CFOs blind to hidden goldmine in production department

It is incomprehensible that production companies leave financial reserves unused in their bank account, and at miserably low interest rates, while they could realize returns of a few 100 percent with part of this money.

How can they realize this? By investing in sustainable energy saving measures; and that begins with the acquisition of measurement and analysis tools. They can use these tools to quickly detect compressed air losses which in turn enables them to save  considerable on energy use. It turns out that in many companies the cost of generating compressed air could be structurally reduced. Even better, when we look at real life, it can be as much as 20 to 50%. According to VPInstruments, a Dutch producer of “state-of-the-art” measurement and analysis equipment, companies can easily save tens of thousands of Euros per year, and in many cases even much more!

It is not only financially interesting for companies to take a critical look at their compressed air system, but it also fits in very well with the European obligation to structurally save on energy usage in the upcoming years. From June 5, 2014 the European Energy Efficiency Directive goes into force. This means that large energy customers are obligated to cut their energy usage by 1.5% annually. This measure is supposed to ensure that the ambitious energy saving plans for 2020 will actually be realized in Europe.

Compressed air is expensive, very expensive!

Compressed air is used in virtually every production company; to drive production machinery, to move product, to clean off packaging material and much more. But also in our normal lives we depend on compressed air. Take a look at your garage for example and ask yourself the question: how do my tires get pumped up? Well, that is also done with compressed air. Compressed air is generated by taking in outdoor air through filters and compress this air to such an extent that it can be conducted under high pressure (usually six to eight bar) through a pipe system to machinery or your car tires. This process is an expensive affair. Even though a lot has improved in the area of compressors over the last decades, 75% of the consumed (electrical) energy is still lost to heat. Compressed air is one of the most expensive energy carriers. It is even 10 to 20 times more expensive than electricity and this is exactly the reason why compressed air is such a tremendous contender for successful energy savings. This is particularly the case at large factories, where there are often five or more compressors. But even if there are only two compressors (see the arithmetical example), the costs are already noticeable and probably much higher than many Chief Financial Officers would suspect!

Facts and figures

When you look at the cost of the total life cycle of a compressed air system, the energy costs account for as much as 75%. The other 25% are the costs of acquisition and maintenance. Worldwide, approximately 5% of all electrical energy is converted into compressed air. Within industry, this even amounts to 10%. But that can be severely reduced, sometimes by as much as 50%. In order to achieve this, a systematic approach is required. In this process, we distinguish three phases with compressed air systems, namely: permanent monitoring, leakage management and system optimization.

Monitoring and analysis

In order to save money, first we have to determine the savings potential. With a modern energy management system focused on compressed air systems, the system can be mapped out and automatic reports can be generated. In the reports, the efficiency, the total costs and the consumption per department would be displayed. Now we can go to work with savings potential on our mind in which case the results will be directly visible in the follow up reports. Of course staff awareness is also important especially when you present the results to them. You will see that their awareness grows and your wastage will decrease.

For the monitoring and analyses of compressed air systems, VPInstruments offers VPVision, a real-time energy monitoring solution to help you get insight in your energy consumption. Via a web browser, VPVision maps out the complete compressed air system; from compressor system to end users. Permanent monitoring and analyses is the first step in identifying savings and, even more important, in maintaining them, so that the savings are subsequently realized year after year.

Leakage management

Leakage management goes further than detecting leaks and fixing them. It involves a systematic approach with a permanent monitoring system as the starting point. Companies can already realize a lot on energy by detecting and repairing leaks.

It is unbelievably simple and thus incomprehensible that in many companies, nothing is done about this. It is the “most normal thing in the world” that when machinery is switched off, the compressor simply carries on running, in order to keep the leaks alive. Many compressed air leaks can simply be heard (hissing sound), but there are also leaks which are more difficult to detect. For these, there is special detection equipment and there are specialized companies which can unerringly trace these compressed air leaks.

Optimization

Over the course of time, there can and will be important changes in compressed air usage. Leakage has decreased, production may fluctuate or the composition of the machinery inventory has been altered through expansion/modification. Thanks to permanent monitoring, changes are indicated in a timely manner. Subsequently, optimizations can be carried out. In this context, think in terms of changes in the number of compressors or the types of compressors. Or reduction in the working pressure, because high pressure machinery has been replaced, which likewise means a further energy saving. One can also think in terms of heat recovery through the exploitation of compression heat for the central heating system. In collaboration with specialists, supplementary improvements can be carried out, resulting in an optimally cost effective compressed air system.

Recoupment period and yield

There are only a few situations in which investments in energy saving measures are so quickly recouped as with the optimization of compressed air systems. As a case study, we shall discuss a modestly-sized compressed air system with two compressors, specifically: one compressor of 125 kW which runs for 7,000 hours per year and one compressor of 75 kW which runs for 5,000 hours per year. At 10 cents per kWh in electrical power costs (in most cases this is higher), the energy costs of this compressor station amount to 125,000 Euros per year. Thanks to the VPVision monitoring system, a large number of leaks was noticed and the maintenance schedule was adjusted. Savings: 15% or € 18,750 per year. Investment: a few new hose fittings and two hours repair time. They also noticed that a number of production lines continuously used air during standstill periods. By turning off the machines during change of product (closing valve), another 5% was additionally saved, being  € 6,250. The total savings in this case study are thus € 25,000 per year, which means that the investment in the measuring and analysis system (approx. € 12,500 in this example) had been recouped in about six months and there was more than enough budget left to invest in repair materials. Considering that many compressed air systems are larger, 3 to 5 compressors, the savings in these situations are also considerably higher and the investment is even recouped in two to three months.

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