Businesses use a lot of energy every day for lights, machines, computers, and air conditioning. But sometimes, energy is wasted without anyone realizing it. This not only increases electricity bills but also harms the environment.
An energy audit helps businesses check how much energy they use and find ways to save it. By fixing problems like faulty wiring, poor insulation, or outdated equipment, businesses can cut costs, use energy wisely, and create a safer workplace.
These audits also help companies follow government rules and prepare for renewable energy sources like solar power. Whether a small shop or a big office, every business can benefit from an energy audit to save money and protect the environment.
What is an Energy Audit?
An energy audit is a check-up for a business to see how much electricity it uses and how to save it. An expert, called an Energy Auditor, looks at the building’s lights, machines, and appliances to find ways to use less power while doing the same work.
The audit helps businesses understand their electricity use and their Energy Star rating. It also shows ways to fix problems and lower electricity bills. Before using solar panels or other renewable energy, businesses should first get an audit.
This helps them make better choices and save money. An energy audit makes a business more energy-efficient and helps the environment.
How is Energy Audit Different from Energy Conservation?
The difference between energy conservation and energy audit is distinct. However, they are both important factors in energy management. Follow this table to learn more:
| Aspects |
Energy Audit |
Energy Conservation |
| Definition |
We can define energy audit as the process of verifying, monitoring, and analysing its usage. |
Energy conservation is the efficient use of energy so that there is no wastage. |
| Purpose |
The audit aims to identify opportunities for improvement. |
Conservation is about implementing those improvements. |
| Scope |
The audit assesses current energy usage and identifies potential savings. |
Conservation is the actual implementation of measures to achieve those savings. |
| Outcome |
The outcome of the energy audit is a report with recommendations. |
The outcome of energy conservation is reduced consumption and positive environmental impact. |
What are the Different Types of Energy Audits?
There are two types of energy audits for businesses; a Preliminary Energy Audit and a Detailed Energy Audit. While both types of audits help businesses find ways to use energy wisely, reduce costs, and protect the environment, the type of audit depends on how much information you need to improve energy use.
1. Preliminary Energy Audit
A Preliminary Energy Audit, or a Walk-through Audit, is a quick check-up of a building’s energy use. An Auditor walks around the building, gathers basic information, and looks for simple ways to save electricity.
This audit does not take much time and only uses basic tools. It helps find common problems and gives general suggestions for saving energy.
2. Detailed Energy Audit
A Detailed Energy Audit, or a Diagnostic Energy Audit, is a deeper and more thorough check-up. The Auditor uses special tools like a scanner, flow meter, and flue gas analyser to measure and analyse energy use.
This audit takes more time and provides a full report with detailed recommendations to improve efficiency. Businesses use this audit to make big changes that can save a lot of money on electricity in the long run.
Another guideline that is increasingly being adopted in India is the ASHRAE energy audit. It offers a globally recognised framework for energy management. Let us know about it in detail.
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ASHRAE Energy Audits
ASHRAE stands for American Society of Heating, Refrigerating, and Air-Conditioning Engineers. The ASHRAE framework used in India plays a crucial role in helping building owners evaluate energy consumption, identify inefficiencies, and implement cost-saving strategies.
These audits follow a structured methodology to enhance energy efficiency. It aligns with Bureau of Energy Efficiency (BEE) standards and provides a globally recognized approach to energy management.
1. Types of ASHRAE Energy Audits
- Level 1: Walk-through Analysis
This is a preliminary audit involving a visual inspection and a basic review of energy consumption data. It is low-cost and helps figure out quick energy-saving opportunities and provides an understanding of energy consumption.
- Level 2: Energy Survey and Analysis
A more detailed evaluation that examines utility bills, equipment specifications, and operational patterns. It provides a cost-benefit analysis of potential energy efficiency improvements.
- Level 3: Detailed Analysis of Capital-Intensive Modifications
The most comprehensive audit, requiring advanced engineering analysis and financial modeling. It is used for large-scale infrastructure upgrades that demand significant investment.
2. Cost of ASHRAE Energy Audits
The cost depends on factors like audit level, building size, and complexity. Level 1 audits are the most affordable, while Level 3 audits involve detailed simulations, making them more expensive.
Businesses should compare quotes to select the right audit for their needs, as the ASHRAE framework in India gains more popularity.
Mandatory Energy Audits for Designated Customers in India
Energy audits play a crucial role in improving energy efficiency, especially in industries that consume large amounts of energy. The Indian government has made energy audits mandatory for certain industries. This is also referred to as the Designated Customers (DC) to help reduce energy wastage and improve sustainability.
Who are the Designated Customers?
Designated Consumers or DCs are industrial units and establishments that use high amounts of energy. The Central Government, under the Energy Conservation (EC) Act, 2001, identified these energy-intensive industries and set criteria for their classification as DCs. The Bureau of Energy Efficiency (BEE) monitors their energy performance.
Since these industries significantly impact the country’s energy consumption, they are required to follow strict energy-saving measures, including mandatory energy audits. These audits help them identify ways to reduce energy waste and improve efficiency.
Provision of the Energy Conservation Act About Energy Audit & Designated Customers
The Energy Conservation (EC) Act, 2001, under Section 14, Clause (e) and (f), empowers the Central Government to set guidelines for energy audits and designate high-energy-consuming industries as DCs. Based on this provision, the government issued S.O. 394(E) on 12th March 2007, officially recognizing DCs.
Later, to further strengthen energy efficiency measures, the government made energy audits mandatory for these industries through S.O. 1378(E) on 27th May 2014. This notification ensures that all DCs conduct regular audits to track their energy usage, identify areas for improvement, and adopt better energy management practices.
What are the 9 Energy-Intensive Sectors Under the DC?
The government has identified 9 sectors that consume the highest energy and require mandatory energy audits. These include:
- Aluminium: Used in manufacturing, packaging, and construction.
- Cement: A key material in infrastructure and construction.
- Chlor-Alkali: Produces essential chemicals like chlorine and caustic soda.
- Fertilizers: Energy-intensive production of agricultural fertilizers.
- Iron & Steel: Crucial for construction, transport, and manufacturing.
- Paper & Pulp: Used in packaging, printing, and paper-based products.
- Railways: High energy use in train operations and infrastructure.
- Textile: Large-scale energy consumption in fabric production.
- Thermal Power Plants: Major power generation units consume high fuel energy.
Each sector must conduct regular audits to comply with government regulations and improve energy efficiency. These audits help businesses reduce costs, meet sustainability targets, and contribute to India’s energy conservation goals.
The Energy Audit Process: Step-by-Step Guide
An audit is done to check how much energy a business uses and find ways to save electricity and money. The three steps in the audit process are:
1. Pre-Audit Phase (Planning the Audit)
An energy audit team is formed to plan the process, before starting. They gather information about the business and its energy use. A kick-off meeting is held to discuss the plan and check how the business is currently using energy.
2. Audit Phase (Checking and Testing Energy Use)
This step has four parts:
- Collecting Data: The auditor gathers details about electricity use, appliances, lighting, and machines. They may also ask workers questions through surveys.
- Site Inspection & Measurement: The auditor visits the business, checks machines like lights, fans, motors, and compressors, and measures how much energy they use.
- Energy Use Analysis: The data and site inspection results are studied to find areas where energy is wasted.
- Reporting & Presentation: The auditor prepares a report that includes a summary of energy use, history of use, current usage details, ways to save and the costs involved, a plan to improve energy use, and expected savings after making the changes.
3. Post-Audit Phase (Following Up on Changes)
After the audit, the business follows the plan to save energy. The auditor monitors progress and makes sure the recommended changes are working. Regular checks are done to ensure continued savings. The need of energy audit for business is to use it wisely, reduce costs, and protect the environment.
Why Must DCs Follow Structured Audits as Part of Regulatory Compliance?
Since the designated consumers’ energy consumption impacts the country’s overall energy efficiency, the government requires them to follow structured energy audits as part of regulatory compliance.
According to the Energy Conservation Act, 2001, DCs must:
- Appoint an energy manager to monitor and report energy use.
- File energy consumption reports annually.
- Conduct mandatory energy audits to identify areas for improvement.
The government enforces these audits through official notifications, such as S.O. 1378(E) dated 27th May 2014, which ensures that DCs conduct regular assessments to optimize energy use. These audits help businesses reduce operational costs, improve efficiency, and comply with legal requirements.
What is the Importance of Energy Audit for Businesses?
The importance of electrical energy audits is as follows:
- Helps businesses find ways to save energy and lower electricity bills.
- Shows how energy is being used and how to use it more efficiently.
- Makes the workplace safer by identifying safety issues like faulty wiring or poor ventilation.
- Helps businesses follow energy rules and avoid fines.
- Reduces carbon emissions, making the environment cleaner.
- Improves the building’s value, making it more attractive to buyers or renters.
- Helps businesses prepare for renewable energy like solar power. (Read: What factors to consider while choosing the renewable energy partner for your business)
How Do Energy Audits Serve as the Baseline for the PAT Scheme?
The Perform, Achieve, and Trade (PAT) scheme is a government initiative to encourage energy-intensive industries to reduce energy consumption. The foundation of this scheme is the energy audit, which helps set Specific Energy Consumption (SEC) targets for industries.
Role of Energy Audits in the PAT Scheme:
- Setting Energy Efficiency Targets:
- The Bureau of Energy Efficiency (BEE) studies industry consumption patterns.
- Based on energy audit data, industries with lower efficiency receive higher reduction targets, while efficient ones have lower targets.
- Monitoring & Compliance:
- Energy audits ensure that DCs track their progress and report accurate data.
- The government uses this data to verify whether industries meet their targets.
- Issuing Energy Savings Certificates (ESCerts):
- Industries that save more energy than their target earn ESCerts.
- These certificates can be traded with industries that fail to meet their targets, creating a market-driven incentive for energy efficiency.
Since its launch, the PAT scheme has saved millions of tonnes of oil equivalent (MTOE) and reduced carbon emissions. Without energy audits, industries would not have a clear benchmark to improve efficiency or participate in the energy savings market.
What are the Advantages of Energy Audits for Indian Businesses?
An audit helps businesses save money, stay safe, and protect the environment. The benefits of energy auditfor business are as follows:
- Cost Savings: An audit helps find ways to reduce electricity use, which lowers bills. Upgrading lighting or heating systems can save money.
- Safety Improvements: Checking electrical wiring and ventilation ensures a safer workplace, preventing accidents.
- Environmental Benefits: Using less energy reduces pollution and greenhouse gases, helping the planet.
- Better Workplace Conditions: Fixing insulation and heating problems makes the office more comfortable for employees.
- Higher Property Value: Energy-efficient buildings are worth more and attract better buyers or renters.
Conclusion
An energy audit is a smart way for businesses to save money, improve safety, and help the environment. By checking energy use and making small changes, companies can lower their electricity bills and create a better workspace for employees.
An energy-efficient business is not only good for the owners but also customers and the community. With an audit, businesses can take the first step toward a greener and more cost-effective future.
In today’s world, saving energy is important for both business growth and environmental protection. If every company works towards energy efficiency, it can make a big difference in building a cleaner, more sustainable world.
