Energy Management (ME17501)

COURSE OBJECTIVES
• To understand the causes of energy crisis and various options in the present scenario of global warming.
• To get awareness about sustainable energy technologies and their economical utilization with least
environmental effects.
• To know about energy auditing and bench marking
• To identify energy conservation opportunities through technical and non-technical interventions.
COURSE OUTCOME

S.N. Outcomes BT Level BT Description

CO1 Develop an understanding of the energy-economy-environment nexus. 2 Understand
CO2 Use the techniques of energy auditing and benchmarking in the 3 Apply
industrial sector.
CO3 Acquire basic knowledge of sustainable energy technologies and their 2, 3 Understand,
applications. Apply
CO4 Undertake case studies in energy management in different sectors of the 4, 5 Analyse,
economy Evaluate

Module Content Lectures

1 Introduction: Energy supply and demand, energy linked environmental crises-causes and 5
options in the present scenario of global warming, Energy classification: renewable and
non-renewable forms of energy and their characteristics.
2 Energy-economy-environment nexus: energy-economy link and factors affecting it, net 3
energy, gross pollution and growth constraints.
 3 Energy auditing and benchmarking: Process and gross energy requirements, Carbon 5
Footprint, Energy payback time, Identification of energy conservation opportunities,
Benchmarking and its parameters.
4 Technical options for emissions mitigation: Combined cycles, Combined heat and 12
power systems (Co-generation and tri-generation systems); Combined cooling and
power systems, energy efficiency through heat pumps; cascade refrigeration with V-C
and V-A systems, Mechanical Vapor Recompression (MVR) systems, Energy recovery
in refrigeration and air-conditioning systems; District Cooling, Geo-thermal heat
pumps, Earth-air heat exchangers.
5 Case studies from industrial/ commercial/ residential sectors. 4
6 Non-technical options for emissions mitigation: Energy rebound effect, Life 3
style/attitudinal changes, GDP vs. holistic growth.

Text Books/ References:

• Energy Systems and Sustainability by Boyle et al, Oxford University Press, II edition, 2012.
• Renewable Energy by Boyle et al, Oxford University Press, III edition, 2012
• Energy efficiency by Eastop and Croft, Longman Scientific and Technical, 1990.
• Bureau of Energy Efficiency (BEE), Government of India: www.beeindia.gov.in
• Our Choice by Al Gore, Bloomsbury Publishing, 2009.
• “An Inconvenient Truth”, Oscar winning documentary by Al Gore, 2006.
• “Before the flood”, National Geographic documentary by Leonardo DiCaprio, 2016
 What is Energy ?

‘En’ means ‘in’

‘ergon’ means ‘work’
‘Energy’ means ‘in-work’ or ‘work content’

‘En-ergon’ word is simplified as ‘Energy’

The term Energy is commonly used for raw matter (Primary

Energy) containing energy sources.

The word “Energy” is derived from the Greek word “Energia”

which means activity or operation.

The unit of Energy is ‘Joule’.

Primary Energy (Raw Energy): These are the resources available (found or
stored) in nature e.g. Coal, Uranium, Firewood.
Primary forms are many and different. Generally these can not be used
directly. e.g. - Uranium contained in the earth’s crust in the form of heat.
- Coal can not be used directly to drive the electric motor although it can be
used directly as fuel.
- firewood can be used as fuel.
- Solar heat can be used for cooking, water heating etc.
Intermediate Energy: It is energy obtained from primary energy resources by
one or more process. e.g. Steam , Chemicals etc.
Secondary Energy (Usable Energy): It is energy finally supplied to the
consumer for final consumption (Utilization). e.g. fuels, electricity etc.

Energy Chain :

Intermediate Secondary
Primary Energy
Energy Energy
 Energy Science
• Science is a systematized body of knowledge about any department of
nature, internal or external to man.

• The energy science deals with scientific principles, characteristics, laws,

rules, unit/dimensions, measurements, process etc. about various forms of
energy and energy transformations. Science involves experimentation,
measurement, mathematical calculations, laws, observations etc.

• Energy science has interface with every other science. Energy science is
the mother science of physics, thermodynamics, electro-magnetics,
nuclear, mechanical science, chemical science, bio-sciences etc.

• Each science deals with some ‘activity’. Energy is the essence of

activities.

• Energy science focuses attention on the ‘Energy’ and ‘Energy

Transformations’ involved in the various other branches of science and
gives an integrated approach.
 Economics
and political
science
Sociology and
Physics
Environment

Geography &
Geology Energy Thermody-
namics
Oceonology Science

Electro-
Chemistry
magnetics
Biology

Energy Science
 Energy Technology
• The applied part of energy sciences for work and processes, useful to
human society, nations and individual is called ‘Energy Technology’.

• Energy Technologies deal with various primary energies, processes, useful

energies and associated plants and processes. The coverage including
exploration, transportation, conversion and utilization.

• Energy Technology is concerned with ‘demand’ for various forms of

secondary energy (usable energy) and the methods of ‘supply’. Various
factors affecting the ‘demand’ and ‘supply’ are in the scope of energy
technology.

• Energy technology deals with plants and processes involved in

transformation and analysis of useful energy (exergy) and worthless energy
(anergy).

• Energy technology includes study of efficiencies and environmental

aspects of various processes.
 Energy Technology deals with the complete
energy route and its steps are:
• Exploration of energy resources; Discovery of new sources
• Extraction or trapping of energy from energy resources
• Processing
• Intermediate storage
• Transportation / Transmission
• Reprocessing
• Intermediate storage
• Distribution
• Supply
• Utilization
Energy, Man, Energy Conversion and Environment Interaction

Energy

Human Life

Energy
Conversion Environment
Processes
 Different forms of energy
The different forms of energy are:

1. Mechanical energy (kinetic and potential)

2. Thermal (or) Heat energy

3. Chemical energy

4. Electrical energy

5. Nuclear energy

6. Electromagnetic energy

7. Gravitational energy
 Energy Consumption as a Measure of Prosperity
• Energy is an important input in all sectors of any country’s economy.

• The standard of living of a given country can be directly related to per

capita energy consumption.

• The per capita energy consumption in U.S.A. is 8000 kWh per year,
whereas the per capita energy consumption in India is 150 kWh U.S.A.
with 7% of world’s population consumes 32% of the total energy
consumed in the world, whereas India, a developing country with 20% of
the world’s population consumes only 1% of the total energy consumed in
the world. (Referred from book NON-CONVENTIONAL SOURCES OF ENERGY by
G.D. Rai 2017)

• Therefore one might conclude that to be materially prosperous, a human

being needs to consume more and more energy than his own.
 Energy Crisis
• Energy crisis is a situation in which the nation suffers from a disruption of energy
supplies (in our case, Oil) accompanied by rapidly increasing energy prices that
threaten economic and national security.

• By the early 1970s, American oil consumption–in the form of gasoline and other
products–was rising even as domestic oil production was declining, leading to an
increasing dependence on oil imported from abroad. Despite this, Americans
worried little about a dwindling supply or a spike in prices, and were encouraged in
this attitude by policymakers in Washington, who believed that Arab oil exporters
couldn’t afford to lose the revenue from the U.S. market. These assumptions were
demolished in 1973, when an oil embargo imposed by members of the Organization
of Arab Petroleum Exporting Countries (OAPEC) led to fuel shortages and sky-
high prices throughout much of the decade.

• The energy “crisis” of 1974, symptomatically identified by long gasoline lines and
increased prices, suddenly caused us to do some serious thinking about energy.

Demand Supply
• The 1973 oil crisis or first oil crisis began in October 1973 when the
members of the Organization of Arab Petroleum Exporting Countries led
by Saudi Arabia proclaimed an oil embargo.

• The embargo was targeted at nations perceived as supporting Israel during

the Yom Kippur War. The initial nations targeted were Canada, Japan, the
Netherlands, the United Kingdom and the United States with the embargo
also later extended to Portugal, Rhodesia and South Africa.

• By the end of the embargo in March 1974,the price of oil had risen nearly
300%, from US$3 per barrel to nearly $12 globally; US prices were
significantly higher.

• The embargo caused an oil crisis, or "shock", with many short- and long-
term effects on global politics and the global economy. It was later called
the "first oil shock", followed by the 1979 oil crisis, termed the "second oil
shock".
• With the international crude oil prices hovering around $ 125 per barrel and
the oil import bill set for a jump of over Rs. 537 billion to reach over Rs.
2727 billion this year, India is heading for a major energy crisis. With a
population of around 113 crore, we cannot afford to follow the high-energy
consumption pattern of the West that has resulted in an indiscriminate
exploitation of fossil fuels and high pollution levels. The situation will
aggravate if necessary steps are not taken in time.

• According to Dr. Rajendra K Pachauri, Director-General, The Energy and

Resources Institute (TERI) ‘The lack of any comprehensive national
energy policy, inadequate public transport system and disregard of
domestic renewable energy resources has led to the present energy crisis”.

• The current population of India is 145,24,17,024 as of August 12, 2024,

based on Worldometer elaboration of the latest United Nations data. India
2020 population is estimated at 1,380,004,385 people at mid year according
to UN data. India population is equivalent to 17.7% of the total world
population.
 Conventional energy sources
Conventional energy sources are those which have been used traditionally for several decades
before 1970s.
(a) Fossil fuel energy
(b) Hydraulic energy
(c) Nuclear energy

(a) Fossil fuel energy :

• Coal, petroleum, and natural gas are called Fossil fuels as these are formed by the
decomposition of the remains of dead plants and animals buried under the earth for a long
time. These are non-renewable sources of energy, which, if exhausted, can not be replenished
in a short time. Their reserves are limited and are considered very precious. These should be
used with care and caution to let them last long. These are also contributing to the global
environmental pollution.

• Wood was dominant source of energy in the pre-industrialization era. It gave way to coal and
coke. Use of coal reached a peak in the early part of the twentieth century. Oil get introduced
at that time and has taken a substantial share from wood and coal. Wood is no more regarded
as a conventional source. Hydroelectricity has already growth to a stable level in most of the
developed countries.
 Coal

Petroleum Products
Gaseous Fuels
(b) Hydraulic energy :
Hydraulic energy is what is produced by the water which is stored in reservoirs and
lakes at a high altitude (so that it has gravitational potential energy). If at a given
moment it falls to a lower level, this energy is transformed into kinetic energy and
afterwards into electrical energy in the hydroelectric plant.

Advantages: - A clean energy source,

- Without waste products,
- Easy to store.
Also the water stored in reservoirs situated at altitude permits the regulation of the flow
of the river.

Disadvantages: - The construction of hydroelectric plants is expensive and needs

large networks of power cables.
- Reservoirs also mean the loss of productive soil and fauna due to the flooding of their
habitat.
- They also cause a decrease in the flow of the rivers and streams below the dam and
alter the quality of the waters.

Hydropower: Hydropower also known as water power, is the use of falling or fast-running
water to produce electricity or to power machines. This is achieved by converting the
gravitational potential or kinetic energy of a water source to produce electrical or
mechanical power.
Hydropower
(c) Nuclear energy
• Nuclear energy is the energy in the nucleus, or core, of an atom. Atoms are tiny units
that make up all matter in the universe, and energy is what holds the nucleus together.
There is a huge amount of energy in an atom's dense nucleus. In fact, the power that
holds the nucleus together is officially called the "strong force.”

• Nuclear energy can be used to create electricity, but it must first be released from the
atom. In the process of nuclear fission, atoms are split to release that energy.

• A nuclear reactor, or power plant, is a series of machines that can control nuclear
fission to produce electricity. The fuel that nuclear reactors use to produce nuclear
fission is pellets of the element uranium. In a nuclear reactor, atoms of uranium are
forced to break apart. As they split, the atoms release tiny particles called fission
products. Fission products cause other uranium atoms to split, starting a chain
reaction. The energy released from this chain reaction creates heat.

• The heat created by nuclear fission warms the reactor's cooling agent. A cooling
agent is usually water, but some nuclear reactors use liquid metal or molten salt. The
cooling agent, heated by nuclear fission, produces steam. The steam turns turbines, or
wheels turned by a flowing current. The turbines drive generators, or engines that
create electricity.
• Rods of material called nuclear poison can adjust how much electricity is produced.
Nuclear poisons are materials, such as a type of the element xenon, that absorb some
of the fission products created by nuclear fission. The more rods of nuclear poison
that are present during the chain reaction, the slower and more controlled the
reaction will be. Removing the rods will allow a stronger chain reaction and create
more electricity.
Schematic diagram of Nuclear Power Plant
 Non-Renewable Energy
• Non-renewable energy comes from sources that will run out or will not
be replenished for thousands or even millions of years. Most sources of
non-renewable energy are fossil fuels. Most non-renewable energy sources
are fossil fuels: coal, petroleum, and natural gas. Carbon is the main
element in fossil fuels.

• There are four major types of non-renewable resources: oil, natural gas,
coal, and nuclear energy. Oil, natural gas, and coal are collectively called
fossil fuels. Fossil fuels were formed within the Earth from dead plants and
animals over millions of years — hence the name “fossil” fuels.

• Non-renewable resources are usually bad for the environment. Most

nonrenewable energy resources produce carbon dioxide as a byproduct.
The CO2 gets trapped in the atmosphere and is the main cause of climate
change, according to most climatologists. Economically, non-renewable
resources pose a problem as well.
 Non-Conventional / Renewable Energy
• Renewable energy is useful energy that is collected from renewable resources,
which are naturally replenished on a human timescale, including carbon neutral
sources like sunlight, wind, biomass, rain, tides, waves, and geothermal heat.
 Comparison between Conventional and
Renewable Energy Sources
Feature Conventional Renewable
Non-Renewable
Technologies Established Under development
Plant Size Large (MW range) Small (kW range)
Main Power Plants Suitable Not sufficient
Energy density of sources High Low
Pollution problems More Less
Energy reserves Limited will get exhausted soon Will continue to renew
Cost of generation Low High
 Commercial and Non-commercial Energy
Commercial
• The sources of energy which command a price and their users have to pay a price for them, are known as
Commercial Energy. This type of energy is usually consumed by commercial entities and industries rather
than by individuals or families. It is a non-renewable source of energy. Commercial Sources such as coal,
petroleum, and electricity are bought and traded to users. The utilization of a commercial source of energy
can be taken as a sign of the development of an economy.

Non-Commercial
• The sources of energy which in general do not command a
price, are known as Non-commercial Energy. People utilize
this type of energy for domestic use. It shows a country’s
standard of living. Non-commercial energy is provided to
users at no cost and is generally a renewable source of
energy. For Example, Cow dung, firewood, agricultural
waste, etc.
Difference between Commercial and Non-commercial Sources of Energy

Basis Commercial Energy Non-Commercial Energy

The sources of energy which command a The sources of energy which in general do not
Meaning price and their users have to pay a price for command a price, are known as Non-
them, are known as Commercial Energy. commercial Energy.

The sources of energy that individuals The sources of energy that individuals utilise
Utilization
utilise for commercial purposes. for domestic usage.

The utilization of commercial energy The country’s living standards can be

Indicator of sources can be an excellent indicator of how determined by the usage of non-commercial
well the economy of a country is doing. energy sources.

Villagers often use non-commercial energy as

free goods. At best, these goods have a local
Commercial energy is traded in the
market. However, currently some of the non-
Market market(domestic and international); i.e., a
commercial sources such as dried dung and
price is demanded for these goods.
firewood are charged a price in urban areas and
are priced to some extent in rural areas as well.

It is generally an exhaustible source of

Nature It is generally a renewable source of energy.
energy (except hydropower).

The main non-commercial energy sources

The main sources of commercial energy are
Example include firewood, charcoal, cow dung, and
coal, oil, natural gas, and hydroelectricity.
agricultural waste.
 Energy Management

Definition:

“Energy management (EM) is the process of proactive and systematic planning, monitoring, optimizing, and
saving energy to create an energy-efficient system. It can help organizations to conserve, reduce energy costs,
increase efficiency, and minimize their environmental impact.”

or

“The strategy of adjusting and optimizing energy, using systems and procedures so as to reduce energy
requirements per unit of output while holding constant or reducing total cost of producing the output from these
systems with no or minimum environmental impact.”

Supply of Energy Energy Management Demand of Energy

Salient Points:

• Energy management not only deals with machines and fuels but also with people’s attitude to energy. It is
very much concerned with instructing and training people to conserve energy and thereby creating awareness
among the people.

• The essential element of energy management is cost optimization.

Scope of Energy Management
• Energy management is a multi disciplinary subject involving Engineering, Science, Mathematics,
Economics, Accountancy, Design, Operation Research, Environmental Science and Information
Technology.

• In case of industries, energy is consumed at every stage, such as:

- Exploration of raw materials, and their extraction,
- Transportation,
- Transformation to basic manufacturing materials,
- Processes during the manufacturing of products,
- Delivery and storage of finished product
- Marketing and distribution
- Utilization of product and finally the waste disposal

• In addition, energy is required during maintenance stage, and to provide the facilities and safety
requirements for the workers and industry.

• Hence, Energy management offers the way to achieve the most favorable and economic operating
conditions. It deals with the provision of as much of energy as is need, when it is needed and with the
quality required.
 Necessary steps of Energy Management Programme (EMP)
1. Initiation phase: This is the planning phase which begins with the realization that energy is a resource to be
managed and the decision to see that adequate management is indeed applied. A coordinator of EMP is
appointed and committee is formed with representatives from all departments/units. Such a created
committee will coordinate good overall plans, bring in new ideas and perspectives through the whole of the
desired goal.

2. Audit and Analysis phase: This phase involves the commitment of the management to execute the EMP in
the following steps:

• Review the historical patterns of usage, of fuel and energy with the aid of indices, graphs, histograms, etc.
• Facilitate walk-through survey.
• Conduct preliminary analyses with the aid of drawings, data sheets, equipment specifications, etc.
• Develop plans and execute energy audit plans of the facility.
• Do the required calculations based on the results of the energy audit and compare them with historical data.
• Analyze and simulate the evaluation of energy management options.
• To do economic analysis of selected energy management options, such as life cycle costs, rate of return,
benefit to cost ratio.

3. Implementation phase: This is also called as controlling phase which consists of the following steps:

• Establishing energy efficient goals for the organization or facility.

• Determining capital investment required and priorities.
• Establishing measurement and reporting procedures in sequential order.
• Instituting routine reporting procedures for managers and publicizing results.
• Promoting awareness and involving personnel for active participation in EMP.
• Making provision for periodic review and evaluation of overall EMP.
 Diagram of Various aspects of EMP

Division of energy coordinator

R&D
Energy Committee
Plant energy coordination

Manufacturing
Energy Management Programme

Legal
Purchasing
Public relation
Financial Staff groups
Planning
Accounting
 Duties of Energy Manager

(i) To generate interest in energy conservation and to sustain the same with new ideas and activities and for
lecturing training courses.

(ii) To ensure that the records and accounting system are maintained in consistent units and are uniform.

(iii) To give technical advice on energy saving techniques and equipment.

(iv) To identify the sources of technical guidance.

(v) To coordinate the efforts of all energy users and set realistic targets.

(vi) To maintain essential records of purchases, stock, consumption reviewing the energy utilization
performance periodically, watching the trends and to advice the senior management.

(vii) To identify the source of energy wastage, quantify the wastage or losses in financial terms and suggest
practical recommendations to reduce these losses.

(viii) To identify areas requiring deep study, maintain records of such in-depth studies and to review the
progress.

(ix) To provide material of good energy practice to suit the needs of the organization.

(x) To give special advices, with due consideration to energy conservation, safety and healthy aspects, to
various departments of the organization.

(xi) To keep track of all the significant developments in the field of energy conservation by maintaining
contact with appropriate research organizations.

(xii) To advise the senior management on matters of energy with latest developments in the global scenario.
 Energy Audit
Definition: “An audit which serves the purpose of identifying where a building or plant facility uses energy and
identifies energy conservation opportunities.”

• Basically, it attempts to determine the magnitude of use of energy presently attributed to each of the major
components of energy use.

• The energy audit forms the basis of understanding of present system operation and serves as a benchmark for
modifications and decisions, in future.

• All efforts to conserve energy should start with an energy audit of the structure, facilities and operation.

Energy Audit is balance sheet of : -

Inputs Throughputs Outputs

• The actions to be taken by energy managers depend completely on the results and recommendations of the
energy audit.

• The aim of energy audit is to obtain a simple but comprehensive photograph of the overall energy flow
situation within a declared system boundary of a building, factory and/or product line.
 Classification of Energy Audit
Energy audit are classified in to three categories viz., Walk-through, Mini-audit and Maxi-Audit.

Walk-through audit type is the least costly method and identifies preliminary energy savings. It is
carried out by virtual inspection of the facility. The maintenance and operation of energy saving
opportunities are made and the information needed for a more detailed analysis is collected.

Mini-audit requires tests and measurements to quantify energy uses and losses and determine the
economics for changes.

Maxi-audit evaluates how much energy is used for each function or process of the facility. It also
requires a model analysis to determine energy use patterns and predictions on a year round basis.
 Classification of Energy Audit
Energy audit are classified in to three categories viz., Walk-through, Mini-audit and Maxi-Audit.

Objectives of Energy Audit

• To understand the facility’s energetic behavior.
• To identify the excess of energy consumed.
• To find out the motive of this excess.
• To propose alternate solutions.
• To justify them from technical and economical point of view.
• To determine the ideal energy consumption profiles.

Energy Conservation Schemes

One of the primary sources of energy in future is the Conservation of Energy. The investment for energy
conservation, in general, is to be regarded and judged exactly in the same manner as any other form of capital
investment.

On Economic basis energy conservation may be classified in to three categories as under:

(a) Short-term energy conservation schemes
(b) Medium –term energy conservation schemes
(c) Long-term energy conservation schemes

Short- and medium-term schemes can achieve savings of 5 to 10%, the long-term schemes may achieve a
further savings of 10 to 15%.
(a) Short-term energy conservation schemes
This group consists of tasks of tightening of operational control and improved housekeeping.

(i) Furnace efficiencies –For good combustion, minimum excess air over stochiometric air is to be maintained.
A continuous monitoring of oxygen level in flue gases is to be done. The oil burners
should be cleaned regularly and well maintained.

(ii) Heat exchangers – In case of het exchangers where there is a transfer of useful heat from product streams
to feed streams. The optimum cycles can be determined by continuous performance
monitoring. An improved heat recovery can be achieved by frequent cleaning.

(iii) Good housekeeping – When natural light is available and sufficient, artificial light should be avoided.
During the heating season, doors and windows should be closed as much as possible.
Encouragement should be given to staff to wear suitable clothing in the working areas.

(iv) Electrical Power – In most of the industries, electrical power is “imported”. About 10 to 15% of electrical
energy costs can be reduced by adopting conservation measures. At locations where
natural air cooling is sufficient, the usage of I.D. fans can be avoided. Gravity flow
applications can minimize pumping costs of liquids.

(v) Steam usage – The majority of steam leaks should be repaired as soon as possible after they occur. The
quality as well as quantity of steam required should be optimized and a careful control
of the supply and distribution of steam is essential.

The payback period of this type of schemes is less than or equal to one year.
(b) Medium-term energy conservation schemes
Considering a payback period of less than two years, considerable savings in energy consupmtion are often
available for quite modest outlays of capital. Some examples are given below:.

(i) Insulation – Improving insulation prevents the leakage of cold air into the room and also thermal losses in
the steam distribution system. Optimum thickness of insulation or critical radius of insulation is
to be evaluated based on the study under consideration. Due to consideration is to be given to
economical thickness of insulation also.

(ii) The temperature control and operation time of cooling/heating systems.

(iii) Whenever necessary, the air compressors are to be replaced.

(iv) The reliable measurement and control of energy parameters can be achieved by providing adequate
instrumentation at all places.

(v) Certain processes of the industry need modification. For example, the uncontaminated steam condensate
may be used as boiler feed water. This results in heat recovery in the condensate as well as in reduction of
raw water amount and its treatment costs.

(vi) Considerable savings can be obtained by suitably adjusting the electrical power factor correction.

(vii) The control and atomizing of steam in boilers and oil in furnaces is found to be in excess of the optimum
designed value. This optimal value when used results in energy conservation.
(c) Long-term energy conservation schemes
Further energy saving can be attained by adopting policies which require large amount of capital expenditure.
The return on capital for the long-term investment may not be as good as that of the medium-term.
Economical appraisal techniques are to be used to ensure the economical viability of such schemes,
involving certain modifications to the existing systems or refurbishments. Some examples are:

(i) Heater modification – The installation of heating tubes, air pre-heaters or any other suitable heat exchangers
results in extraction of more heat from furnace flue gases..

(ii) Additional lagging (improved insulation) for storage tanks minimizes thermal energy losses.

(iii) To obtain improved heat recovery, additional heat exchangers are to be provided in the processing areas.

In this type of energy conservation schemes, the payback period is more than two years. In such cases while
evaluating the present worth of an investment, the interest and escalation rates are to be considered, like

 (1  R) n  1  where, (1  i )
P A  n  R 1
 R(1  R)  (1  e)

P = Present worth ; A = Annuity ; R = net interest rate per annum ;

n = Number of years ;
i = interest rate per annum of money borrowed or accrued when invested otherwise
E = Escalation rate