Rotary encoder wake-up

Hi

I would like to have an energy saving for my Arduino so it shuts down when not in use (10 seconds timeout)
That's not a problem

The problem is I want it to wake up when I use a knob on top of my device, which is connected to a rotary encoder
So the Arduino should wake up immediately and register the change in the encoder

Can this be done?

Yes. Before putting the Arduino into a sleep mode, enable a pin change interrupt on one of the pins that the encoder is connected to, so that the Arduino will be woken.