Lecture Notes
Energy Management
Carlos Santos Silva
Fernanda Margarido
September 2020 (V3.0)
,FORWARD
The objective of these lecture notes is to summarize the main contents of the course Energy
Management at Instituto Superior Técnico. The objective is not to replace any fundamental text book
on Energy Management, but solely to highlight the main points that are scattered around many
textbooks, reports and other important documents on Energy Management.
They result mostly from the development of the MOOCs Energy Services (esX) and Economic and
Legal Aspects of Energy in Buildings (elbX), from the MOOCS@IST, and from many other indirect
contributions of many colleagues that have lectured this course with me over the years: Paulo Ferrão,
Tânia Sousa, André Pina, Patrícia Baptista, Diana Neves, Cláudia Sousa Monteiro, Samuel Niza,
Francisco Capucha. A particular word of appreciation to Diana Fernandes, that helped me to develop
the Economic and Legal Aspects of Energy Services MOOC during 2017 and 2018, and compiled many
of the information presented in this lecture notes, including formulas and figures. More recently, to
João Araujo, a student from the class of 2019-2020, which gave a detailed feedback to all chapters,
which highly improved the text.
A final word to Fernanda Margarido, who co-authored chapters 10 and 11, and did a fantastic review
of the whole document.
Now, I pass the ball to the many students that every year participate enthusiastically in classes to
provide feedback, by finding mistakes, inconsistencies, and suggesting ways to improve these notes.
Lisbon, September 21sh, 2020
Carlos Santos Silva
i
,CONTENTS
I. DEFINITIONS ..................................................................................................................... 1
1 Introduction to Energy Management ............................................................................... 2
1.1 Energy management definition ..................................................................................... 2
1.2 The energy manager .................................................................................................... 2
1.3 Energy management certification ................................................................................. 2
1.4 Fundamental bibliography for energy managers........................................................... 3
2 Energy Systems ................................................................................................................ 4
2.1 Definitions .................................................................................................................... 4
2.2 Representation ............................................................................................................. 7
II. CONTEXT ......................................................................................................................... 11
3 Energy around the world ................................................................................................ 12
3.1 The word Sankey diagram.......................................................................................... 12
3.2 Total Primary Energy Supply ...................................................................................... 13
3.3 Final energy demand.................................................................................................. 13
3.4 Electricity generation .................................................................................................. 15
4 Energy markets and prices ............................................................................................. 16
4.1 Energy Supply Chains ................................................................................................ 16
4.2 Types of energy markets ............................................................................................ 18
4.3 Market players............................................................................................................ 20
4.4 Energy Prices ............................................................................................................. 20
4.5 Drivers for energy prices ............................................................................................ 24
4.6 Dynamic pricing and Intervention in Price Setting Mechanisms .................................. 26
5 Regulations and Standards ............................................................................................ 27
5.1 Definitions .................................................................................................................. 27
5.2 European and National Legal Frameworks ................................................................. 27
5.3 History of regulation ................................................................................................... 28
5.4 ISO 50001 .................................................................................................................. 31
6 Energy contracts ............................................................................................................. 33
6.1 Contract definition ...................................................................................................... 33
6.2 Types of energy contract ............................................................................................ 33
III. TOOLS .......................................................................................................................... 38
7 Energy Project Evaluation .............................................................................................. 39
7.1 Concepts .................................................................................................................... 39
7.2 Project evaluation indicators....................................................................................... 42
7.3 Evaluation of energy management projects ................................................................ 44
ii
, 7.4 Example of application ............................................................................................... 45
8 Energy Audit .................................................................................................................... 47
8.1 Objective .................................................................................................................... 47
8.2 Activities ..................................................................................................................... 47
8.3 Energy audit protocol ................................................................................................. 47
9 Measurement and Verification........................................................................................ 50
9.1 IPMPV scope ............................................................................................................. 50
9.2 IPMVP documents ..................................................................................................... 50
9.3 IPMPV principle.......................................................................................................... 51
10 Life Cycle Assessment (LCA) ..................................................................................... 52
10.1 Goal and scope definition ........................................................................................... 54
10.2 Inventory Analysis ...................................................................................................... 56
10.3 Impact Assessment .................................................................................................... 58
10.4 Interpretation .............................................................................................................. 62
10.5 Improvements ............................................................................................................ 63
11 System Analysis (Material Flow and Energy Analysis) ............................................. 64
11.1 Material Flow Analysis (MFA) ..................................................................................... 64
11.2 Energy Flow Analysis (EA) ......................................................................................... 64
11.3 System definition ........................................................................................................ 65
11.4 Example ..................................................................................................................... 72
iii
Energy Management
Carlos Santos Silva
Fernanda Margarido
September 2020 (V3.0)
,FORWARD
The objective of these lecture notes is to summarize the main contents of the course Energy
Management at Instituto Superior Técnico. The objective is not to replace any fundamental text book
on Energy Management, but solely to highlight the main points that are scattered around many
textbooks, reports and other important documents on Energy Management.
They result mostly from the development of the MOOCs Energy Services (esX) and Economic and
Legal Aspects of Energy in Buildings (elbX), from the MOOCS@IST, and from many other indirect
contributions of many colleagues that have lectured this course with me over the years: Paulo Ferrão,
Tânia Sousa, André Pina, Patrícia Baptista, Diana Neves, Cláudia Sousa Monteiro, Samuel Niza,
Francisco Capucha. A particular word of appreciation to Diana Fernandes, that helped me to develop
the Economic and Legal Aspects of Energy Services MOOC during 2017 and 2018, and compiled many
of the information presented in this lecture notes, including formulas and figures. More recently, to
João Araujo, a student from the class of 2019-2020, which gave a detailed feedback to all chapters,
which highly improved the text.
A final word to Fernanda Margarido, who co-authored chapters 10 and 11, and did a fantastic review
of the whole document.
Now, I pass the ball to the many students that every year participate enthusiastically in classes to
provide feedback, by finding mistakes, inconsistencies, and suggesting ways to improve these notes.
Lisbon, September 21sh, 2020
Carlos Santos Silva
i
,CONTENTS
I. DEFINITIONS ..................................................................................................................... 1
1 Introduction to Energy Management ............................................................................... 2
1.1 Energy management definition ..................................................................................... 2
1.2 The energy manager .................................................................................................... 2
1.3 Energy management certification ................................................................................. 2
1.4 Fundamental bibliography for energy managers........................................................... 3
2 Energy Systems ................................................................................................................ 4
2.1 Definitions .................................................................................................................... 4
2.2 Representation ............................................................................................................. 7
II. CONTEXT ......................................................................................................................... 11
3 Energy around the world ................................................................................................ 12
3.1 The word Sankey diagram.......................................................................................... 12
3.2 Total Primary Energy Supply ...................................................................................... 13
3.3 Final energy demand.................................................................................................. 13
3.4 Electricity generation .................................................................................................. 15
4 Energy markets and prices ............................................................................................. 16
4.1 Energy Supply Chains ................................................................................................ 16
4.2 Types of energy markets ............................................................................................ 18
4.3 Market players............................................................................................................ 20
4.4 Energy Prices ............................................................................................................. 20
4.5 Drivers for energy prices ............................................................................................ 24
4.6 Dynamic pricing and Intervention in Price Setting Mechanisms .................................. 26
5 Regulations and Standards ............................................................................................ 27
5.1 Definitions .................................................................................................................. 27
5.2 European and National Legal Frameworks ................................................................. 27
5.3 History of regulation ................................................................................................... 28
5.4 ISO 50001 .................................................................................................................. 31
6 Energy contracts ............................................................................................................. 33
6.1 Contract definition ...................................................................................................... 33
6.2 Types of energy contract ............................................................................................ 33
III. TOOLS .......................................................................................................................... 38
7 Energy Project Evaluation .............................................................................................. 39
7.1 Concepts .................................................................................................................... 39
7.2 Project evaluation indicators....................................................................................... 42
7.3 Evaluation of energy management projects ................................................................ 44
ii
, 7.4 Example of application ............................................................................................... 45
8 Energy Audit .................................................................................................................... 47
8.1 Objective .................................................................................................................... 47
8.2 Activities ..................................................................................................................... 47
8.3 Energy audit protocol ................................................................................................. 47
9 Measurement and Verification........................................................................................ 50
9.1 IPMPV scope ............................................................................................................. 50
9.2 IPMVP documents ..................................................................................................... 50
9.3 IPMPV principle.......................................................................................................... 51
10 Life Cycle Assessment (LCA) ..................................................................................... 52
10.1 Goal and scope definition ........................................................................................... 54
10.2 Inventory Analysis ...................................................................................................... 56
10.3 Impact Assessment .................................................................................................... 58
10.4 Interpretation .............................................................................................................. 62
10.5 Improvements ............................................................................................................ 63
11 System Analysis (Material Flow and Energy Analysis) ............................................. 64
11.1 Material Flow Analysis (MFA) ..................................................................................... 64
11.2 Energy Flow Analysis (EA) ......................................................................................... 64
11.3 System definition ........................................................................................................ 65
11.4 Example ..................................................................................................................... 72
iii
