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What no one tells you about life cycle cost of compressors

iceberg
There are a number of significant factors that must be taken into account when customers invest in an air compressor. Off course CAPEX (Capital Expenditure) is an important consideration for any business but the initial purchase price is only the tip of the proverbial iceberg. The hidden two thirds submerged under the water, the largest and strongest part of an iceberg, must never be overlooked as this is where the biggest costs lie i.e. the costs involved in generating compressed air. It is therefore about purchasing the most economically competitive compressed air in the market to curtail life cycle costs or total cost of ownership. This is where premium Atlas Copco product brand is incomparable in delivering the best value for money.

The initial cost of the equipment is only a small part of the life cycle costs (LCCs) related to compressed air. Making up the biggest portion over the machine’s total life span is OPEX (Operational Expenditure) which includes maintenance costs (service, parts and spares) as well as the cost of power consumption which makes up the largest portion.

The success recipe to achieving sustainability and profitability therefore lies in looking beyond the tip of the iceberg (the purchase cost). By taking into consideration all cost factors will avoid a titanic catastrophe that can result from exorbitantly high life cycle costs (LCC’s) that will eat away at profits.

According to Atlas Copco’s compressed air experts, energy costs are the highest expense making up some 76% of the overall life cycle cost of compressors with investment and maintenance costs making up 14% and 10% respectively. Hence it is said that Air is Free. Compressed Air not!

Understanding life cycle cost

The Life cycle cost, also called total cost of ownership, is the cost you pay for buying, maintaining and operating the equipment for its total life. 

The LCC for compressed air includes everything from the initial equipment cost, installation cost and related maintenance costs which includes service, spare parts and the cost of electricity usage.  

However, it should be noted that LCC analysis should be carried out only after productivity, reliability and safety aspects are met. 

How compressor life cycle costs are built up

total cost of ownership
Did you know the overall life cycle cost of compressors consists of



 Energy cost 76% 




 Investment cost 14% 




 Maintenance cost 10%

Understanding types of energy cost

There are different types of energy costs which not only impact the profits and plant efficiency but they also impact the quality of the end product. In other words, these are the target opportunities which help to earn more by right prioritisation. 

air is free compressed air is not

Earning opportunities 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. 

Every industry aims to measure and reduce unnecessary costs by adopting several best practices and latest technologies. One such practice to quantify the compressed air leakages is No Load Test. Atlas Copco energy managers recommend that the air leakage percentage should always be less than 5% to run a plant at optimum energy levels. By conducting this simple No Load Test, which does not require any additional investment, and by focussing on air leakages can provide you with valuable insights on potential savings in your compressed air plant, subsequently adding substantially to your plant’s bottom line. 

Atlas Copco Compressor Technique