Energy Data Analytics | Energy Efficiency | India

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ENERGY DATA ANALYTICS

By Sumit Jadwal, Indian Institute of Management, Lucknow

This white paper/forward looking note focuses on the role that energy data analytics can play in driving energy efficiency practices and investments, especially in the Indian context. It’s based on extensive desk research and supported by an online survey conducted on industry personnel and other experts.

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Executive summary

In the present era energy consumption has a very significant role to play in input costs and thus reduction of

energy consumption has taken precedence in the industry over other cost optimization measures. Despite

this fact, any large scale adoption and implementation of energy efficient practices has not been observed

in India and this can largely be attributed to scanty knowledge with regards to energy efficiency best

practices and interpretation of process and energy data. Moreover the inability to draw meaningful and

actionable inferences from the data excavated from in-plant metering and the regular energy audits being

conducted at plants has largely rendered such exercises useless.

In April 2014, E-cube surveyed over 90 executives, academicians, OEMs and consultants from Energy and

allied sectors to ascertain the perspective on the present energy scenario in industries, the scope of data

analytics in driving energy efficiency practices and to identify the key enablers that are likely to influence

industrial energy efficiency strategy in the coming years.

Following are the key highlights from the survey:-

90%

of the respondents believe that

"energy optimisation"

is the best cost

reduction strategy.

98%

of the respondents

agree that "energy

efficiency" is going to be a key energy optimising

strategy

89%

of the respondents believe "Data Analytics" is

the next frontier to

drive energy efficiency strategies.

80%

of the respondents will use Data Analytics, as

it is an excellent way to track long term health

of the unit/system

89%

of the respondents stressed that

capacity building is required to

maximise the returns from

Data Analytics

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"Over and above the key takeaways from the survey as noted above, some very interesting findings also transpired. For example, even though the survey revealed the unanimous agreement among respondents regarding the benefits of data analytics, surprisingly only 46% considered data analytics as something that (would) add significant value to their core energy efficiency (work) strategy." The need of having an “ Indian Perspective “ lies in the fact that in India, concepts like energy data analytics have not been on the radar for most industries and though adoption of good metering practices and energy audits has gained traction, lack of utilization with respect to procured data, has prevented Data analytics from taking on a larger role. Recently, large global firms have started opening up to such concepts, thus contributing to the genesis of a similar trend in India as well. Mindset has a strong role to play in acceptance of such practices and concepts and this survey brings out the perception, though in a rationalized scale. This white paper/forward looking focused on the role energy data analytics can play in driving energy efficiency practices and investments, especially in the Indian context. It’s based on extensive desk research and supported by an online survey conducted on industry personnel and other experts

Respondents’ Profile:

A total of 90 respondents from

academia, industry, consulting,

policy makers etc participated in

the survey.The survey also had

good representation from some

of the largest stakeholders in the

Indian Energy Efficiency

Markets.The fairly broad-based

respondent’s base makes us

believe that the findings

represent the perceptions of the

Indian industry fairly well.

Some of the organization

represented by the respondents:

The Ruby Mills

Limited

NTPC

BHEL

Prayas Energy

Alliance for Energy

Efficiency Economy

BSL Limited

TCS

Tata Motors

Cheema Boilers

L&T

cKinetics

FICCI

Gujarat Energy

Development

Agency

BEE

Century Plywoods

Mahindra &

Mahindra

Shakti Foundation

IIT-Bombay

IIM- A,IIM-L

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Introduction& Overview

An expanding role for data analytics

Today we live in a digital world. The quantum of structured as well as unstructured data being generated and channeled from diverse sources like transactions, videos, audios, etc. has increased exponentially over the years in line with global digitization. “Global players spent more than $15 billion on software firms only specializing

in data management and analytics in 2010. Today, this industry on its own is

worth more than $140 billion and growing at almost 15 percent a year: about

twice as fast as the software business as a whole”2

1 2

It is increasingly becoming imperative for organizations to mine this data in order to stay competitive.

Analyzing data can provide significant competitive advantage for an enterprise. Proper and careful analysis of this data can lead to the inheritance of a wealth of information which can further be used for redefining business strategies accordingly.

1http://www.forbes.com/sites/louiscolumbus/2012/08/16/roundup-of-big-data-forecasts-and-market-estimates-2012/

2Fig :Data Investments by Industry. Source: Gartner (July 2012) 2http://en.wikipedia.org/wiki/Big data

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Applications of Data

Finance and Banking 34Proper utilization of Data differentiates financial service providers and forms the bedrock for a flourishing business. In the most recent study on big data in 95 countries from IBM Institute for Business Value in collaboration with the University of Oxford, it was founded that 71% of the banking and financial markets firms report that the use of information and analytics is creating a competitive advantage for their organizations, compared with 63% of cross-industry respondents. The number of firms reporting an advantage in this area has nearly doubled in just two years when compared to a similar study in 2010.

5E-Commerce

E-Commerce companies are one of the fastest adopters of Big Data. The dynamics of the industry are constantly changing and many companies are operating with wafer thin margins. These companies are looking for opportunities to increase their sales and profit margins by using Data Analytics to stay on top of the game 1. Personalization 2. Dynamic pricing 3. Data-Driven Decisions

3http://blogenterprisesearch.de/wp-content/uploads/2013/06/bigdata_studie.jpg

4 http://thefinancialbrand.com/38801/big-data-profitability-strategy-analytics-banking/

5 http://www.cuecommerce.com/3-ecommerce-big-data-predictions/

Globally 60% of financial

institutions believe that big

data analytics offers a

significant competitive

advantage and 90% think that

successful big data initiatives

will define the winners in the

future

Source :

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Healthcare

Digitization of patient medical records has paved the way for the creation of a huge database. Technology

may replace 80% of what doctors do. This will ultimately reduce costs, reduce physician workloads and

improve patient care.

6

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6http://coolhealthinfographics.com/post/52105286141/big-data-and-the-future-of-healthcare

7 http://www.saviance.com/news_letters/MayJuly2013/

Among all,

Utilities/

Energy

Intensive

Industries have

significantly

higher “data

value potential

index”

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Role of data analytics in energy domain

Worldwide Energy consumption of the

industrial sector is expected to grow from

200 quadrillion Btu in 2010 to 307

quadrillion Btu in 2040, increasing by an

average of 1.4 percent per year. Based on

India’s GDP growth rate of 6.1 percent per

year from 2010 to 2040 , an average

increase of 1.5 percent per year in energy

consumption pertaining to the industrial

sector can be expected.

Although operating companies can still save

energy in specific areas, the full potential of

energy saving can only be ascertained through a

holistic and integrated analysis of the complete

value chain of the plant or system.

It is estimated that in our country, about 48% of the total energy consumed in the

industrial sector can be attributed to Small and Medium Enterprises (SMEs) and by

adopting energy conservation measures, at least 25% of it could be potentially

saved, without any substantial investments. But, in quantitative terms, there is not

much authentic information and data available with respect to their energy

consumption and energy saving opportunities, which perhaps acts as one of the

biggest hindrances to implementation of sustainable energy efficiency practices.

Energy Analytics combines energy data management with the knowledge of energy

experts to uncover hidden saving potential, thereby contributing effectively in

making faster and quality business decisions.

Also, with usage data, companies can save money and energy by retrofitting or

optimizing the operation of their equipment. And data analytics can provide

information about how systems function on a day-to-day, even minute-by-minute

basis.

“Less visible and less

publicized than wind and

solar farms, energy

efficiency is the aspect that

is the most misunderstood

of the energy transition, and

yet the one that works best,"

said Stephan Kohler,

president of German

energy agency Dena.

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Need for an Indian perspective?

In a bit to remain competitive, industries have been forced into evaluating possible ways of reducing overall operational costs. With energy costs being a sizeable chunk of the total input costs and the increased stress on cost optimization, Energy Efficiency has been a buzz word in the “energy” circles of India in the recent past. We have seen a massive transformation in the energy efficiency markets with the advent of market driven mechanisms like Perform Achieve and Trade “PAT” scheme and with this new set of challenges and opportunities have emerged more for industries and especially SMEs.

Try to Google “Energy Data Analytics”, “Energy Benchmarking”, you will hardly find any case study, reference document or even a forward looking note from Indian companies. At E-Cube Energy, we believe that there has to be an Indian way of looking at Energy Data Analytics and the role it can play in driving down energy efficiency measures that are sustainable and have a long term impact. That is what prompted us to do a terse survey to ascertain the perspectives of Indian companies on Energy Data Analytics and to have a forward looking note/white paper that every CEO/COO/Energy Manager/Production Manage can refer to,

something that will give them an urge to think new, think different and think DATA!

Energy Efficiency in India has more of psychological barriers than financial or technology. Data is perhaps the only way which could change conventional way of looking at Energy Efficiency, shifting away from “ROI”, “Product Driven” decision making process to implementing more holistic and sustainable energy efficiency practices.

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Survey Results

Tools for reduction in operational costs

In this tumultuous economy, reducing operating expenses has emerged as the number one objective for

business owners everywhere. While every business's circumstances are different, certain opportunities for

cost reduction are common for most businesses. Introducing a cost-control system can bring immediate

savings and ensure that you remain competitive in the longer term.

Top 3 Cost Optimization Avenues

Only 23% agreed that pruning HR Costs would be a formidable strategy for overall cost reduction.

20%

7%

42%

51%

19%

16%

35%

38%

32%

32%

16%

11%

18%

34%

7%

11%

11%

Raw materials

Pruning HR expenses

Change in operational procedures

Optimizing Energy consumption

Q: Which of the following is having largest scope to reduce the operational costs in an industry?

Strongly Agree Agree Somewhat Neither Agree Nor Disagree Disagree Somewhat Strongly Disagree

Energy Cost Optimisation

Change in Operational Procedure

Raw Material Cost Optimisation

●●●

Based on India’s GDP growth rate

averaging 6.1 percent per year

from 2010 to 2040, an average

increase of 1.5 percent per year in

energy consumption pertaining to

the industrial sector is expected.

These facts are in accordance with

the industries’ view to underscore

the role reduction of energy

consumption plays in controlling

operational costs.

●●●

Energy Cost Reduction – Most formidable cost cutting strategy!

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How to slash Energy costs?

From the opinion of respondents, it is clearly apparent that energy is one of the most important cost factors in the industry. Although operating companies can still save energy in specific areas, 98% of the people (74% strongly agree & 24% agree somewhat) believe that the full potential of energy cost saving can only be leveraged through managing energy usage more efficiently, thus involving a holistic and integrated analysis of the complete value chain of the plant or system.

Among the respondents, 50% agree for continuously monitoring

energy supply market drivers to identify savings opportunities by

altering the procurement and source of energy. Similarly only 53%

consider varying the energy-mix8 as a viable method.

Integration of an efficient energy management system in the

organizational structure is very important. Responsibilities and the

interaction of the decision makers should be regularized.

Furthermore, a comprehensive coordination can ensure timely

fulfillment of tasks.

Looking beyond the absolute level of energy prices, executives point

out that volatility of energy prices is another reason to curb power

consumption—not only improving earnings, but improving earnings

predictability too.

8The term energy mix refers to the distribution, within a given industry, of the consumption of various energy sources crude oil, natural gas, coal, nuclear energy and the many sources of renewable energy

11%

22%

23%

74%

39%

31%

45%

24%

28%

35%

18%

1%

12%

7%

9%

9%

5%

5%

Alter the procurement and sourcing of energy

Varying the composition of Energy-mix

Assistance by Off-grid renewable energy generation

Managing energy usage more efficiently

Q: Among the following, which is the most effective & feasible way to cut-down the energy costs of an industry?

Strongly Agree Agree Somewhat Neither Agree Nor Disagree Disagree Somewhat Strongly Disagree

Among the academicians

who polled, 75% consider

assistance by Off-Grid

renewable projects to be a

smart way to reduce long

term energy costs; however

industries response on this

has not been as

encouraging.

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En-route to energy efficiency

Almost all industry executives are apparently aware of the critical role of improved energy efficiency, both

in their own companies and in the wider economy. In this survey, fully 98 percent of executives,

consultants, researchers and scholars surveyed for this research “agree strongly” or “agree somewhat” that

energy efficiency is a critical success factor for manufacturers today.

Results of the survey show that merely 45% consider investing heavily in technology up gradation as a

potent energy efficiency strategy. Retro-fitting of outdated equipment and alteration in operational

procedures are much more viable options as observed by the responses.

It is worth noting that all the energy consultants/policy makers who took part in this survey ‘strongly

agreed’ on the role data analytics can play in boosting the efficacy energy efficiency projects. It got an

astonishing 100% from this domain. Similar is the support for the method of retro-fitting from the

consulting/auditing fraternity, which clearly depicts that in the current the Indian energy scenario we need

to plug leaks in energy consumption by outdated and inefficient equipment. The results also highlight the

role that data and data analytics can play both in the decision making process and in validating the results

of any up-gradation or retrofitting activity.

47%

19%

38%

54%

35%

26%

39%

31%

11%

50%

19%

14%

4%

4%

4%

Retro-fitting of outdated & inefficient equipments

Invest heavily in technology upgradation

Alteration in operational procedures

Data analysis to develop an industry-wide benchmarking

Q: What do you think should be the approach by organizations to foster the efficiency in energy consumption?

Strongly Agree Agree Somewhat Neither Agree Nor Disagree Disagree Somewhat Strongly Disagree

One of the major outcomes of the survey is that the industry believes that the key to

improving energy efficiency will increasingly lie in software rather than in hardware.

About 89% respondents from industry consider analysis of energy and production data are

important to effectively manage the energy usage by developing an industry-wide

benchmarking.

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If “Data Analytics “is the way forward, then why so much reluctance in

its application?

The survey transpired unanimous agreement among people regarding the benefits of data analytics

pertaining to our products and services, for all phases of product development and production process. But

surprisingly, only 46% consider data analytics as something that can add significant value to their core

energy efficiency/optimization strategy. This exposes the prevalent disconnect in industry’s perception,

serving as a handicap for coalescing energy data analytics with primary business operations despite its well-

accredited immense hidden potential.

Over 70% consider the inability to utilize this data as the main hindrance. Among the energy

consultants, 89% stated that the lack of internal expertise to comprehend the data available is

the principal reason behind the hesitation of industries to implement and use data analytics.

16%

30%

23%

23%

11%

12%

28%

41%

41%

36%

30%

15%

27%

18%

22%

23%

30%

27%

18%

7%

14%

11%

19%

23%

11%

5%

1%

7%

11%

23%

Absence of technology for getting accurate & reliable data

Lack of expertise to utilize this data substantively

Acquisition of data is cumbersome & costly

After access to this volume of data, how to make it insightful?

Analysis & evaluation of data is complicated and pricey

It doesn’t add significant value to my core work strategy

Q: What are the reasons behind companies’ reluctance to use data acquisition system/tools for energy management?

Strongly Agree Agree Somewhat Neither Agree Nor Disagree Disagree Somewhat Strongly Disagree

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The driving force for energy data analytics

As observed in the survey, 80% respondents agree that the main reason for adopting data analytics is thatit

isan excellent vehicle to maintain the long-term health of system.

96%agreed that the availability of proficient external agencies providing offsite analytics support acts as

a catalyst to drive data evaluation. Industry believes that backed by expertise, these external agencies

crusade pretty superbly towards evaluating opportunities for optimization through a precise analysis.

91% of the energy consultants believe that anytime, anywhere access to tamper-proof data has utmost importance, wherein 64% of total respondents are in accordance with them.

Key Enablers- Energy Data Analytics!

16%

15%

23%

30%

30%

22%

42%

45%

41%

39%

50%

43%

26%

31%

26%

27%

16%

31%

11%

8%

11%

4%

4%

4%

5%To comply with govt. stipulations regarding data recording

Its a latest advancement that my competitors have adopted

Anywhere access to tamper-proof data, using cloud system

This system will aid in critical processes to stay within limits

It is needed to maintain the health and efficiency of system

Availability of external agencies providing offsite support

Q: If you consider ratifying the analytics of energy data, what would be the driving force for this decision?

Strongly Agree Agree Somewhat Neither Agree Nor Disagree Disagree Somewhat Strongly Disagree

Access to long term performance assessment/ health indicators

Availibility of profecient agencies providing offsite analytics support

Access to cloud based anytime anywhere tamper proof data.

Complying with Givt regulations/ sphisticated data submissions on energy and production

Competitor deploying similar strategy!

In the words of Mr. Manoj Garg,

General Manager (Engineering) at

BSL Limited “though there may be

lot of reasons for companies to use

Energy Data Analytics, initial

thrust has always been provided by

the need to abide by government

regulations”

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Conclusion

In a unified effort to improve cost competitiveness and to meet sustainability commitments, Indian industries plunk for better energy efficiency. Especially, in the SME sector, which plays a dominant role in Indian industrial scenario, the benefits of improved energy efficiency are clear, both in terms of financial impact and in terms of environmental impact.

As on date most of the SMEs have limited mandate/vision when it comes to framing energy efficiency strategies. Investments have largely been around change of equipment, installations of VFDs etc., which particularly is reflection of having a “product/vendor” driven strategy and not “data” driven strategy.

For the SMEs and industry to take advantage of energy saving opportunity that lies in process optimization and retrofitting (two of the energy efficiency strategies widely supported by the survey respondents), it is important for SMEs and industries at large to shift to taking data driven decisions, for which an evolved Energy Data Analytics strategy has to be devised and implemented.

Getting started is always the key; there is a change required in the overall thought process, there has to be a new way of looking at exploring energy efficiency measures and investing in them. Like in most cases change comes from the top, perhaps CXOs need to take a lead and challenge the overall thought process by asking the following key strategic questions:

How does the company’s energy consumption and

management compare with peers, best-in-

class and global players?

How can data accquired be

utilised to make overall strategic

road map?

What are the gaps? Is there a

need to review the company’s long-

term energy consumption

goals?

Is there an effective

monitoring system and processes in place to achieve

stated objectives? What kind of KPIs and dashboards

are desired?

In the energy domain, use of

Data Analytics has widely

been adopted in Utilities;

commercial buildings sector

seems to be catching up on

the trend.

However it’s the energy

intensive industries, SMEs

at large that have huge “data

value” to be tapped.

Need to be “Data” driven

Very often a change of view-point is needed more

than a change of panorama

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Once the questions mentioned above become more prominent in the board rooms, it will lay the foundation for developing and adopting an EDA strategy. An evolved EDA strategy will assist industries in driving down sustainable energy efficiency practices and manage their obligations towards global and domestic market driven mechanisms.

Implementing an inclusive EDA strategy- How to get started?

Select process/ problem areas and

its scope

Define Key Performance

Indicators "KPIs"

Identify data sources

Initate data accquistion with

time stamp

Analyse energy and production/process

KPI based benchmarking/ trend analysis

Automatic Alerts/Offsite

reports, energy saving projects

Implementation of projects/ Highlight Best Case Practices

Implementing EDA strategy-

How to get started?

Use of Data Analytics in Energy Efficiency markets has the power to transform the way energy efficiency

services are sought and delivered. It’s going to be disruptive.

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Impediments/Perceptions Solvents

Inadequacy of actionable data for the

diverse SME sub-sectors

But, with data analytics system in place, we have access

to authentic production and energy consumption data

which is verifiable and easily retrievable. It also

facilitates customized M&V which can assist during

verification by designated Govt. authorities

Every process is inflicted with so many

factors/variables, we can’t have industry-

wise standard procedures and models

Data analytics tackles this problem by including the key

process parameters as Normalization Factors to be

considered while making any comparisons, thereby

neutralizing the variations to bring standardization

A longer timeframe is needed to

comprehend and develop workable

solutions for energy efficiency

Contrary to this, data analytics enables you to make

expeditious decisions on the basis of statistical

evaluation of the past data and other factors

influencing the behavior of the targeted process or

equipment

Massive facilitation efforts needed for

assisting implementation

Implementation of data analytics system doesn’t

require massive deployment of resources. It can be

very easily aligned with the already running processes

of the plant. Joint follow-up with external energy

agencies further catalyzes the scheme by giving expert

advices

Meager budget for the SME component

is a handicap

To support the data analytics system, relatively very

low budget and resources are needed. It can be

initiated with very modest outlay and scaled up later,

as necessitated. Moreover, its cost is paltry when

compared with other energy saving measures namely

retrofitting, modernization of machines etc, however

EDA can play a significant role in effective selection

and implementation of these savings’ measures.

Implementing EDA Strategy-

Let‟s get some myths busted!

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Energy Data Analytics- Benefit Matrix!

In the future, it is very likely that the energy efficiency value in industrial process technology will lie more in software, apps, and

other intellectual property, and less in the physical industrial hardware itself. Those companies that are already complying with the

spirit of energy management standards —for example, by acting in accordance with the ISO 50001 standards—say that data is the next

big thing and availability of proficient external agenci es giving off-site data analytics support will have a large role to play in energy

arena across the globe.

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E-Cube Energy is one of the emerging companies working in the Energy Efficiency domain.

We work with energy intensive industries to help them develop and implement sustainable

energy efficiency practices.

We believe that Energy Data Analytics is the next frontier in energy efficiency markets, with

potential to change the way energy services are sought and delivered.

We have developed a cloud based energy information management and analytics portal

EnView, which is currently being used by over a dozen industries!

To know more about us or our work please visit our website www.eetpl.in.