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Understanding the cost of compressed air

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29 April, 2021

Without compressed air, entire industries would have to shut down. Its use is everywhere. Compressed air is widely considered the “fourth utility” in addition to electricity, water, and gas.

That versatility, however, comes at a cost. Generating and consuming compressed air is much more expensive than other utilities. For example, it is estimated that 10% of all energy consumed by the industrial sector is used for compressed air. In other words, a lot of money is spent each year to keep production facilities supplied with compressed air.

Therefore, businesses should zero in on energy consumption when looking for compressed air savings. It plays a much larger role than all other cost factors combined. In fact, about 80% of the cost of compressed air generation is spent on energy – much more than the initial investment in compressors or maintenance and upkeep.

Learn more about the air generation cost with our interactive catalogue below

A comprehensive look at your compressed air system

Very few applications of compressed air only require a compressor. Most compressed air and gas applications require a complete system delivering high-quality air to where it is needed.

This is the way of identifying potential opportunities for savings: first looking at a company’s compressed air needs and all of the components that make up the required compressed air network (as well as the associated costs).

With that information, a manager can determine how these components – and the related processes – can be optimized.

Before looking at the individual parts of a compressed air system, however, it should be noted that businesses should not necessarily plan for the system that is in place now but rather for the system they anticipate having in place in the future.

For example, if a company is ready to scale up production or add a new process, it is beneficial to plan for future needs and not just the current demand. This is especially important when choosing the right combination based on the company’s requirements as well as the size of the piping system.

Every component of a compressed air system

1. Air compressors

First, there is the compressor itself. As noted above, the initial price tag of the unit only accounts for a tiny percentage of a compressor’s total cost of ownership. Because energy costs make up the bulk of the overall cost, it makes no sense to purchase a less efficient compressor that uses a lot of energy. Instead, investing in an energy-efficient compressor is likely to be the most cost-effective option over the lifetime of the compressor.

When selecting the right compressor for the job, air demand matters. If the air supply is stable, then a fixed-speed compressor may be the best solution. If, however, the air demand fluctuates, then a model with a variable speed drive (VSD) will likely be the ideal choice.

Larger manufacturers and production facilities often call for multiple compressors. These can be switched on and off depending on the air demand and provide additional flexibility. 

2. Dryers and filters

Next, there are dryers and filters. For some applications, air quality hardly matters. For many others, however, high air quality is essential. It is not only important to keep contaminants in the air from finding their way into the end products – especially in the food and pharmaceutical industries – but also to protect downstream equipment from corrosion and contamination.

This is a good example that illustrates the hidden cost of low-quality compressed air: It may be cheaper in the short run not to invest in dryers and filters, but eventually, it will result in high expenses. 

When selecting dryers and filters, it is important to choose the right technology based on the application. This will limit the pressure drop as the air passes through them. Similar to compressors, energy is the main contributing factor to the total cost of ownership of dryers. That is why it is especially noteworthy to point out that we also offer dryer with VSD technology.

3. Drains

Intelligent zero-loss drains discharge the accumulated condensate of a compressed air system only when needed. This will save energy, as opposed to timer drains that drain on a selected time interval, even when there is no condensate. Intelligent zero-loss drains are another sensible addition that can save energy and money over time.


Just as important as the equipment used to produce clean compressed air is the piping that gets it to where it is needed. Even the most efficient compressor system wastes energy if this piping system is leaky or the wrong size. An adequate piping system eliminates air restrictions, pressure drop and can reduce air leakage.

In addition to picking the proper material for their piping, operators also have to choose between a ring main or a branch system
A ring main system has the ability to deliver air from multiple directions, unlike the branch system. Branch systems flow in one direction delivering air to the closest application first and can cause pressure drop downstream affecting production.

5. Air receiver tanks

A related issue is the use of receiver tanks that store the compressed air. If properly sized, this can eliminate false demand on your compressed air system. Eliminating the need for additional compressors and helps reduce system pressure changes. Pressure controls can be added to stabilize the pressure in your air net while reducing leakages and saving energy.

6. Ventilation and energy recovery

While many companies are doing their homework regarding the compressed air system they invest in, they might not pay attention to what happens to the waste heat that is generated in compressing air.  For example, good ventilation reduces heat circulation, which, in turn, lowers energy consumption.

Furthermore, most of the waste heat can be recovered and used in other areas of an operation, e.g. to heat rooms, water or production processes. That is why, in order to optimize the effectiveness of a compressed air system, it is essential to consult with experts prior to designing a compressor room.

7. Air leakage

While many inefficiencies can be eliminated even before such a system begins operation, it is also very important to constantly monitor it while it is in use. That includes the detection and repair of expensive air leaks, which may cost businesses thousands of rupees a year. Keep in mind that simply increasing the air pressure of the system increase leakages and doesn’t address these leaks, this will only increase energy use.

8. Central controller

In systems that feature more than one compressor, central controllers can play a major role. They can reduce the average pressure band (a pressure reduction of 1 bar lowers energy usage by 7%), control compressor capacity, and regulate the compressor speed.


While this seems like a lot of factors to pay attention to, a properly designed and maintained compressed air system can dramatically reduce the operating costs of a business. That is why planning ahead and making smart investments now will always pay off in the future. 

And if you are unsure about any of the hardware or processes that will help you optimize your compressed air system and maximize your savings, simply contact an our specialists. 

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