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Fundamentals of Energy Management and Energy Managers - A technical


report and a short course

Technical Report · February 2018


DOI: 10.13140/RG.2.2.20027.31524

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1 author:

Mohamed EL-Shimy
Ain Shams University
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Fundamentals of Energy Management and

Energy Managers

A technical report and a short course

By

Prof. Dr. Mohamed EL-Shimy Mahmoud

(http://shimymb.tripod.com)

Abstract

The fundamental goal of energy management is to produce goods and provide

services with the least cost and least environmental effect. The purpose of energy

management is to minimize energy and water consumption and costs, while meeting

all operational mission requirements and providing quality working and living

conditions for personnel and family housing occupants. Energy management requires

a careful balancing between efforts to use energy efficiently and meet the quality of

life requirements, while insuring that primary mission requirements are met. Effective

energy management strives to avoid conflicts between the two, while achieving

substantial energy reductions and cost savings. To establish a successful energy

program, the energy manager must have a good understanding of both the technical

and managerial aspects of energy management. This report covers the basics of

energy audit, and energy efficiency projects.

Energy Audit is the key to a systematic approach to decision-making in the

area of energy management. It attempts to balance the total energy inputs with its use,

and serves to identify all the energy streams in a facility. It quantifies energy usage

i
according to its discrete functions. Industrial energy audit is an effective tool in

defining and pursuing a comprehensive energy management program. In general,

Energy Audit is the translation of conservation ideas into realities, by lending

technically feasible solutions with economic and other organizational considerations

within a specified time frame. The primary objective of Energy Audit is to determine

ways to reduce energy consumption per unit of product output or to lower operating

costs. Energy Audit provides a " bench-mark" (Reference point) for managing energy

in the organization and also provides the basis for planning a more effective use of

energy throughout the organization.

Energy efficiency projects can result in numerous benefits. By using energy

more efficiently an organization's vulnerability to energy prices is reduced, while its

cost effectiveness is improved, and the environmental impacts of electricity

production are avoided. Frequently entities must choose between investing in energy

efficiency or energy supply. There are numerous issues surrounding these decisions.

Including energy efficiency in the resource planning process is essential to

realizing its full value and setting resource savings and funding targets accordingly.

Many utilities, states, and regions are estimated and verifying the wide range of

benefits of energy efficiency and are successfully integrating energy efficiency into

the resource planning process. The primary purpose of energy and economic analysis

of potential energy conservation measures is to make decisions. The type of decision

will determine the appropriate type of analysis and the decision statistics to be used.

Except for special situations where a measure is obviously cost-effective or not cost-

effective or where the cost of the analysis would not be justified, LCC techniques

should be used to make decisions about energy projects. Energy managers must make

several types of decisions frequently. The most common is

ii
“SHOULD I ACCEPT OR REJECT THIS PROJECT IDEA?”

Another decision is

“WHICH OF THESE PROPOSED PROJECTS SHOULD I SELECT?”

This type of decision may be required for situations where multiple systems are being

considered doing the same job, when deciding how far to go in conserving energy (for

example, how much insulation), or when several combinations of interdependent

systems are being considered. In these cases, the objective is to select the best

(economically optimum) project from a series of alternatives, each of which may

individually meet the pass/fail or accept/reject criteria.

Another type of decision involves how to spend a limited amount of energy

funds when presented with a long list of projects that are all cost-effective.

This report/course covers all the above subjects and more!

Contents

CHAPTER 1: ENERGY MANAGEMENT AND AUDIT – INTRODUCTION

Definition and Objectives of Energy management

Key Points

Benefits Of Energy Conservation

Energy Management: A Systems Approach

Energy Audit – Types and Methodologies

Need for Energy Audit

Type of Energy Audit

Preliminary Energy Audit Methodology

iii
Detailed Energy Audit Methodology

Identification of Energy Conservation Opportunities

Technical and Economic feasibility

Classification of Energy Conservation Measures

Energy Audit Reporting Format

Understanding of Energy Costs

Benchmarking and Energy Performance

Plant Energy Performance

Production factor

Matching Energy Usage to Requirements

Maximizing System Efficiency

Fuel and Energy Substitution

Energy Auditing Equipment

CHAPTER 2 ECONOMIC AND FINANCIAL EVALUATION OF ENERGY EFFICIENCY

PROJECTS AND PROGRAMS

Introduction to Energy Efficiency

Energy Supply

Energy Efficiency

Environmental Costs of Energy Use

Cost Benefit Analysis

Energy Services Company Model

Performance Contracting

Energy Efficiency Project Development Process

Identify & Qualify the Client

iv
Preliminary Audit

Submit Proposal and Enter a Letter of Intent

Audit, Analyze & Design

Negotiate and Sign Contract

Installation

Commission

Monitoring & Verification

Energy Auditing Overview

Preliminary Audit

Utility Cost Analysis

Standard Energy Audit

Detailed Energy Audit

Introduction to End Use Analysis

Baseline Growth Projections

Financial Analysis

Economic Terminology

Financial Example of a Typical Performance Contract

Overview of Risk in Energy Efficiency Projects

Project Sponsor Risk

Construction Risk

Country & Sovereign Risk

Environmental Risk

Performance & Persistence Risk

Contractual Liability

Currency, Inflation & Interest Rate Risk

v
Risks Facing the Client

Risks Facing the ESCO

Risks Facing the Lender

Finance & Contract Arrangements

Financing Options: Cash

Financing Options: Loan

Financing Options: Performance Contracting

Contractual Arrangements: Savings Guarantee

Financing Options: Capital Lease

Financing Options: Operating Lease

Creating an ESA

Financing Terms

Construction Terms

Savings Performance

vi
Warranties

Other Terms

Legal Requirements & Notification

Representations

ESCO Insurance

Customer’s Insurance

Bonds

Events of Default

Remedies Upon Default

Assignment

Hazardous Materials

Lamp & Ballast Disposal

Sever-ability

International Monitoring & Verification Standards

CHAPTER 3: BUILDING ENERGY USE AND ENERGY REDUCTION

Part I: Building Energy Use

Overview

Site and Massing Considerations

Interior Layout/Spatial Design

Building Envelope

Daylighting/Sun Control

Light Pollution

High Performance Lighting

vii
Electrical Systems and Equipment

Energy Sources

Mechanical Systems

Energy Load Management

PART II: HOME ENERGY USE REDUCTION

What You Can Do?

Energy Labels on Appliances

Energy Jargon

Off-Peak Rates

Hot Water

Lighting

Another Option

CHAPTER 4: INTEGRATED RESOURCE PLANNING FOR ELECTRICITY

Introduction to Integrated Resource Planning

Developed Countries

Developing Countries

The Planning Process: Scope and Objectives

The Scope of Planning

Setting Objectives

Demand Forecasting

Data Needs for Demand Forecasting

Types of Forecasting Models

Investigation of Supply-Side Options

viii
Options for Generating Electricity

Transmission and Distribution Infrastructure

Emissions Treatment and Waste Disposal

Attributes of Supply Options

Preliminary Assessment of Options

Investigation of Demand-Side Options

DSM Options

Attributes of DSM Options

Preliminary Assessment of DSM Options

Preparation and Assessment of Supply Plans and DSM Plans

Supply Plans

Assessing Supply Plans

DSM Plans

Assessing DSM Plans

Alternative Integrated Resource Plans: Construction and Assessment

Assessment Criteria

Assessment and Selection

Preferred. and .Contingency. IRPs

The Resource Plan Report

Implementation, Evaluation, Monitoring, and Iteration

CHAPTER 5: LIFE-CYCLE COSTING AND SOFTWARE TOOLS - KEY POINTS

Background

LCC Terminology and Concepts

Types of Costs

ix
Time Period of the Economic Analysis

Life-Cycle Cost Methods

Making Decisions With LCC Analysis

Lowest Total LCC

Payback Period

Savings-to-Investment Ratio

Life-Cycle Cost Summary for Funding Requests

Using Software Tools

Key Points

Renewables and Energy Efficiency Planning (REEP)

COMcheck™

MECcheck™

Facility Energy Decision Screening

A Simplified Energy Analysis Method (ASEAM)

DOE2/PowerDOE

Building Loads Analysis and System Thermodynamics (BLAST )

Federal Lighting Energy eXpert (FLEX)

Federal Renewable Energy Screening Assistant

Life-Cycle Costing

Installation Water Resources Analysis and Planning System (IWRAPS)

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