Energy Monitoring: Step by Step Guide

Why is energy monitoring important?

The average commercial building wastes 30% of its energy. Energy costs are rising, and businesses are under pressure to reduce their energy consumption. Energy efficiency is a key way to reduce greenhouse gas emissions and combat climate change.

The Internet of Things (IoT) is rapidly transforming the energy sector. By connecting devices and sensors to the internet, IoT can help utilities collect and analyze data about energy consumption, grid performance, and weather conditions. This data can be used to improve efficiency, optimize operations, and reduce costs.

One of the most promising applications of IoT in the energy sector is smart metering. Smart meters are devices that collect data about energy consumption in real-time. This data can be used by utilities to bill customers accurately, identify energy leaks, and promote energy efficiency.


There are a number of challenges in energy monitoring, including:

1. Data collection and management:

Energy monitoring systems collect a large amount of data, which can be difficult to manage and analyze.

Energy data makes a significant difference in optimizing the current energy consumption in facilities, hospitals, and buildings. Unfortunately, many offices, residential, and industrial buildings are not even close to collecting reliable data regarding energy consumption. 

2. Cost:

The cost of the system will vary depending on the size and complexity of the system, as well as the features that are included. Additionally, the cost of maintenance can be significant, as the system will need to be regularly checked and calibrated.

3. Security:

Energy monitoring systems need to be secure to protect sensitive data. This data could include information on energy consumption. 

4. Sudden equipment breakdown:

A proactive maintenance strategy that includes routine and preventive maintenance schedules can help extend asset lifespan, reduce downtime, improve efficiency, save money, and improve safety. Preventive maintenance can help to identify and address problems before they cause damage, preventing costly repairs in the long run.

Here are some specific examples of challenges in energy monitoring:

1. Heterogeneity of energy assets:

Energy assets can be heterogeneous, meaning that they can be of different types, ages, and manufacturers. This can make it difficult to collect and analyze data from all of the assets.

2. Dynamic energy consumption:

Energy consumption can be dynamic, meaning that it can vary over time due to factors such as weather conditions, occupancy levels, and equipment usage. This can make it difficult to accurately track energy consumption.

3. Security risks:

Energy monitoring systems can be vulnerable to security risks, such as unauthorized access or data breaches. This can lead to the disclosure of sensitive data or the disruption of energy services.

How does an IoT based Energy monitoring system work?

Important aspect of an Energy monitoring system is it has to be on the granular level so that optimization can be done. Each and every major source of energy consumption has to be monitored and then optimized. 

The image represents the typical architecture of the IoT based energy management/monitoring system. Here each and every important section is fitter with the energy meter which measures the following parameters.

  1. Voltage of all 3 phases
  2. The current of all 3 phases
  3. Power factor (phase-wise)
  4. Power Factor ( Average)
  5. Real power
  6. Apparent power
  7. Thresholds limits of the parameters

Based on this granular level analysis business can detect the equipment or sections where maximum energy is consumed. Further analysis based on the time frame helps businesses to know the peak hour of power consumption. Knowing peak hours of power consumption helps businesses to use backup power systems in the same period to reduce the Energy bills.

Advantages of IoT-based smart monitoring systems:

The integration of the Internet of Things (IoT) into energy management and monitoring processes can provide a number of notable benefits. These include:

1. Savings on Energy bills

Energy management systems (EMSs) can help save energy, by monitoring & optimizing energy usage, implementing energy efficiency measures, and managing renewable energy systems. By doing these things, it can help reduce energy costs and improve environmental sustainability. 

For example, A manufacturing plant can use an EMS to monitor the energy usage of its machines. This information can be used to identify machines that are using more energy than they should. The plant can then take steps to repair or replace these machines, or to implement energy efficiency measures, such as upgrading the lighting or insulation. The EMS monitors the energy consumption of the machine, by measuring the total amount of energy used by the machine over a period of time. It measures the peak demand for energy, calculating energy efficiency, using energy cost data & energy consumption data. 

2.Improved sustainability: 

Smart energy management systems can help businesses to improve their sustainability by reducing energy consumption and increasing the use of renewable energy. These systems can be up to 50% more energy efficient than conventional technologies, which can lead to significant savings and emissions reductions. Additionally, smart energy management systems can help businesses integrate renewable energy sources into their operations, which can further reduce their reliance on fossil fuels.

3.Green energy integration: 

Energy monitoring sensors, power consumption data, and utilities can help businesses to better understand their energy use and to identify opportunities to integrate renewable energy sources into their operations. This can help businesses to reduce their reliance on fossil fuels and to improve their sustainability. According to the International Energy Agency (IEA), these industries account for 30% of global energy use and 40% of global carbon emissions. As governments around the world work to reduce greenhouse gas emissions, energy efficiency in buildings will become increasingly important.

4. Asset maintenance optimization: 

Data analytics and sensors can be used to monitor the performance and condition of equipment and machinery in distribution networks and power plants. This is similar to how connected technology is used in industrial facilities.

5.Process automation: 

Power distributors and electric utilities are investing in modernization to optimize labor costs and enhance automation. This includes using IoT-enabled monitoring systems to improve maintenance operations and automate asset management.

6. Reduced operational expenses: 

The past two years have seen a historic rise in energy costs. In some regions, electricity prices have increased by as much as 135% between mid-2021 and mid-2022. This has led many companies to prioritize energy saving and to adopt IoT solutions to reduce their electricity spending. Studies have shown that businesses can save up to 40% on average costs over a 12-month period by implementing an EMS. This is because EMSs can help businesses identify and address areas of energy waste. 

For example, it can be used for:

a) Optimize the operation of HVAC systems to reduce energy consumption.

b) Schedule lighting and other equipment to operate during off-peak hours.

c) Detect and fix energy leaks.

d) In addition to reducing costs, EMSs can also help businesses improve their environmental performance. 

By reducing energy consumption, businesses can help reduce greenhouse gas emissions and improve air quality.

7. Energy consumption predictive analysis:

 Energy management systems can be paired with machine learning algorithms and IoT technology to create a tool that can predict future energy consumption. This tool can be used by businesses and organizations to develop a data-driven strategy for energy production and consumption. It can also be used by utilities to improve their pricing models.

8. Malfunction prevention: 

Predictive algorithms can help identify potential problems in your operations before they happen. This can help you to take preventive measures to avoid malfunctions and the associated costs and downtime.

For example, energy providers can use predictive algorithms to analyze energy consumption trends and predict load spikes. This information can be used to plan strategies to prevent overloads and ensure that the grid is able to meet demand.

9. Effectively addressing outages and accidents:

 Predictive measures are not always possible, such as in the case of blackouts or accidents caused by natural disasters. However, smart analytics systems can still be used to locate problems and reduce damages.

For example, sensor data can be used to help operators find the root cause of a problem, assess the severity of the damage, and develop an effective restoration plan. This can help reduce the impact of outages and accidents and improve the reliability of the system.

Future trends, 

The Internet of Things (IoT) is rapidly transforming the energy management landscape. IoT devices are becoming increasingly affordable and easy to deploy, making it possible to collect and analyze data from a wide range of energy-related assets. This data can be used to improve efficiency, reduce costs, and increase sustainability.

In the next five years, consumers can expect to see IoT used in a variety of ways to manage their energy use. For example, IoT devices can be used to:

  • Monitor energy consumption in real time, so that consumers can identify and address areas of waste.
  • Optimize the operation of heating, ventilation, and air conditioning (HVAC) systems to improve efficiency.
  • Control smart appliances to reduce energy usage when not in use.
  • Enable demand response programs, which allow consumers to reduce their energy consumption during peak demand periods.
  • Integrate with renewable energy sources, such as solar and wind power.
  • The growth of the IoT market is creating challenges around interoperability. Different IoT devices often use different communication protocols and standards, which can make it difficult to integrate them into a single system. To address this challenge, there is a growing focus on developing open standards for IoT devices and systems.

As interoperability improves, the potential benefits of IoT for energy management will become even more apparent. Consumers can expect to see IoT devices become increasingly ubiquitous in homes and businesses, helping them to save money, reduce their environmental impact, and live more sustainably.