ASHRAE Journal Supplement - AMCA International In Motion - Summer 2014 - (Page 11)

Industrial Fan Rebate Programs Electric and natural gas utilities and public benefit organizations spent over $700,000 on industrial energy efficiency in 2010. They are increasingly looking to the industrial sector to meet state targets for energy efficiency. The reasons for this are twofold: (1) low-cost opportunities in the residential and commercial sectors are already being addressed, and (2) the industrial sector is a source of some of the most cost-effective opportunities. Efficiency financial incentive programs fall into two main categories: prescriptive and custom. Prescriptive savings programs provide a rebate based on the estimated average or "deemed" energy savings that is likely to result from the installation of a more efficient device, such as a motor or variable speed drive. A custom program provides an incentive based on the anticipated energy savings, such as a fan system improvement project. The historical challenge for customer projects has been to capture these savings in a cost-effective way - in other words, to make up for the cost of generating and distributing power. To keep incentives high and the cost of program administration low, it is preferable to keep the resources required to verify energy savings to a minimum. For larger projects, this is usually not a problem. However, for smaller projects costing less than $250,000, this can be a challenge. The easier the energy savings is to predict and later verify, the better. When working with efficiency programs, energy data gathering and reporting should be built into the project plan. Once the project design is set and the initial costs established, contact the local utility rebate program administrator. Alerting the administrator early on is important. Programs often have application schedules that may or may not align with internal schedules. Identifying timing issues early will minimize headaches later on. Also, if a program has limited funds, letting the administrator know of a project early allows the institution to reserve money. And early contact with the administrator begins a conversation about the amount of incentive and the associated caveats. This information can then be built into the proposal that is submitted for internal approval. If the project is small or simple, the utility rebate program administrator may recommend pursing only a prescriptive rebate. A larger project will be eligible for a custom rebate program. The incentive will likely be tied to the total energy savings in kilowatt hours over a given period of time, perhaps over one or two years of operation. Some programs provide incentives that are less than the cost of retail power. Others will pay more. For example, if retail price is $0.09 per kilowatt hour, the incentive may be $0.15 per kilowatt hour. Many programs have a cap on how much can be provided, and that cap may be on a single project or on annual spending per customer. Some programs require a project to be completed within a program period that can be as short as a single year. Contacting the program administrator early will help avoid complications later on. With proper planning and a bit of proactive energy-data gathering, utility incentive programs can greatly help finance process upgrade and capital improvement projects. W W W. A M C A . O R G cases, a local utility company will have a custom rebate program that will pay for some - or even most - of the project (see sidebar, Industrial Fan Rebate Programs). Custom rebate programs involve engineering studies and close coordination between the plant, the utility company, third party consultants and contractors. Navigating the rebates offered by local utility companies can be a daunting task, but the utility companies have personnel on staff to help plants through the process. In fact, the energy savings are usually so great that the utility companies will dedicate multiple resources to get the proper funding in place, which will make project payback even more attractive. Some utility companies will pay up to $0.15 per kilowatt hour, while others cap the amount. Either way, it is an attractive option to help pay for a capital project. Project Calculus In the example outlined in Table 2, the existing fan had an annual operating cost of $1,120,162. This fan was originally designed in the 1970s. In the facility design phase, the design architect and the customer did not want the fan to be the limiting factor for production. Because the cost of energy was low, multiple layers of safety factor were placed upon the actual operating conditions. This yielded a fan system that was too large and over 50% dampered. Following AMCA Publication 203, Field Performance Measurement of Fan Systems, the independent contractor measured the flow (acfm), static pressure (inches water gauge) and motor load (amperes). It was evident that the impeller was oversized. The new impeller was designed to be slightly smaller and to reuse the existing housing. The project was also partially funded by the local utility company. Because of the utility rebate program, 50% of the project was paid for by the utility company. Annual Operating Cost of Existing Fan Annual Operating Cost of Redesigned Fan Annual Savings Equipment Cost of Fan and Testing Utility Rebate Incentive Total Project Cost Simple Payback $1,120,162 $864,767 $255,396 $230,500 ($115,250) $115,250 5.4 months CONCLUSION In every type of industrial facility, there is a high probability that there are inefficient fans. These fans have an extremely high operating cost due to the current conditions not reflecting the design conditions. Not only the wasted electrical cost but also the overall maintenance cost and downtime must be taken into consideration. Fortunately, most utility companies have customized rebates that can offset retrofit cost. These rebates make the payback period for fan retrofit projects very attractive. REFERENCES 1 Office of Energy Efficiency and Renewable Energy. "United States Industrial Electric Motor Systems Market Opportunities Assessment: Executive Summary." U.S. Department of Energy. Olympia, Washington: EERE Clearinghouse, 2002. Accessed June 19, 2014. http://tinyurl.com/ nacewxn 2 Ibid. 3 Cimtec. "Pelletizing Waste Gas Fan." Pulaski, Tennessee: Twin City Clarage, 2012. A M C A I N T E R NAT I O NA L inmotion Summer 2014 11 http://tinyurl.com/nacewxn http://tinyurl.com/nacewxn http://WWW.AMCA.ORG

Table of Contents for the Digital Edition of ASHRAE Journal Supplement - AMCA International In Motion - Summer 2014

Contents

ASHRAE Journal Supplement - AMCA International In Motion - Summer 2014