Control Energy Costs

Conduct an energy audit and repeat it periodically.

By Ven V. Venkatesan, Energy Columnist

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1401 fix energy costs buttonControlling energy cost usually involves lowering the energy use or using lower-cost energy without negatively impacting operations, processes, safety and occupants' comfort. Because plants face a more-competitive market environment due to quick technological obsolescence, energy cost control is all the more important. Understanding the energy cost structure and identifying and monitoring key energy performance indicators should be the first step for any plant's energy engineer or energy manager. To reduce energy costs and sustain the improvements achieved, it's necessary to have a systematic approach that's reviewed periodically. The first step to this approach is generally an energy audit. Depending upon the final deliverable, an energy audit can have multiple scope levels. In this column we'll discuss the applicable deliverable levels of an energy audit.

To sustain lower energy costs and remain competitive, energy-control efforts require continuous monitoring.


Energy audits usually consist of two stages: a walk-through energy audit and a comprehensive review. The main goal of each is to review a plant's energy use; a report summarizes the audit results and compares utility use to that of "Best in Class" plants with similar processes to prioritize strategies that can reduce the overall cost of utilities.

A quick walk-through energy audit is typically required first. Even though it incurs some cost, it's better to conduct this audit with external energy experts as they have a single objective: identifying means to reduce the plant's utility costs. Some of the external expert's suggestions might even challenge routine practices and plant personnel's thought process. Such opportunities can be investigated further through the next step — a comprehensive energy audit. In most cases, savings achieved by addressing some utility leaks and drains identified during the walk-through audit can pay for its cost.

A comprehensive energy audit expands the preliminary audit with more plant data and analysis. This audit should consider at least 12 months of plant operating data, utility bills and processing throughputs at major equipment levels in the plant. Current data relevant to energy use and losses would be tracked extensively from existing instruments or by measuring with test instruments to carry out the detailed analysis. A comprehensive energy audit identifies and prioritizes appropriate energy and utility cost-savings measures along with the preliminary investment estimate for each recommended measure.   

One added deliverable in any energy audit is providing a return on investment (ROI) for each of its recommended actions. It's common that some energy savings can be realized just by changing operational habits, which require little or no investment and could bring immediate results. However, most recommendations, and the energy audit itself, incur financial costs; hence, management must justify any decision. Therefore, the goal of an energy audit is to identify energy savings opportunities that offer attractive payback periods.  

The types and magnitudes of energy-saving opportunities vary widely among process plants. Typically, plants with older and larger equipment realize greater savings and better ROI (or shorter payback period). Newer plants with proactive operations and maintenance programs that use predictive and preventive maintenance techniques generally offer fewer energy savings opportunities with smaller ROIs. However, to sustain the lower energy costs and compete in the ever-challenging market, their energy-control efforts must be pursued continuously.

Utility cost reductions also have other spinoff financial benefits such as higher profits due to lower operating cost, improved cash flow, lower bank interests and a safer cushion to manage energy price surges.

Plants with poor housekeeping consume comparatively more utilities and pose more safety risks to people and equipment. Deferred maintenance is cited as the prime reason for housekeeping lapses. Hence, energy engineers and managers should include safety and reduced maintenance spinoff benefits to justify energy savings projects.

In addition to these benefits, continuous monitoring of energy-control efforts can help reduce emissions and improve morale.

One last thing to note: the validity of recommendations from an energy audit may change depending on changes in the plant's processing levels, market prices of purchased energy and technological developments. This is another reason to perform periodic energy audits to sustain results.  



ven-head-shot.jpgVEN V. VENKATESAN is Chemical Processing's Energy Columnist. You can e-mail him at vvenkatesan@putman.net

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