Comprehensive Systems Analysis

May 2006
Background

When a participating utility selects the 12-cent incentive level for the Conservation Renewables Credit (CRC) and Conservation Acquisition Agree ent (CAA)! "onneville #ower Ad inistration ("#A) currently provides funds for approved technical analysis for large co pressed air syste s$ %he a ount provided depends on the cost and depends on site specific circu stances! ris& anage ent! and the end user willingness to underta&e the cost-effective energy efficiency i prove ents$ %he purpose of this docu ent is to provide a reco endation and related support regarding the incentive approaches that participating utilities should use to fund co pressed air technical studies perfor ed for larger custo ers$
Overview on Compressed Air Systems Assessment

According to the Co pressed Air Challenge ' (CAC) (ourceboo&) *A co prehensive co pressed air syste analysis should include an e+a ination of both air supply and usage and the interaction between the supply and de and$ Auditors typically easure the output of a co pressed air syste ! calculate energy consu ption in &ilowatt-hours! and deter ine the annual cost of operating the syste $ %he auditor ay also easure total air losses caused by lea&s and locate those that are significant$ All co ponents of the co pressed air syste are inspected individually and proble areas are identified$ ,osses and poor perfor ance caused by syste lea&s! inappropriate uses! de and events! poor syste design! syste isuse! and total syste dyna ics are calculated! and a written report with a reco ended course of action is provided$- 1
Technical Assistance Approaches Recommended by the Compressed Air Challenge Program

%he CAC2 has developed guidelines to define three levels of syste analysis services! independent of the type of fir offering these services$ %hese three levels of service include) a wal&-through evaluation (1.2 to 2 days)! a syste assess ent (2 to / days)! and a fully-instru ented audit (0 to 11 days)$ %hese levels are defined below)

1 From Compressed Air Challenge Sourcebook, Improving Compressed Air System Performance. 2 From Compressed Air Challenges Guidelines for Selecting a Compressed Air Service Provider.

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CA 2006-13

Walk-through Evaluation (1/2 -2 days) Cost Range $ 500 to $1,500 A wal&-through evaluation is an overview of a plant co pressed air syste by identifying the types! needs! and appropriateness of end uses! pressures and air quality require ents$ %he distribution syste is analy2ed for any apparent proble s of si2e! pressure drops! storage! lea&s! and drains$ %he supply side is analy2ed for types of co pressors! and the types! suitability and settings of capacity controls$ 3ryers! receivers! and filters are also analy2ed$ A si ple bloc& diagra of the syste is drawn$
Written report of findings and proposed solutions is submitted. (olution and product neutrality should be aintained with any

reco

endations$

!yste" #ssess"ent (2-5 days) Cost Range $1,500 to $$,000 A syste assess ent is ore detailed than a wal&-through evaluation of a plant co pressed air syste $
In addition to identifying the items and problems of the walk-through

evaluation, readings are taken at appropriate locations to identify the dynamics of the system.

A si ple bloc& diagra of the syste is drawn! also a pressure profile and a de and profile! to help identify potential proble s and how they could be resolved$ 4aintenance procedures and training are reviewed$ A written report of findings and reco endations is sub itted$ (olution and product neutrality should be aintained with any reco endations$

!yste" #udit (%-10 days) Cost Range $2,000 to $10,000 A syste audit is si ilar to a syste assess ent but in ore depth and detail$
Data logging of flow, pressure and kW readings throughout the system is

conducted for a more in-depth analysis of the dynamics of the system and resulting problems.

Again! aintenance procedures and training are reviewed$ %he ob5ective is a proper align ent of the supply side and the de and side for opti u efficiency! energy savings! and reliability$ A baseline is established! against which the results of any proposed changes are easured$ A co prehensive written report of all findings! reco endations! and results is sub itted$ (olution and product neutrality should be aintained with any reco endations$

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Findings rom Research on Approaches !sed by Other Programs

6unding for ulas and ini u eligibility levels used by Co pressed Air or Custo energy efficiency progra s offered by utilities and public benefits progra s generally have 7 variants) 1$ Cost-share. 4any utilities offering energy efficiency progra s use a cost-share approach to fund technical assess ents or studies for larger end-users$ 4any utilities fund half of the study costs! with the end-user responsible for paying the re aining half$ 8ther progra s will fund the re aining /1 percent of study costs! but only after the end-user i ple ents all of the reco ended cost effective easures$ %his is an effective way to provide the end-user with an incentive to i ple ent the energy efficiency easures reco ended in the study$ 2$ Minimum size of customer. (o e progra s! li&e 9ew :or& (tate ;nergy Research and 3evelop ent Authority (9:(;R3A) 6le+%ech custo progra ! only provide technical assess ents for custo ers eeting a ini u si2e require ent$ 9:(;R3A<s progra requires the custo er to have electric bills of at least =/1!111 per year to be eligible for technical studies or assess ents$ 0$ Size of energy efficiency opportunity. 8ther progra s! such as >cel ;nergy<s Custo progra (covering 4innesota and Colorado service territories)! have no stated ini u si2e require ent! but pay for study costs based on the energy or de and savings of the pro5ect$ >cel ;nergy is interested in reducing pea& de and and uses a de and-based for ula of =211 per pea& &W saved to fund study costs$ %his for ula pays only a very s all fraction of costs (?/ percent) for s aller pro5ects! and a larger fraction (up to 111 percent) of costs for larger pro5ects$ 6or other energy efficiency providers! a for ula based on energy (&Wh) saved ay be ore appropriate$ 7$ Hybrid approaches. %here are also hybrid approaches used$ 6or e+a ple! >cel ;nergy<s (49) Co pressed Air progra provides a sliding scale of cost coverage based on the total co pressed air @# si2e$ >cel ;nergy<s progra requires the co pressor to operate a ini u of 2!111 hours per year to qualify$ Ander >cel ;nergy<s progra ! cost coverage for very s all pro5ects (between /1 and 111 @#) is capped at =2!111 to =2!/11! but 111 percent of study costs are paid for$ 6or larger pro5ects! 111 @# and above! sponsors are required to pay a greater share of pro5ect costs (2/ percent and higher) but have a uch higher cap (=1/!111)$ 8ne of >cel ;nergy<s ain goals is to attract ediu and s aller si2ed CA pro5ects into the progra $

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Analysis o Costs versus Bene its o Technical Assessments

%o develop so e insight into ini u pro5ect si2e standards and funding levels! we developed so e analyses of costs and benefits of different si2es and co ple+ity levels of pro5ects! using hypothetical custo ers as e+a ples$ %hese e+a ples are below) E&a"'le 1 ( 100 )* +o"'ressor, o'erating ,,000 hours/year %he first e+a ple presu es a 111 @# co pressor! operating B!111 hours per year$ %his pro5ect erits a (yste Assess ent! which we<ve assu ed will ta&e 0 days to perfor $ %he analysis also assu es a 00 percent probability that the custo er will install the reco ended easures$ %he various other assu ptions regarding arginal costs! easure life! etc$! are shown below$
System Size H# kW

Operating Hours -.***

Measure Life (years) )*

CA % Savings )+

CA kWh savings/year +-.,/*

Stu y Cost 0 1.***

Margina! Costs 0*2*,,

CA "" #ro$e%t Su%%ess &ate 11

"'pe%te (enefits over #ro$e%t Life

)**

+,

0 3.144

;ven under these fairly conservative assu ptions! the benefits of perfor ing the study and installing the reco ended easures far outweigh the study cost of =0!111$ 9ote that if the co pressor<s operating hours were reduced to 0!111 hours per year! the study would still be cost-effective$ E&a"'le 2 ( %00 )* +o"'ressor, o'erating ,,000 hours/year %his second e+a ple assu es a 011 @# co pressor! operating B!111 hours per year$ A (yste Audit will be perfor ed for a pro5ect of this si2e$ %he re aining assu ptions are shown below$
System Size H# kW

Operating Hours -.***

Measure Life (years) )*

CA % Savings )+

CA kWh savings/year 443.-)3

Stu y Cost 0 ,.***

Margina! Costs 0*2*,,

CA "" #ro$e%t Su%%ess &ate 11

"'pe%te (enefits over #ro$e%t Life

1**

44/

04+.3-,

;ven with the considerably higher study cost of =/!111! the e+pected benefits fro perfor ing the study far outweigh its costs$ Cn fact! a uch ore e+pensive study would easily be cost 5ustified based on the lifeti e arginal cost savings of the co pressed air efficiency i prove ents$ E&a"'le % ( 50 )* +o"'ressor, o'erating %,500 hours 'er year 8ne final e+a ple involves a s aller co pressor (/1 @#) operating for fewer hours per year (0!/11) as would be e+pected in a s aller si2ed facility$ Cn this case! the study cost is not 5ustified by the lifeti e energy benefits of the co pressed air efficiency i prove ents$
System Size H# kW

Operating Hours 1.,**

Measure Life (years) )*

CA % Savings )+

CA kWh savings/year 44.14/

Stu y Cost 0 1.***

Margina! Costs 0*2*,,

CA "" #ro$e%t Su%%ess &ate 11

"'pe%te (enefits over #ro$e%t Life

,*

1+

0 4.+)3

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Recommendations

%he reco

endations for funding technical studies are)

1$ Consider funding 111 percent of the cost of a Wal&-through ;valuation for all interested end-users! large and s all$ %his is the first step in the assess ent process continuu and will allow the utility to quic&ly assess whether there are significant co pressed air savings opportunities in the end-user<s facility! before co itting to further! ore e+pensive studies$ 2$ Restrict funding of detailed 6acility Assess ents and (yste Audits to pro5ects si2ed at 211 @# or greater and with a ini u of 2!111 operating hours per year$ %his would target funding of detailed assess ents.audits to ediu and large si2ed opportunities! and help to ensure that study funds are spent costeffectively$ 0$ (elect a funding for ula that requires an up-front cost contribution by the enduser$ %his will itigate the utility<s ris&$ Also! by a&ing the financial co it ent up-front! it will help to ensure that those that choose to have their facility assessed are serious about following up on any reco endations provided$ An approach that rei burses the custo er for their cost share after the reco ended i prove ents are underta&en ay be even ore beneficial because it provides the custo er with additional incentive to i ple ent the audit reco endations$ 7$ With respect to funding for ulas! several approaches are available$ approach selected ay depend on the goals of the progra ) %he

For example, if the goal is to provide customers with an incentive to

install recommended measures, a cost-sharing approach would be appropriate.

Cf the goal is to tie co pensation to the savings reali2ed (and.or parallel the approach used for other end-uses)! then a for ula based on = per &W saved or cents per &Wh saved ay be appropriate$

%he Co pressed Air Challenge (CAC) is a nationwide govern ent.industry collaborative for ed in 1DDE$ %he goals of the CAC are to raise awareness in industry to the true costs and efficiency i prove ent opportunities in co pressed air syste s operations and to bring co pressed air best practices to the plant floor level for A erican anufacturing$ Fo to www$co pressedairchallenge$org for ore infor ation

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