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1
ENERGY DATA
ANALYTICS
By Sumit Jadwal, Indian Institute of Management,
Lucknow
This white paper/forward looking note foc...
2
Executive summary
In the present era energy consumption has a very significant role to play in input costs and thus redu...
3
"Over and above the key takeaways from the survey as noted above, some
very interesting findings also transpired. For ex...
4
Introduction& Overview
An expanding role for data analytics
Today we live in a digital world. The quantum of structured ...
5
Applications of Data
Finance and Banking
34
Proper utilization of Data differentiates financial service
providers and fo...
6
Healthcare
Digitization of patient medical records has paved the way for the creation of a huge database. Technology
may...
7
Globalenergyleadersbelieve–„Energydataisanasset„.TheIndustrialProcessDataisconsideredasapotentialproductivity
„goldmine‟...
8
Need for an Indian perspective?
In a bit to remain competitive, industries have been forced into evaluating possible way...
9
Survey Results
Tools for reduction in operational costs
In this tumultuous economy, reducing operating expenses has emer...
10
How to slash Energy costs?
From the opinion of respondents, it is clearly apparent that energy is one of the most impor...
11
En-route to energy efficiency
Almost all industry executives are apparently aware of the critical role of improved ener...
12
If “Data Analytics “is the way forward, then why so much reluctance in
its application?
The survey transpired unanimous...
13
The driving force for energy data analytics
As observed in the survey, 80% respondents agree that the main reason for a...
14
Conclusion
In a unified effort to improve cost competitiveness and to meet
sustainability commitments, Indian industrie...
15
Once the questions mentioned above become more prominent in the board rooms, it will lay the
foundation for developing ...
16
Impediments/Perceptions Solvents
Inadequacy of actionable data for the
diverse SME sub-sectors
But, with data analytics...
17
Energy Data Analytics- Benefit Matrix!
In the future, it is very likely that the energy efficiency value in industrial ...
18
E-Cube Energy is one of the emerging companies working in the Energy Efficiency domain.
We work with energy intensive i...
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Energy Data Analytics | Energy Efficiency | India

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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

Energy Data Analytics | Energy Efficiency | India

  1. 1. 1 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.
  2. 2. 2 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
  3. 3. 3 "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
  4. 4. 4 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
  5. 5. 5 Applications of Data Finance and Banking 34 Proper 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. 5 E-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 3 http://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 :
  6. 6. 6 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 7 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”
  7. 7. 7 Globalenergyleadersbelieve–„Energydataisanasset„.TheIndustrialProcessDataisconsideredasapotentialproductivity „goldmine‟.Theanalysisofbigenergydataisimportantinimprovingenergymanagement.Over80%ofenergygiantssaid thattheirdataholdsstrategicvalueandmoreclientsaremovingfromtacticaltostrategicenergymanagementbyleveraging energydataasabiglever.Expertsnowpointto4300%increaseinannualdatagenerationby2020thannow. 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.
  8. 8. 8 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.
  9. 9. 9 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 PruningHR expenses Change in operational procedures OptimizingEnergy 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 EnergyCost 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!
  10. 10. 10 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.
  11. 11. 11 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.
  12. 12. 12 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
  13. 13. 13 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 competitorshave 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 providingoffsite 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 submissionson 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”
  14. 14. 14 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’senergy consumptionand management compare with peers,best-in- classand global players? How can data accquiredbe utilised to make overall strategic road map? What are the gaps? Is there a need to review the company’slong- term energy consumption goals? Is there an effective monitoring system and processesin 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
  15. 15. 15 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.
  16. 16. 16 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!
  17. 17. 17 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 agencies giving off-site data analytics support will have a large role to play in energy arena across the globe.
  18. 18. 18 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.

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