Boost your profit via an energy audit

Sept. 12, 2018
Two programs offered by the U.S. DOE can help you improve your energy efficiency.

For years, industrial and commercial facilities viewed their electrical utility bill as a cost of doing business. Then, energy costs began to spike as fossil-fuel costs rose to unprecedented heights – more than $100 per barrel in the case of oil. Concurrently, energy-efficiency technology innovations able to deliver energy savings with no sacrifice in performance (and sometimes improvements in product quality, production rate, safety, etc.) accelerated in development.

Even though oil prices have settled, the surge of interest in energy retrofits remains unabated as governments and environmentally conscious companies look to curb greenhouse gases blamed for climate change and utilities seek to extend the capacity of existing power-generation plants. And of course, the specter of higher fuel costs looms in the future.

American facilities have found a potential new source of profit margin by cutting their monthly energy bills and becoming more efficient. Specifically, significant savings and profits can be realized by performing energy audits and executing retrofits and upgrades at industrial facilities.

For example, the owners of an average small- to mid-size industrial facility could save 10% on their power bill and $42,000 annually by auditing energy use and implementing recommendations to upgrade equipment and change operations, according to data from a U.S. Department of Energy program. University professors and students in 24 locations across the United States are involved in the Industrial Assessments Centers (IACs). Data from those centers, the results of more than 16,000 on-site industrial assessments, suggest that savings at least this great are possible depending on the type of manufacturing facility.

About the Author: Frank Healy

Frank Healy is the marketing manager for Fluke power quality products. Frank has advised and consulted on many aspects of instrumentation for electrical engineering, including installation testing, earth/ground testing, and power, for more than 25 years. Contact him at [email protected].

The U.S. DOE has set up programs to help industrial companies curb energy costs and thus greenhouse gases. One of those completes in-depth assessments on plant operation to identify energy-efficiency improvement opportunities, minimize waste and pollution, and improve productivity. The IACs compile the data for their assessment for use by industry in a database accessible online (see https://iac.university/topTens). Users can glean valuable information from the database by approximating potential electrical and natural-gas energy savings by taking a look at the average results obtained at similar industrial plants. The database also lets users identify frequently recommended efficiency measures for each industrial plant.

Another energy-savings estimate tool is the Plant Energy Profiler Excel, into which a user inputs annual energy use and cost data as well as a breakout of energy use by operating process or system in a given plant. A default breakout of energy use by production process is offered in the absence of the specific data.

Top 10 recommendations for energy savings (all industries)

1. Utilize higher-efficiency lamps and/or ballasts
2. Eliminate leaks in inert gas and compressed air lines
3. Use most efficient type of electrical motors
4. Install compressor air intakes in coolest locations
5. Reduce the pressure of compressed air to the minimum required
6. Use energy-efficient belts and other improved mechanisms
7. Install occupancy sensors
8. Use more efficient light source
9. Insulate bare equipment
10. Analyze flue gas for proper air/fuel ratio

Beyond the federal government programs, local utilities have launched customer service campaigns aimed at helping facility managers make better use of the power they’re consuming. Why do this? Utilities have capacity concerns, and it’s easier to curb waste than it is to build power plants. Even getting a new power plant approved through the tangled regulatory framework can take years. And the random oil spill or nuclear plant disaster shows just how limited the options are for generating new power.

Thus, electrical utilities have a keen interest in avoiding having to add to their existing generation capacity. And facility managers have incentives to reduce power waste and become more efficient. If a company’s profit margin is 5%, saving $30,000 in energy costs equates to sales of $600,000, and many energy-savings measures may have simple payback of several years or less.

Energy audit basics

A basic energy audit can help determine which operational function consumes the most energy per month. Many facilities have identified the easy targets – energy consumption that can be decreased without substantial investment as well as taking advantage of government energy-efficiency subsidies. Common examples include:

  • Fixing leaks in compressed air lines
  • Shutting off equipment and systems overnight instead of leaving them on
  • Upgrading lighting systems to more energy-efficient LED banks and motion-sensor switches.
  • Upgrading chillers to high-efficiency models
  • Adding controls to match mechanical equipment output to performance requirements

For more effective energy savings, it’s best to take a systems approach. Rather than replacing a component with something similar, start with end uses, then look at distribution systems, and finally look at the central plant. For a compressed air system, this would mean reconsidering wasteful end uses (such as sweeping the floor—get a broom!), then fixing distribution leaks, and finally considering a more-efficient compressor, which may now be sized smaller than the previous equipment.

Quantify energy waste

Add to those examples yet another major concern that can hit facility manager’s bottom line: dirty power. Energy engineers have known for many years that imperfections in the purity of power, such as harmonic distortion and load unbalance, caused performance issues in three-phase equipment and, in the case of power factor, diminished the usability of the distributed electricity. Utility companies sometimes even charge for excessive power factor.

Industrial Assessment Center (IAC) database and program

The Industrial Assessment Center (IAC) database contains results from more than 16,000 energy assessments. This database allows users to identify both the annual average electrical energy use by plant type as well as the potential energy use reduction. The database allows users to (1) approximate potential electrical and natural-gas energy savings through an examination of the average results obtained at similar industrial plants, and (2) identify the most frequently recommended efficiency measures for each industrial plant type.

The U.S. DOE has long supported the IAC program. Under this program, engineering school faculty and upperclass and graduate students perform no-cost energy assessments at small and mid-size industrial companies. The industrial plants selected are from the manufacturing sector (SIC 20-39) and have:

  • Gross annual sales below $100 million
  • Fewer than 500 employees at a plant site, and
  • Annual energy bills more than $100,000 but less than $2.5 million.

The IAC teams conduct a one- or two-day site visit to familiarize themselves with equipment and process operations and to take engineering measurements. Utility bills are examined to document annual purchased fuel, energy, demand, and power factor penalty costs. The team then performs a detailed examination of potential energy savings opportunities and prepares a report containing recommendations along with estimates of total installed costs, annual savings, and simple paybacks for required investments in improved performance equipment. The IAC program currently involves 34 engineering schools. Since the program’s inception, 16,263 assessments have been completed at small and mid-size industrial plants with more than
122,000 efficiency improvement, waste minimization, or productivity enhancement recommendations made.

In 2001, this database was put online with a series of search and analysis tools added to allow for public inspection of program activity, energy efficiency recommendations, and other metrics. The public now has access to almost all assessment results with only the plant name and contact person information being restricted.


It was only a decade ago the IEEE along with academics sought to quantify the amount of power made unusable by such imperfections. In two studies, one at an automobile plant and another at an industrial park, professors Vincente Leon and Joaquín Montañana at the University of Valencia in Spain were able to quantify annual energy savings from power quality adjustments. In the industrial park example, the utility was able to save $14,000 a year by installing time-control relays to disconnect a capacitor bank at night; and the automobile plant upgraded transformers and installed capacitors and regulator controls for a savings of $50,000.

Hailed as a breakthrough, their Unified Power measurement took recommendation of the IEEE-1459-2000 standard that defined the sources of specific wastes and calculated the energy wastes of reactive power, harmonics and unbalance in the electrical system. Now, portable handheld energy and power quality analyzers can deploy Unified Power measurement calculations to express power and energy data that directly quantify the waste energy in electrical system by measuring harmonics and unbalance waste in terms of kilowatts. The measurements also factor the cost of each kilowatt hour to calculate the cost of waste energy over a week, a month or a year.

Armed with handheld energy analyzers, engineers or electricians can log the energy to equipment known to consume large quantities of power and then quantify the savings to make a case to managers for improvements in their plants. The recommendations might include adding capacitor banks to resolve power factor issues or changing the type of electronic equipment. In the case of unbalance, recommendations might involve installing unbalance compensation equipment, or increasing the over electrical distribution system capacity. Even the installation of a harmonic filter will improve overall power quality and increase equipment reliability, efficiency, and lifespan and decrease downtime.

But with the new Unified Power capability, coming up with the cost of labor and equipment necessary to mitigate harmonics and unbalance as compared with the amount of energy wasted, becomes a relatively straightforward ROI equation. Once the changes are implemented, a routine of monitoring equipment with the handheld analyzers can be a way of ensuring smooth and efficient operations, and justifying the costs of upgrades and improvements at your facility.

Tactics and Practices

This article is part of our monthly Tactics and Practices column. Read more Tactics and Practices.

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