Compressed Air Retrofit Screening Under a Capital Cap
A mid-size metal fabricator runs three 250-hp lubricated rotary screw compressors: two modulate continuously at 78% average capacity and one runs as trim at 40%. Plant pressure is held at 110 psig because one die-casting cell requires it, though 90% of the plant can run at 85 psig. A leak survey found 22% of output escaping through 60 tagged leaks, most in the older stamping area. The facility manager has $300,000 and a two-year payback hurdle. Three options are on the table: (A) leak repair campaign, $45,000, expected to cut leak load by 70%; (B) add a 100-hp VSD trim compressor, $180,000, projected to save 1.1 million kWh/yr; (C) pressure/flow controller to hold 85 psig plantwide while isolating the die-cast cell, $95,000, saving 700,000 kWh/yr. Blended electricity cost is $0.085/kWh, and demand charges add $11/kW-month with a 0.8 coincident factor.
1. Rank the three options by simple payback and determine which combination fits within the $300,000 cap while meeting the two-year hurdle.
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Compute each option's annual savings including demand.
Option A: Leak load is 22% of output; repairing 70% of it removes 0.22 x 0.70 = 15.4% of total compressed-air energy. Without a measured baseline, estimate from compressor power: roughly 500 hp of modulating capacity at 78% plus 250 hp trim at 40% gives about 490 hp average, or 366 kW. Removing 15.4% saves about 56 kW, or 494,000 kWh/yr at 8,000 h. Energy savings = $42,000; demand savings = 56 kW x $11 x 12 x 0.8 = $5,900. Total ~$47,900/yr. Payback = 45,000 / 47,900 = 0.94 yr.
Option B: 1.1 million kWh = $93,500 energy. Demand is embedded in the kWh figure if measured at the meter; if not, avoid double counting. Payback = 180,000 / 93,500 = 1.93 yr.
Option C: 700,000 kWh = $59,500 energy. Payback = 95,000 / 59,500 = 1.60 yr.
Ranking: A (0.94 yr), C (1.60 yr), B (1.93 yr).
A + C = $140,000, both under two years, leaves $160,000. Adding B exceeds the cap ($320,000) and B alone barely meets the hurdle. Recommended: A + C, then re-measure; leak repair lowers the flow that C must control, and the VSD decision should be deferred until the new baseline is known, since a smaller trim unit may then suffice.
2. The plant engineer argues that leak repair is "free money" and should be done first regardless. What implementation risks would you raise, and how would you sequence the work?
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Leak repair is high-return but not risk-free. Risks: (1) savings decay - leaks recur unless tagged, tracked, and re-surveyed quarterly; (2) the 70% reduction is an assumption, not a guarantee, and difficult leaks (buried piping, press-fit fittings) may be uneconomic; (3) repairing leaks without reducing compressor pressure can simply let modulating machines unload further, capturing less than the theoretical savings unless controls are adjusted; (4) production disruption during repair windows.
Sequencing: repair the largest, most accessible leaks first in the stamping area, then verify with a weekend no-load test or flow meter. Only after confirming the reduced leak load should you size the trim compressor. Pair leak repair with the pressure/flow controller so the lower plant pressure amplifies savings. Establish a leak-tagging program with monthly KPIs (leaks found vs. repaired, cfm avoided) to prevent decay.