Project Inputs
Example Data Table
Use this example to understand how baseline and improved performance can differ while output changes.
| Scenario | Energy (kWh) | Output (units) | Intensity (kWh/unit) |
|---|---|---|---|
| Baseline | 120,000 | 60,000 | 2.0000 |
| Improved | 95,000 | 65,000 | 1.4615 |
Formula Used
- Energy intensity = Energy (kWh) ÷ Output (units)
- Expected energy at baseline intensity = Baseline intensity × Improved output
- Energy savings (kWh) = Expected energy − Improved energy
- Annualized savings = Savings per period × (12 ÷ Period months)
- Annual net savings = Annual cost savings − Annual O&M
- Simple payback (years) = Implementation cost ÷ Annual net savings
- NPV = Σ(Annual net savings × (1+growth)^(t−1) ÷ (1+discount)^t) − Implementation cost
- Carbon reduction (kg CO₂/year) = Annualized kWh savings × Emission factor
How to Use This Calculator
- Enter baseline energy and output for a consistent measurement period.
- Enter improved energy and output for the same period length.
- Set the energy cost per kWh and your currency symbol.
- Add implementation cost, annual O&M, and analysis assumptions if needed.
- Press Submit. Results appear above the form under the header.
- Download CSV or PDF to share results with stakeholders.
Energy intensity as a controllable cost driver
Energy intensity is measured as kWh per unit of output. In the example table, baseline performance is 120,000 kWh for 60,000 units, or 2.0000 kWh/unit. This ratio lets finance teams compare periods fairly, even when production volumes rise or fall, because it separates efficiency from throughput. A 5% intensity improvement on a 10 GWh site can exceed the savings from tariff changes.
Normalizing savings when output changes
The calculator estimates how much energy the improved output would have required at baseline intensity. With improved output of 65,000 units, expected energy at baseline intensity is 130,000 kWh. If the improved scenario uses 95,000 kWh, the period savings are 35,000 kWh after normalization. The implied improved intensity is 1.4615 kWh/unit, a 26.92% reduction versus baseline.
Translating kWh to cash and annual budgets
Cost savings equal kWh savings multiplied by the energy price. At 0.12 per kWh, 35,000 kWh in a one‑month measurement period annualizes to 420,000 kWh/year and 50,400/year in avoided cost. Subtract annual O&M, such as 500/year, to reach annual net savings that align with operating budgets. If the measurement period is three months, annualization becomes 4× instead of 12×, which can change forecasts.
Decision metrics for capital prioritization
Simple payback is implementation cost divided by annual net savings. With a 25,000 implementation cost and 49,900 net savings, payback is about 0.50 years. NPV discounts future savings using the selected discount rate and can apply a savings growth rate, such as 3%/year, to represent tariff escalation or persistence. For site programs, compare projects on NPV per dollar of capital to maximize portfolio value.
Adding carbon signals to portfolio reporting
If an emission factor is provided, annualized kWh savings convert to emissions avoided. Using 0.45 kg CO₂/kWh and 420,000 kWh/year savings, the impact is 189,000 kg CO₂/year, or 189 t CO₂/year. This creates a consistent story across operations, finance, and sustainability dashboards. When reporting, cite whether the factor reflects grid average, location‑based, or market‑based accounting.
FAQs
1) What does “energy intensity” mean here?
It is energy consumed divided by output for the same period. It helps compare performance even when production volume changes.
2) Why is savings normalized to improved output?
Normalization estimates how much energy the improved output would have used at baseline intensity, then compares it to actual improved energy.
3) What if annual net savings are negative?
Payback will not be reached. Review energy price, measured savings, period length, and annual O&M, then rerun scenarios to test sensitivity.
4) How should I choose the discount rate?
Use your organization’s hurdle rate or weighted cost of capital. Higher rates reduce NPV and emphasize near-term savings.
5) Can I use different units for output?
Yes. Output can be units, tons, liters, or any consistent production measure. Keep baseline and improved outputs in the same unit.
6) How is the carbon reduction calculated?
Annualized kWh savings are multiplied by the emission factor in kg CO₂ per kWh. The result is also shown in metric tons per year.