How to Save $4.5 Million in Energy Costs over 10 Years

The most expensive component in the total cost of compressed air—including capital costs and service and maintenance costs—is energy consumption. In fact, over the lifespan of a compressor, energy typically costs several times more than the purchase price of the compressor. Thus, maximizing energy efficiency saves money, while also contributing positively to the environment.

The following scenario illustrates how an energy audit can result in excellent savings, especially when older and inefficient compressed air equipment represents the majority of the current installation. It is also a reminder of how important it is to manage the complete plant air system over time, while demonstrating the life cycle profit (LCP) when energy efficient products and energy recovery systems are included.

The chart below represents a facility with older and energy inefficient equipment totaling six air compressors, dryers (not shown), an old piping system throughout and higher operating pressure than actually required.

Figure 1

The subsequent life cycle cost (LCC) calculation charts illustrate a new system without energy recovery as well as a new recommended system with calculated return on investment, energy efficiency improvements and energy recovery values. The chart below is a simple 10-year LCC calculation with no additional energy savings master controls or energy recovery equipment.

Figure 2

Figure 3 shows the same LCC calculation, now with energy savings equipment taken into consideration. Although the initial equipment cost is higher than in the calculation without energy recovery, the energy savings difference is significant. The savings shown is $4,540,847 over 10 years. This will be considered life cycle profit because it significantly lowers the 10-year LCC energy cost calculation. The other positive factor in this scenario is the initial savings for the first two years. Savings of $1,189,645 yields a payback and ROI in less than two years (1.7 years).

Figure 3

Always Perform an Energy Audit First, Then Purchase Equipment

It is always recommended to have a plant air audit performed before any new equipment purchase is considered. Many times the actual compressed air requirement has changed over the years and in most cases less air can be consumed due to production area reductions or even newer, more energy efficient production equipment. Also review the air quality requirement when considering the type of compressors for the new installation. Do you need oil-free air? If you are a food processing plant, the answer is probably yes.

If you’d like to learn more about compressed air energy audits or equipment upgrades, fill out our Request a Quote form and a representative will be in touch with you shortly.