Conduct an energy efficiency assessment

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Conducting an energy efficiency assessment helps business owners and management understand how and where energy is used, where to improve usage and equipment, and how to reduce costs.

Energy management practices should be undertaken at a level appropriate to the size and resources of the business. This is also true for energy efficiency assessments. Organisations need to factor in their size, energy expenditure, and resources when planning an energy-efficiency assessment.

The amount and cost of energy use for the organisation can be a guide to the level of resources dedicated to the assessment. A scoping assessment can identify potential savings and secure resources for a more detailed assessment.

Best practice energy efficiency assessments have several key components in common.

Start with a strong plan

The assessment project plan should detail the objectives and scope of the assessment.

This includes:

activities to be undertaken
timing
key personnel
financial and technical resources required
potential risks and risk-management strategies
expected deliverables
post-assessment reporting
timelines for tracking, review and future assessments.

Your organisation can leverage a well-planned assessment by using methodologies that can transfer findings to similar sites, technologies or processes.

Engage the right people

You can increase the value of an energy efficiency assessment by proactively engaging with stakeholders throughout the organisation. The necessary skill sets may exist within parts of an organisation, reinforcing the need to use both a team-based and company-wide approach.

Ideas for energy efficiency improvements can be found from 'shop floor' operators to corporate office staff. Key stakeholders include:

senior management
personnel who influence capital and operating budgets
staff with a direct role in implementing improvements.

Assessments should include those with energy and process expertise and people external to the process who can provide a different perspective. A ’cross-silo’ approach often leads to the most innovative solutions.

Decide when to use external resources

Depending on business size and resources, it may be worth creating full-time positions dedicated to energy efficiency or deploying staff to specific assessment tasks.

For some organisations it may be necessary to source external technical expertise. Energy services companies can support aspects of an assessment including data collection, opportunity identification, analysis, facilitation and reporting.

Preparing a ‘scope of work’ helps clarify expectations and input required of the contractor. The scope of work should ensure your business can compare quotes and services on offer. It should also outline how analyses and recommendations should be presented in the business case. This includes assumptions made when estimating costs and savings.

Develop an understanding of your energy use

Developing a good understanding of your energy use and connecting energy with core business activities can make the relationship between energy and productivity a lot clearer.

Collect data

Gathering new data typically begins with high-level data that is readily available. Invoice data can show types of energy and the sites and processes where it is used, with each shown as a proportion of total energy use. This information is often available in financial or greenhouse gas accounting systems. It can also be sourced from energy retailers who can usually provide more detailed metering data on request.

Several technologies and techniques can be used to measure energy use within a facility or process. You can hire temporary meters on a short-term basis or install permanent meters where appropriate and cost-effective.

Ensure that the measurement frequency and timeframe capture a representative operational period. Intraday, daily, monthly or seasonal variations may need to be measured.

The data set can then be augmented using other sources, such as automated processes like supervisory control and data acquisition (SCADA) or programmable logic controller (PLC) systems. Discussions with facility or process managers, accounting personnel, environmental reporting staff and other site personnel can uncover data sources to consolidate into the energy analysis.

Collect detailed data on other variables such as:

production throughput
ambient temperature
process parameters
operating modes or profiles.

Combining energy data with other business data provides insight into the effects of one factor on the other. For example, the energy use per unit of production may differ at different production volumes. Changes in environmental conditions may impact energy-use patterns.

Other business contextual information such as organisational changes, growth projects, and planned shutdowns can also have a big impact on energy use.

Analyse results

High-level analysis can enable you to better understand risks and opportunities for improvement. An initial high-level analysis of available data can also reveal data gaps for key energy-using areas or processes which should be prioritised for more detailed analysis.

However, high-level information often represents the aggregated energy spend for an entire facility or business unit. A deeper understanding of energy use is required to derive full value from the assessment process.

You can analyse energy data to calculate an energy baseline to establish the relationship between energy use and business activity. This baseline relates energy expenditure to business output over a specific timeframe.

The correct selection and use of analysis techniques is critical to identifying and evaluating opportunities.

Graphs of energy use over time (seasonal, monthly, weekly, daily, hourly)

Understanding the reasons behind changes in energy use and how they relate to business activities can often provide new insights.

X-Y plots of energy use versus production or other parameters

This technique can reveal relationships between energy use and production. It can also highlight production thresholds where there is a dramatic change in energy use.

Benchmarking

Using energy performance indicators can show if a process, facility or business unit is operating at its optimum performance level. Benchmarking can be used to compare actual energy use with theoretical (calculated or simulated) energy use. You can also compare plants, sites, processes, shifts, operators, or other aspects.

Pinch analysis

A design method based on graphical analysis that can optimise the design of complex thermal systems to maximise heat recovery. For processes or plants with complex flows of hot and cold streams, pinch analysis can identify opportunities for better heating and cooling by placing heat exchangers at the best locations. This method requires engineering expertise.

First principles (theoretical calculations)

A theoretical calculation of estimated energy use can be used to assess systems which can’t be easily measured. Theoretical models are less costly to interrogate than changing the actual system, allowing different scenarios to be explored through manipulating operating modes, variables and parameters.

Energy-mass balance

Balancing energy and materials flows within a site, facility, equipment or machinery can provide a deep understanding of energy and material use. This modelling can indicate where energy is exiting the process through heat or steam losses and identify efficiency opportunities.

This list of analysis techniques is not exhaustive. There are other engineering, logistical, and experimental methods to develop a better understanding of energy use.

The Energy Efficiency Tools Review report provides a list of software tools used internationally for analysing energy use in the manufacturing, oil, gas, and power generation sectors. These software tools help users find energy savings in their business operations. The Australian Government commissioned the report in collaboration with state and territory governments.

Identify opportunities

Opportunity identification ideally uses data analysis to identify energy saving opportunities. Providing the results of this analysis to a broad range of personnel can often result in further ideas and insights.

Workshops are a common way to gather relevant experts to discuss data and information gathered during the assessment and brainstorm ideas. Further collaboration can be achieved through:

focus groups
site visits
staff suggestions
consultation with suppliers or external experts.

All identified opportunities should be documented in a ‘register of opportunities’ or similar document. This can become an enduring record to track ideas and outcomes and revisit potential opportunities if operating conditions or energy prices change.

The detailed investigation phase determines the feasibility of each opportunity and provides decision-makers with information to make a final investment decision. Further analysis is often required before a decision is made on what to implement. This may require investment in measuring equipment or collecting more data.

A ‘whole of business’ approach that extends beyond cost and energy impacts will improve the understanding of the overall costs and benefits of opportunities.

Factors which may be considered are:

shutdowns or downtime
changes in production output
changes in other process inputs, such as water or raw materials
changes in maintenance costs
hardware changes that make spare parts inventories obsolete
business plans or forecasts that affect the lifetime or throughput of the process being affected
costs of training or new skills
occupational, health and safety impacts
environmental impacts
public relations and waste disposal costs
project risks.

Business decisions and implementation

Once you have the results of an energy efficiency assessment, decide which areas you will prioritise and present to decision-makers. The payback period or cost savings of each improvement is a good starting point.

The business case should succinctly outline the business costs and benefits of each opportunity and allow decision-makers to make an informed business decision.

The level of information varies according to the size and scope of each project. It is important that you understand your business’ own internal investment policy and criteria and ensure the business case is consistent with capital expenditure approval processes.

Track and communicate

Once improvements have been implemented, make sure the changes are tracked and reported. This can:

provide further insights into energy use
track any issues or unintended consequences
build internal knowledge and expertise in energy management.

Communicating the outcomes to senior managers and the rest of the organisation will help build valuable support for future energy management initiatives.

Energy Efficiency Opportunities Assessment Handbook

Energy Efficiency Tools Review

Energy Savings Measurement Guide

Energy Performance Contracting Energy Efficiency Council

Australian standard for energy auditing AS/NZS 3598 SAI Global