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1 Energy Conservation, Audit and Accounting In Unit 2, you have studied about energy accounting, which is an integral part of energy management and conservation. You have learnt that energy accounting helps us measure and account for energy inputs, energy consumption and energy losses in a power distribution system right from generating stations to the consumer end. Energy audit goes hand-in-hand with energy accounting. Actually, good energy management begins with an energy audit. Energy audit is one of the most important tools for energy conservation and for achieving energy efficiency. It provides the means to identify the areas of leakage, wastage or inefficient use. It helps in identifying measures suitable for reduction of T&D losses. Thus, it helps in effective management of energy consumption and can lead to significant cost and energy savings as well as increased comfort, lower maintenance costs, and extended equipment life. Therefore, in this unit, we discuss the concept and process of energy audit in relation to the power distribution sector. We would like to sensitise you to the importance of energy audit so that you can appreciate its need in a power utility. In the next unit, you will learn about demand-side management, which is an effective way of bringing about energy conservation. You may be familiar with financial audit. You may know that it is an examination of accounts dealing with funds or property by officers appointed for the purpose and hence, a calling to account, an examination into one s action. The ISO 9001:2000 defines audit as a systematic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled. Here independent and evidence are not very relevant as an auditor can be independent or inhouse. The concept of energy audit is similar to that of the financial audit. An energy audit is an in-depth study of a facility to 68 determine how and where energy is being used or converted from one form to another, and identify opportunities to reduce energy usage and prevent energy losses. It is the technique to establish the current status of energy efficiency of a system.

2 Energy auditing in a power utility involves Energy Auditing identifying energy losses and quantifying them; segregating the losses into technical and commercial losses; estimating the energy conservation potential of a system; and proposing economically viable and attractive solutions. The ultimate end result of such an exercise is to improve system performance, increase its efficiency and introduce design changes leading to renovation, modernisation and upgrading the existing systems. Energy audit helps to evaluate the economics, and technical practicability of implementing the measures for energy loss and usage reductions. Thus, it helps the utility to formulate prioritized recommendations for implementing process improvements to save energy. Definition of Energy Audit under the Energy Conservation Act, 2001 As per the Energy Conservation Act, 2001, an energy audit is defined as the verification, monitoring and analysis of use of energy including submission of a technical report containing recommendations for improving energy efficiency with cost benefit analysis and an action plan to reduce energy consumption. Energy accounting gives us an overall picture of energy availability and its use. Energy audit helps us in analyzing the data in a systematic and meaningful manner to evolve appropriate measures to introduce checks and balances in the system for reducing leakages and losses; and achieve technical performance Aims of Energy Audit In any industry, the three top operating expenses are often found to be energy, labour and materials. Amongst the three, energy emerges as the top ranking area for cost reduction. Energy audit can help us understand more about the ways energy and fuel are used in the industry, and help in identifying the areas where waste can occur and where scope for improvement exists. Energy audit is carried out with the following aims: a) review and upgrading of procedure for energy accounting; b) review of technical efficiency of system elements in sub-transmission and distribution (ST&D) system; c) analysis of the techniques for measuring the energy received, energy billed and the corresponding revenue collection; d) review of performance of equipment, meters, distribution transformers, etc.; e) segregation of technical and non-technical losses; and 69

3 Energy Conservation, Audit and Accounting f) establishment of norms for checking the consumption of various categories of consumers and overall energy balance in the circles. In general, energy audit facilitates the translation of ideas about energy conservation into reality, by lending technically feasible solutions with economic and other organisational considerations within a specified time frame. The primary objective of energy audit is to determine ways of reducing energy consumption per unit of product output or to lower operating costs. For a distribution utility, energy is a commodity and its monitoring is essential. Energy audit for a distribution utility ensures that input units into an area are recorded; ensures that the corresponding output units are recorded; identifies areas of deficiency (under recording and/or theft) and its correction; enables accurate calculation of systemic losses (both technical and commercial); Energy audit in a power utility provides a benchmark or reference point for managing energy in the utility and the basis for planning a more effective use of energy in the utility. Proper energy accounting and auditing would facilitate in the creation of a data base to act as input for the following improvements in the distribution system: HOW CAN YOUR UTILITY BENEFIT FROM AN ENERGY AUDIT? load management; details of power factor, active and reactive power flows and suitable location for reactive power injection in the system; assessment of diversity in the system; optimum utilisation of equipment and services; improved voltage profile in the system; details of category-wise consumption of loads and proper forecast of demand; and better system augmentation and expansion planning.! Explain the concept of energy audit. What is its purpose? 70

4 3.2.2 Types of Energy Audit Energy Auditing The nature of energy audit to be performed depends on: the function and type of industry; the depth to which final audit is needed; and the potential and magnitude of cost reduction desired. There are several types of energy audits. These are listed below in order of increasing scope and, therefore, cost: Preliminary Audit, Utility Cost Analysis, Standard Energy Audit, and Detailed Energy Audit. ion You may like to study these types of energy audit in some detail. Preliminary Energy Audit This is the simplest and quickest type of audit. It focuses on evaluating the energy usage pattern and generates baseline data on the operational practices in vogue. It is a relatively quick exercise to: establish energy consumption in the organization; estimate the scope for energy savings; identify the most likely (and the easiest) areas for attention; identify immediate (especially no-/low-cost) improvements/ savings; set a reference point ; and identify areas for more detailed study/measurement. Preliminary energy audit uses existing or easily obtainable data. It usually involves a one day site visit to collect an overall facility profile and information on major energy using systems and equipment. It includes minimal interviews with site operating personnel, a brief review of facility bills and other data. A walk-through of the facility is also done to become familiar with the operation and to identify any glaring areas of inefficiency. Typically, only major problem areas are uncovered during this type of audit. Corrective measures are briefly described, and quick estimates of implementation cost, potential savings, and simple payback periods are provided. This level of detail is adequate to prioritize energy efficiency projects and determine the need for a more detailed audit. Recommendations resulting from a preliminary audit include low to no-cost actions that can provide immediate energy use and/or operating savings. Utility Cost Analysis The purpose of this type of audit is to analyze the operating costs of the facility, and determine the potential for energy efficiency retrofits. The auditor may also perform a preliminary audit to familiarize himself/herself with the facility. Utility data and the facility s utility bills are analyzed for the past 71

5 Energy Conservation, Audit and Accounting several years to identify patterns of energy use, peak demand, and weather effects. This information is used to identify energy savings potential, calculate the energy utilization index, and determine the incremental cost of each unit of energy. Standard Energy Audit This audit provides a comprehensive analysis of the energy systems of a facility. It includes both a preliminary audit and utility cost analysis. In addition, the standard energy audit includes the establishment of baseline energy use, evaluation of energy measures in terms of energy and cost savings and cost effectiveness. Off-site, the auditor establishes the utility s operational characteristics through drawings and discussions with utility managers. Standards and codes are reviewed and building and equipment use schedules are established. On-site, an inventory is taken of all the energy consuming equipment nameplate ratings of energy consumption. Metering equipment is installed to verify the energy consumption of the equipment. Based on the drawings, site survey, and utility analysis, the auditor creates a baseline energy model. Potential energy savings measures are then evaluated for their efficiency and payback. Detailed Energy Audit The detailed audit, also called a maxi audit, site-energy audit or complete site energy audit, expands on the preliminary audit. It is carried out by collecting more detailed information about the operation and performing a more detailed evaluation of energy conservation measures. It follows essentially the same steps as the standard audit; however, it is broader in scope and usually takes more time. Computer simulation tools are typically employed, and more detailed metering of consumption is undertaken. The economic analysis involves an integrated systems approach which accounts for interactions in implementing multiple retrofit measures, such as lighting and HVAC. The purpose of a detailed audit is to identify specific recommendations and make suggestions for energy savings. This type of audit offers the most accurate estimate of energy savings and costs. It accounts for the energy use of all major equipment and operations, and includes detailed cost saving calculations and project cost. It can be used to formulate action plans for the implementation of these recommendations based on the investment required, payback period, cost benefit ratio, etc. Utility bills are collected for a period of months to allow the auditor to evaluate the facility s energy demand to rate structures, and energy usage profiles. The additional metering of specific energy consuming systems is often performed to supplement utility data. In-depth interviews with facility operating personnel are conducted to provide a better understanding of major energy consuming systems as well as to gain an insight into the variations in consumption and demand. 72

6 This type of audit helps in identifying all energy conservation measures appropriate for the facility. A detailed financial analysis is performed for each measure based on detailed implementation cost estimates, site-specific operating cost savings, and the customer s investment criteria. Sufficient detail is provided to justify project implementation. Energy Auditing So far, you have studied about the concept of energy audit, its aims and the types of energy audit. You may now like to know as to how an energy audit is conducted in a power distribution utility. This is what we discuss in the next section. But before that, we would like you to check your own understanding of the concepts you have studied so far. $%&'! Distinguish between a preliminary and a detailed energy audit for a power utility. You may like to present your answer in the form of a table. " # The various steps in the methodology for conducting a detailed energy audit for an industry may be outlined as follows: 1. Gathering and collating information in a specially designed, Energy Systems Questionnaire format, for the industry under study. (A format of the questionnaire is given in an Appendix to this unit.) 2. Inter- and intra-industry comparison of the collected data. 3. Assessment of present efficiency index for energy consumption in the industry/process. 4. In-depth study of plant operations, equipment and systems for a general review of the energy systems to assess the operational efficiency and potential for economising. 5. Evaluation of the detailed recommendations for energy saving/conservation, 6. Formulation of detailed action plans/strategies in consultation with plant management for implementation of the identified energy saving measures. 7. Training operating personnel in the specifics of energy conservation to enable them to implement the recommendations and also to monitor the progress on a periodic basis. 73

7 Energy Conservation, Audit and Accounting Let us now study how this methodology can be applied to the power distribution systems. You have studied in Units 1 and 2 that in the process of supplying electricity to consumers, energy losses occur on account of technical and commercial reasons. The technical losses are due to energy dissipation in the conductors and the equipment used for transmission and distribution of power. Commercial losses are caused due to pilferage of energy, defective meters, meter reading errors and energy not accounted for (Table 3.1). Table 3.1: Energy Losses in the Power Distribution System Technical Losses Commercial Losses 11 kv line losses Theft by direct tapping Distribution transformer losses (iron and copper losses) LT line losses Losses due to loose jump connections Short circuit and earth fault losses Losses in service mains and energy meters Theft by tampering meters, CTs and PTs Non-performing meters Under-performing meters Meters not read Mistakes in billing, etc. In an energy audit of a power distribution system, the energy losses are to be computed for each element of the network on the basis of actual energy sent out and actual consumption as recorded by the meters installed on both sides of the element (you may like to refer to Sec of Unit 2). It may not be possible to conduct energy audit for the entire power system of a utility in one go. This could be due to financial, organizational and logistical constraints. Hence it may have to be conducted in stages. A compact area of the power system would have to be identified and energy audit studies taken up. We now describe briefly the procedure to determine technical and commercial losses for an 11 kv feeder. Procedure to Determine Technical Losses on the 11 kv Feeder Technical losses on the 11 kv feeder are assessed by conducting load flow analysis of the individual 11 kv feeder including distribution transformer and LT distribution losses. We consider the steady state model to find technical losses and take the loads to be of constant impedance. 1. Assessing Load Factor (LF) and Loss Load Factor (LLF) 74 a) Copper losses of all transformers = Copper loss of each transformer capacity wise in kwh x Numbers of transformers capacity wise in the feeder

8 b) Energy input to the transformer LF = (Peak load of the transforme r during the month number of hours the transforme r is in service during the month) Energy Auditing c) LLF = 0.3 (LF) (LF) 2 d) (Energy sent out on the 11kV feeder from SS Energy losses in the 11kV feeder) Capacity of the transformer Energy input to the transformer = Total transformer capacities in the feeder 2. Distribution Transformer Losses a) No-load losses, i.e., iron losses: No-load losses in kwh of one distribution transformer = No load loss of transformer in kw x number of hours the transformer was in service during the month b) Load losses, i.e., copper losses: Copper losses in kwh = Copper loss of each transformer capacity wise in kw x (Actual load / Full load) 2 x number of hours the transformer capacity wise was in service during the month x LLF 3. Calculation of LT Line and Network Losses a) The losses of LT network of each capacity transformer are computed by averaging the losses of the LT network of all similar capacity transformers. b) The computed average losses of LT network radiating from each capacity transformer are extrapolated for assessing the total energy losses of LT network on the feeder kv Feeder Loss The monthly energy losses in the feeder should be computed by extrapolating the daily energy loss proportional to the energy sent out in the feeder, for all feeders for all the months in the audit period. 5. Energy losses in loose jump connections, short circuit and earth faults on the lines, service mains and energy meters are assumed to be: a) 1% of the total energy sent out through the 11 kv line from the substation, for the 11 kv lines of 20 km and more, and b) 0.5% of the total energy sent out through the 11 kv line from the substation, for the 11 kv lines of less than 20 km. 75

9 Energy Conservation, Audit and Accounting The total technical loss in the 11 kv feeder is the sum of the various losses described above. This is equal to the sum of kv line losses, 2. Distribution transformer (no load and load) losses, 3. LT network losses, and 4. Energy losses in loose jump connections, service mains and energy meters. Energy losses in the feeder = Energy input to the 11 kv feeder Energy sales Determining Commercial Losses The commercial losses are assessed by deducting technical losses from the total losses of the feeder, i.e., the difference between energy sent out and the energy sold. Thus, Commercial loss in the feeder = Energy loss Technical loss The following activities are undertaken to record these losses: The meter reading schedules of meter readers are revised and made coterminous with distribution transformers. On that day, the distribution transformer meter is also read and comparison is made between distribution transformer meter reading and sum total of consumption recorded in all other consumer meters coming under that distribution transformer. The difference is noted (see Fig.3.1). If the losses are found to be high, action is initiated to trace the installation causing losses. It is very difficult to get a very accurate picture of these losses due to the following reasons: the energy meters provided on 11 kv feeders are of class 1 / class 0.5 accuracy, whereas at consumer installations the meters are of Class 2 accuracy; all the energy consumed is not recorded due to illegal tapping, theft, pilferage etc.; the sending end readings are taken on a particular day whereas the readings for consumers are taken in a staggered manner; the meter readings of some consumers are not taken due to locked premises/ defective meters; meters are not reading at light load; 76 meters are not recording within prescribed accuracy limits; and

10 assessment of consumption in respect of un-metered consumers is missing. Fig.1: ENERGY ACCOUNTING SUBSTATION Sub Station ENERGY BALANCE Energy Balance MU 5 MU 5 MU Sub Station Balance Input = = 15 MU Output = Loss = 14 MU = 1 MU = 6.6% Energy Auditing 2 MU 0.6 MU DT 1 MU DT 0.2 MU 6 MU 5 MU 3 MU Feeder 1 Feeder 2 Feeder 3 DT 1MU 3 DT METER Balance Input 1.2 MU = 1 MU 1+N = 0.97 MU 1 N Loss = 0.03 MU = 3.0 % Feeder 1 Balance Input = 6 MU HT consumers = = 3.2 MU DTs = = 1.8 MU Output = = 5 MU Loss = 1 MU = 16.66% Fig. 3.1: Determining Technical Losses Proper and accurate meters, meter reading, meter testing and calibration, billing and collection systems are essential for effective and accurate energy accounting and audit. The meters for energy accounting and audit are termed as system meters which basically are meters at S/S, outgoing feeders, distribution transformers, etc. The role of meters for energy accounting and audit, i.e., system meters is to arrive at operating and performance parameters, energy accounting and energy audit. System meters are generally not used for measuring energy for commercial purposes, and hence need not cater to any tariff structure. Conducting an effective energy audit will be possible only through a perfect mechanism where the required facilities are available. WHAT STEPS CAN YOUR UTILITY TAKE TO CARRY OUT AN ENERGY AUDIT? CONDITIONS FOR PERFECT ENERGY AUDIT All the consumer installations are metered. All the meters are read simultaneously. Electronic trivector meters are provided on secondary side of all the distribution transformers. The same accuracy class of energy meters are provided both for measuring energy input to system and energy sales. 77

11 Energy Conservation, Audit and Accounting You may like to pause here and consolidate the ideas presented so far.!$&* Prepare an estimate of the technical losses for a typical 11 kv feeder in your power utility. What are the problems encountered in making these estimates? What measures need to be taken to solve them? Audits will usually culminate in an energy audit report that must be easily readable and digestible by both technical and non-technical audiences. We now briefly describe what the energy audit report should contain. ( #)" The exact format of an audit report depends on the specific objectives of the audit and on the nature of the plant under audit. There is no particular standard format for audit reports, but it is important that the report be clear and concise rather than being written in a rigid predefined format. It should include charts and graphs to display information graphically whenever possible. All assumptions should be clearly stated and explained. Recommendations must be as clear as possible and include quantitative detail. Per A typical report should contain the following elements: Preface, Executive Summary, Background and Plant Description, Findings and Recommendations. We now briefly describe each element. Preface This should be in the form of a short note indicating when the audit was carried out. It should acknowledge the assistance of personnel at the plant giving the names of those who participated in the audit and supported it. Executive Summary The executive summary should contain the following information: 78 Major Points Requiring Management s Attention: It should include all the major points made in the full report but should be kept as short as reasonably possible giving recommendations. For the Chief Executive: It should be aimed at the plant manager, the enterprise president, or chief executive, who will be involved in making the decision on investments. A List of Recommended Measures: These should be justified in technical and financial terms. The Expected Savings and Costs as well as the estimated paybacks or rates of return. A Recommended Action Plan as well as guidance on implementation of measures.

12 Background and Plant Description Energy Auditing This section should contain General Plant details and description (an introduction with typical production data); Process description; and Major energy supply systems, and energy uses. This section indicates total plant consumption and the major users of each energy form. Findings This section is essentially descriptive in nature and should include discussions on the plant performance that was observed. Recommendations Recommendations may be made in various areas such as the following: Energy utilization; Measures requiring further analysis; Separate project summary; and Action plan. The table of contents of a typical energy audit report is shown below. DETAILED ENERGY AUDIT REPORT i. ACKNOWLEDGEMENT ii. EXECUTIVE SUMMARY Table of Contents Energy Audit options at a glance and recommendations. 1. Introduction about the Plant 2. Production Process Description 3. Utility System Description 4. Detailed Process Flow Diagram, and Energy and Material Balance 5. Energy Efficiency in Utility and Process Systems 6. Energy Conservation Options and Recommendations ANNEXURES A1 List of Energy Audit Worksheets A2 List of Instruments A3 Technical details 79

13 Energy Conservation, Audit and Accounting The worksheets given in Tables 3.2 and 3.3 can be used as guidance for energy audit assessment and reporting. Table 3.2: Summary of Energy Saving Recommendations S. Energy Saving Annual Annual Capital Simple No. Recommendations Energy Savings Investment Payback (Fuel and (Rs. Lakhs) (Rs. Lakhs) Period Electricity) Savings (kwh / MT or kl / MT) Total Table 3.3: Types and Priority of Energy Saving Measures Type of Energy Saving Annual Electricity / Annual Priority Options Fuel Savings (kwh / Savings MT or kl / MT) (Rs. Lakhs) A No investment (Immediate) Operational Improvement Housekeeping B Low investment (Short to Medium Term) Controls Equipment Modification Process change C High investment (Long Term) Energy Efficient Devices Product Modification Technology Change 80

14 On the basis of the energy audit, certain actions can be recommended to reduce losses. We briefly outline them here. Energy Auditing Actions Recommended for Reducing Technical Losses Reconfiguration; Reconductoring; Employing Shunt Capacitors; Conversion from Single Circuit to Double Circuit; Setting up of more Substations; Changeover from Low Voltage Distribution System (LVDS) to High Voltage Distribution System (HVDS). Actions Recommended for Reducing Commercial Losses Changeover to static meters with tamper proof data and remote metering facility; Replacing all burnt, stuck up, non-performing and underperforming meters; Calibrating the existing meters; Flying squads and Special task force for detection of pilferage of energy; AMR for online energy recording. You will study this aspect in detail in Block 4 of the course BEE-001. The adoption of proper energy audit would ultimately facilitate increased revenue realisation for the energy supplied to the consumers, identification of areas and causes of high energy losses and cutting down on its own expenses on account of the operational inefficiencies. It also helps the utility in bringing accountability and efficiency in its working. This would enable improving the financial health of the utility and would contribute substantially towards overall development of the power sector and improving financial health of the utilities. Let us now sum up what you have learnt in this unit. +,, Energy audit is one of the most important tools for energy conservation and for achieving energy efficiency. An energy audit is an in-depth study of a facility to determine how and where energy is being used or converted from one form to another, and identify opportunities to reduce energy usage and prevent energy losses. It is the technique to establish the current status of energy efficiency of a system. The aims of energy audit are to review and upgrade the procedure for energy accounting, review the technical efficiency of system elements in sub-transmission and distribution (ST&D) system, analyze the techniques for measuring the energy received, energy billed and the corresponding revenue collection, review the performance of equipment, meters, distribution transformers, etc., segregation of technical and non-technical 81

15 Energy Conservation, Audit and Accounting losses, establishment of norms for checking the consumption of various categories of consumers and overall energy balance in the circles. The type of energy audit to be performed depends on the function and type of industry, depth to which final audit is needed, and the potential and magnitude of cost reduction desired. Energy audit can be classified into the following types: Preliminary audit, utility cost analysis, standard energy audit and detailed audit. In an energy audit of a power distribution system, the energy losses are to be computed for each element of the network on the basis of actual energy sent out and actual consumption as recorded by the meters installed on both sides of the element. The total technical losses are given by the sum of 11 kv line losses, distribution transformer (no load and load) losses, LT network losses, and energy losses in loose jump connections, service mains and energy meters. Energy losses in the feeder equal the difference of energy input to the 11 kv feeder and energy sales. The commercial loss in the feeder equals the difference of energy loss and technical loss. The findings of an energy audit should be reported in the form of an energy audit report, which should contain Preface, Executive Summary, Background and Plant Description, Findings and Recommendations. -,) 1. Explain the need for energy audit giving examples from your own experiences in a power distribution utility. 2. Which of the objectives of energy audit in the unit are relevant for your utility? Explain with examples. 3. What are the benefits of an energy audit for a power distribution utility? 4. In your opinion, what problems will your utility encounter if it resorts to energy audit? How can these be managed? 5. Describe the procedure of each of the different types of energy audits described in Section How can these be applied in the area of your responsibility? For example, if you are stationed at the feeder, what are the steps you would take for energy audit? Explain each step. Give data as far as possible. 6. Explain how the energy audit exercise can benefit from the use of information technology. 82

16 ""., #, Energy Auditing This format is prepared for the industry under study. Generally, the information to be gathered includes: data on energy consumption, by type of energy, by department, by major items of process equipments, by end-use; material balance data (raw materials, intermediate and final products, recycled materials, use of scrap or waste products, production of by-products for re-use in other industries, etc.); energy cost and tariff data; equipment and process specifications including drawings, process flow charts; occupancy schedule of buildings, if relevant; generation and distribution of site services (e.g., compressed air system); sources of energy supply (e.g., electricity from grid or self generation); design, operating data and schedule of operation; annual energy bill and energy consumption pattern; specific energy consumption; and potential for fuel substitution, process modifications, and the use of co-generation systems (combined heat and power generation). For example, we would need the basic data for: An AC plant: Chilled water temperature, refrigeration load (TR), kw/tr of refrigeration, etc. Electrical system: power factor, load variations, daily and seasonal load curves, maximum demand data, electricity charges for maximum demand (kva), kwh, ToD charges, Electricity tariff for High Tension and Low Tension category consumers and for commercial, residential, industrial, government and agricultural consumers, etc. 83