Premium-Efficiency Motor Purchase Under Budget and Gift Pressure
You are the assistant manager (mechanical) of a publicly owned process plant. A vendor has quoted an IE3 premium-efficiency 75 kW induction motor to replace an existing IE2 motor. The existing motor has a measured full-load efficiency of 92.5%; the proposed motor is rated 95.0% at full load. The driven pump runs at an average output of 45 kW for 6,000 h/year. Tariff is ₹7.80/kWh. The premium price is ₹2.40 lakh, but the approved budget for this replacement is only ₹1.50 lakh. The vendor has offered a free family trip if the purchase order is placed this week, and has said the offer is 'normal customer appreciation'. The plant has a planned shutdown in eight months, when the motor could be changed without production loss. The finance department has asked you to recommend whether to buy now, defer, or reject.
1. Calculate the annual energy and cost saving and the simple payback. Does the purchase fit the approved budget?
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Input power of existing motor = 45/0.925 = 48.65 kW. Input of proposed = 45/0.95 = 47.37 kW. Saving = 1.28 kW. Annual energy = 1.28×6000 = 7,680 kWh. Annual cost = 7,680×7.80 = ₹59,904. Simple payback = 2,40,000/59,904 = 4.0 years. The premium price exceeds the ₹1.50 lakh budget by ₹0.90 lakh, so it cannot be approved within the current budget. Also, the quoted efficiencies are full-load values; at 60% load the part-load efficiency gain is likely smaller, so the saving is an upper estimate. The decision should not be based only on the nameplate η.
2. Identify the ethical issue and state the action you would take.
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The free trip is a personal benefit linked to placing the order. It is a conflict of interest/inducement even if called customer appreciation. I would decline it in writing, record the offer in the procurement file, and ensure the technical evaluation is done by the nominated committee. I would not sign the PO this week to capture the gift. If the vendor insists, escalate to the integrity/vigilance officer. The commercial comparison should use delivered life-cycle cost, not gifts.
3. What decision do you recommend and what data would you require before the shutdown?
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Recommend deferring to the eight-month shutdown. Before then: (i) obtain part-load efficiency curves and a guaranteed performance test; (ii) measure the actual load profile, not just average 45 kW; (iii) revise the budget or split the purchase; (iv) compare with rewinding, a VFD, and a right-sized motor. If the verified saving still gives a payback of about four years, it may be acceptable as an energy project, but it needs proper budget approval, not a rushed PO. At the shutdown, replacement avoids production loss.