Energy Accounting

Energy costs may seem small in comparison with total production and operating costs. But, in money terms, and in relation to profits, energy costs can be substantial. Energy accounting is the first step in usefully identifying and controlling energy costs to improve profitability.

Energy accounting is a disciplined management activity combining systematic procedures for monitoring and documenting energy consumption, with a planned approach for improvement of overall energy efficiency. By management's diligent use of Energy Accounting methods, short and long term changes in energy costs and efficiencies can be identified, whether they be caused by direct efforts to improve energy efficiency, or by inadvertent increases in energy usages. As is true for financial accounting methods, Energy Accounting methods only supply information to management - management must evaluate and act as required, to obtain the desired benefits.

Specific Energy Consumption

One quantity that is commonly monitored is the specific energy consumption C, the energy used (E) per unit of output (P):

C = E/P

For the ideal factory, with no services and no standing losses:

C = E/P = m (i.e., a constant)

In the typical industrial case illustrated below, the specific energy consumption is given by:

C = E/P = e/P + m

When production is very high, e/P becomes very small and the value of C approaches m. But, if orders fall off and P becomes small, then "e", which is the energy not related to production, becomes very important and C increases very rapidly.