Energy efficiency as a base of the energy economy
in a modern industrial plants
Michal Czosnyka Bogumiła Wnukowska
Wroclaw University of Science and PWSZ Witelona, Department of
Technology, Department of Power Technical and Economic Sciences,
Engineering Legnica, Poland
Wroclaw, Poland bogumila.wnukowska@pwr.edu.pl
michal.czosnyka@pwr.edu.pl
Abstract – The fast pace of economic development,
competitiveness, and innovativeness in industrial production,
force to take actions that minimize expenditures. This is often done
at the expense of product quality, but it is a highly risky idea, that
can lead to loss customers. Consequently, it seems reasonable to
look for other ways of saving, which will not directly affect the
quality of product. It is possible to do, if a sustainable energy
management which is concentrate with optimization
(minimization) consumption of energy resources is introduced in
the plant. It is realized by regular measurements of energy
consumption, obligatory energy audits, raw materials planning
and development strategy. This policy is in line with European
trend to reduce energy consumption by increasing the energy
efficiency of industrial processes. Nowadays, the reduction of
energy intensity in the industry is not only dictated by the desire
to minimize outlays and the same maximize profits, but it is
obligatory activity. The paper discusses important problems of
energy economy in industrial plants and shows the benefits of
efficient energy use. Also included standards and regulations, that
are in operation in Poland. The article points to the benefits and
opportunities resulting from application of the energy
management system and proposes some methods of improving
energy efficiency in industrial plant.
Keywords – energy, efficiency, economy, management,
industrial, plant, innovativeness, competitiveness, development
I. INTRODUCTION
20 years ago, the topic of energy efficiency and energy
conservation in Poland did not exist. Power system engineering
and the industrial sector were fully nationalized and centrally
controlled. Electricity was treated as a common good that
belongs to everyone [1]. Machines used in the industry were
often oversized and not optimally selected. The basic criterion
for equipment selection: fulfilling a specific task and a long
service life. During the political transformation in '90. for fear of
the future, investments were stopped in many industries. The
situation changed after Poland's accession to the European
Union. A number of regulations and the European Union
climate and energy package forced action to increase the
efficiency of generation, transmission, distribution and
utilization of electric power. Responsibility has fallen on
companies that need to adapt their production to the existing
regulations.
978-1-5386-6091-1/18/$31.00 ©2018 IEEE
Katarzyna Karbowa
Wroclaw University of Science and
Technology, Department of Power
Engineering
Wroclaw, Poland
katarzyna.karbowa@pwr.edu.pl
II. ENERGY EFFICIENCY
Energy efficiency should be understood as a set of processes
leading to a more rational use (transmission and utilization) of
energy. Ensuring obtaining the same or even better final result
[2, 3, 4]. Maximizing the efficiency of energy use directly
affects the minimization of expenditures on electricity. This
allows the company to operate on the market in good condition,
be competitive and have financial resources for further
development. Another equally correct definition of energy
efficiency is described in the following formula:
  
where:
E – obtained size, amount of utility effect [pcs, kg, meter, etc.]
W – amount of energy used to get the effect [kWh, MWh].
The formula (1) shows that energy efficiency can mean the
ratio of, for example, the amount of product produced and the
amount of energy used to produce it. In the case when both E
and W are expressed in units of power or energy, Ee directly
points to the energy efficiency of a given process. The reverse
of the energy efficiency of the process is energy intensity.
III. STIMULATORS FOR INCREASING OF ENERGY EFFICIENCY
A. Legal Acts
The main document currently regulating energy efficiency
issues is: Directive 2012/27/EU of the European Parliament
and of the Council of 25 October 2012 on energy efficiency [5].
Its main objective is to reduce primary energy consumption by
20% between 2010 and 2020, which means that Member States
are obliged to reduce their final energy consumption by 1.5%
per year.
In Polish legislation, the act implementing the EU Directive
is the Act of 5 May 2016 on energy efficiency. It applies to
energy companies, end consumers and public sector entities.
The Act defines the role, tasks and objectives of public sector
entities that should be achieved by 2020, rules for conducting
an energy audit, principles for elaborating an energy efficiency
plan.
 Another legal act that influences the need to improve energy Programme Infrastructure and
efficiency is the energy and climate package adopted in 2007 in the field of energy efficiency in Environment 2014–2020
transport regional operational programs for
(3x20%), which assumes: 2014-2020
 to reduce emissions of greenhouse gases by 20% by 2020
Programme Infrastructure and
taking 1990 emissions as the reference, Environment 2014–2020
 to increase energy efficiency to save 20% of EU energy Promotion of low-carbon strategies
consumption by 2020, for all types of territories

 to reach 20% of renewable energy in the total energy

supporting sustainable multimodal
consumption in the EU by 2020. urban mobility and adaptation
The implementation of these requirements will not be in the field of energy production measures with mitigation impact on
and distribution climate change
possible without an increase in energy efficiency. The current
Polish Energy Policy until 2030 puts special emphasis on
Promoting the use of high-
energy efficiency and describes the basic directions of action in efficiency cogeneration of heat and
order to improve it. electricity based on the useful heat
demand

B. Support mechanisms regional operational programs for

2014-2020
The programs and support mechanisms available at the
national, regional and local level allow obtaining funding for the
implementation of investments improving efficiency [5, 6]. IV. THE ROLE OF ENERGY EFFICIENCY
These include:
Each transformation of energy is associated with power
 measures to reduce the energy intensity of the energy losses (Fig. 1). The basic solution is to replace the device with
management of enterprises, more energy-efficient ones. High efficiency of the device means
less energy needed to perform the same task.
 purchase of energy-saving devices and technologies,
investments increasing the share of renewable energy, The energy of losses usually emanates from the device as
heat. Many modern devices are commonly powered from power
 investments using heat and waste energy recovery, inverters. The amount of heat released is significant and forced
 costs of energy audits, cooling is necessary. It seems reasonable to recover heat from
power electronics devices (recuperation) and use it to heat the
 costs of technical projects leading to increased places that require it. It will be necessary to rebuild the heating
efficiency. infrastructure, but this should reduce the expenditure on heating
Available in Poland programs and sources of funding are buildings. The recuperation of the energy can also be talked in
presented in Table 1. the context of electric drive. The kinetic energy of the rotary
motion of the motor, can be converted into electric energy and
TABLE I. PROGRAMS SUPPORTING INVESTMENTS INCREASING ENERGY returned to the main power grid. Energy recovery from
EFFICIENCY [5] production processes is one of the types of projects
recommended in the Act on energy efficiency.
Resources: Realisation programs:
White Certificates
Smart Grids Program
of a horizontal nature
Programme Infrastructure and
Environment
Thermomodernization and
Renovation Fund
in the field of energy efficiency in Green Investment System
buildings Programme Infrastructure and
Environment 2014–2020
improving energy efficiency
Support for entrepreneurs in the
field of low-emission and resource-
efficient economy
in the field of energy efficiency in
industry improving energy efficiency

Programme Infrastructure and

Environment 2014–2020
Green Investment System
Fig. 1. Energy recovery [7]
 Increasing energy efficiency affects not only the reduction of
energy consumption by final customers, but also the reduction
of primary energy, necessary to generate electricity. This fits
perfectly in the Polish climate commitments and sustainability
policies. It obtained the same three main aspects (Fig. 2).
ECONOMIC SOCIAL
ASPECT ASPECT
ENERGY
EFFICIENCY
ECOLOGICAL
ASPECT
Fig. 2. Aspects of energy efficiency [8]
The economic aspect is currently the most important and the
most encouraging stimulus to take actions that reduce energy
consumption in production [8]. If the company uses energy more
rationally, production costs will be lower and the company will
generate more profit. Given the high competitiveness, this is
very important.
The ecological aspect results from social and environmental
changes that have occurred over the last few decades. Lower
energy consumption means less energy to produce. Considering
that Polish energy is based in 70% on conventional fuels: lignite
and hard coal, reducing the demand for power generation will
significantly reduce the emission of harmful substances into the
atmosphere.
The social aspect means creating a friendly image of a
company caring for the environment and local residents.
At the same time, it is also necessary to change the way of
thinking and understanding of certain phenomena. It should be
borne in mind that energy efficiency is treated equally with
other, traditional energy resources, and its growth is important
for the condition of the Polish economy and energy.
V. THE POTENCIAL FOR IMPROVING ENERGY EFFICIENCY
Improving energy efficiency in industrial plants does not
always have to involve high financial expenses. Measures
reducing energy intensity can be divided into three stages, which
is presented in Fig. 3.
Stage 1 - does not require any additional financial expenses.
It allows you to save up to 4.6% of energy. Implementation is
associated with the introduction or in some cases only with the
practical use of energy management systems and process
control. Many modern drivers and controllers are equipped with
measuring outputs based on open communication protocols. It
eliminates the need to purchase and install additional measuring
devices.
Stage 2 - assumes the necessity to equip the production line
with additional measuring, communication, control and energy
recovery devices (depending on the needs of the plant). This is
a low-cost operation that saves up to 6.5% energy.
Stage 3 - requiring high financial outlays, is connected with
the modernization or change of the technological process in
order to improve the production process. It involves the use of
new, more energy-efficient devices and metering the entire
process. Despite the fact that financial outlays for investments
increasing energy efficiency are high, their rate of return is
currently relatively low and these activities bring measurable
financial results. As a result of step 3, 1.5% of energy savings
are achieved. However, it should be remembered that the
reliable implementation of stage 3 is automatically connected
with the realisation of the objectives of stage 2 and 1.
14%
12% 1,5%
10%
8% 6,5%
6%
Stage 3
4%
Stage 2
2% 4,6%
Stage 1
0%
Fig. 3. Potencial for improving energy efficiency [7]
Implementation of all three stages mentioned above, allows
to save up to 12.6% of electricity [9]. If in Poland, in most of the
industrial processes, energy consumption could be reduced by
only 10% (about 15 TWh / year), it would allow to shut down
obsolete power units and start construction of new ones without
worrying about power shortages in the power system.
VI. ELECTRICAL ENERGY MANAGEMENT IN THE ENTERPRISE
Energy management is an important element of a rational
energy economy and is crucial in increasing the energy
efficiency of industrial plants [1, 10]. The aim of management is
to maximize profits by minimizing costs incurred for electricity.
The energy management consists of the following activities:
 optimization of electricity tariffs and energy suppliers,
 planning, setting the production schedule adapted to the
energy tariffs used in the plant,
 introducing improvements, carrying out modernization
activities, searching for the best available techniques,
 assessment of the profitability of ideas and their
measurable effects,
 conducting an internal electrical power audit.

Fig. 4. The mechanism of energy management [10]
In a modern production plant, the energy management
process is supported by the energy management system (EMS).
It consists of hardware: measurement, transmission, recording
systems and software. The software allows you to aggregate,
filter and analysis the results of measurements and draw
appropriate conclusions based on them (Fig. 4). The system
should be flexible, scalable and based on proven, standardized
modules and controllers. This will allow for quick and easy
adjustment of the system to changes occurring during production
or development. The system monitors the process parameters in
real time: electricity consumption, utilization rate, temperature
or motor load, etc. EMS allows immediate reaction of personnel
in the event of equipment damage. This allows you to make the
right decisions in the right time to prevent unnecessary financial
losses.
The Act on energy efficiency requires every large enterprise
to carry out an energy audit (a procedure whose purpose is to
carry out checks and detailed tests and calculations) once every
four years [11, 12]. As a result of the audit, confirmed
information about energy consumption, possibilities of energy
efficiency improvement and energy savings. Pursuant to the
Business Activities Freedom Act, the large enterprise is a
company that in the last two financial years met at least one of
the following conditions:
 employed more than 250 people,
 the balance sheet total exceeded EUR 42 million,
 generated more than EUR 50 million of annual turnover.
The energy audit should be carried out by an independent
entity or not directly related to the activity of the company,
which has the knowledge and experience in conducting audits.
It is carried out on the basis of current, measurable and
identifiable data. It contains a comprehensive and detailed
overview of energy consumption in buildings, industrial
installations and transport. Failure to comply with the audit
obligation is subject to a penalty of up to 5% of annual turnover.
Most importantly, companies that have implemented a
certified energy management system according to ISO 50001 or
an environmental management system compliant with EMAS
are exempted from the obligation to perform the audit. Having
one of the above-mentioned systems allows to conduct an
energy audit on their own, at any time, without having to
outsource this activity to an external company. This results in
the undeniable advantage of having an energy management
system in the company that allows you to conduct an energy
audit of the company at any time. Achieved direct control over
the energy efficiency of processes and financial outlays for
energy.
However, a standard energy audit has a disadvantage. To a
large extent, it is based only on cost and economic analysis,
without taking into account other equally important factors [13,
14]. In a few cases, the criterion determining the implementation
is ecology and energy (type of energy saved, quantity,
production technology). Economic evaluation of the project
determines the taking or not taking action. The exceptions are
investments necessary from the point of view of health and
safety at work. With only one economic criterion, the low energy
prices maintained will not facilitate the process of making
investment decisions in energy efficiency. Low prices will result
in a longer return on investment. Therefore, attention is drawn
to the need to modify the methodology for assessing
undertakings reducing energy intensity, including the following
criteria:
 implementation (saving strategy, type of efficiency
activity),
 related to production (improvement of productivity,
improvement of work environment, other production
advantages)
 related to corporate engagement (relationship to the
core-business),
 considering the probability of success, acceptance or
failure (reducing the risk of business operations,
employee acceptance),
 branding (creating a friendly image),
 taking into account the distance from the core-business
of the company (necessity: gaining additional
knowledge, training of employees, involvement of new
services),
 taking into account the frequency and necessity of
control (the need to incur additional costs for service and
maintenance),
 taking into account indirect effects (increased
innovation, new jobs, increased corporate culture).
The creation of a methodology for assessing projects that
increase energy efficiency, taking into account both the classic
economic, ecological and energy indicators, as well as the
above-mentioned criteria, will allow for more reliable opinions
on projects. It will also help to improve the decision-making
process, presenting the effects of implementation of the project.
VII. CALCULATIONS
The analysis presented below is a real example and concerns
the investment consisting in the complete modernization of
lighting in a certain industrial plant. Traditional incandescent,
luminescent, sodium and metal halide lamps installed in a total
of 27 spaces of the plant were replaced with electroluminescent
light sources. The list of lighting points, the number of working
hours, unit power and power consumed by light sources is
presented in Table 2.
 TABLE II. MODERNIZATION OF LIGHTING IN THE INDUSTRIAL PLANT Assumptions that were adopted for the calculation are as
follows:
Electroluminescent light
Old light sources
sources the price of electricity: 384 PLN/year,
Number of working hours cash flow: 240 766 PLN,
Number of lighting points

Energy consumed during

Energy consumed during

Investment expenditure
acceptable payback period: 3 years,
Unit power
discount rate: 10%.

Unit power
Spaces

the year

the year
As a result of the modernization, 56% less electricity is used
for lighting per year. The number of lighting points has not
changed. The cost of such an investment is significant. In this
case, it amounted to 565 050 PLN. The results of the economic
pcs. h W MWh/yr W PLN MWh/yr
analysis are presented in the Table 3.
1 136 5760 400 313.3 150 136000 117.5
2 79 8640 400 273.0 200 94800 136.5 TABLE III. VALUES OF ECONOMIC INDICATORS
3 34 8640 250 73.4 120 30600 35.3
Indicator Value Requirement Fulfilled?
4 18 8640 72 11.2 40 3960 6.2
5 23 8640 72 14.3 40 5060 7.9 PP 2.3 year PP < 3 years Yes
6 6 8640 400 20.7 200 1200 10.4 NPV 33 699
NPV > 0 Yes
7 26 8640 250 56.2 120 23400 27.0 (for t=3) PLN
8 4 8640 116 4.0 48 1120 1.7 IRR 13% IRR ≥ 10% Yes
9 19 8640 250 41.0 48 17100 7.9
10 6 8640 116 6.0 60 1680 3.1
11 6 8640 36 1.9 20 1080 1.0 The PP received is less than the allowable payback period,
12 20 8640 72 12.4 40 4400 6.9
and it follows that this investment will pay back after 2 years and
13 19 5760 72 7.9 40 4180 4.4
14 19 5760 36 3.9 20 3420 2.2
4 months. The obtained NPV is greater than 0 and amounts to
15 67 5760 116 44.8 60 18760 23.2 33.699 PLN. This value should be interpreted as the return on
16 9 5760 72 3.7 40 1980 2.1 investment after 3 years of exploitation. IRR is 13%, which
17 38 5760 116 25.4 60 10640 13.1 means that discount rates would have to rise to this level, so that
18 26 5760 116 17.4 60 7280 9.0 the investment ceases to be profitable.
19 1 5760 58 0.3 30 190 0.2
20 15 5760 116 10.0 60 4200 5.2 In this case, the analysis show that this investment is
21 24 5760 116 16.0 60 6720 8.3 profitable from an economic point of view. However, this is not
22 84 3600 250 75.6 90 92400 27.2 always the case. Investments in the energy sector are
23 114 2880 36 11.8 18 21660 5.9 characterized by long payback periods, which are often
24 226 2880 72 46.9 36 45200 23.4 unacceptable for investors for whom only profit counts. Hence
25 76 2880 116 25.4 36 21280 7.9
the need to create a multi-criteria instrument for investment
26 8 2880 116 2.7 60 2240 1.4
27 5 3600 250 4.5 120 4500 2.2
assessment, as mentioned in the previous chapter.

Σ 1108 1123.9 565 050 496.9

SUMMARY
Increasing energy efficiency is an important aspect, which
Economic analysis of the project, used basic economic should be paid special attention. Fuel prices are currently very
indicators: volatile, deposits of raw materials are depleted, and Polish
 PP – Payback Period energy is based on the production of energy from hard coal and
𝐼 lignite. The reduction of energy intensity of industrial processes
𝑃𝑃 = 0 (2) will positively contribute to increasing the energy security of the
𝐶𝐹𝑡
country.
 NPV – Net Present Value
𝑁𝑃𝑉 = ∑𝑛𝑡=1 (1+𝑟)
𝑡
− 𝐼0 (3)
𝐶𝐹 Measures increasing energy efficiency in industry are also
𝑡
very well justified from an economic point of view. Smaller
 IRR – Internal Rate of Return
𝐶𝐹 financial expenditures for electricity mean the possibility of
𝑁𝑃𝑉 = ∑𝑛𝑡=1 (1+𝑟)
𝑡
𝑡 − 𝐼0 = 0 => 𝑰𝑹𝑹 = 𝑟 (4) allocating the funds saved for research and development.
where: Innovation is then growing, and the environmental aspect allows
I0 – initial investment, for creating a friendly external policy.
CFt – annual cash flow, There are currently huge technical possibilities for the
r – discount rate implementation of a measuring system that works with the
t – the time of the cash flow. energy management system. The introduction and skilful use of
the EMS system allows you to achieve a number of benefits.
A classic energy audit is not always a sufficient indicator to
allow a reliable assessment of technical projects in the energy
economy of an industrial plant. Therefore, further work is
needed to develop a method to take into account other criteria.
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