Energy is one of the main cost factors in the textile industry. Especially in times of high energy price volatility, improving energy efficiency should be a primary concern for textile plants. Focusing on energy utilization assessment and consumption reduction efforts through efficient energy usage, better production management and also through introduction of new Technologies significant results can be achieved; saving money on energy bills, improving energy efficiency and maintaining sustainable environment.rnThe main objective of this thesis is to analyse the current use and management of electrical energy as well as to identify the power quality problems in the textile manufacturing processes of the selected plant, a detailed assessment of energy consumption and loss has been taken. Based on the losses, energy efficiency performance assessments on the major energy intensive equipments like electric motors and drives, lightings have been done. In addition, measurements and simulations have been made to assess power quality related problems of the factory. Based on the results obtained from measurement (voltage unbalance, current unbalance, power factor) and simulation results (total harmonic distortion of voltage, total harmonic distortion of current) a comparison has been made with the standard values. With this comparison a mitigation technique to the harmonic problem has been done by design of passive filters and power factor correction using ETAP software tool.rnIt has been found from Energy Audit results that there exists a difference of 1.23KWh/Kg between the benchmarks and what exists at Arbaminch Textile factory; the factory spends 1,282,988 Birr per year on this account. In the breakdown of energy use in the different section of the textile factory, the Ring frame and the Open end machineries are observed to have large consumptions of energy 43.7% and 30.3% respectively. Thus some measures are proposed to reduce the energy lose.rnUsing motor master+ international software, it has been seen that in the ring frame section replacing 22KW of the existing motor with a 15KW energy efficient motor can bring energy savings of 13,189KWh per year and money savings of 325 dollars per year with four yearsrnAAU, AAIT, Electrical and Computer Engineering Department Page vrnpayback periods. And also through improving the lighting installation systems resulted in energy saving of 209,802KWh/y and in money savings of 85,725 Birr annually.rnThe voltage and the current unbalance for the factory distribution system are all within the standard (< 3% for voltage and