B2B Energy Toolbox Tip No.36

B2B Energy Toolbox Tip No.36

Understanding how to calculate energy consumption?

Recently whilst delivering energy management programs to organisations, it has become apparent that not everyone understands how energy should be calculated. Why should people understand this though? I strongly believe that once we understand how energy is consumed, we can really start to understand what needs to be adjusted, turned off or even removed from day-to-day operations.

Before we begin to understand an energy calculation, we need to explain how energy is calculated on bills as it is shown in kilowatt hours with the abbreviation of kWh (lower case k, upper case W, and lower-case h). When we are presented with our utility bills, be it gas or electricity, the consumption of that period would have been calculated and presented with this value. The supplier will multiply the kWh by the unit rate to provide us with the cost for ‘energy’ only. Obviously, there are what we call non-commodity adjustments that also need to be added.

We need to understand how the supplier has arrived at the kWh value for this period and we will need to clarify this with two separate answers as both electricity and gas have two different calculations:

Gas

This utility is based on ‘quantity’ as it is a gas that will flow through our pipes and is ignited to provide us with heat to warm our houses or allow us to cook with. When we look at this quantity, it is measured at our meter and the meter could either be in Cubic Metres or Cubic Feet. To confuse matters we are still finding Cubic Feet meters being installed, even in new properties as the gas shipping companies still have these in stock. Gas quantity is also measured at the meter and presented back in kWh once a calculation has been conducted.

Cubic Feet (Ft3)

Cubic Feet × Metric Conversion Factor Calorific Value (0.0283) × Conversion Factor ÷ 3.6 Conversion Factor for kWh = kWh

Cubic Metres (M3)

M3 × Calorific Value × Conversion Factor ÷ 3.6 Conversion Factor for kWh = kWh

The Calorific Value (CV) varies from month to month and by region and is determined by the shippers.

Electricity

This is a little easier as we are not measuring a quantity but instead measuring a ‘Unit.’ The only issue here is that when we are calculating our own energy consumption it will depend on whether the unit of electricity is measured in Watts or kilowatts. For example, if we have a ‘lamp’ and the value is 100W we will need to convert this to kilowatts which is quite simple as we just divide it by?1000 -

100W ÷ 1000 = 0.1kW

We then need to convert this to kWh. This is simple because this is how long the Watts or kWs have been in operation (h=hours). Therefore, going back to our 100W lamp if the lamp is turned on for 10 hours -

100W ÷ 1000kW Conversion x 10 Hours = 1kWh

Based on this calculation the lamp could be on every day for 12 months. For me, this is when it starts to get interesting -

100W ÷ 1000kW conversion x 10 hours x 365 Days = 365 kWh

When we start to multiply the days of operation you start to recognise the importance of energy management. We started with just the one lamp and now we have one hundred lamps, so you will see the kWh figures start to jump up further to 36,500 kWh. When I am discussing this with an organisation, we can see the true costs of things as we are now multiplying this by a unit rate. I am going to choose a value here based on 2022 rates and I am going to use a rate of 48p which will now show us the cost.

In both utilities of gas and electricity the calculation here is simple:

kWh x Rate = Cost

Let us look at our lamp again.

100W lamp on for 1 hour - (100W ÷ 1000kW x 1 hour) x 48p = 0.48p

100W lamp on for 10 hours - (100W ÷ 1000kW x 10 hours) x 48p = 48p

100 x 100W lamps on for 10 hours - (100 x 100W ÷ 1000kW x 10-hour x 1 Day) x 48p = ￡48.00

100 x 100W lamps on for 10 hours for 1 year - (10 x 100W ÷ 1000kW x 10-hour x 365) x 48p = ￡17,520.00