Energy Key Performance Indicators

📖William Thomson, a renowned physicist and engineer, stated that “When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind.” 

📍This quote highlights the importance of numerical data and quantitative key performance indicators (KPIs) for any effective energy management system in the fields of energy efficiency and sustainability. 

📈Identifying energy performance indicators is a challenging task, but they can be simply defined as metrics that monitor and enhance the energy performance and consumption of an organization or a system. 

✒️These indicators reveal the potential areas of improvement, assist in setting and tracking goals, and evaluate the impact of energy efficiency projects and initiatives. Energy efficiency KPIs vary according to the industry’s complexity and the organization’s size, but some of the most common indicators are:  

1️⃣Energy Cost Index (ECI): it is the ratio of total energy costs to total revenue or output. It measures how much energy costs affect your profitability. A lower ECI means lower energy costs per unit of revenue or output.

▶️Example:

A factory that has a monthly revenue of $50,000 and a monthly energy cost of $5,000. To calculate ECI: 

Divide energy cost by revenue and multiply by 100 to get a percentage. 

ECI would be:

ECI = ($5,000 / $50,000) x 100 ECI = 0.1 x 100 ECI = 10%

This means that energy costs are 10% of a revenue. 

A lower ECI means lower energy costs per unit of revenue or output, which is desirable for most businesses. lower ECI can be achieved by reducing energy consumption or increasing revenue or output, with unchanged energy consumption. 

2️⃣Energy Use Intensity (EUI): it is the amount of energy consumed per unit of floor area or activity. 

It measures how efficiently use of energy in buildings or processes. A lower EUI means less energy consumption per unit of floor area or activity.

▶️Example:,

A building that has a floor area of 1000 square meters and consumes 500,000 MJ of energy per year. 

 EUI would be:

EUI = 500,000 MJ / 1000 m2 EUI = 500 MJ/m2/year

This means that this building consumes 500 MJ of energy per square meter per year. A lower EUI means less energy consumption per unit of floor area or activity, which is desirable for most buildings. By implementing energy efficiency measures and smart technologies this ratio could be decreased. 

3️⃣Energy Productivity: it is the ratio of output or value added to energy input. It measures how much output or value generated from a given amount of energy. A higher energy productivity means more output or value per unit of energy input.

▶️Example: 

A factory that produces 100,000 units of a product per year and consumes 200,000 kWh of electricity per year. 

To calculate energy productivity, divide output by energy input and the measure will be in units/year/kWh: 

Energy productivity = (100,000 units / 200,000 kWh) 

 Energy productivity = 0.5 units/year/kWh

A higher energy productivity means more output or value per unit of energy input, which is desirable for most businesses. 

Energy productivity could be used to compare productivity with another factory that has the same business as a kind of benchmark. 

4️⃣Specific energy consumption (SEC), it is the amount of energy consumed per unit of output or value added. 

▶️Example, if a factory consumes 100,000 kWh of electricity and produces 10,000 units of a product in a year, its SEC would be:

SEC = 100,000 kWh / 10,000 units SEC = 10 kWh/unit

This means that the factory consumes 10 kWh of electricity per unit of product.

 A lower SEC means higher energy efficiency and eventually lower energy costs.