Optimization of the Economics of Energy Management

Suhrit K. Dey


In the world of economics the words "Energy Management" carry different conno- tations for different groups of people. From the point of view of producers, they mean the scheme of optimization of all the different factors costing productions of different types of energy such that the total amount of revenue is maximized and the total cost of operation is minimized. They attempt to achieve both. But they must achieve at least one of these primary objectives. From the point of view of consumers, "Energy Management" means use of all different types of energy to sustain life and health most economically. Often both producers and consumers fail to understand what environmentalists mean by "Energy Management." To this group energy management must be done in such a way, so that all factors needed for production and usage of all forms of energy must meet all the strin- gent criteria to control pollutants released into the atmosphere by all agents of production and consumption of energy.
Unfortunately, companies who are in the business of production, look into how to manage energy by considering different forms of energy production in order to make their investment most profitable. However, they are bound by the rules of the department of energy and they must follow the guidelines of the Environ- mental Protection Agency (EPA) and other mandates of federal, state and local governments. This topic is energy management in production control and it has a strong impact on the global economy.
In this article energy management is studied applying mathematical methods of optimization. The model is quite general and the solution is quite simple which may be done using the calculator. The model predicts how many units of types of energy must be produced to maximize the revenue which depends on the demands for those types of energy in the market and the protocol and policies that the company plans to adopt for production. Thus the method developed in this article is to be applied at the planning stage for optimization of the economics of energy management. A model illustration has been used in the text explaining the step- by-step application of the theory.

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"Intellectual Economics" ISSN online 1822-8038 / ISSN print 1822-8011