Wednesday, 21 January 2015

Energy Audit - What Next?

Energy Audit - What Next?
(Updates of 01st August 2016 - below)

International Energy Agency (IEA) estimates that Energy Conservation and Energy Efficiency can alone result in more than 60% of CO2 Abatement by 2020.

Energy Efficiency IEA Chart
CO2 Abatement IEA Chart

As can be seen above Energy Efficiency sits on top of all other initiatives for CO2 abatement and thereby controlling global warming. Interestingly the investment required to achieve 60% of CO2 abatement during the period 2010-2020 is 70% of the total investment required for all the initiatives during the period.

Energy Audit is the first step towards Energy Conservation in an Industrial plant or a Commercial facility. In India Energy Audit, although quite popular with Industrial plants, is yet to take off in a very big way. Many Companies have realized the potential of energy saving in their plant and have also carried out energy audit. However one must realize that Energy Audit is only the first step in the direction of energy efficiency and energy conservation. The recommendations made as part of the energy audit have to be implemented to achieve the energy saving targets.

The energy saving recommendations may require little or no investment and in some cases high investments as well. The investments are then taken up by the plant in a phase-wise manner, which result in delayed energy saving for the plant. In fact some of the recommendations may never be taken up by the plant. This renders the entire energy audit exercise futile.

In addition to the technical expertise required for Energy Audit the need of the hour is to have mutually beneficial business models such as ESCO and RESCO. 
Energy Audit - ESCO Approach

In case of ESCO the service provider (Energy Audit Company) invests in the energy saving projects identified in the plant or commercial facility (Target Company). The benefits of the savings achieved are then shared by the service provider and the plant.

The benefits of this approach to a plant :

  1. Energy Audit enables to assess the true potential of energy saving in the plant. Typically this can range from 5% to 12% of Specific Energy Consumption (SEC).
  2. The service provider (Energy Audit Company) has the responsibility to identify truly feasible projects after mutual discussions and an in-depth analysis.
  3. The responsibility of service provider does not end with submission of energy audit report.
  4. Financing for the identified energy saving projects would also be undertaken by the service provider and hence no investment to be done by the plant once the energy audit is completed.
  5. The plant would start saving from the first day of implementation of project without investing in the project.
Updates of 01st Aug 2016
In addition to above mentioned benefits it is also prudent to note that Energy Efficiency and Energy Conservation is an ongoing exercise. This means fresh influx of investments are required from time to time.

In most of the cases any Industrial plant or manufacturing unit wishes to focus it's major resources - money, time and work-force - on it's core activities. For example a Steel plant would want to focus it's entire work force on quality, timely and cost-efficient way of manufacturing Steel. In such a 

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scenario a holistic approach by a dedicated Energy Saving company could reap results and benefits in the short to long term. While the Energy Saving Company resources work independently (under the leadership guidance of a Energy Manager) there are various improvement suggested over a period of time (as against a one-time Energy Audit activity) :
  1. Brainstorming sessions : Prepare a list of all identifiable Energy Saving opportunities - including the ones suggested by in-house team. Evaluate all the opportunities and come up with a final list of practically possible Energy Saving measures. This is supported by data.
  2. Expert Consultancy under ESCO : Visit by a process expert under ESCO model wherein the said Company does not pay for consultancy charges but the charges for consultancy are linked to actual energy saving achieved.
  3. Contemporary Solutions : As the approach is cyclical and ongoing in nature it ensures that the most contemporary solutions are being suggested and implemented in the plant.
  4. 360 Degree view : All the critical touch-points including all equipment, machinery, logistics (if applicable) from gate-to-gate are covered and explored for Energy Saving opportunities.
Many plants wish to go for an Express Energy Audit after a detailed Energy Audit for 3rd party verification of energy saving recommendations and to continue the momentum of energy saving within the plant. This could be a good next step after a detailed or Comprehensive Energy Audit.

At Enerco Energy Solutions LLP we partner with your Company for Technical Consultancy but also Financial Consultancy as well as fund Energy Saving Projects and Solar Energy Projects. There are various financing models including (but not limited to) -
  1. 100% investment in Energy Saving / Solar Power under ESCO / RESCO model.
  2. Low-cost Debt financing of Energy-related projects.
  3. Performance-linked financing of Energy-related projects etc.

If you wish to know more about how Enerco Energy Solutions LLP could partner with you in bringing down your energy costs - under ESCO and RESCO (or other financing) models - please write into us on info@econserve.in . To know more about our Energy Audit related services please visit our website section dedicated on the same - Energy Saving Audit.