Payback and Process- Energy Monitoring Payback

What to Monitor
Monitoring of total electrical consumption and sometimes key load centers
provides important data that can be analyzed to give key cost reduction
information. Guidelines from the DOE and similar sources recommend using
“live” or “real-time” data for reporting and analysis. Automated alerting and
real-time cost analysis are extended benefits that enable decisive, cost
reduction actions.
Monitoring Benefits
Reduced energy costs and reduced energy demands on the power grid are the
foundational benefits. Monitoring also provides the ability to verify efficiency
improvements, effectively reduce loads, calculate the ideal tariff schedule and
verify billing accuracy.
Monitoring Payback
Direct Payback Indirect Payback
Operations Tariff & Usage Energy Profiling
1 to 3% 2.5 to 4.5% 15 to 40%
Changes in
operational behavior
Business Process
Changes
Tariff schedule
changes
Billing Corrections
*Peak demand
corrective action
Energy reduction
projects
Facility improvement
measures
There is direct and indirect payback from energy monitoring. Direct payback is received from changes in organizational behavior and
business process and represents 1 to 3% of immediate payback. Indirect payback is comprised of two components; tariff & usage
involving tariff schedule, billing and peak demand corrections, and load profiling to identify energy reduction measures. The payback
amount is dependent on monitoring key variables e.g. type of load, load profile, tariff schedule, and peak usage; variables which
cannot be identified without monitoring. Reductions of 2.5 to 4.5% come from tariff and billing corrections and are considerably higher
when peak demand charges are levied; where 15 to 40% reduction gains can be accomplished through load profile identification and
follow on facility improvements. Paybacks on single source monitoring generally range from 8 to 20 months. Payback is maximized
when combined with energy analysis and when definitive reduction energy use habits and load shifting/sharing processes are employed.
Below is the monitoring payback analysis for your review.
BENEFITS OF MONITORING ENERGY
Gives better information for analysis of energy consumption.
Provides technical and financial information needed to make strategic
decisions regarding operating activities.
Identifies inconsistencies in operating and shutdown procedure.
Utility billing accuracy, and levelizing of solar once/year billing offsets.
Better information for analysis of energy consumption and performance
improvement trends
Energy Monitoring Payback
Information to justify and support a strategy for achieving improvements
through target setting, and development of Energy Benchmarks
Impartial and accurate reporting, which enables senior management to assess
and control energy consumption and costs.
RULES OF THUMB FOR EFFECTIVE MONITORING
Record historical data from the past 24 months at least.
Ensure measurements are accurate enough to be
useful, use revenue grade meters when possible
Ensure recordings are regular and frequent enough to
pick up any relevant highs and lows
Plot the ratio of peak and off-peak electricity, and peak
demand
Plot actual versus charged demand (electricity).
Record associated data simultaneously for comparison
Consider monitoring large use items individually
Install sub-meters to measure energy use by areas with
separate accountability.
Monitor in real time and use alarm set points to alert
staff that presets have been exceeded
Real Life Monitoring Cases
Private School
A private school experiences the high energy costs,
particularly from demand charges.
ACTION: Energy monitoring is installed and demand peaks
are found to occur early morning. Real-time analysis
determines that that electric classroom heaters are being
turned on simultaneously and causing a 30-45 min spike in
electric demand. Programmable thermostats are installed
and set to provide a staggered heater operation during
early morning hours. Monitoring confirms the expected
drop in peak demand.
RESULTS: Classrooms are pre-warmed, demand charges
drop 50%, energy costs are reduced by >20%, System
payback 12 mo.
Food Manufacturing Plant
A specialty food manufacturing facility seeks to improve the bottom line by cutting energy costs.
ACTION: Energy monitoring with cost analysis is installed on the main meter and key load centers. Cost profiles identify two large
refrigeration units with high energy consumption and high demand. Multiple energy efficiency technologies are employed to reduce
consumption and demand.
RESULTS: Energy consumption and demand decreases are verified and documented using energy monitoring data which isolates
benefits derived from each of the different technologies. Utility company issues rebate based on monitoring system reports. Rebate
amount covers 1/3 of project cost. Payback for customer is less than 24 months, including the cost of monitoring. Customer now
monitors performance of units in real-time and is alerted when energy consumption exceeds preset limits.

The Cost Reduction Solution