Cost-benefit Analysis And Emission Reduction Of Motor Retrofits In An Industry

Energy Efficiency Assignment o. 2

Assignment Title:

COST-BE EFIT A ALYSIS A D EMISSIO REDUCTIO OF MOTOR RETROFITS I A I DUSTRY

Edited by: Emad Sadeghi ezhad KGH080002

Lecturer: T.M.I. Mahlia

Academic Year-(Semester): Session 2008/2009-(Sem. 2)

Contents List of Tables………………………………………………………………...2 List of Figures……………………………………………………………….3 Nomenclature………………………………………………………………..4 Summary…………………………………………………………………….5 1. Introduction……………………………………………………………….5 2. Survey Data……………………………………………………………….6 3. Methodology……………………………………………………………...7 3.1. Number of Retrofit (NR)………………………………………... 7 3.2. Useful Energy (UE)……………………………………………... 7 3.3. Energy Saving (ES)……………………………………………... 7 3.4. Bill saving (BS)…………………………………………………. 7 3.5. Capital Recovery Factor………………………………………….8 3.6. Net saving………………………………………………………...8 3.7. Cumulative present value (PV)…………………………………. 8 3.8. Emissions Reduction (ER)……………………………………… 8 4. Results and Discussions…………………………………………………..9 6. Conclusions……………………………………………………………...12 References………………………………………………………………….13

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List of tables:

Table 1: Power, number of inefficient motor, and operating hour………………………..6 Table 2: Input data for inefficient and efficient motor........................................................6 Table 3: Emission from fossil fuel per unit of electricity generation……………………..6 Table 4: Number of Retrofits and Energy Savings………………………………………..9 Table 5: Bill Savings, Net Savings, and Present Value…………………………………...9 Table 6: Percentage of power source based on fuel types………………………………...9 Table 7: Emission reduction………………………………………………………………9

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List of Figures:

Fig 1: Energy savings per year…………………………………………………………...10 Fig 2: Amount of savings per year……………………………………………………….10 Fig 3: Emission reduction………………………………………………………………..11 Fig 4: Emission reduction………………………………………………………………..11

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omenclature

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Summary Energy is an integral component of a modern economy. It is an essential ingredient in nearly all goods and services, but its use exacts heavy financial, environmental, and security costs. A key method of reducing energy’s costs while retaining its benefits is to use it more efficiently. Industry is a very large consumer of energy. Efficiency and intensity are terms used to compare energy consumption and product output. Efficiency is a term that is sometimes ambiguous, because it has one meaning in engineering contexts and another in economic contexts. In this report, the terms efficiency and energy efficiency are used to denote the engineering sense of the word, while economic efficiency is used when the economic sense is implied. Motor retrofitting in industry is a process of utilizing a more efficient motor to replace the existence of the inefficient motor. This study is an attempt to predict the financial savings of the industrial motor retrofitting, and the annual saving benefit because of the motor efficiency improvement. In the case of emission reduction, this retrofitting also reduces the amount of energy needed by the industry which also mean the reduction of emission caused by the power generation.

1- Introduction The efficiency of a motor is the ratio of the mechanical power output to the electrical power input. This may be expressed as:

Design changes, better materials, and manufacturing improvements reduce motor losses, making premium or energy-efficient motors more efficient than standard motors. Reduced losses mean that an energy-efficient motor produces a given amount of work with less energy input than a standard motor. In 1989, the National Electrical Manufacturers Association (NEMA) developed a standard definition for energy-efficient motors. The definition, designed to help users identify and compare electric motor efficiencies on an equal basis, includes a table of minimum nominal full-load efficiency values. The emission reduction is divided into four groups of emission caused by the power generation that are used for the power to drive the motor, that are coal, petroleum, and gas. The pollutant that are produced by the power generations, are CO2, SO2, NOx, and the most dangerous CO. By reducing the amount of energy needed by the industry to produce the goods, will off course reduce the amount of emission of those dangerous gases. To identify the appropriate GHG mitigation strategies for all energy-consuming sectors in the state, it is first necessary to develop a statewide energy baseline that accounts for sector-by-sector consumption by fuel use and end-use technology. This section provides an overview of Utah’s baseline energy use and CO2 emissions.

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2. Survey Data The data available in this study are; the power, number of inefficient motor, operating hour; input data for both groups, and the emission for the power generation. Power

No.

Inefficient Operating

(HP)

Motor

Hour

5

336

2100

10

245

3200

20

136

4700

Table 1: Power, number of inefficient motor, and operating hour

Motor Type

Inefficient Motor

Efficient Motor

A1

A2

A3

B1

B2

B3

Power (HP)

5

10

20

5

10

20

Lifetime (year)

12

12

12

12

12

12

Purchase price (RM)

1000

1500

3000

1250

1750

3500

Motor efficiency (%)

83

86

85

92

94

90

Working load (RM)

87

88

86

87

88

86

Table 2: Input data for inefficient and efficient motor

Fuels

Emission (kg/kWh) CO2

SO2

NO x

CO

1.18

0.0139

0.0052

0.0002

Petroleum 0.85

0.0164

0.0025

0.0002

Gas

0.0005

0.0009

0.0005

Coal

0.53

Table 3: Emission from fossil fuel per unit of electricity generation

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3. Methodology Establishing an energy baseline is somewhat problematic. A fundamental choice must be made whether to measure energy used directly for an application such as power generation (“direct accounting”) or indirectly at the end use in applications such as electric motors or appliances (“end use accounting”). In the case of the former strategy, the methodology is straightforward: 1) first, for each fuel, count the physical units of consumption, such as barrels, cubic feet, or short tons; 2) convert the physical units to energy units (million Btu); 3) multiply by the carbon coefficient (which translates million Btu to carbon pounds); 4) adjust for stored and oxidized carbon; and 5) convert to tons of CO2. Because the “end use” methodology accounts for energy use at the final point of consumption – the last link in the energy delivery chain – all of the thermodynamic losses associated with moving energy from the point of production to the point of consumption are accounted for in end-use data. The baseline analysis in this report employs the “end use” methodology. This approach is favored because it begins with an accounting, by end-use sector, of the major uses of energy. Therefore, it is easier to target specific GHG mitigation measures to specific energy uses. The end-use sectors are the residential, commercial, industrial, and transportation sectors. This study and data analysis is using the following term: 3.1. umber of retrofits ( R) Number of retrofits is depends on the number of motor used in the industry, represented by the following multiplication of Retrofits (RE) and Number of Motor (NM): R = RE x M 3.2. Useful energy (UE) Useful energy by the motor is divided into two comparative group; BAU (Business as Usual) and Retrofit (using more efficient motors). BAU the multiplication of the sum of Efficiency of inefficient motors (IUE), Horse Power (HP), NR, and Operating Hour (OH) multiplied by 746-Watt conversion. UEBAU = sum ( UE x HP x R x OH) x 746 W UERet = sum ( E x HP x R x OH ) x 746 W 3.3. Energy savings (ES) Energy savings from retrofitting is the difference between useful energy of efficient and inefficient (BAU) motor. This can be calculated using the following equation: ES = UERet - UEBAU 3.4. Bill savings (BS) The bill savings of motor retrofit is a function of energy savings and the average price of electricity (PE). The average price of electricity in KL is RM 0.235. The potential bill savings by motor retrofit is calculated by the following equation: BS = ES x PE

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3.5. Capital recovery factor The capital recovery factor is the correlation between the discount rate and the lifetime of more efficient motor; this correlation is calculated by the following equation; which include the discount rate (d): CRF

= 0.355

3.6. et savings There are two methods to calculate economical impact of motor retrofit i.e. annualized costs and cash flow. In the first method, the incremental cost (IC) spreads over the lifetime of the efficient motor so that the pattern of expenditures matches the flow of bill savings. The Annual Net Savings (ANS) over time and calculated by the following calculation, which include BS, NR, Incremental Cost (IC), and Capital Recovery Factor (CRF). A S = BS - sum( R x IC) x CRF IC = PPE - PPUE IC is the difference between Purchase Price of efficient (PPE) and inefficient (PPUE) motors The second method is the cash flow over the lifetime of the efficient motor, where the motor is paid for full when it is installed. The purchasers incur the incremental cost when the motor is purchased, but the benefit of higher energy efficiency is spreads over the motor efficiency. The Net Savings (NS) in term of actual cash flows is calculated by the following equation: S = BS - sum( R x IC) 3.7. Cumulative present value (PV) The cumulative present value is calculated using the percentage of discount rate. The cumulative present value of the annualized net savings for motor retrofit is calculated by the following equation:

3.8. Emissions reduction (ER) The environmental impact from retrofitting is potential reduction of greenhouse gasses or other element that caused negative impact to the environment. The common emission reductions are usually, CO2, SO2, NOx and CO. The emission reduction is a function of energy savings. The emission reduction can be expressed mathematically by the following equation: ERpollutant Pfuel m

= sum (Pfuel x m) x ES

: percentage of power sourced from this fuel : mass of pollutant per kWh

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4. Result and Discussion The result of calculation is used the listed formulas for energy savings, bill savings, net savings, and emission reduction, are presented as follows:

Number of Motor

5 10 HP HP 336 245

20 HP 136

Number of Retrofits 25% 50% 75% 5 10 20 5 10 20 5 10 20 HP HP HP HP HP HP HP HP HP 84 61 34 168 123 68 252 184 102

Useful Energy (MWh) per year 25% 50% 75% BAU RET BAU RET BAU RET 3830.2 4125.6 7660.3 8251.1

11490.5

Energy Savings (MWh) 25% 50% 75%

12376.7 295.4 590.8

886.2

Table 4: Number of Retrofits and Energy Savings

Energy Savings (KWh) 25% 50% 75% 295401 590802 886203

Bill Savings (RM) per year 25% 50% 75% 69419 138839 208258

Annual Net Savings (RM) 25% 50% 75% 50493 100987 151480

Net Savings (RM) 25% 50% 75% 16107 32214 48320

Present Value (RM) after year 25% 50% 75% 47190 94380 141570

Table 5: Bill Savings, Net Savings, and Present Value

Year 2006

Power Source Coal Petrol Gas 15.84% 2.96% 56.80%

Hydro 24.40%

Table 6: Percentage of power source based on fuel types

CO2 (ton) 151.57

25% SO2 NOx (kg) (kg) 877.70 416.18

CO (kg) 95.00

Emission Reduction 50% CO2 SO2 NOx CO (ton) (kg) (kg) (kg) 303.15 1755.39 832.37 190.00 Table 7: Emission reduction

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CO2 (ton) 454.72

75% SO2 NOx CO (kg) (kg) (kg) 2633.09 1248.55 285.00

Energy Savings (MWh) per Year 1000.0 900.0 800.0 700.0 600.0

MWh

500.0 400.0 300.0 200.0 100.0 0.0 25%

50%

75%

Retrofits Fig 1: Energy savings per year

Savings 250000

200000

BS

150000

RM

ANS NS

100000

PV

50000

0 25%

50%

Retrofits

Fig 2: Amount of savings per year

10

75%

Emission Reduction

3000.00 2500.00

mass

2000.00

CO2 SO2

1500.00

NOx CO

1000.00 500.00 0.00 25%

50%

75%

Retrofits

Fig 3: Emission reduction

Emission Reduction 3000.00 2500.00

mass

2000.00

25%

1500.00

50% 75%

1000.00 500.00 0.00 CO2 (ton)

SO2 (kg)

NOx (kg)

Pollutant

Fig 4: Emission reduction

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CO (kg)

5. Conclusion The energy savings for motor retrofitting plays a significant figure in the industry, and as a function of the percentage of retrofitting. Energy savings for 25 % retrofit reach as much as 300 MWh, and even higher for the greater value of retrofit. The amounts of savings are also increase as the energy saved by the motor retrofitting. Bill savings reaches RM 70,000 per year for 25 % retrofit and even higher for the greater percentage of retrofit. The last is the emission reduction is increasing, as the percentage of retrofits is higher. The emission of CO2 is reduced up to 150 ton a year for 25 % retrofit and even higher for the greater percentage of retrofits, and so with the other emission follows the same mode. The motor retrofitting is proven to be very important and significant for the financial savings for the industry, and also play a vey important role for the emission reduction because of the power generation.

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References [1] Dr. Indra Mahlia, Energy Policy-Lighting Retrofits, Lecture Paper of Energy Efficiency, 2007 [2] Stefano JD. Energy efficiency and the environment: the potential for energy efficient lighting to save energy and reduce carbon dioxide emissions at Melbourne University, Australia. Energy – The Int Journal 2000;25:823-839. [3] Lee AHW. Verification of electrical energy savings for lighting retrofits using short- and long-term monitoring. Energy Convers Mgmt 2000;41:1999-2008. [4] Guan FM, Mills E, Qin Z. Energy efficient lighting in China. Energy Policy 1997;25:77-83. [5] Kazakevicius E, Gadgil E, Vorsatz D. Residential lighting in Lithuania. Energy Policy 1999;27:603-611. [6] Philips. Product Catalogue–Family Detail: Lamps Compact Fluorescent Integrated, www.lighting.philips.com, 2003. [7] Turiel I, Atkinson B, Boghosian S, Chan P, Jennings J, Lutz J, McMahon JE, Pickle S, Rosenquist G. Advanced technologies for residential appliance and lighting market transformation, Energy and Buildings 1997; 26:241-252. [8] Vorsatz D, Shown L, Koomey J, Moezzi M, Denver A, Atkinson B. Lighting market sourcebook for the U.S. Lawrence Berkeley Laboratory, University of California, Berkeley. 1997. [9] McMahon J, Liu X., Turiel I, Hakim SH, Fisher D.Uncertainty and Sensitivity analyses of ballast life-cycle cost and payback period. Lawrence Berkeley Laboratory, University of California, Berkeley. 2000. [10] Mahlia TMI. Emissions from electricity generation in Malaysia, Renewable Energy 2002; 27(2):293-300. [11] Masjuki HH, Mahlia TMI, Choudhury IA. Potential electricity savings by implementing minimum energy efficiency standards for room air conditioners in Malaysia, Energy Convers and Mgmt 2001; 42:439-450.

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