Why should you calculate your compressor’s Life Cycle Cost?
Most people have an idea of what they like when purchasing a new vehicle, such as a car, SUV or 4x4 pickup to deal with our Canadian winters and some even have a preference as to what manufacturer they have always liked. But most people like to shop around to see what else is out there, kick the tires and see what the asking price is, review the maintenance plan, compare the fuel efficiency to choose the best economical model.
Buying a compressor can be as personal as purchasing a new vehicle. You might have several preferred vendors in your list but what is more importance is to purchase the most economically competitive compressed air in the market to have minimum life cycle costs or total cost of ownership.
Life cycle cost calculation
The life cycle cost (LCC), also called total cost of ownership, is the cost you pay for buying, maintaining and operating the equipment for its total life. LCC calculations are used more and more as a tool to evaluate various investment options. Included in the LCC calculation are combined costs due to the product operating over a specific period, including the capital expenditure which is only a small part of the life cycle cost related to compressed air, the operating cost includes the cost of power consumption which makes up the largest portion and the maintenance costs (service and parts).
The LCC calculation is often implemented based on a planned installation or a working installation. This serves as the basis for defining requirements for a new installation. It should, however, be pointed out that an LCC calculation is often only a qualified estimate of future costs and is somewhat limited due to it being based on current knowledge of the condition of equipment condition and impacted by future evolutions in energy prices. Nor does this calculation account for any "soft" values that can be just as important, such as production safety and its subsequent costs.
What does the life cycle cost calculation compare?
Making an LCC calculation requires knowledge and preferably experience with other compressed air installations. For the best result, the LCC calculation should be made in consultation with the compressed air sales consultant. LCC calculations look at how different investment options affect:
- Production quality
- Production safety
- Subsequent investment requirements
- Maintenance of production machines and distribution network
- Environment
- Quality of final product
- Risks for downtime
- Planned compressor lifetime
Compressors generally have a limited lifespan, especially given the harsh climate conditions in Canada. As compressors age, key components such as the motor, coolers, and compressor element can deteriorate, leading to reduced efficiency and a higher risk of sudden failure. It's advisable for users to start considering replacement as the compressor approaches the later stages of its lifespan.
Discover opportunities for increased energy efficiency
Energy consumption typically represents 80% of the overall cost of a compressed air installation. A life cycle cost analysis can reveal areas for improvement. For instance, there are a few opportunities to reduce energy cost by optimizing the following.
- Load Power - Power consumed to generate compressed air at certain pressure with required flow.
- Unload Power - Air compressor runs in idle condition without generating any useful compressed air for internal process.
- Blow off losses - Every time the machine has to go into idle conditions, it depressurises and can lead to loss of valuable compressed air to atmosphere.
- Pressure drop - Every 1 bar(g) increase in pressure consumes 7% more power and hence if there is a pressure drop in the system, it incurs losses.
- Air leakages – Studies show that compressed air leakages in a plant can use approximately 10 - 30% of the compressed air energy and thus result in huge power losses coupled with operating losses.
Prior to making any purchase in your facility, it is always recommended to compare different options and calculate the compressed air system’s LCC to understand its financial and operational impacts. If you do your homework upfront, it can be a rewarding experience and save money for your company. You can start by contacting one of our experts to conduct the analysis with a comprehensive report for your compressed air system.
