Energy efficiency can be defined as that energy not wasted as useless heat. It is the percentage of total energy input to an equipment or machine used up in the work.
Businesses should invest in energy efficiency as it helps the environment. This can be attained by making the business more efficient, avoiding unnecessary energy use, irrespective of the number of employees’ in enterprises they can reduce their ecological footprint and save money. Businesses lacking the time or resources cannot undertake a full carbon management programme, but with taking certain measures energy and cost savings can be easily made with little or no cost.
Increased energy efficiency contributes a lot of benefits in the financial/economic, environmental and social sectors of a business. The importance of these benefits varies from country to country depending on the situation of the country or area such as the cost of energy efficiency measures and equipment, rates of different types of energy and the current levels of energy efficiency attained.
In the case of private companies, relevant benefits of higher energy efficiency are associated with the financial benefits of lower costs used to run the business. Typical manufacturing companies to energy suppliers such as oil refineries and electricity generating plants reap out of these benefits. Companies that are energy efficient hold the competitive edge, where the scope for an increase in their profits at the current price, or lowering their prices to gain market share is made possible. The merits of higher operating efficiency shared between energy producers and consumers for mutual benefit which is the result of utility regulators calls for the need of utility suppliers to reduce their prices to consumers. This benefits the society as a whole. Companies keen on energy efficiency influences purchasing decisions of their customers with the public perception of ‘green’ used a marketing tool.
In cases of increase in company’s output with expanding manufacturing capacity, improvements in energy efficiency play a significant role in the reduction of the negative impact of energy consumption per unit of output. Thus any increase in pollutant emissions will be minimized.
There are chances of inefficiencies at any stage of the supply-demand chain. For instance, conventional electricity generating plant’s overall efficiency is often more than 30 percent. On the other hand, a poorly operated coal-fired boiler is in the struggle to reach 50 percent efficiency. Thus the energy losses can be visible throughout the chain. There are two kinds of energy losses, the avoidable and intrinsic losses. The losses arising out of maintenance and operation of systems, sub-optimal and poor designs are avoidable losses.
Examples are inadequately sized electricity wiring, steam leaks, incorrectly adjusted combustion equipment and non-insulated lines.
Intrinsic losses are unavoidable losses which arise out of the function of the activity based on thermodynamic and physical laws. Electricity distribution lines and steam pipelines always undergo associated losses, even if they are well sized or well insulated.
The avoidable losses in the supply-demand chain lead to the need for additional primary energy resources that have to be used in order to get the required output from a given activity. Moreover, it results in a corresponding increase in environmental degradation.
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