Finding Cost Savings by Reducing Direct Energy and Fuel Use

March 1, 2008
The Department of Energy found that more than half of energy saving opportunities identified for steam and process heating systems alone pay back their initial investment in less than a year.

Manufacturers can identify the best opportunities to save energy and money by focusing key systems such as steam, process heating, compressed air, fan and pumping systems. These processes consume most of the energy used by U.S. industry. Fine-tuning these systems can often deliver large savings at a relatively small cost.

According to the Department of Energy, manufacturers can achieve the greatest cost savings by targeting ways to reduce direct electricity and fuel use. However, fine tuning major systems and processes can also deliver savings through reduced maintenance requirements, decreased production of scrap metal, and increased productivity.

Industrial plants can often see significant cost savings within their heating systems by reducing furnace openings leakage, improving furnace insulation and heat recovery and performing regular furnace maintenance programs. With steam systems, improving the efficiency of boilers, through tune-ups or replacements, can be another major source of savings. Improved system insulation and implementation of steam trap maintenance programs can also help reduce costs. Moving away from fossil fuels to alternate energy sources such as solar energy can reduce energy costs as well.

Alternative energy sources are one of the major components of the new energy legislation passed by the House of Representatives this August. The bill repeals approximately $16 billion in tax breaks for oil and gas companies to fund conservation incentives and renewable energy sources such as wind and solar power. It requires utilities to generate 15% of their electricity from renewable sources by 2020, making alternative energy more readily available.

Many manufacturers use compressed air systems as power sources for tools and equipment used for pressurizing, atomizing, agitating and mixing applications. These systems account for $1.5 billion in energy costs per year in the U.S. alone. By optimizing compressed air systems, manufacturers can achieve energy efficiency improvements of 20% to 50%. Improved use of recoverable heat and reduction of air leaks are two focus areas that can provide short-term energy savings. For example, a leak of 1/8" in diameter can cost over $2,000 in energy loss, based on an electricity rate of $0.05 per kilowatt-hour. While leakage can come from any part of the system, common problem areas include couplings, hoses, tubes, and fittings, pressure regulators, shut-off valves and pipe joints.

Finally, small improvements in pumping systems can yield considerable energy cost savings for manufacturers. A typical continuously operated centrifugal pump, driven by a fully loaded 100-horsepower motor, costs over $36,000 to operate annually. Therefore, a modest 10% reduction in operating costs saves $3,600 per year. By focusing on signs of inefficient pump operation, including pumps with high maintenance requirements and systems with large flow rate or pressure variations, manufacturers can often implement improvements that will deliver these savings.

The Department of Energy reports that more than half of energy saving opportunities identified for steam and process heating systems alone pay back their initial investment in less than a year, while over 70% have an estimated payback period of two years or less. Quick successes with optimizing these systems can lead to significant long-term savings if the approach is spread throughout a company's plants.

Lisa Raffin is Vice President of Professional Services at VFA, Inc., a provider of software and services for facilities capital planning and asset management. For more information, please visit

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