Energy Management

Maximizing Energy Efficiency: A Guide to Energy Accounting Concepts and Workflows

Energy accounting is like keeping a checkbook for your energy usage. It's a way to track how much energy your organization uses, where it's being used, and how much it costs you.
Energy Accounting

Energy accounting is a method of tracking and measuring the use and cost of energy in a particular system or organization.

This includes monitoring energy consumption, pinpointing areas of inefficiency, and implementing strategies to reduce energy usage and costs.

You can use energy accounting in different settings, including:

  • Businesses
  • Homes, and
  • Government agencies

Importance of energy accounting

Energy accounting is essential for several reasons, including:

  1. Saving costs: By tracking and measuring energy usage, businesses can identify where there is energy wastage and enforce measures to decrease consumption. Save more money by doing this!
  2. Enhanced energy efficiency: Energy accounting helps organizations understand energy consumption patterns, spot inefficiency areas, and implement strategies to boost all-around energy efficiency.
  3. Reduced carbon footprint: Energy accounting helps organizations reduce their carbon footprint by recognizing ways to reduce energy consumption and shift towards more sustainable energy sources.
  4. Compliance: Since companies need to track and report energy usage, energy accounting can help them to meet these requirements and avoid penalties.
  5. Transparency and accountability: Energy accounting provides organizations with energy consumption data and insights on how to improve operations, track their progress, and set energy reduction targets, leading to transparency and accountability.
  6. Sustainability: Energy accounting is vital for organizations to implement sustainable energy management practices, which reduce their environmental impact and contributes to a more sustainable future.

Let's now take a look at the different types of energy accounting.

Schedule a call with us and learn how you can save on energy costs.

Different types of energy accounting

There are several different types of energy accounting, including:

  • Building energy accounting involves measuring and handling building energy consumption. This includes commercial, residential, retail, and industrial buildings. In addition, building energy accounting monitors heating and cooling systems (such as HVAC), lighting, and appliances.
  • Industrial energy accounting focuses on measuring and managing energy consumption in industrial environments, such as manufacturing plants and mines. This includes overseeing energy consumption in specific industrial processes and their respective equipment.
  • Energy accounting for transportation deals with the energy consumption in transportation systems like cars, trucks, buses, and trains. This involves gauging fuel consumption, emissions, and other factors.
  • Energy accounting for renewable energy systems handles energy consumption in renewable energy systems, such as solar, wind, and hydroelectric power. This process includes surveying energy generation, consumption, and renewable energy systems efficiency.
  • Energy accounting for the grid measures and manages grid energy consumption like electricity transmission and distribution. This includes energy generation monitoring, consumption, and the efficiency of the grid.
  • Energy accounting for carbon: focuses on carbon emissions and includes implementing strategies to reduce emissions, such as carbon offsetting and carbon credits.

Now that you know the different energy accounting types, let's look at its process.

The energy accounting process

The energy accounting process is the organized and systematic approach to tracking, measuring, and analyzing energy usage within a particular system or organization.

This process helps identify energy inefficiency areas, implement strategies to reduce energy usage and costs, and observe its progress over time.

The energy accounting process commonly involves six steps:

Step 1: Collecting data

The first step includes measuring the energy consumption for different systems and equipment, such as lighting, heating, cooling, and appliances. This data is collected using energy meters, building automation systems (BAS), building management systems (BMS), or energy management software.

Step 2: Energy consumption analysis

After data collection, it needs to be analyzed to determine energy consumption patterns, identify areas of inefficiency, and gauge the potential for energy conservation. This includes creating energy consumption profiles, identifying peak energy usage times, and likening energy consumption data to industry standards.

Step 3: Identifying energy conservation opportunities

This step includes identifying systems or equipment that consume more energy than necessary, identifying areas of energy wastage, and determining opportunities to shift to more energy-efficient methods and equipment.

Step 4: Implementation of energy conservation measures

The next step is to implement energy conservation measures. This includes upgrading equipment, installing energy-efficient lighting, implementing energy-efficient building practices, and executing a comprehensive energy management program.

Step 5: Monitoring and reporting

The final step involves monitoring and reporting on energy consumption, energy conservation measures, and their efficacy. This includes creating regular energy consumption reports, conducting energy audits, and monitoring energy consumption over time to identify trends and areas where further conservation measures are needed.

Step 6: Continuous improvement

Energy accounting is a continuous process. Therefore, it is essential to regularly repeat it and ensure that the energy conservation measures implemented are still effective and that new opportunities are being identified and acted on.

Tools used for energy accounting

There are several tools that organizations can use during energy accounting, including:

  • Energy management software helps organizations track and analyze energy consumption data in real-time. This includes energy consumption, identifying areas of inefficiency, and generating reports on energy usage and costs.
  • Energy audits assess an organization's energy use, costs, and potential savings. These include thoroughly examining the energy systems and equipment, identifying energy-efficient opportunities, and recommending energy conservation measures.
  • Energy modeling software simulates and predicts energy consumption and evaluates the energy efficiency of a building, process, or equipment.
  • Building automation systems (BAS) allow for the remote monitoring and control of building systems, such as heating, ventilation, air conditioning (HVAC), lighting, and security.
  • Smart meters measure and record energy consumption in real time and can communicate the data to the utility or energy management software.
  • Carbon accounting tools help organizations measure and report on their carbon emissions, identify areas of high emissions, track progress in reducing emissions and report to regulatory bodies or for sustainability reporting.

Benefits of energy accounting

Some of the benefits of energy accounting are as follows:

  1. Increased awareness: Energy accounting helps raise awareness among employees, management, and stakeholders about energy consumption and costs. This leads to better decision-making and improved energy management.
  2. Improved asset management: Energy accounting provides data on the energy consumption of specific systems and equipment. This information is used to optimize these assets' maintenance and replacement schedules, leading to more efficient and cost-effective management.
  3. Better budgeting: Energy accounting provides a clear picture of energy costs. It helps organizations set realistic energy budgets and track actual energy costs against budget, which helps to identify areas of overspending and take corrective actions.
  4. Better negotiation of energy contracts: Energy accounting provides data on energy consumption patterns and costs. This information is used to negotiate better energy contracts with suppliers, including arrangements for renewable energy sources.
  5. Improved communication and reporting: Energy accounting provides data on energy consumption. You can use it to communicate energy performance to stakeholders, report on energy performance to regulatory bodies, and for sustainability reporting.
  6. Improved energy procurement: Energy accounting helps organizations identify energy consumption patterns and costs. Use this to identify opportunities for energy procurement from more cost-effective and sustainable energy sources.
  7. Improved energy security: Energy accounting helps organizations identify energy consumption patterns and costs. Leverage this to identify opportunities for energy procurement from more cost-effective and sustainable energy sources and to recognize opportunities for on-site energy generation.

Challenges and limitations of energy accounting

Energy accounting has some challenges and limitations that include:

Data accuracy

Energy accounting relies on accurate data, which can lead to incorrect conclusions and decision-making if inaccurate. Data accuracy is affected by various factors, such as meter and entry errors and inaccuracies in energy consumption data.

Difficulty in obtaining data

Collecting energy consumption data is difficult and time-consuming, especially in large organizations with multiple locations and various energy-consuming systems and equipment.

Limited understanding of energy accounting by management

Energy accounting is a complex process requiring expertise and knowledge, and if the administration of an organization needs to understand the process, it can be challenging to implement and maintain.

Implementation and maintenance costs

Energy accounting requires significant investment in time and money, including the cost of energy management software, energy audits, energy modeling, and building automation systems.

Data management and analysis

Energy accounting generates a large amount of data, requiring efficient data management and analysis. However, mishandling this leads to information overload and difficulty extracting actionable insights.

Resistance to change

Energy accounting can reveal areas of inefficiency, and it also requires significant changes to systems and processes. If employees or management are resistant to change, it can be challenging to implement energy conservation measures.

Data privacy and security

Energy accounting sometimes requires collecting sensitive data, such as data on the energy consumption of individual buildings or equipment. That's why it is vital to ensure that this data is protected from unauthorized access and misuse.

Third-party data validation

Energy accounting data can be used to verify energy consumption and usage, and this requires third-party data validation, which can be time-consuming and costly.

Despite these challenges and limitations, energy accounting is an essential tool for organizations to track and manage energy consumption, identify areas of inefficiency, implement energy conservation measures, and meet regulatory requirements.

With proper planning, implementation, and management, organizations can overcome these challenges and realize the benefits of energy accounting.

Facilio for energy management

Facilio combines the essential elements of asset maintenance and energy management by integrating real-time data-driven intelligence into existing building infrastructure.

Utilizing IoT and machine learning technology (FDD), it extracts valuable insights from large amounts of siloed data from current automation systems. This way, Facilio streamlines building assets and energy consumption management in one platform.

Facilio is a central command platform that utilizes portfolio-wide insights to drive improvement in asset and energy performance, as well as the efficiency of facility management teams. This approach enables real-time informed decision-making at a high level, enhancing overall performance.

Facilio provides:

  • Regression charts & heatmaps
  • Energy measurement and analysis across the portfolio
  • Monitoring of HVAC equipment
  • Heavy usage alerts and trend monitoring
  • EnPI (Energy Performance Indicator) benchmarks
  • Anomaly detection and predictive diagnosis

See a demo and learn why Facilio is the best option for all your sustainability needs.