Energy Audit is a vital link in the entire management chain.

The energy manager, while proposing various courses of action and evaluating their consequences, requires a detailed information base to work from energy audit

attempts to balance the total energy inputs with its use and serves to identify all the energy streams in the system and quantifies energy usages according to its discrete function.


Energy audit is an effective tool in defining and pursuing comprehensive energy management programmes. It has a positive approach aiming at continuous improvement in energy utilisation in contrast to financial audit which stresses maintaining regularity.


Energy audit provides answer to the question

- what to do,

- where to start,

- at what cost and

- for what benefits?

Energy audit helps in energy cost optimization, pollution control, and safety aspects and suggest methods to improve the operating and maintenance practices of the system. It is instrumental in coping with the situation of variation in energy cost availability, reliability of energy supply, decision on appropriate energy mix, decision on using improved energy conservation equipment, instrumentation and technology.

It has been established that energy saving of the order of 15 to 30% is possible by optimising use of energy by better housekeeping, low cost retrofitting measures and use of energy efficient equipment at the time of replacements. Indian industry consumes more energy compared to its counter parts in the developed countries.


Energy Audit

​In the Indian Energy Conservation Act of 2001 (BEE 2008), an energy audit is defined as:

"Verification, monitoring and analysis of the use of energy and submission of technical reports containing recommendations for improving energy efficiency

with cost-benefit analysis and an action plan to reduce energy consumption."

It should be noted that the term “energy assessment”

is sometimes used interchangeably with “energy audit” in some countries like the USA.


Introduction to Industrial Energy Auditing

An energy audit is key to assessing the energy performance of an industrial plant and for developing an energy management program. The typical steps of an energy audit are:

• preparation and planning

• data collection and review

• plant surveys and system measurements

• observation and review of operating practices

• data documentation and analysis

• reporting of the results and recommendations

Overview of an Industrial Energy Audit

Energy Audit
Audit criteria
Audit scope
Selection of audit team
Audit plan
Checklists preparation
Initial walk-through
Collecting energy bills
and available data
Preliminary analysis
Energy Audit
Data inventory and
Analyzing energy use
Benchmarking and
Comparative analysis
Identifying energy
efficiency potentials
Cost-Benefit Analysis
Energy Audit
Writing audit report
with recommendations
Post - Audit
Preparing action plan
for implementation
Implementing the
action plan


The objectives of an energy audit can vary from one plant to another. However, an energy audit is usually

conducted to understand how energy is used within the plant and to find opportunities for improvement and energy saving. Sometimes, energy audits are conducted

to evaluate the effectiveness of an energy efficiency project or program.

The energy audit provides the vital information base for overall energy conservation programme covering essentially energy utilization analysis and evaluation of energy conservation measures. It aims at:

i. Assessing present pattern of energy consumption in different cost centres of operations

ii. Relating energy inputs and production output

iii. Identifying potential areas of thermal and electrical energy economy.

iv. Highlighting wastage in major areas

v. Fixing of energy saving potential targets for individual cost centres

vi. Implementation of measures of energy conservation and realisation of savings.


The overall objectives of the Energy Audit are accomplished by:

i. Identifying areas of improvement and formulation of energy conservation measures requiring no investment or marginal investment through system      improvements and optimisation of operations.

ii. Identifying areas requiring major investment by incorporation of modern energy efficient equipment and up-gradation of existing equipment.

Types of energy audits

The type of industrial energy audit conducted depends on the function, size, and type of the industry, the depth to which the audit is needed, and the potential and magnitude of energy savings and cost reduction desired. Based on these criteria, an industrial energy audit can be

classified into two types: a preliminary audit (walk-through audit) and a detailed audit (diagnostic audit).


a) Preliminary audit (Walk-through audit)

In a preliminary energy audit, readily-available data are mostly used for a simple analysis of energy use and performance of the plant. This type of audit does not require a lot of measurement and data collection. These audits take a relatively short time and the results are

more general, providing common opportunities for energy efficiency. The economic analysis is typically limited to calculation of the simple payback period, or the time required paying back the initial capital investment through realized energy savings.

b) Detailed audit (Diagnostic audit)

For detailed (or diagnostic) energy audits, more detailed data and information are required. Measurements and a data inventory are usually conducted and different energy systems (pump, fan, compressed air, steam, process heating, etc.) are assessed in detail. Hence, the time required for this type of audit is longer than that of preliminary audits. The results of these audits are more comprehensive and useful since they give a more accurate picture of the energy performance of the plant and more specific recommendation for improvements. The economic analysis conducted for the efficiency measures recommended typically go beyond the simple payback period and usually include the calculation of an internal rate of return (IRR), net present value (NPV), and often also life cycle cost (LCC).