Energy loss in any industrial process or plant is inevitable; it is a foregone conclusion. But its economic and environmental impacts are not to be taken lightly, thus explaining the growing need for industrial energy efficiency. Put simply, the level of energy efficiency a plant or process can achieve is inversely proportionate to the energy loss that occurs; the higher the loss, the lower the efficiency. Where and how do most of the losses occur, how much energy is actually lost and are they controllable or recoverable? The answers to these questions remain well concealed in a black box where once energy is input, we do not know what really happens to it inside and how much the losses are. It is only when we look into the black box and extract these details that we are able to ascertain the performance of the overall or process levels and respond more effectively to the weaknesses in energy management.

Overall energy losses in a plant can result from losses due to designs that do not incorporate energy efficient specifications such as heat recovery option; operations that run on inefficient methods; and poor or non-energy efficiency-conscious maintenance programme. Reducing these losses will substantially increase the plant's efficiency, but we need data to identify and quantify the losses and subsequently suggest suitable techno-economic solutions to minimise the losses. This data can be acquired through energy audits.

Energy audit is a systematic study or survey to identify how energy is being used in a building or plant, and identifies energy savings opportunities. Using proper audit methods and equipment, an energy audit provides the energy manager with essential information on how much, where and how energy is used within an organisation (factory or building). This will indicate the performance at the overall plant or process level. The energy manager can compare these performances against past and future levels for a proper energy management. The main part of the energy audit report is energy savings proposals comprising of technical and economic analysis of projects. Looking at the final output, an energy audit can also be defined as a systematic search for energy conservation opportunities.

This information can be transformed into energy savings projects. It will facilitate the energy manager to draw up an action plan listing the projects in order of priority. He will then present it to the organisation's management for approval. Providing tangible data enables the management to be at a better position to appreciate and decide on energy efficiency projects. Adopting this activity as a routine or part of the organisation's culture gives life to energy management, and controlling the energy use by energy audit is what we refer to as Energy Management by Facts.

Walk-through or preliminary audit comprises one day or half-day visit to a plant and the output is a simple report based on observation and historical data provided during the visit. The findings will be a general comment based on rule-of-thumbs, energy best practices or the manufacturer's data.

Detail audit is carried out for the energy savings proposal recommended in walk-through or preliminary audit. It will provide technical solution options and economic analysis for the factory management to decide project implementation or priority. A feasibility study will be required to determine the viability of each option.

There is a lot of potential for energy savings from energy audits. Pusat Tenaga Malaysia, which is the executings agency for the Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP), conducted energy audits at 24 factories from eight energy intensive sub-sectors, namely Food, Iron & Steel, Rubber, Cement, Ceramic, Glass, Paper and Wood. Technical solutions proposed in the energy audits show massive potential for energy savings in every sub-sector with an average of almost ten percent of the energy usage. However, this can only materialise through replication at other factories within the respective sub-sector.

The results are bound to create a positive impact to the industries as well as the national economy and the environment. By saving energy, industries can reduce the emission of green house gases (GHG) into the atmosphere. The Malaysian industries will also be prepared for the coming Asean Free Trade Area (AFTA).