Definition: What is Energy Management?
We define the term energy management as the implementation of various data-based optimization measures to reduce costs in the supply of energy. This cost reduction can be achieved through optimized use or even modernization of existing energy consumers. Another possibility is the additional generation of revenues from own electricity production plants (e.g. rooftop photovoltaic systems) or from the marketing of flexible consumers, such as in electromobility or electrified heat supply. For this reason, energy management is by no means synonymous with the term energy efficiency, even though there may well be overlaps between the two fields.
What is the Scope of Energy Management?
Energy management has many areas of application, ranging from commercial and industrial properties to residential buildings and even entire city districts or municipalities (for example, through the establishment of energy communities). In all cases, modern energy management uses the data and information of individual assets in a spatial context – such as an office complex or an industrial plant – and optimizes them on a higher level, taking into account various parameters such as the capacity of the local grid connection, the utilization of the electricity grid or the availability of cheap and climate-friendly renewable energies in the region or on the national electricity market.
What are the Objectives of Energy Management?
The objectives of energy management can be categorized into four steps, each of which leads to a higher level of complexity, but also to a higher level of added value.
At the beginning of every energy management project is the observational monitoring and analysis of the actual state of the energy supply (“energy monitoring”). Which consumers use how much energy at what time? How has energy consumption developed over time, taking past usage data into account? Which standards and anomalies can be derived from this?
The results of the analysis can be presented once or continuously (“live”) in purely numerical form, but of course also in graphical visualization – for example, by using history graphs – and allow a comprehensive and transparent view of the current use of energy in the spatial unit under consideration.
Based on the results of energy monitoring, the local optimization of the energy flow at the individual device, such as the charging station, the production facility or the photovoltaic system, is carried out. This isolated optimization often consists of a one-off measure, such as an optimized parameterization of the consumer or the replacement of individual components, in order to achieve increased energy efficiency thus lowering overall costs. Apart from the reduction of the total energy consumption, other goals can also be decisive here: technical and regulatory requirements, for example regarding minimum and maximum operating times of equipment, or also an optimization of grid charges.
At the management level, the system no longer optimizes the individual object in an isolated manner. Rather, energy management now aims at the interaction of different electricity consumers and/or electricity producers in order to achieve an increased economic or ecological optimum. This extends beyond the result of the combined isolated optimization of individual consumers or producers. Optimization of the inverter, for example, would focus on replacing it, e.g., to increase efficiency, while management would focus on the permanent interaction of the inverter with other components, e.g., a charging station for electric vehicles.
Management measures also differ from optimization measures in that they are usually repeated – often automated – and are not one-off measures. Here, however, the degree of complexity increases enormously, as the interaction of different components can certainly have conflicting goals: For example, the dynamic management of a battery storage system to increase self-consumption from the in-house PV system is opposed by the purely technical objective of maximizing the life cycles of the battery storage system. Modern energy management incorporates these conflicting goals into the management of the components and thus achieves an overall optimum.
The “supreme discipline” of energy management aims to integrate the property optimized and continuously managed by an energy management system into the local or national energy market. For example, energy procurement can be made more flexible and automated in order to reduce energy procurement costs. Or flexible components such as electric vehicles, battery storage or heat pumps offer their flexibility on the balancing energy market. Or local energy communities are created that align their electricity consumption as much as possible with the regional production of renewable energies. The integration of (flexible) properties into the electricity market has not only an increased economic benefit for the property user, but also an overall increased macro-economic benefit for society.
Energy Management in Practice: Example of a medium-sized Company
After the introduction of live energy monitoring, a medium-sized company notices that the local grid connection point is frequently overloaded by charging processes of electric vehicles (“transparency”).
By reducing the maximum available charging power at the individual charging stations, the company stretches out the charging processes to relieve the load on the grid connection point (“optimization”).
The next step is to consider the company’s own photovoltaic system: Its electricity production is to be increasingly used for own consumption. For this purpose, the energy management system now controls various consumers on the industrial site and shifts the times of their electricity consumption – such as the charging processes at the charging station mentioned above, the company’s own heat pump for hot water production or the air conditioning system for cooling the building – to the times with maximum PV electricity generation (“management”).
In the final step, the company uses the remaining available flexibilities – for example, if the PV system fails to produce electricity due to lack of sunshine – to purchase the required residual electricity quantities through a time-of-use-tariff (“integration”).
Advantages of integrated energy management
In the early days of energy management, the focus was primarily on optimizing the electricity consumption of individual assets, whereas today energy management is increasingly being seen as integrated enhancement. This is mainly due to the aforementioned higher added value of integrated energy management, as the potential for optimizing a single unit (such as the charging process of an electric car) is lower than the optimization of the individual unit in interaction with other local units (such as the charging process of an electric vehicle depending on the current electricity production with a rooftop photovoltaic system).
Modern energy management follows the logic of the energy market. On a large scale (e.g. on a national level), the energy market aligns the different consumption and generation profiles in order to achieve security of supply, affordability and resource efficiency, and rewards behavior that serves the system. Modern energy management also aligns consumption and generation profiles in order to improve the (local) energy system and, above all, the energy costs incurred.
In addition, the energy market is undergoing a radical transformation due to the decentralization of electricity generation, so that smaller and smaller players are gaining direct access to the market. This enables previously passive consumers to become active participants in the energy market and, for example, to secure their own supply cost-effectively via flexible electricity tariffs by using their own local flexibility to enhance the procurement of residual electricity. Participation in local and/or regional energy markets – if they exist – is also possible. The target of any integrated energy management must therefore be the participation in the energy market.
Another advantage of integrated energy management is the possibility of simple and rapid scaling. The one-time optimization of a single asset has a higher cost per unit than the permanent, automated improvement of a fleet of networked assets, which flexibly aligns itself with the current opportunities on the electricity market. Of course, this also reduces the per unit costs for the introduction of an energy management system.
If you have any further questions on energy management or need individual advice for your energy management project, please do not hesitate to contact us.