Energy Management System

An energy management system (EMS) is a system of computer-aided tools used by operators of

electric utility grids to monitor, control, and optimize the performance of
the generation and/or transmission system. Also, it could be used in small scale systems like microgrids.

Energy management systems are also often commonly used by individual commercial entities to
monitor, measure, and control their electrical building loads. Energy management systems can be used
to centrally control devices like HVAC units and lighting systems across multiple locations, such as retail,
grocery and restaurant sites. Energy management systems can also provide metering, submetering, and
monitoring functions that allow facility and building managers to gather data and insight that allows
them to make more informed decisions about energy activities across their sites.

Six Key Steps of an Energy Management System

 Step 1 - Get Commitment and Appoint an Energy Manager

The first step is to make sure that senior management understands the business benefits of an energy
strategy and supports the proposed energy-saving measures. Appointing an energy manager
demonstrates that the business takes its energy-saving goals seriously. The energy manager's role is to:

a. Lead the energy team in their energy-saving actions

b. Communicate and emphasize to colleagues the importance of the energy strategy

The energy manager needs experience and training to be effective - relevant professional qualifications
are available. Depending on the size of your organization the role might be full or part time.

 Step 2 - Understand the Issues

To manage energy use effectively you need to have a clear understanding of:

a. How your business is currently using energy

b. How your energy usage compares with other businesses
c. Attitudes within your business towards adopting energy-saving measures

The Carbon Trust has produced guidance for businesses on implementing an effective energy
management strategy. This includes an energy matrix to help you assess your current performance.

 Step 3 - Plan and Organize

Start by carrying out an energy survey to see where you can make energy savings. Use all the
information you gather to produce an energy policy and identify long, medium and short-term energy-
saving targets.

 Step 4 - Develop an Action Plan

Once you have identified your targets, draw up an action plan outlining the practical steps your business
will take to achieve your goals. Give individuals responsibility for specific tasks.

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  Step 5 - Involve your Staf
It's very important to get support for the energy strategy from:

a. Key decision makers

b. Senior management
c. Staff at all levels of the business

 Step 6 - Control, Monitor and Report

Monitor your performance regularly to check that you're making progress towards your energy-saving
goals. Put in place procedures to make sure your systems will carry on operating efficiently and continue
to make savings in the future. Let staff know how progress towards achieving targets is going - this helps
to keep them motivated.

Objectives of an Energy Management System

1. Objectives of supply side:

To formulate energy strategies, plan energy supply on short term, mid-term and long term basis and to
ensure adequate supply of various forms of secondary (usable) energy to various consumers in the
allocated geographical zone with minimum cost and minimum environmental pollution, to regulate
energy flow.

2. Objectives of End-user side:

To select optimum energy forms for consumption and to optimize energy consumption of each form of
energy for reducing energy costs and for improving productivity, standard of living and environment.

In accordance with this generic objective, every end-user organization should have an energy objective
statement in written form as a management policy statement. This is an obligatory function for every
organization on supply side and demand side in individual and national interest.

What is energy audit?

Energy Audit - An energy audit is an inspection survey and an analysis of energy flows for energy
conservation in a building. It may include a process or system to reduce the amount of energy input into
the system without negatively affecting the output. This kind of audit is a good way to find out where
excess energy may be creeping out of your home. It also shows you where elements of your home that
are not energy-efficient may contribute to the problem.

Types of Energy Audit

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Bench Marking

Benchmarking mainly consists in comparing the measured consumption with reference

consumption of other similar buildings or generated by simulation tools tot identify excessive or
unacceptable running costs. As mentioned before, benchmarking is also necessary to identify buildings
presenting interesting energy saving potential. An important issue in benchmarking is the use of
performance indexes to characterize the building.

Walk Through or Preliminary Audit

The preliminary audit (alternately called a simple audit, screening audit or walk-through audit) is
the simplest and quickest type of audit. It involves minimal interviews with site-operating personnel, a
brief review of facility utility bills and other operating data, and a walk-through of the facility to become
familiar with the building operation and to identify any glaring areas of energy waste or inefficiency.

General Audit

The general audit (alternately called a mini-audit, site energy audit or detailed energy audit or
complete site energy audit) expands on the preliminary audit described above by collecting more
detailed information about facility operation and by performing a more detailed evaluation of energy
conservation measures.

Investment-grade Audit

In most corporate settings, upgrade to a facility’s energy infrastructure must compete for capital
funding with non-energy related investments. Both energy and non-energy investment are rated on a
single set of financial criteria that generally stress the expected return on investment. The projected
operating savings from the implementation of energy projects must be developed such that they provide
a high level of confidence. In fact, investors often demand guaranteed savings. The investment-grade
audit expands on the detailed audit described above and relies on a complete engineering study in order
to detail technical and economical issues necessary to justify the investment related to the
transformations.

Advantages of Energy Audit

 It helps reduce energy costs in your facility.

 With a reduction in production costs, the competitiveness of your company will be improved.

 It helps reduce the dependence on foreign energy sources.

 It helps reduce environmental damage and pollution.

 It can increase the security of your energy supply.

 It can reduce the consumption of natural resources.

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  It can reduce damage to the environment associated with the exploitation of resources.

 It helps reduce the impact of greenhouse gas emissions.

 It helps you to lower energy bills.

 It enables you to increase the comfort of those in the facility.

 It helps you to increase the life span of the equipment in your facility.

 It discovers any unaccounted consumption that may exist at the facility.

Roles of Energy Manager

The role of an Energy Manager (EM) involves facilitating energy conservation by identifying and
implementing various options for saving energy, leading awareness programs, and monitoring energy
consumption. As such, EMs play a critical role in the successful implementation of energy conservation
and demand management programs within the industry.

1.1 Saving Energy

EM duties revolve around the identification, reporting and implementation of energy savings
opportunities. For quick reference, the responsibilities identified in the EM Agreement are summarized
below:

 Electrical Energy Saving Project Implementation

 Energy Tracking & Monitoring
 Primary Assessment
 Maintenance and Operating Schedules
 Energy Savings Opportunities & Action Plan
 Measurement & Verification Strategy
 Energy Management Behaviour and Business Process Improvements
 Employee Awareness Programs
 Assistance to IESO Projects
 Reporting

Continuation of funding is primarily decided on the basis of energy savings target achievement and
future savings potential. Properly and thoroughly reporting savings is essential to retaining funding.

1.1.1 Industrial Accelerator Program Initiatives

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Under the IESO’s Industrial Accelerator Program (IAP), you have a wide range of initiatives available to
help you fund the energy conservation projects that you identify. All successful energy managers use
these programs. Available IAP incentive programs are listed here:

Retrofit Process and Systems

Incentive Paths:
Prescriptive/Engineered/Custom Preliminary & Detailed Engineering Studies

Technology Specific Incentive Offerings: Project Incentives

Motors Unitary AC
VFDs Interior Lighting
Compressed Air Exterior Lighting
Synchronous Belts Lighting Controls

High Performance New Construction

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 1.2 Annual Savings Targets

EMs must meet two targets as laid out in the IAP Energy Manager Funding Agreement:
 Minimum 2,000 MWh Annual Savings Target
 Minimum 10% of Annual Savings Target attributed to Projects not financed by IESO
incentives (non-incented)

Understanding that it can be challenging to reach the targets in the first year of the agreement, if the
EM does not meet the Annual Savings Target in the first twelve month period of the Agreement, the
shortfall will be added to the Annual Savings Target for the second twelve month period. There is no
adjustment in the maximum funding amount if some of the missed target in the first year is carried
over to the second year. And the transfer of the target is only available in the first year.

Performance will be assessed based on Quarterly Reports submitted by EMs.

1.3 Reporting

Energy management activities and conservation measures must be reported in Quarterly Reports.
Quarterly Reports are submitted to the IESO for review and approval under the EM Funding
Agreement.

As part of the reporting requirements under the EM Funding Agreement, EMs are required to
prepare the following reporting documents:

 Quarterly Reports within 30 days of the end of each quarter.

 EMs are encouraged to provide the Quarterly Reports as close to the end of each
quarter as possible.
 It is recommended that the Quarterly Report be maintained as a living document
and used for project tracking purposes, such that it can be provided to the IESO at
any time, without need of significant updates.
 An Energy Management Plan (EMP) for each Facility occupied by the Participant, no later
than six (6) months after the EM’s employment start date, unless an EMP already exists.
 An updated EMP is required for each subsequent twelve (12) month term.

It is highly recommended that Energy Managers make use of the Quarterly Report Template.

1.4 Quarterly Report Reviews

 Each Quarterly Report will be reviewed by the IESO’s Technical Reviewer so that the
likelihood of targets being met can be assessed.
 Mid-term technical review of non-incented Measures can be valuable to IESO accounting.
 Quarterly Reports should include all Measures to date, including those in previous reports
and those that have been reviewed.
 Quarterly Reports should also include Projects planned for the next term that show the
potential to meet the next term’s targets.

1.5 Annual Reviews

  At the end of the fourth quarter of each EM term, an annual review will be performed by the
IESO’s Technical Reviewer to determine whether targets have been met.
 The annual review is based on the fourth Quarterly Report, which should identify all Projects
that are complete and in-service such that they can be counted towards the current term’s
Annual Savings Target.

Technical Review of Non-Incented Savings

Technical review of non-incented savings are conducted as the pre and post project information
becomes available. This review may occur during a Quarterly Report review or the Annual Review.

 During the Quarterly & Annual Review process for EMs, the IESO’s Technical Reviewer will
perform a technical review of significant non-incented projects in order substantiate and
verify the reported savings.
 For all other non-incented savings, the IESO’s Technical Reviewer will still perform a high
level check to ensure that the reported savings are reasonable and to assign a persistence
value.
 In order to enable the review of non-incented projects, it is recommended that additional
documentation be maintained, such as spillover forms, supporting calculations, operating
conditions and technical specifications for pre and post project equipment.
 In addition, it is also recommended that pre and post project Measurement and Verification
(M&V) be conducted for non-incented projects, where feasible, to provide support for the
claimed energy savings.
o The best support of any project is robust pre-project and post-project power
consumption data as collected with power meters or similar instrumentation.
o IPMVP-level M&V may not be warranted, but reasonable M&V should be performed
for the benefit of internal project management, as well as IAP reporting.
 An M&V strategy for ALL substantial projects is a characteristic of successful
energy management and a proven strategy for gaining management buy-in.

2.0 Energy Manager Strategies for Success

Meeting targets, especially in the first year, can be challenging. Planning and strategy are critical to
success. The following section is a compilation of recommendations based on lessons learned by EMs
under the saveONenergy program.

2.1 Early Activities

1. Establish what your current situation is: Learn about your internal funding cycle, including
critical dates
a. The timing of Participant/client budget cycles will influence what your initial focus
should be. Assess your opportunities to secure funding for capital projects in time to
complete those projects in your first term.
b. Project funding timing and availability will be a major factor in the balance between
focusing on a few large projects to meet a deadline vs. building a funnel of
2. Orient yourself: Learn the capital approval process, including how to prepare and craft a
business case, who the decision-makers are what their influencing factors are
 a. Your business cases need to speak in the language of your organization. Rather than
kW and kWh, and besides dollar figures (which are always important), it may help to
compare energy cost reductions to an equivalent unit of production.
i. E.g. Energy savings are the equivalent of additional sales of 5,000 widgets
per month.

2.2 Planning for the Short and Long Term

Ramping up an Energy Manager program can be one of the greatest challenges to an EM, and
identifying projects is sometimes the easiest part. Once projects are identified, they can be delayed
or scheduled for action much later than the EM might want due to the timing of annual budgets and
windows of opportunity that are only open during scheduled plant shutdowns. Time to complete
studies and resolve technical issues can also delay completion dates. Despite all the potential for
lengthy delays, EMs are expected to meet their first-year targets.

This difficulty can be mitigated with a plan that splits its focus between the short and long term.
Large projects that take substantial investment should be developed with a view to the long term,
while a portfolio of projects that can be completed quickly should be developed and acted on to
ensure first-year success. Short term projects should then be completed as soon as possible.

This is not to say that long-term project should not receive attention in the first year. Many large
projects will take a great deal of effort and time to develop so that they can be completed in a
second or even third term. EMs are encouraged to develop short and long term projects, and to
ensure that the short term targets result in enough savings to meet first-year targets.

2.3 Use some early, valuable wins to prove the value of EMs

Technical ability and project management skills are only part of being a successful Energy Manager. A
large part of EM success entails building trust with your employer. It’s been said by some EMs that it
took a year of successful operation for managers and other sceptical personnel to trust their EM
enough to consider the more extensive projects.

Another advantage of planning for both the short and long term is that some especially short-term
but valuable projects can accelerate the building of trust and demonstrate the value of investing in
energy management. EMs should identify the more easily implemented projects and complete those
as soon as possible. Doing so should make it easier for managers and operators to support an EM’s
future activities.

Also critical is M&V of these early savings. Concrete, quantifiable proof of energy savings, and
therefore cost savings, makes it easier for others to trust the value of savings made. It also solidifies
EMs’ reputation as competent professionals who act methodically and ensure they achieve results.

Example project types that could provide “quick wins”

 Lighting replacement
 Maintenance measures (e.g. filter replacements, motor and belt replacement practices)
 Scheduling and set-backs
 Shutting down unnecessary equipment or curtailing during non-production

3.0 Training
The IESO will work with EMs to achieve their training goals, through awareness or participation in the
following programs:

 Certified Energy Manager (CEM)

 Certified Measurement & Verification Professional (CMVP)
 Other training events hosted or sponsored by the IESO

4.0 EM Funding

Energy Manager

 Assuming all obligations are met by the EM and the Participant per the EM Funding
Agreement, the IESO agrees to pay the Funding Amount to the Participant as follows:
o $50,000 upon notice to the IESO of the EMs employment start date, and each
anniversary thereof if applicable; and
o upon approval by the IESO of the fourth Quarterly Report, the lesser of:
 (A) the product of $40/MWh and the total electricity savings in MWh arising
from activities of the EM for projects that are completed and in-service up to
a maximum of $200,000, less $50,000; and
 (B) $150,000

5.0 Supporting Documentation

The following documentation details terms, responsibilities, and mechanics of the Energy Manager
Program.

Energy Manager Agreement: Contains legal agreements around the EM Initiative and Schedules
including many useful definitions (though not all the definitions in Schedule are repeated), EM
duties, and Participant eligibility.

Energy Management Plan Template: A possible template to use when writing an Energy
Management Plan.

Steps in Conducting Energy Audit

Step #1. Conduct a Conditions Survey

The purpose of a conditions survey is to assess the general level of repair, housekeeping and
operational practices that have a bearing on energy efficiency and flag situations that warrant further
assessment as the audit progresses.

Step #2. Establish the Audit Mandate

For the audit to be a success, you should establish the audit mandate. That is, you should get
a commitment from senior management and define the expectations and outcomes of the audit. To
do so, you’ll need input from management and production and maintenance staff. The mandate
should make the audit’s goals and objectives clear and outline the key constraints in timing,
resources and access to facilities or areas.

Step #3. Establish the Audit’s Scope

 The results of the conditions survey will help you define the scope. You’ll also need the
location of all energy inputs and a list of all major energy-consuming systems. The final scope should
specify the limits of the audit in terms of:

Step #4. Analyze Energy Consumption and Costs

You should look at utility bills for each purchased energy source, metered data and
applicable utility rate structures. You may also be able to get historical energy consumption data
from the utilities themselves. The goal is to determine the relative annual cost and
incremental/marginal cost of each purchased form of energy.

Step #5. Compare Energy Performance

Determine energy use indices and compare them externally to best practices available within
your industry or internally from:

 One period to another;

 One facility to a similar one within your organization; and/or
 One system to a similar one.
To conduct this analysis, you’ll need periodic energy consumption data as well as information
about factors that impact consumption, such as production, weather and occupancy. You want to
establish:

 Relationships between energy use and significant factors;

 Trends in consumption;
 Preliminary reduction targets; and
 The potential savings in reducing the variability of energy consumption.

Step #6. Profile Energy Use Patterns

Next, you’ll need to determine the time relationships of energy use, such as the electricity demand
[Link] conduct the analysis, you’ll need logged data over intervals from one minute to one hour
to one day for:

 Electrical power;
 Gas flow;
 Temperature;
 Humidity;
 Light level;
 Air flow or pressure; and
 Other pertinent or measurable factors.

Step #7. Inventory Energy Use

The inventory measures how much electricity is used, and how much and how fast it’s used
in each category. To compile the inventory, you’ll need:

 Facility and equipment drawings and specs;

 Equipment inventory and nameplate data;
 Power and fuel consumption;
 Measured flow rates, temperatures, etc.; and
 Equipment condition and performance.

Step #8. Identify Energy Management Opportunities

By looking at the energy inventories and balances, notes from the conditions survey and
selected measurements, you should be able to identify opportunities to improve the management of
your energy use. You should prioritize these opportunities based on those that require immediate
action and those that need additional analysis.

Step #9. Assess the Benefits

The possible benefits of an opportunity include:

 Direct and indirect energy savings;
 Comfort/productivity increases;
 Operating and maintenance cost reductions; and
 Environmental impact reductions.
Possible costs to consider include:
 Direct implementation costs;
 Direct and indirect energy costs; and
 Operating and maintenance cost increases.

Step #10. Report Findings

Lastly, it’s important to report the audit’s findings in a way that facilitates action. The report should
include a succinct and compelling presentation of the audit’s findings, including:
 An executive summary;
 An analysis of existing energy consumption;
 A description of the identified energy management opportunities—from inexpensive
housekeeping improvements to costly, capital-intensive retrofits;
 A savings assessment of these opportunities; and
 An action plan for implementing those that are feasible.

The Decision Process

Building Size

Building size determines a host of details of an energy management system’s usefulness and
appropriateness. The size of a building generally can determine the overall energy spend, the types
of equipment that is installed to heat and cool the building, the
number of occupants, etc. Generally, the larger the building,
the more sophisticated the EMS can be.

Energy Spend

The monthly or annual energy spend of a company or building is one of the first
determinants of selecting an EMS. Sophisticated and expensive systems are not
appropriate for small buildings that use little energy. The savings from the EMS
can’t overcome the initial and ongoing costs, and ROI and payback won’t meet
acceptable levels. The greater the energy spend, the more sophisticated (and
expensive) the EMS can be as the savings created by the EMS will produce a more
acceptable ROI and payback period.

Geographical Location

Geographic location generally determines climate related effects on energy consumption. For
example, the extremes of hot summers in southern locations and cold winters in northern locations
significantly affect a building’s energy spend. In any case, an EMS that can effectively deal with
weather related energy effects on a building (including demand response, where applicable) should
be a consideration for certain size properties.

Number of Sites

Having an EMS for one building is different than procuring one for
a campus or portfolio of buildings. When more than one building
is involved, it should be a consideration that the EMS can “roll up”
and summarize the data from all sites as well as make
comparisons of individual buildings.

Geographical Dispersion of Buildings

If there is more than one building, the dispersion of those

buildings is an important consideration. Campuses of buildings can
be located relatively close to one another, while national chains
can be widely dispersed. The main consideration here is if the EMS
in question can acquire and manage data from a number of
buildings based on their proximity to each other.
 Building Use

Building use can determine the requirements for an EMS. A warehouse has different requirements
than an office building which must consider things like occupant
comfort. Data centers have different needs than office
buildings, hospitals, or schools...and so on.

Occupancy

Occupancy is a factor in a building’s energy

consumption. Occupant comfort while still managing
energy is one of the most important considerations for selecting
an EMS. Un-occupied spaces can create misleading information regarding a building (e.g. less energy
use than “normal”), so the EMS should be able to normalize energy spend based on occupancy, or
determine the energy intensity of the building.

Intended Use of System

Intended EMS use affects the choice of system in many ways. This should be discussed at length prior
to making the EMS choice. Some companies may just want better visibility into their energy
consumption while not needing the sophistication and capabilities that some EMS’s contain. Other
businesses may face situations where an EMS is a critical component of their business...such as a
laboratory or hospital where the inside environment of the building may be critical for safety
reasons.

Type of Building

Older buildings are different than new buildings. There are a host of considerations to be made
based on the building type including the equipment that is installed, insulation, windows, lighting,
digital capability vs. pneumatic, etc.

Intended Use of System

 Intended EMS use affects the choice of system in many ways. This should be
discussed at length prior to making the EMS choice. Some companies may just
want better visibility into their energy consumption while not needing the
sophistication and capabilities that some EMS’s contain. Other businesses may
face situations where an EMS is a critical component of their business...such as a
laboratory or hospital where the inside environment of the building may be
critical for safety reasons.

Business Risk

Some businesses have more business risk related to energy supply and consumption than others.
Examples of this include hospitals and data centers versus a warehouse or even office buildings. Data
centers rely on stable power supply and also effective and precise temperature control within the
center. Critical data system failures can occur if the HVAC system is not operating correctly. In these
situations, an EMS that has precise control and even predictive analytics may be necessary to
support the mission critical systems of the business.

Responsibility

An EMS must actually be used to be worth anything to a company or

building owner. Resources must be available and assigned to utilize
the system to its full capabilities. Additionally, EMS’s generally can
make recommendations for repairs or preventative maintenance
procedures. Resources must be available to schedule and perform this
work, or to call a service company to have the recommendation
addressed. It is not uncommon in today’s economic environment to
see EMS’s go unused or underused. Responsibilities should be
assigned or understood prior to making an EMS decision.

Knowledge Base

Not only must there be resources to operate the system,

these resources must have the capability to understand
how to use it and determine what the EMS is actually
saying. For some of the simpler EMS’s on the market,
this may not be an issue. For larger and more
sophisticated buildings and EMS’s, appropriate personnel
must be trained or assigned to work with the EMS.

Organization Maturity

An EMS is a technology-based system (in one definition), but it is also an organizational competency.
Immature organizations (with regard to structured processes and procedures) may find themselves
disorganized and working in an ad hoc manner regarding energy management initiatives. This can be
 detrimental to the overall effectiveness of the EMS resulting in less energy savings
and reduced ROI/payback. More mature organizations will necessarily have
repeatable processes in place to afford the most effective use of the EMS and the
energy management program that is in place.

Financial Consideration

Although many of the above EMS considerations are deemed important to the decision process, the
reality is that the selection process ultimately boils down to the numbers. Does this EMS make
financial sense to the company? What is the return on investment that this EMS will provide, and
how long will it take to pay back the initial and ongoing costs related to the system.