.
Demand side management and power factor correction
Electrical distribution network, operating voltage
Performance of capacitors, harmonics in the system
Performance of installed motive load
Performance of installed machinery
Boiler and steam distribution
Furnaces
Fuel substitution
Process optimization
Combined power and fuel options, co-generation
Use of non-conventional energy sources.·

c. Application of Energy Audit

Energy audit is applicable to all types of energy users like all industries
irrespective of size, type, product, nature, capacity etc., Commercial Buildings
like office complex, Hospitals. Hotels, Entertainment facilities like cinema halls,
clubs, and Public utilities like water and sewage etc.

95
 d. Benefits of Energy audit
The benefits of energy audits are: -
Reduction in energy cost which is a direct profit.
Reduction in energy consumption leads to reduced environmental pollution
directly and indirectly.
Slower depletion of natural resources and narrowing demand supply gap.

2.10 ENERGY EFFICIENT UTILITY MANAGEMENT

2.10.1 Electricity

Today is the day of energy efficiency. In good old days, when electrical power was a
cheap commodity, none was giving due importance to the efficient use of power.
However, there is a sea change in the situation now. Power is no cheaper and for most
of the industries, electrical energy has become almost a raw material. Most of our
traditional industries like sugar, textile etc. are dying down. One of the main reasons is
the inefficiency in operation and the comparatively high operating cost, which makes
the product incompetent in the current global market.58

The recent initiatives taken by the government by way of enacting the energy
Conservation act 2001 and electricity act 2003 are to help the industries in coping with
the efficiency crisis and to make them energy efficient, thereby leading them to become
competitive.

Electricity is a very expensive form of energy. This is because electricity is a secondary

form of energy. With private sector participation in the power sector yet to materialize,
power shortages are likely to continue for at least for another decade, users of electricity
must keep the following factors in mind.

58
Energy Efficiency in Electrical Motors, 2008, Water and Energy Abstracts, Indian Journals, Volume
18, Issue 2, page No 58.Retrieved from
http://www.indianjournals.com/ijor.aspx?target=ijor:wea&volume=18&issue=2&article=abs144

96
 i. Efficiency of thermal generation is quite low around 30-35%. Thus one unit of
electricity is produced by 3 unit of electricity is produced by 3 units of primary
fuel.
ii. Transmission and distribution losses account for 20% - 25% of electricity
generated. Thus one unit of electricity at user industry requires 4 unit of
primary fuel. Each unit of electricity saved leads to saving of 4 unit of primary
fuel.
iii. Setting up power station is very expensive.
iv. Electricity in thermal power station leads to significant emission of pollution
gases and water use.

In majority of Industries, 50-60% of total power consumption is consumed by Utilities

like HVAC, Compressed air, Steam, water systems etc. Energy efficient management of
these utilities would really save considerable amount of energy.

2.10.2 Energy Efficiency in Electrical Motors

Electrical motors are the driving mechanism for majority of operations in industries,
agriculture, commercial complexes etc. In India, 80% of the electrical power consumed
in industries, 50% of power consumed in domestic and commercial connections and
about 90% of power consumed in agricultural connections are through electrical motors.
Hence, electrical motors are the major component to address when we talk about energy
efficiency. A critical analysis of the performance of electrical motors reveals that the
power loss due to in-efficient electrical motors is also as high as 25-30%.This shows the
importance of maintaining proper operational efficiency of the electrical motors. Still, in
both, developed and developing countries, the policies in place are not sufficient to
exploit the energy efficiency potentials of motor system optimization. (UNIDO, 2011)59

The following Figure No. 2.1 shows share of different motor systems of total electricity
use by industrial motor systems in the US.

59
United Nations Industrial Development Organisation,2011,Energy Efficiency in Electric Motor
Systems: Technical potential and Policy Approaches for developing countries, working paper#11

97
Figure No 2.1 Share of different motor systems of total electricity use by industrial
motor systems in the US

Share of different motor systems

Fans, 14% Pumping, 25%

Other , 4%

Material
Handling , 12%
Compressed Air,
16%

Material
Processing, 22%

Refrigeration , 7%

Source –IEA (International Energy Association- 2007)

a. Ways to Save on Motor Energy Costs60

i. Turn it off when not needed

The simplest and most obvious method of saving motor energy is simply turn it
off when it‘s not needed. Motors often run un-noticed when they are not
needed, increasing energy costs. Motors can be switched manually and this is a
fine solution for many applications but there are timers and sensors available
that will turn them off automatically.

60
Ways to Save on Motor Energy Costs.Retrieved from http://www.hartmanheating.com/heating/high-
efficiency-motors/

98
ii. Reduce the Speed
Another simple method of reducing motor energy costs is to reduce the speed
of the driven equipment, especially pumps and fans. Energy consumption of
pumps and fans varies according to the third power, so small change in speed
can make big changes in energy consumption.

iii. Use of Variable Speed Drives

Some loads driven by motors does not need to operate at the same speed all the
time. These types of loads offer big opportunities for saving by moderating
their speed according to their load.

iv. Specific Energy efficient Motors

When replacing an existing motor or when specifying new equipment, consider
using a High efficiency motor. High efficiency motors use better quality
materials and are manufactured to higher quality specifications than standard
efficiency motors. The major benefit of these motors is comparatively less drop
in efficiency with respect to the load factor on the motors.

v. Properly Sized Motors

Many motor systems are oversized and a significantly oversized motor will run
at low efficiency, increasing energy costs. Motors loaded below 50% are
candidates for replacement provided other conditions are met like starting
torque requirements, intermittent loads, availability of a lower capacity motor
in spare etc. In some of the cases, the motors can be made to run on star
connection to save energy.

vi. Reduce the Load

Often it is possible to reduce the load on a motor and save energy. This could
be done by reducing pressure losses in pipe and duct runs with low pressure
loss elbows and fittings, aligning the motor and drive properly, use of better
transmission systems, direct drives etc.

99
 vii. Perform Regular Maintenance
For maximum performance and greatest energy efficiency, lubricate drive
trains like bearings, chains and gears etc.; keep drive belts at their proper
tension, clean fan blades, check pump impeller blades for wear, replace the
filters regularly etc. Most maintenance actions pay for themselves with longer
lasting equipment and less downtime even without the energy savings.

2.10.3 Energy Efficiency in Compressed Air System61

Air Compressor is a machine that increases the pressure of air.Most manufacturing

plants need an air compressor to drive tools such as high-speed drills, pneumatic
hammers, riveting guns, etc. Its use lies at the heart of all pneumatic control systems. A
properly designed and maintained compressed air system that is energy efficient could
save a company Lacs of rupees each year.

Compressed air systems consume about 10 percent of industrial electricity consumption

in the EU as well as in the US (Radgen, Blaustein 2001; XEnergy 2001)62. They range
in size from several kW to several hundred kW. In comparison to electric motor-driven
systems, compressed air tools can often be designed smaller, lighter and more flexible.
They allow for speed and torque control and show security advantages, because no
electricity is used where the pneumatic tools are used. Consequently, compressed air
systems are found in all industries, although they are considerably less energy efficient
than direct motor-driven systems.

As energy costs account for the highest cost share of compressed air systems, many
energy efficiency options show very short payback periods as shown in the figure No
2.2.

61
Efficient Compressed Air Systems, Air and Mine Equipment Institute of Australia. Retrieved from
http://www.energyrating.gov.au/wpcontent/uploads/Energy_Rating_Documents/Library/Industrial_Equip
ment/Air_Compressors/aircomp-brochure.pdf

62
Radgen, P.; Blaustein, E. (2001): Compressed air systems in the European Union, Stuttgart: LOG_X.

100
Figure No 2.2 Costs of a compressed air system with a 10-year lifetime

Source - The Carbon Trust 2005

Surprising energy facts!

FACT: Annual energy cost of air compressors is approximately 7 times the

compressor‘s capital cost. One liter per second of free air delivery requires
approximately 330 watts of electrical power input (at 700 kPa).

FACT: Every 0.5 bar operating set pressure reduction yields 4% saving in driving
energy.

FACT: Every 10 l/s of compressed air leakage increases energy use by about 7
MWh/year costing about Rs.40000/-.

FACT: The energy efficiency of a compressed air system is very low, often only 4–5%

FACT: Audits have regularly highlighted system leakage exceeding 20% and, in some
cases, more than 50% of the total air compression output.

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 a. How to Gain Big Efficiencies in your Present System

i. Hunt for air leaks

Leaks may be costing much more than you think. Table No 2.1 lists the
estimated amount of air leaking from a system operating at a pressure of 7 Bar
for 8000 hours per year, the energy wasted and its cost at Rupees 9 /kWh.
Analyzing one result as an example, if the sum of all leaks is equivalent to a hole
of only 1.6 mm diameter, 0.8 l/s of air is lost, wasting energy each year at a cost
of Rs.57600/-

System operators are usually the first to know if a problem such as a leak has
developed. So educate your plant staff on the importance of monitoring the line.
Check all piping, joints, drains, relief valves, drain valves, flexible hoses, quick
release hose fittings and filter/lubricator units for leaks regularly (monthly). If a
leak is found, instant repairs or replacement of the part are necessary.

Table No 2.1, According to Bureau of Energy Efficiency, India, Air leakage

Wasted energy and cost for equivalent hole diameter

Equivalent hole Quantity of air lost in

Annual cost of leaks (Rs.)
diameter (mm) leaks (l/s)
0.8 0.2 14400
1.6 0.8 57600
3.1 3.0 216000
6.4 12.0 864000

Source: Bureau of Energy Efficiency, India. (2005)

ii. Optimize the system operating pressure

It is important to ensure that the air pressure at the compressor is the minimum
required to do the job. Air must be delivered to the point of use at the desired
pressure and in the right condition. Too low a pressure will impair tool
efficiencies and affect process time. Too high a pressure may damage

102
 equipment, and will promote leaks and increase operating costs. It‘s a balancing
act, but getting it ‗just right‘ delivers good savings. e.g. reducing the system
pressure on a 30 kW air compressor from 7 bar to 6 Bar would save about 4780
kWh per year and Rs.43020/-.Compressors should not be operated above their
optimum operating pressures as this not only wastes energy, but also leads to
excessive wear, leading to further energy wastage. The volumetric efficiency of
a compressor is also less at higher delivery pressures. Compressors is helpful to
reduce specific power consumption. Namdeo Adate and R.N. Awale 63 describes
that optimizing discharge air pressure of Air a compressor consumes more
power at higher pressures. The following Table No. 2.2 indicates Annual energy
and cost savings resulting from reduction in air pressure at the compressor.

Table No 2.2, Annual energy and cost savings resulting from reduction in air
pressure at the compressor

Air pressure 0.5 Bar 1 Bar 1.5 Bar 2 bar

reduction
Comparative Energy Cost Energy Cost Energy Cost Energy Cost
average load saving saving saving saving saving saving saving saving
(kW) (kWh/yr) (Rs/yr) (kWh/yr) (Rs./yr) (kWh/yr) (Rs./yr) (kWh/yr) (Rs./yr)
4 320 2880 640 5760 960 8640 1280 11520
7.5 600 5400 1200 10800 1800 16200 2400 21600
11 875 7875 1750 15750 2625 23625 3500 31500
15 1195 10755 2390 21510 3583 32247 4780 43020
22 1755 15795 3510 31590 5265 47385 7020 63180
30 2390 21510 4780 43020 7170 64530 9560 86040
37 2945 26505 5890 53010 8835 79515 11780 106020
55 4380 39420 8760 78840 13140 118260 17520 157680
75 5975 53775 11950 107550 17925 161325 23900 215100
110 8760 78840 17520 157680 26280 236520 35040 315360
160 12750 114750 25500 229500 38250 3825 51000 459000

63
Adate Namdeo D and R.N.Awale,‖Energy conservation through energy efficient technologies at thermal power plant‖,
International Journal of Power System Operation and Energy Management ISSN (PRINT): 2231 – 4407, Volume-2, Issue-3,4

103
 iii. Check temperature reduction at the compressor intake
Investigate the possibility of providing cooler air to the compressor intake.
Experience shows that up to 6% of compressor using cooler outside air rather
than hot compressor room air can save power. A very cheap way to save on
compressed air costs is to duct outside air directly into the compressor inlet. If
air is drawn from a cool, dry source, rather than from a hot compressor house,
the system will operate more efficiently. Table 2.3 lists the annual energy and
cost savings for given intake air temperature reductions. For example, reducing
the compressor inlet temperature by as little as 6°C on a 30 kW air compressor,
the annual energy saving is 1200 kWh/year and the annual cost saving is
Rs.10800/-
Table No 2.3, Annual energy and cost savings with reduced compressor inlet
temperature

Air 3ºC 6ºC 10ºC 20ºC

temperature
reduction
intake
Comparative kWh/yr Rs./yr kWh/yr Rs./yr kWh/yr Rs./yr kWh/yr Rs./yr
average load saving saving saving saving saving saving saving saving
(kW)
4 80 720 160 1440 264 2376 528 4752
7.5 150 1350 300 2700 495 4455 990 8910
11 220 1980 440 3960 725 6525 1450 13050
15 300 2700 600 5400 990 8910 1980 17820
22 440 3960 880 7920 1450 13050 2900 26100
30 600 5400 1200 10800 1950 17550 3960 35640
37 740 6660 1480 13320 2440 21960 4880 43920
55 1100 9900 2200 19800 3625 32625 7251 65259
75 1500 13500 300 2700 4950 44550 9900 89100
110 2200 19800 4400 39600 7260 65340 14520 130680
160 3200 28800 6400 57600 10550 94950 21100 189900

104
iv. Abuse and miss-use
Often compressed air availability is treated in much the same way we treated
water in the past, as an unlimited resource that costs us virtually nothing. One
typical disregard of the real value of compressed air is to use the system as a
drying aid for machinery or parts. It‘s like using a Mack truck to haul a box of
matches—a simple fan would usually do the same job for a fraction of the cost.
Here are some more examples
Possible inappropriate use Alternative

 Dusting, Clean-up, Drying, Process cooling

 Low pressure blowers, fans, brooms, nozzles
 Low pressure blowers and mixers
 Aspirating, Atomizing

v. Consider adding variable speed drives

In many cases, it is possible to fit existing compressed air systems with Variable
Speed Drives. With this modification, very high energy efficiency is possible
with savings of up to 50%.

vi. Consider Heat Recovery

Wasted heat need not be a lost resource. It is usually possible to recover waste
heat and use it elsewhere in a plant. For instance, the hot exhaust air from the air
compressor can be ducted into other spaces to provide heating in the winter, or
to heat water. This can achieve up to 80% energy savings by replacing fuels for
other heating purposes. Heat Recovery equipment adds approximately 10 % to
the air compressor plant costs.

vii. Installing New or Upgrading Plant

Whether you are building new facilities from scratch, or modifying existing
facilities, it is usually possible to design a large system so that it is modular, with
isolation points allowing parts of the system to be operated independently of the
rest. You might be able to site compressors in different areas instead of housing

105
 several in one shed. (This could be important in minimizing air temperatures at
the compressor intake—the higher this is, the less efficient the performance.)

viii. Choosing an Energy efficient Compressed Air System

This decision is controlled by the type of work you expect it to do.

Reciprocating compressors

Are by far the best choices in situations where operation is short-term or

Intermittent, and load is fluctuating For example, a tyre shops where demand
varies. They can be used alongside screw compressor systems to provide smaller
amounts of air that may be required on weekends or nights.

Screw compressors

Screw compressors are best used where you need a relatively constant ‗base
load‘ air supply. For example, a production line where operation is continual.
They are very efficient, but when idling, not under load, they control their output
by reducing their inlet volume. This means that efficiency drops dramatically
because the compressor motor is still running and using virtually the same
amount of electricity at all times, regardless of its output. This shortcoming can
be overcome to some degree by the use of variable output compressors such as
variable speed drives or variable output air ends.

ix. Select size to meet needs

Select the size of the compressor so that it runs as closely as possible to full load.
Choose suitably sized receivers to act as a buffer between output and demand.
Importantly, do not install an oversized compressor to meet anticipated future
demand. It is usually more economical and more efficient to install an
additional, appropriately sized compressor when needed later.

106
 x. Consider using multi-stage compressors
These provide additional efficiencies, for example, the air can be cooled between
the compression stages.

xi. Consider using variable output compressors

Variable output compressors can better match power with varying air demands.
By being able to vary the speed of the drive motor or the output of the air end
automatically, this kind of compressor will reduce part-load power consumption
and may result in considerable power savings.

xii. Optimize Air Velocity in the pipe work

In a distribution main air velocity not to exceed 6 m/s. In a branch line air
velocity not to exceed 10 m/s. A 50 % increase in the maximum recommended
velocities increases energy use by approximately 2%.

2.10.4 Energy Efficiency in Steam Boilers64

a. Energy Efficient Operations and Maintenance Strategies for Industrial

Boilers

Proper operations and maintenance (O&M) procedures must be followed to

ensure safe and efficient operations. It is often assumed that good O&M
provides no energy savings because it is simply ―what should be done.‖
Actually, without proper O&M energy consumption can increase dramatically—
as much as 10 to 20 percent as the system slowly gets out of adjustment. Thus,
savings from energy-efficient O&M strategies can be thought of as avoided
consumption.

64
Energy Efficient Operations and Maintenance Strategies for Boilers- Retrieved from
http://www.dem.uminho.pt/UCs/MEC/Energ_Industrial/ReservadoEnerg_Industrial/Textos/boileropeartio
n.pdf

107
 As long as boilers produce steam reliably and safety, there is tendency to ignore
them. At least 10% energy saving could be achieved by improvements in design
and operation of boilers and their distribution system. The majority of
improvements in technology involve better controls over combustion and heat
recovery from flue gases. These technologies are well proven throughout the
world. In view of the growing concern for environment technological
improvements should also focus on reduction in emission levels. Although
significant opportunities do exist for efficiency improvement in boilers, which
would themselves result in reduction of energy consumption, the extent to which
operational and equipment modifications would actually result in this improved
performance is determined by
 Type and condition of boiler and firing system.
 Combustion control methods.
 Fuel type.
 Heat recovery system.
The performance deficiencies can be heat transfer related, combustion related or
a result of unnecessary losses such as high auxiliary power consumption,
excessive blow down, steam leaks, defective insulation etc.

b. Boiler maintenance
Boiler maintenance refers to keeping the boiler itself in efficient working
condition. Boiler operation refers to adjustments and procedures that ensure the
boiler meets its loads efficiently and safely. Boiler maintenance must be
systematic. Applied properly, it minimizes energy Consumption and downtime
due to unanticipated failures. Responsibility should be assigned for performing
and keeping written records of daily, weekly, monthly and annual maintenance
tasks. Checklists should be used.

A list of specific energy-related Maintenance items follows.

108
 i. Boiler System Diagnostics and Inspection
Before analysing stack gas, negative-draft boilers should be checked for air
leakage using smoke-generating sticks, the flame of butane lighter or ultrasonic
equipment. Leaks need to be sealed so the quantity of air supplied for
combustion can be controlled; such control is essential if stack gas tests are to be
accurate. The boiler should also be checked for steam and water leaks.
Ultrasonic probes can be used to detect steam leaks in water-tube boilers.

ii. Maintain Clean Heat Transfer Surfaces - Fire Side

Although it is unlikely to be significant for gas boilers, soot can build up on the
Fire side of heat transfer surfaces, inhibiting heat transfer. It is estimated that
each 40°F rise in stack temperature cuts efficiency 1 percentage point.

iii. Maintain Clean Heat Transfer Surfaces - Water Side

Scale deposits on the waterside of boiler tubes present problems similar to those
described above. The relationship between scale thickness and efficiency losses
is similar to those for soot build up, although losses may be twice those for soot,
depending on the type of scale.

c. Boiler Operations
Boiler operational problems commonly fall into three major categories:

i. Air-to-fuel ratio
Efficient operation of any combustion equipment is highly dependent on a
proper air-to-fuel ratio. Incomplete combustion can arise from a gross shortage
of air or surplus of fuel or poor distribution of fuel, generally by accident
rather than from a continuous operational defect. It is usually obvious from the
Colour of smoke and must be correct immediately.

ii. Combustion Uniformity

Complete combustion at efficient excess air levels requires the fuel and air to be
uniformly mixed throughout the primary Combustion zone. In multi-burner gas

109
 boilers, non-uniform combustion can result if the fuel and air are not evenly
distributed. Just one misadjusted or malfunctioning burner spoils the boiler
efficiency effort.

iii. Blow down Management

Blow down is essential for maintaining low concentrations of dissolved solids in
the water (skimming blow down) or removing solids that have settled out of the
water (bottom blow down). Both practices result in unavoidable energy.

iv. Load Management

In many industrial facilities, loads vary with production schedules or seasons.
When multiple boilers serve many loads, it is important to manage them as
efficiently as possible. Individual boilers achieve maximum efficiency over a
specific firing range.

v. Optimum oil Temperature

In order to prepare oil for combustion and lower viscosity to suit burner
requirements, furnace oil is normally heated. This also ensures that the oil is
properly atomized at the burner tip. The heavy oils can be heated to 100-110c,
either by electricity or by steam.

vi. Reduction of boiler steam pressure

Steam is generated at pressure normally dictated by the highest pressure/
temperature requirement for a particular process. In same case, the process does
not operate all the time, and there are periods when the boiler pressure could be
reduced.

vii. Boiler tune-up

It is a cost effective method of achieving efficient operation and fuel saving.
Adjustment and maintenance of fuel burning equipment and combustion control
permits operation with the lowest practical excess air, thus reducing stack losses.

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 Boiler set-up for low excess O2 is accomplished through a series of test
conducted on boiler. During the test, the excess O2 is varied over a range of 1 to
2 % above the normal operating point, down to the point where the boiler just
starts to smoke, or the co emissions rise above 400 ppm. Either of these two
lower limits can be selected, based on the fuel fired in the boiler.

viii. Boiler replacement

The potential savings from replacing a boiler plant depend on the anticipated
change in overall efficiency. A change in a boiler plant can be financially
attractive if the existing plant is:
 Old and inefficient.
 Not capable of firing cheaper substitution fuel.
 Over or under-sized for present requirements.
 Not designed for idea for ideal loading conditions.

These reasons will be apparent from the detailed energy audit, and calculating
the change in efficiency can make an estimate of the saving:
Fuel saving =
(Existing fuel use) (Efficiency of new plant- efficiency of old plant)
(Efficiency of new plant)

No decision to change a plant should be taken based on the detailed energy audit
alone. When the result of the detailed energy audit indicates that it would be
financially attractive to replace a boiler plant, a feasibility study should be
conducted. The feasibility study should examine all implications of long-term
fuel availability and company growth plans. All financial and engineering
factors should be considered. Boiler plants traditionally have a useful life of well
over 25 years; hence, replacement must be carefully studies.

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2.10.5 Energy Efficient HVAC System65

Portland Energy Conservation Inc. (1999)66 found that building operation and
maintenance Programs specifically designed to enhance the operating efficiency of
HVAC and lighting systems decreased energy bills 5 to 20 percent in commercial
buildings, without significant capital investment.

Heating, ventilation and air conditioning (HVAC) constitutes up to 35 percent of energy

used in manufacturing facilities. This fact sheet is geared towards energy efficiency in
existing equipment and covers common opportunities for facilities to conserve energy
and cut costs. The fact sheet contains a checklist to assess existing conditions in order to
determine the opportunities available during an HVAC audit.

On a centrifugal chiller, if the chilled water temperature is raised by 2˚F to 3˚F, the
system efficiency can increase by as much as 3% to 5%. On a centrifugal chiller, if the
condenser water temperature is decreased by 2˚F to 3˚F, the system efficiency can
increase by as much as 2% to 3 %.( US Department of Energy, 2010)67

When the opportunity exists, energy conservation should be a factor in the original
equipment selection and system design. The best HVAC design considers the
interrelationship of building systems while addressing energy consumption, indoor air
quality, and environmental benefit.

HVAC stands for heating, ventilation and air conditioning and refers to the equipment,
distribution network and terminals used either collectively or individually to provide
fresh filtered air, heating, cooling and humidity control in a building.

65
Energy Efficiency in Industrial HVAC Systems, 2003, N.C. Department of Environment and Natural
Resources, USA. Retrieved from http://infohouse.p2ric.org/ref/26/25985.pdf
66
Portland Energy Conservation, 1999, Operation and Maintenance Assessments: A Best Practice for
Energy-Efficient Building Operations
67
Operations & Maintenance Best Practices - A Guide to Achieving OperationalEfficiency,2010,Federal
Energy Management Programme, US Department of Energy

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Air conditioning is treating air for temperature, cleanliness and humidity, and directing
its distribution to meet requirements of a conditioned space. Comfort air conditioning is
when the primary function of the system is to provide comfort to occupants of the
conditioned space. The term industrial air conditioning is used when the primary
function is other than comfort.

Ventilation is a process that either supplies or removes air from a space by natural or
mechanical means. All air that is exhausted from a building must be replaced by outside
air. Outside air must be brought to a certain temperature by makeup air units used
throughout the building.

a. Energy efficiency requirements

The American Society of Heating, Refrigerating and Air-Conditioning Engineers
Inc. (ASHRAE) writes standards and guidelines for energy efficiency. While
designing HVAC systems for energy efficiency, it is also good to take into
account the design for human comfort. Good working conditions increase
productivity and employee satisfaction. The HVAC design should incorporate:

A determination of indoor conditions and how energy use is affected;

The impact on equipment selection, ducting and register design; and
A determination whether certain conditions will be acceptable for comfort
criterion.

b. Conducting an HVAC Audit

The potential for energy conservation varies depending on the design of the
system, the method of operation, operating standards, maintenance of control
systems, monitoring of the system, and competence of the operators. General
opportunities for energy conservation are discussed below.

Please keep in mind that some of these efficiencies will need to be conducted by
an expert. Some of these efficiencies will be at no cost, while others will require
some investment. Generally, implementing a maintenance plan, installing

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 controls and upgrading equipment when possible are good ways to save on
energy costs.

c. Assess existing conditions

To conduct a HVAC audit you will first need basic HVAC information such as
type and number of units, hours of use, etc. to help you understand the current
energy use attributed to HVAC systems in your facility. This information will
help you understand how much you are currently spending and the potential
savings available from HVAC efficiencies.

d. Assess opportunities for increasing HVAC energy efficiency

Determine if the following opportunities exist for a given location. Each
checkbox represents an opportunity for energy savings.

1) Reduce HVAC system operation when building or space is unoccupied.

2) Reduce HVAC operating hours to reduce electrical, heating and cooling
requirements.
3) Eliminate HVAC usage in vestibules and unoccupied space.
4) Minimize direct cooling of unoccupied areas by turning off fan coil units and
unit heaters and by closing the vent or supply air diffuser.
5) Turn fans off.
6) Close outdoor air dampers.
7) Install system controls to reduce cooling/heating of unoccupied space.
8) Reduce HVAC operating hours.
9) Turn HVAC off earlier.
10) Install HVAC night-setback controls.
11) Shut HVAC off when not needed.
12) Adjust thermostat settings for change in seasons.
13) Adjust the housekeeping schedule to minimize HVAC use.
14) Schedule off-hour meetings in a location that does not require HVAC in the
entire facility.
15) Install separate controls for zones.

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 16) Install local heating/cooling equipment to serve seldom-used areas located far
from the centre of the HVAC system.
17) Install controls to vary hot water temperature based on outside air.
18) Use variable speed drives and direct digital controls on water circulation pumps
motors and controls.
19) Adjust areas that are too hot or too cold.
20) Adjust air duct registers.
21) Use operable windows for ventilation during mild weather.
22) Use window coverings such as blinds or awnings to cut down on heat loss and
to avoid heat gain.
23) Use light-coloured roofing material and exterior wall covering with high
reflectance to reflect heat.
24) Incorporate outside trees to create shade.
25) Install ceiling fans.
26) Create zones with separate controls.
27) Reduce unnecessary heating or cooling.
28) Set the thermostat higher in the cooling season and lower in the heating season.
29) Allow a fluctuation in temperature, usually in the range of 68° to 70°F for
heating and 78° to 80° for cooling.
30) Adjust heating and cooling controls when weather conditions permit or when
facilities are unoccupied.
31) Adjust air supply from the air-handling unit to match the required space
conditioning.
32) Eliminate reheating for humidity control (often air is cooled to dew point to
remove moisture, and then is reheated to desired temperature and humidity).

2.10.6 Water Management

Water scarcity is a growing worldwide problem; including the United States, Europe
and India. It is not an issue of physical availability, but of unbalanced power, poverty
and related inequalities.

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Water scarcity will become a much larger issue than it is today due to population
growth, economic growth, water crowding (i.e. increasing pressure on a locally finite,
erratically available and vulnerable resource), and lastly global climate change. Future
water use requirements will increase dramatically due to the current movement to use
biomass (i.e. corn, grains and other plant materials) as an energy source. Bio-energy, as
it is being called, is being projected to consume as much water as is currently used for
agricultural purposes. 68

Water stressed areas, as defined by the UN, occur when withdraws exceed 40% of the
river or aquifer. Currently over 1.4 billion people are affected today; including, those
using the Colorado and Rio Grande rivers in the United States as well as numerous
rivers and aquifers in China and India.

It is projected that fully two-thirds of the world‘s population will be affected by water
scarcity over the next few decades. Better management will go a long, long way
towards of solving our growing water scarcity problem.

Some of the suggested demand management options include installation of sensor

faucet in place of water taps. Sensor or automatic faucets have the advantage of shutting
off automatically after a hand wash therefore cutting down on water waste. Waterless
urinals is also is a better option to reduce daily water consumption. Urinals require lot
of water for flushing and odour elimination. To avoid water requirement for urinals,
waterless urinals are recommended. The absence of water flushing saves substantial
volumes of water while the easy-clean design and lack of mechanical component
significantly cuts Maintenance. Further, water recycling, reusing is a Mantra for water
conservation.

Education and awareness must be key components of any policy program as some of
the required demand driven options will require behavioural changes in how we relate
to water and use it.

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http://www.harvesth2o.com/water_scarcity.shtml

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