Like any industry, the three top operating expenses are often found to be energy (both electricalrnand thermal), labour and materials in a sugar factory. Energy has the highest potential for costrnreduction by ensuring energy efficiency and conservation. The energy costs are rising steadilyrnand availability of fuel is becoming scarce. Electrical energy and thermal energy are the primaryrnenergy types used for sugar processing and the benefits of energy efficiency and conservation arerncommonly accepted in the sugar industry. Cogeneration power plants using bagasse in sugarrnfactories produce steam and electricity for use in the sugar processing and also export the excessrnpower to the grid. For the generation of excess power there is continuous analysis required forrnthe economical balance for input and output power. The success of cogeneration depends onrnefficient use of energy. rnThe thesis work tries to identify the way energy is being used, mainly targeted at identifyingrnpractical, sustainable and economically viable energy saving opportunities in different sectionsrnof the factory, i.e. electrical systems, major drive motors, lightings, captive power plants,rnresulting from a compressive study and analyses of technical parameters through energy auditrnmethodology. The study involved using a wide range of sophisticated, portable, diagnostic andrnmeasuring instruments to generate refined data. International Motor Selection and SavingrnAnalysis (IMSSA) software and RETScreen energy efficiency model tools are used to facilitaternin complex analyses to give a more reliable basis for evaluation of performance, energy savingrnmeasures and economic/financial viability. rnThe study conducted (energy conservation and efficiency improvement) on electrical systems,rnmajor drive motors and lightings identify recommendations, which identified an annualrnelectricity saving potential of 4,303MWh. This works out around 15% of the total base casernelectricity consumption with fuel cost saving of 77,883 USD Analyzed with RETScreen EnergyrnEfficiency model. The power quality parameters like voltage unbalance, total harmonicrndistortions and frequency are measured at PCC/MCC and compared against the IEEE-519rnstandard and they are found to be well within the limit, but power factor at some MCC are lessrnthan optimum.The second part of the study focuses on the steam generation and distribution system. The studyrnconducted in the steam generation unit shows the steam generation units during the study (boilerrn1, boiler 3 and boiler 4), have very low efficiency (on average 63.59%) when compared to thernminimum acceptable efficiency of boiler that uses bagasse as a fuel (70 %). rnThe determined low efficiency is caused by large quantity of heat losses particularly due tornexcess air and moisture in the fuel, i.e. bagasse that should be transferred to steam. Therninvestigation on the steam distribution systems also shows there is significant amount of lossesrndue to deteriorated steam distribution line thermal insulation and steam leakages. rnThe study conducted on both steam generation units (boilers), thermal losses due to deterioratedrninsulation of steam lines and steam leakages identified energy conservation measures of annualrnsaving potential of 17,807ton of bagasse which could avoid additional fuel/FO utilization andrnenhance generation of electricity that significantly reduce grid electricity dependency of thernfactory.