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Energy management enhances power systems via smart grid controls, demand response, load forecasting, SCADA, and IoT sensors to improve energy efficiency, peak shaving, power quality, and renewable integration across industrial and utility operations.

What Is Energy Management?

Energy management is the control of electrical loads and assets to optimize efficiency, reliability and cost.

✅ Predictive load forecasting and peak shaving strategies

✅ SCADA/EMS integration with IoT sensors and analytics

✅ Demand response, power quality, and DER coordination

Energy management (EM) is a crucial practice today, as it helps businesses and individuals reduce their carbon footprint, save money, and contribute to a more sustainable future. By incorporating key elements such as efficiency, demand response, building automation, audits, smart grid technology, HVAC optimization, conservation, renewable energy, monitoring, and analytics, a comprehensive EM program can lead to significant savings and environmental benefits. As the world continues to face the challenges of climate change and dwindling resources, EM will remain an indispensable tool for creating a more sustainable and efficient future. For organizations starting out, an energy management program can provide a structured roadmap for setting goals and tracking performance.

Energy management is crucial for several reasons. First, it helps reduce carbon emissions and the overall environmental impact of energy use. Second, it saves money by lowering costs and making facilities more energy efficient. Third, EM practices contribute to businesses and organizations' long-term sustainability and competitiveness. Modern energy management systems offer centralized dashboards and automated alerts that help sustain these gains over time.

Building automation is one of the primary ways energy management systems improve efficiency in buildings. These systems utilize sophisticated technology to control and optimize energy use in various systems, such as heating, ventilation, air conditioning (HVAC), lighting, and security. By automating these systems, buildings can operate more efficiently and effectively, reducing waste and saving on costs. For broader context, guides on building automation fundamentals can help teams understand integration points with HVAC and lighting controls.

Energy management in industrial facilities requires a combination of best practices, including implementing EM systems, regular audits, and data analytics. By monitoring and analyzing data, asset managers can identify areas of inefficiency, implement targeted improvements, and track the success of their energy management strategies. As operations mature, adopting advanced energy management practices can unify analytics, forecasting, and optimization across multiple facilities.

Renewable energy sources, such as solar, wind, and geothermal, can be integrated into energy management systems to improve sustainability further and reduce reliance on fossil fuels. For example, a facility may use solar panels to generate electricity during peak sunlight hours, reducing the need for grid-supplied energy and reduce energy costs. Additionally, renewable energy can be used with energy storage systems to provide backup power during high demand or grid outages. Well-designed building energy management systems coordinate on-site renewables with storage and loads to maximize self-consumption and resilience.

An effective EM strategy comprises several key components, including a thorough understanding of use, a commitment to continuous improvement, and a focus on energy-efficient technologies and practices. For example, businesses can implement energy-saving measures, such as retrofitting lighting systems with energy-efficient LEDs, upgrading HVAC systems to more efficient models, and improving building insulation to minimize heat loss. Upgraded energy management controls enable granular scheduling, sensor-driven setpoints, and measurement and verification to prove savings.

Smart grids and demand response play a critical role in EM by enabling a more flexible and responsive approach. Smart grids use advanced technology and real-time data to optimize electricity generation, distribution, and energy consumption. On the other hand, demand response programs incentivize consumers to reduce or shift their energy use during periods of high demand, helping to balance the grid and lower overall costs. When paired with a capable building automation system, demand response signals can trigger coordinated load shifts with minimal occupant disruption.

Audits are an essential part of energy management, as they provide a comprehensive assessment of a building's performance and identify opportunities for improvement. During an audit, an EM professional evaluates the consumption of a facility, typically an office building or industrial plant, and recommends cost-effective measures to reduce use and costs. These recommendations may include upgrading equipment, implementing energy-efficient practices, and addressing inefficiencies in the building's design or operations.

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Hierarchical Levels Industrial Networks align device, control, and enterprise layers across PLCs, SCADA, MES, and ERP, using fieldbus, Ethernet/IP, and Profinet to ensure deterministic control, real-time data, cybersecurity, and scalable OT-IT integration.

What Are Hierarchical Levels Industrial Networks?

Layered OT networks linking devices, control, and enterprise systems for real-time, deterministic, secure automation.

✅ Defines device, control, and enterprise layers in OT/ICS

✅ Maps PLCs, HMIs, drives, and sensors to appropriate network tiers

✅ Ensures determinism, redundancy, and EMC-compliant cabling practices

The industrial automation systems can be very complex, and it is usually structured into several hierarchical levels. Each of the hierarchical level has an appropriate communication level, which places different requirements on the communication network. Figure 1.1 shows an example of the hierarchy of an industrial automation system. For a broader overview of protocols and trends, industrial automation communication resources explain how hierarchy influences network design across levels.

Industrial networks may be classified in several different categories based on functionality - field-level networks (sensor, actuator or device buses), control-level networks (control buses) and information-level networks. Organizations adopt these layers to gain measurable efficiencies, and the benefits of industry networks include improved interoperability, uptime, and lifecycle support.

We primarily use sensor and actuator buses to connect simple, discrete devices with limited intelligence, such as a photo-eye, limit switch, or solenoid valve, to controllers and computers. Sensor buses such as ASI and CAN are designed so information flow is reduced to a few bits and the cost per node is a critical factor. Selecting cabling, interfaces, and gateways depends on understanding industrial network components that shape reliability, diagnostics, and scalability.

Field level

The lowest level of the automation hierarchy is the field level, which includes the field devices such as actuators and sensors. The elementary field devices are sometimes classified as the element sublevel. The task of the devices in the field level is to transfer data between the manufactured product and the technical process. The data may be both binary and analogue. Measured values may be available for a short period of time or over a long period of time.

For the field level communication, parallel, multiwire cables, and serial interfaces such as the 20mA current loop has been widely used from the 

past. The serial communication standards such as RS232C, RS422, and RS485 are most commonly used protocols together with the parallel communication standard IEEE488. Those point-to-point communication methods have evolved to the bus communication network to cope with the cabling cost and to achieve a high quality communication. Comparisons of copper, fiber, and wireless media, along with signaling and topology choices, are covered in transmission methods for industrial networks to help match performance with environmental constraints.

Field-level industrial networks are a large category, distinguished by characteristics such as message size and response time. In general, these networks connect smart devices that work cooperatively in a distributed, time-critical network. They offer higher-level diagnostic and configuration capabilities generally at the cost of more intelligence, processing power, and price. At their most sophisticated, fieldbus networks work with truly distributed control among intelligent devices like FOUNDATION Fieldbus. Common networks included in the devicebus and fieldbus classes include CANOpen, DeviceNet, FOUNDATION Fieldbus, Interbus-S, LonWorks, Profibus-DP, and SDS.

These characteristics also underpin infrastructure applications such as rail crossings, where distributed sensors and controllers coordinate safety logic, as seen in smart city automated level crossings that rely on deterministic messaging.

Nowadays, the fieldbus is often used for information transfer in the field level. Due to timing requirements, which have to be strictly observed in an automation process, the applications in the field level controllers require cyclic transport functions, which transmit source information at regular intervals. The data representation must be as short as possible in order to reduce message transfer time on the bus.

Control Level

At the control level, the information flow mainly consists of the loading of programs, parameters and data. In processes with short machine idle times and readjustments, this is done during the production process. In small controllers it may be necessary to load subroutines during one manufacturing cycle. This determines the timing requirements. It can be divided into two: cell and area sublevels.

Cell Sublevel

For the cell level operations, machine synchronizations and event handlings may require short response times on the bus. These real-time requirements are not compatible with time-excessive transfers of application programs, thus making an adaptable message segmentation necessary.

In order to achieve the communication requirements in this level, local area networks have been used as the communication network. After the introduction of the CIM concept and the DCCS concept, many companies developed their proprietary networks for the cell level of an automation system. The Ethernet together with TCP/IP (transmission control protocol/internet protocol) was 

accepted as a de facto standard for this level, though it cannot provide a true real-time communication. Similar patterns appear in buildings, where building automation systems integrate HVAC, lighting, and security over IP while reserving real-time tasks for specialized buses.

Many efforts have been made for the standardization of the communication network for the cell level. The IEEE standard networks based on the OSI layered architecture were developed and the Mini-MAP network was developed in 1980s to realize a standard communication between various devices from different vendors. Some fieldbuses can also be used for this level.

Area sublevel

The area level consists of cells combined into groups. Cells are designed with an application-oriented functionality. By the area level controllers or process operators, the controlling and intervening functions are made such as the setting of production targets, machine startup and shutdown, and emergency activities.

We typically use control-level networks for peer-to-peer networks between controllers such as programmable logic controllers (PLCs), distributed control systems (DCS), and computer systems used for human-machine interface (HMI), historical archiving, and supervisory control. We use control buses to coordinate and synchronize control between production units and manufacturing cells. Typically, ControlNet, PROFIBUS-FMS and (formerly) MAP are used as the industrial networks for controller buses. In addition, we can frequently use Ethernet with TCP/IP as a controller bus to connect upper-level control devices and computers.

Information level

The information level is the top level of a plant or an industrial automation system. The plant level controller gathers the management information from the area levels, and manages the whole automation system. At the information level there exist large scale networks, e.g. Ethernet WANs for factory planning and management information exchange. We can use Ethernet networks as a gateway to connect other industrial networks. At this level, analytics platforms often drive energy KPIs, and advanced energy management strategies leverage network data for optimization and demand response.

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Energy management controls optimize electrical systems via building automation, IoT sensors, BMS/SCADA integration, demand response, and load-shedding to improve power quality, reduce peak demand, and enhance HVAC, lighting, and motor efficiency in industrial facilities.

What Are Energy Management Controls?

Automated systems that monitor, control, and optimize electrical loads to boost efficiency, uptime, and power quality.

✅ Integrates PLCs, BMS, and SCADA for centralized load control

✅ Implements demand response, peak shaving, and load shedding

✅ Meters energy, analyzes power quality, and optimizes setpoints

Energy management controls are conservation tools implemented to control heating, energy consumption, lighting systems, heathing ventilation and air conditioning (HVAC) systems. Modern Direct Digital Control (DDC) systems, which can accurately control building systems, have become very cost-effective in recent years. As a result, they are replacing traditional manual and electromechanical building control systems in retrofitted buildings and being installed in almost all new commercial and institutional facilities. However, maximizing energy efficiency requires strategic facility management control methods for controlling the HVAC, power and communications systems. For a deeper look at modern strategies, the overview at advanced energy management explains integration trends across HVAC and lighting.

Regardless of the technology used, deciding which energy management control mode to apply is important. It is important to understand that these modes can be implemented using many available technology types. In many cases, simple on-off control is adequate and very appropriate. In other cases, the desired effect can be on with modulating controllers. The following are basic control modes. The accompanying diagrams will illustrate typical system performance. Practical frameworks for selecting modes are discussed in energy management systems resources available to facility teams.

The term system capacitance refers to the rate of response of a system to a stimulus. Systems with a large capacitance tend to resist change, and the effects of control are felt more slowly than with systems of smaller capacitance. Comparing the effect to a flywheel or relative mass is a good way to describe this concept. Another useful example to illustrate system capacitance is an instantaneous electric water heater (small volume of water) compared to a standard residential tank-type water heater. Upon energizing the heater elements, the water temperature in the tank unit changes much more slowly because it has more mass, and we say it has greater system capacitance. Understanding capacitance helps in tuning building energy management systems for stability under variable loads.

The term gain is a control term synonymous with sensitivity and is usually an adjustable amplification value used to tune the devices. For example, if a quicker response is desired for a small input change, the gain is increased in a stronger output reaction from the controller. These parameters are typically adjusted within a centralized building automation system interface to synchronize responses across equipment.

On-off Energy Management Controls

Also called two-position control, this rudimentary mode is used with either on or off equipment. A nominal setpoint exists but is only achieved in passing. A range of control values must be tolerated to avoid short-cycling the equipment, and temperature ranges are often fairly wide. In the case of equipment that cannot be modulated, this is often the only choice. The smoothness of control depends strongly upon the system capacitance; systems with very low capacitance can experience short cycling problems using two-position control. In practice, on-off strategies often reflect principles introduced in what is building automation guidance that relates simple control to overall system behavior.

Floating Energy Management Controls

This hybrid combination of on-off and modulating control is also called incremental control. As with on-off control, there is a control range (cut-in/cut out). However, unlike on-off control, floating control systems can maintain a mid-position of the controlled device instead of being limited to full-on or full-off. The controlled device holds its last position between the cut-in and cut-out thresholds. The process variable is not under control within this range, and it floats with the load until it crosses a threshold to get another incremental nudge in the correcting direction. This control is tighter than simple on-off control, and although tight than true modulating control, it is inexpensive and reliable. Equipment items from small HVAC terminal units to 1000 HP water chiller inlet vanes are controlled in this manner with good success. Note that floating control is limited to processes that change slowly, and floating control actuators are usually selected as slow-moving. Selecting floating control as part of a broader energy management approach can reduce wear while maintaining comfort within acceptable bands.

Proportional-only Control (P)

This is the basic modulating control and what most commercial pneumatic and analog electronic systems utilize. It is an error-sensing device with an adjustable gain or amplification. A control output is issued to regulate a process, and the magnitude of the output is directly proportional to the size of the error. This type of control is economical and reliable. However, a characteristic offset (residual error) is natural with this type of controller, and the size of the offset will increase with load. This offset occurs because an error must increase (further off setpoint) before an output increase can occur.

If the proportional energy management controls are too sensitive (gain set too high), the controller’s response will be excessive, and oscillation or hunting will occur. When this occurs, the controller output (and the equipment connected) will oscillate up and down, open and closed, etc., and the control action will not settle out. Training and commissioning within an organized energy management program help operators set appropriate gains and avoid persistent hunting.

Conclusion

Automatic energy management controls are useful for basic regulation and quality control of processes and environments. They can also be leveraged for energy savings through optimization. Properly applied, these systems are reliable and cost-effective. Returning to the chapter's intent, the stated purpose of this chapter was to focus on the application of automatic system controllers as a tool to achieve energy savings. The reader should review the titles of each section, reflect on the key topics taken away, and decide if the stated objective was met. It is hoped that the reader has gained insight into how automatic energy management controls can help achieve energy goals. Therefore, they will endeavour to put these systems to work, optimizing processes and saving energy.

From: Energy Management Handbook, 7th Edition, The Fairmont Press

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Certified Energy Manager (CEM) professionals optimize energy efficiency, manage sustainability programs, and reduce operational costs through advanced analysis, auditing, and strategic planning for industrial, commercial, and institutional facilities.

Building Energy Management Systems integrate automation, efficiency, and monitoring of HVAC, lighting, and electrical loads. These systems optimize energy performance, reduce costs, and support sustainability goals for smart buildings and modern facilities.

What are Building Energy Management Systems?

Building Energy Management Systems (BEMS) are intelligent platforms that monitor, control, and optimize building energy usage for greater efficiency and sustainability.

✅ Automate HVAC, lighting, and power systems

✅ Lower operating costs through energy efficiency

✅ Support smart building and sustainability initiatives

Understanding Building Energy Management Systems

Building Energy Management Systems are crucial tools for optimizing energy use in industrial, commercial, and institutional facilities. By integrating advanced technologies such as the Internet of Things (IoT), machine learning, and predictive analytics, BEMS enable significant cost savings, improved performance, and measurable progress toward sustainability. The focus of building management systems is on long-term energy efficiency in commercial buildings, reducing consumption while enhancing comfort. Building Energy Management Systems are closely tied to advanced energy management strategies that help facilities optimize efficiency through real-time monitoring and automation.

How Building Energy Management Systems Work

A BEMS combines hardware and software components to monitor, control, and optimize energy consumption. Sensors, controllers, and actuators collect data on power usage, temperature, humidity, and occupancy. The system software utilizes algorithms and analytics to identify inefficiencies, optimize HVAC and lighting systems, and provide facility managers with actionable insights. IoT devices strengthen this process by enabling real-time communication between equipment, ensuring responsive and precise adjustments. A well-designed building automation system integrates HVAC, lighting, and power controls into a unified BEMS platform that improves performance and sustainability.

Generic BEMS Features: Comparison Table

Key Benefits of BEMS

Building Energy Management Systems improve efficiency by identifying waste and optimizing performance. Facility managers can address equipment malfunctions, poor insulation, or inefficient lighting while reducing carbon footprint. These adjustments lead to:

• Lower operating costs through reduced consumption

• Enhanced occupant comfort and productivity

• Long-term sustainability through emissions reduction

Organizations that implement energy management systems benefit from reduced costs, increased operational control, and the ability to meet regulatory requirements.

Case Studies and Industry Leaders

Global companies such as Schneider Electric, IBM, and Emerson offer BEMS platforms that demonstrate measurable returns. For example, AI-driven HVAC optimization has shown reductions of up to 15% in energy use by automatically adjusting based on occupancy and weather conditions. Real-world implementations demonstrate how BEMS not only reduce costs but also extend equipment life and enhance resilience. To achieve maximum value, facility managers often combine BEMS with specialized energy management controls that automate schedules, adapt to occupancy, and respond to changing conditions.

Standards and Certification

BEMS adoption aligns with international standards, such as ISO 50001, which provides a framework for continuous improvement in energy performance. Certification under ISO 50001 enhances credibility, helps organizations meet regulatory requirements, and supports recognition through programs like LEED and ENERGY STAR.

Best Practices for Implementation To maximize benefits, organizations should:

• Conduct comprehensive energy audits to pinpoint inefficiencies

• Set achievable energy-saving targets using benchmarking data

• Establish monitoring and verification systems for performance tracking

• Engage staff in awareness and training programs

• Update BEMS continuously as technology evolves

Sustainability goals are supported by green energy integration, allowing Building Energy Management Systems to incorporate renewable sources into daily operations.

Demand Response and Future Trends

Demand response strategies are becoming integral to BEMS. These involve adjusting consumption in response to grid fluctuations, price signals, or periods of peak demand. Automated demand response enables facilities to reduce their load without compromising comfort, often earning financial incentives and contributing to grid stability. Looking forward, artificial intelligence, predictive maintenance, and data-driven decision-making will further enhance the role of BEMS in creating smarter, more sustainable buildings. Successful deployment requires a broader energy management program that aligns strategy, technology, and staff engagement across the organization.

Building Energy Management Systems are no longer optional—they are essential for organizations seeking efficiency, cost savings, and environmental stewardship. By integrating advanced technology, following best practices, and aligning with global standards, BEMS deliver long-term value while helping to meet the urgent demand for sustainable building operations.

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Benefits of industry networks include collaboration, knowledge sharing, standards alignment, and vendor partnerships that accelerate innovation in electrical engineering, grid modernization, smart manufacturing, and safety compliance across power systems and automation ecosystems.

What Are the Benefits of Industry Networks?

They enable faster innovation, standards compliance, risk mitigation, and scalable solutions through shared expertise.

✅ Accelerates compliance with IEEE, IEC, UL standards and codes

✅ Improves interoperability across SCADA, PLC, and smart grid systems

✅ Enables supplier benchmarking, risk sharing, and joint R&D

Modern control and business systems require open, digital communications. Industrial networks replace conventional point-to-point RS-232, RS-485, and 4-20 mA wiring between existing measurement devices and automation systems with an all-digital, 2-way communication network. Industrial networking technology offers several major improvements over existing systems. With industry-standard networks, we can select the right instrument and system for the job regardless of the control system manufacturer. Other benefits include:

To understand how device-level buses, controllers, and enterprise systems coordinate, resources like industrial automation communication outline protocol choices, latency tradeoffs, and integration patterns. Selecting between Ethernet, fieldbus, and wireless options benefits from comparing transmission methods for industrial networks with respect to determinism, noise immunity, and distance.

• Reduced wiring -- resulting in lower overall installation and maintenance costs
• Intelligent devices -- leading to higher performance and increased functionality such as advanced diagnostics
• Distributed control -- with intelligent devices providing the flexibility to apply control either centrally or distributed for improved performance and reliability
• Simplified wiring of a new installation, resulting in fewer, simpler drawings and overall reduced control system engineering costs
• Lower installation costs for wiring, marshalling, and junction boxes

Delivering these benefits also depends on choosing switches, gateways, and physical media from a well-architected set of industrial network components that match environmental and reliability requirements. Designers often map sensors, controllers, and supervisory systems across the hierarchical levels of industrial networks to balance real-time control with plantwide visibility.

Standard industrial networks offer the capability to meet the expanding needs of manufacturing operations of all sizes. As our measurement and automation system needs grow, industrial networks provide an industry-standard, open infrastructure to add new capabilities to meet increasing manufacturing and production needs. For relatively low initial investments, we can install small computer-based measurement and automation systems that are compatible with large-scale and long-term plant control and business systems. This standards-based approach aligns closely with how a building automation system aggregates HVAC, power, and security data for unified operations. For teams expanding beyond production into facilities integration, understanding what building automation entails helps frame networking requirements and data governance.

As energy costs and sustainability goals rise, leveraging advanced energy management over the same industrial network can drive measurable efficiency gains and carbon reporting accuracy.

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