What is Energy Audit?

Energy Audit is the key to a systematic approach for decision-making in the area of energy management. It attempts to balance the total energy management. It attempts to balance the total energy inputs with its use,and serves to identify all the streams in a facility. It attempts to balance the total energy inputs with its use, and serves to identify the entire stream in a facility. It quantifies energy usage according to its discrete functions.Industrial energy audit is an effective tool in defining and pursuing comprehensive energy management program.

As per the Energy Conservation Act, 2001, Energy Audit is defined as“the verification, monitoring and analysis of use of energy including submission of technical report containing Recommendations for improving energy efficiency with cost benefit analysis and an action plan to reduce energy consumption”.

Energy today has become a key factor in deciding the product cost at micro level as well as in dictating the inflation and the debt burden at the macro level. Energy cost is a significant factor in economic activity. On per with factors of production like capital, land and labor. The imperatives of an energy shortage situation calls for energy conservation measure, which essentially mean using less energy for the same level of activity. Energy Audit attempts to balance the total energy inputs with its use and serves to identify all the energy streams in the systems and quantifies energy usage’s according to its discrete function. Energy Audit helps in energy cost optimization, pollution control, safety aspects and suggests the methods to improve the operating & 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’s,Instrumentation’s and technology.


Objectives of Energy Audit

The Energy Audit provides the vital information base for overall energy conservation program covering essentially energy utilization analysis and evaluation of energy conservation measures. It aims at-


  • Identifying the quality and cost of various energy inputs.

  • Assessing present pattern of energy consumption in different cost centers of operations.

  • Relating energy inputs and production output.

  • Identifying potential areas of thermal and electrical energy economy.

  • Highlighting wastage’s in major areas.

  • Fixing of energy saving potential targets for individual cost centers.

  • ​Implementation of measures for energy conservation & realization

      of savings.

Need For Audit

In any industry, the three top operating expenses are often found to be energy (both electrical and thermal), labor and materials. If one were to relate to the manageability of the cost or potential cost savings in each of the above components, energy would invariably emerge as a top ranker, and thus energy management function constitutes a strategic area for cost reduction. Energy Audit will help to understand more about the ways energy and fuel are used in any industry, and help in identifying the areas where waste can occur and where scope for improvement exists.

The Energy Audit gives a positive orientation to the energy cost reduction,preventive maintenance and quality control programmes which are vital for production and utility activities. Such an audit program helps to keep focus on variation which occurs in the energy costs, availability and reliability to supply of energy, decide on appropriate energy mix, identify energy conservation technologies, retrofit for energy conservation equipment etc.

In general, energy Audit is the translation of conservation ideas into realities by lending technically feasible solutions with economic and other organizational consideration within a specified time frame.The primary objective of Energy Audit is to determine ways to reduce energy consumption per unit of product output or to lower operating costs. Energy Audit provides a “benchmark” (Reference point) for managing energy in the organization and also provides the basis for planning a more effective use of energy throughout the organization.