April 2016

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Should Your Plant Have an Energy Audit?

This is 2016; the Information Age - not the Estimation Age.
Bill Holmes,

Holmes AutoPilot LLC


The accepted view seems to be that reflected in a DOE sponsored report. (1) “An energy audit is a key to assessing the energy performance of an industrial plant and for developing an energy management program.” I beg to differ. All of my experience during my 42 years in the energy efficiency profession tells me just the opposite.

Energy Audits don’t work. They’ve never worked. They’re an antiquated concept that should have been abandoned years ago. Don’t waste your time and money on an Energy Audit. There are much better ways to lower your energy costs.

Energy Detectives #1


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I have been designing, operating, controlling, instrumenting, learning and teaching about energy systems since 1974.  After I had been in business for a few years, I agreed to do an energy audit of a foundry for the local electric company. I wanted to learn about their program for myself, to see how effective it was. After reading the Energy Audit Report I had written, it was obvious it had little value.

The plant was too complex for an audit to reveal much of anything. But the utility was happy. They had what they needed to check off a box on a form, give the foundry some money, something they were required to do by the State Public Service (Utilities) Commission. The fact that the Audit wouldn’t result in any significant energy savings didn’t seem to matter to anyone but me.

I resented wasting my time in a paperwork exercise when I could have been actually working with the building systems, saving energy. I had been in enough Plant Engineer’s and Plant Manager’s offices and seen audits laying on shelves gathering dust to know what kind of savings often resulted from energy audits - None!

Since that time, I have written over 100 articles, blogs and made numerous presentations including several webinars, all with the goal of getting the energy profession to abandon their antiquated methods. Our profession must move from using “estimated” data to actual monitored data combined with valid scientific method and do what is best for facility owners. Not what is most profitable for those providing the products and services.

My latest effort has been my book, “Unleash the Power of Cloud-Based Energy Monitoring”. You can download a free copy from our Website. (2)

This article is a compilation of my thoughts on energy audits. I have provided links to the articles and Holmes & Watson, Energy Detectives Blogs they came from. (3)

Are Energy Audits Necessary or a Waste of Valuable Resources? (4)

Energy Detectives #2

Watson: Since nearly everyone in this field accepts what I was taught Holmes, that an energy audit must be the first step in every energy project, why do you feel the way you do?

Holmes: Simple answer. Experience. Most energy audits recommend simple, cookbook solutions and miss the best opportunities. (5).

Energy usage patterns in industrial plants are extremely complex. They change every hour of every day. When I first started my own business, I would go to each prospective project and spend a day, similar to a walk-through audit, looking at everything in the building, all of the energy systems, to see if the facility looked like a good candidate for my services. Would I be able to save them anything? I quickly learned that you can’t tell much of anything from an energy audit. There is absolutely no way to know without accurate information, and it can’t be just from estimates, spot checks or installing temporary monitoring equipment for a few days.

I also learned that every industrial plant has huge opportunities for energy savings. Because of the ineffectiveness of energy audits and other traditional methods, industrial plants are ripe for improvement. As a result, I stopped doing any type of audit, survey or study to determine if a facility had potential.

Watson: I assume you have found others who agree with your opinion of energy audits?

Holmes: Most experienced energy professionals that I have talked to are in total agreement. Nearly all of the articles I have read supporting energy audits either come from those selling audits or from government agencies, utility companies and academia, not from those actually working with energy systems on a daily basis.

One of my most popular articles was, “The Energy Audit; A Sacred Cow of Energy Management”. (6). In it I challenged this profession to replace the Energy Audit with the Energy Inventory and install a permanent Energy Monitoring System as the first step in every project.

Some of the responses are included below: (7).

“We have completed a couple of lighting efficiency upgrades, a retro commissioning and numerous energy efficiency audits…the estimated energy savings gained through the completion of the ECM’s is just that, “Estimated”…I am looking for an Energy Monitoring System that can provide me with data that I can use to determine how to optimally operate the facility and to minimize energy consumption.”

“Great article and insight. Most energy audits sit on a shelf and today they are being done by people with 0-2 years’ experience, that haven’t ever been in the field or operated a building.”

“We’ve had several energy audits provided by the utilities for free, and we’re having a lot of internal debate about the validity of their recommendations.”

“The “energy audit” appears to be the right thing to do and makes people feel warm and fuzzy. Meanwhile, there are some big, long-term opportunities being missed.”

“All these reports start to look the same: 1) fix leaks and reduce artificial demand 2) improved system efficiency (SCFM/KW), 3) get the compressors under control. You cannot do this by putting in temporary data loggers once every couple of years and then sit in a review meeting and agree the that nothing has changed or if there is a change, find some justification for it (new production line, utility rate change, etc.).”

“Our local utility seem to be more interested in “putting numbers on a board” than actually managing energy consumption. No measurable action to reduce energy is achieved from Energy Audits.”

Energy Audits are a Flawed Concept (8)

Watson: I found an article in DOE’s Energy Efficient Building Hub (EEB Hub) that contradicts their quote at the beginning of this article. It talks about the Variation in Energy Audits. They contracted three energy auditing firms to survey their building, a 60,000+ sq ft office in the Navy Yard in Philadelphia, and report on energy use and costs, as well as to make recommendations for upgrades and renovations. (When I tried to follow the original link, I found that it was no longer active.) Luckily I had copied the article. (9)

The article said that the EEB Hub researchers expected the results of the three firms to be fairly consistent. However, each Energy Audit firm presented vastly different findings and recommendations. Not only did the recommendations vary significantly, the estimate of installed costs ranged from $138,000 to nearly $500,000. Estimated savings ranged from 14.5% to 38%.

Holmes: Interestingly enough, the article said that the building is one of the nation’s most highly instrumented buildings and they would use the instrumentation to evaluate the accuracy of the Energy Audits. They didn’t have an “A” Team of Super Energy Auditors who could do their own audit to tell which of the three firms were correct; they needed data from an Energy Monitoring System to determine which Energy Audit was accurate.

It seems to me that the fact none of three energy auditing companies nor DOE themselves could do an accurate energy audit, confirms my belief that they don’t work. What else did it have to say?

Watson: It recommended standardization of energy audits. “The next step in limiting variability among energy audits is to provide all auditors with a detailed, sequential walk-through protocol as well as mandatory documentation “to give building owners and institutions more confidence in the value of energy audits and the building retrofit projects that rely on them.”

Holmes: As confirmed by their own experience in the EEB Hub building, the Energy Audit is seriously flawed. They don’t work. They never have and never will. They literally haven’t changed in more than 40 years.

How many other fields can you think of that are still providing the same entry-level training that they were 40 years ago? (10).

Instead of trying to prolong its life by throwing more time and money at it, why don’t they admit that the first tool developed on the heels of the Energy Crisis in the mid-‘70s, has outlived its usefulness and needs to be abandoned?

Replace the Energy Audit with a Permanent Monitoring System (11).
Energy Detectives

Watson: How do you start working with a new facility?

Holmes: Instead of trying to identify and estimate usage and potential savings, which can’t be done accurately during an Energy Audit, we start by doing an Energy Inventory. We identify the significant energy-using equipment and systems. Then we select the points to be monitored, the sensors and we design and install an energy monitoring system.

From then on the facility has permanent, continuous and unbiased energy information that shows where and how efficiently every dollar is spent every hour of every day. Utility dollars can be managed like every other dollar. (12)

The monitoring system allows the owner to start making no-cost and low-cost changes and generating energy savings the first day. And in nearly every case the monitoring system has paid for itself in a few weeks or months. We have seldom found the need for capital improvements, the primary goal of energy audits and the energy establishment. If they are required they should be the last step after all of the low-cost, no-cost improvements have been made, certainly not the first.

To fly an airplane, pilot a ship, drive a car or cook a turkey, you need Real-Time, accurate information. So at the very end of the whole energy auditing process, an Energy Monitoring System must be installed to provide the continuous Real-Time and Historical Data on the total facility and all of the Energy Systems in order for the operators to keep them running efficiently.

Watson: Rather than paying for three energy audits and then having to use instrumentation to see how accurate they were, why didn’t they skip all of the intermediate steps and expenses and invest every dollar in instrumentation at the beginning of the project, as you have always found to be the most effective approach?

Holmes: Great question Watson. The very first step, not the last should be to install the instrumentation, the Energy Monitoring System.

Energy Audits, benchmarking, collecting spot data, all of the hours associated with “estimating” energy use and savings, commissioning, M&V evaluation, periodic retro-commissioning and many capital projects can be eliminated.

Remote Monitoring of energy systems provides continuous commissioning to ensure that energy systems are working properly and running efficiently. It provides Real-Time Fault Detection and a way to be notified the instant something goes wrong. In addition, the Historical Data can be used to accurately predict savings from possible energy projects, verify the actual savings from any that are implemented, size new equipment and much more.

We have been demonstrating for more than 35 years that when monitored data is used to change the way energy systems are operated and maintained, performance and reliability increase, operating and maintenance costs go down and through remote monitoring and fault detection, personnel can spend their time proactively managing energy systems rather than reacting to costly and potentially hazardous failures.

All of those savings will more than pay for the cost of an Energy Monitoring System within the first few weeks or months.

This is 2016; the Information Age - not the Estimation Age.


References & Links

(1)https://china.lbl.gov/sites/all/files/guidebooks/Industrial_Energy_Audit_Guidebook_EN.pdf. This work was supported by the China Sustainable Energy Program of the Energy Foundation through the U.S. Department of Energy under Contract No. DE-AC02-05CH11231

About the Author

Bill Holmes is a mechanical engineer who has spent his entire career working with Energy Systems, first with planes in the Air Force and since 1974, in buildings. Based on his instrumentation experience in the Air Force, he may have been the first Energy Professional to recognize the opportunity to apply the same methods used to fly airplanes successfully, to operate buildings efficiently. Bill has been called the “Father of Energy Monitoring”.

With a BS and MS in mechanical engineering and additional coursework toward his PhD, Bill has been a practicing Engineer, Mechanical Systems Designer, Purdue Professor and Energy Manager Responsible for Energy Conservation, System Operation, Control and Maintenance 24/7 in multiple facilities. He taught for several years in the Continuing Education in Energy Management Program at the University of Wisconsin.  After receiving his Registrations as a Professional Engineer in Ohio and Indiana, he became a Charter Member of the Association of Energy Engineers (AEE) and one of the first Certified Energy Managers (CEM). He was later the Energy Manager of the Year for the Hoosier (Indiana) Chapter of AEE and received a DOE Award for Energy Innovation in 1990 for using his Energy Monitoring System and Methods to reduce the energy costs by 67% in an Ice Arena.

Contact Bill: bill@holmesautopilot.com


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