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Investing in energy saving products can pay big dividends

SEW adds ongoing value to stimulus savings

Using the Federal Government stimulus incentives to invest in energy-efficient motor and drive solutions can provide ongoing savings and help reduce the impact of projected energy price rises, SEW-Eurodrive engineering manager, Frank Cerra writes.

Energy efficiency is taking on increased significance as business philosophy shifts towards denvironmental sustainability.

At present, investment in efficiency is even more attractive due to Government stimulus incentives. While the 30 per cent tax-break for new investment has now ended, until December 31 there is still a 10 per cent and 50 per cent new capital investment tax-break available for eligible general and small businesses respectively. This, coupled with significant uncertainty surrounding future energy prices and the complex regulatory landscape, means investing in energy efficiency is now more important than ever. Treasury modelling indicates that with the introduction of the Carbon Pollution Reduction Scheme (CPRS) and associated emissions trading, by 2020 the average wholesale electricity price could increase by a staggering 80-150 per cent.

Furthermore, the increased deployment of expensive low-emission technologies is likely to cause electricity prices to further escalate.

Additional complexity is also added with the introduction of a number of new regulations over the past few years. Many companies are now required to assess and reduce energy and resource use, and greenhouse gas emissions.

This is achieved through federally mandated programs, such as Energy Efficiency Opportunities (EEO) and National Greenhouse and Energy Reporting (NGER) – in addition to state programs such as the Energy Resource Efficiency Plans (EREP) administered by the Victorian EPA.

Whether the CPRS eventuates, or industry is forced to adopt more environmentally sustainable practices through other schemes, energy prices are likely to rise. The only way to reduce the financial impact of potential price rises is to understand where energy is used in the business, and then implement energy saving options.

In fact, by using current Government incentives to invest in energy-efficient motor and drive solutions, energy and financial savings can continue long after the economic crisis subsides.

By optimising entire drive solutions – from the gearbox, motor, and drive electronics, through to the driven machine – enormous savings can be realised. These energy savings translate into financial savings, and contribute to the reduction in greenhouse gas emissions.

Compliance with Minimum Energy Performance Standards (MEPS) can provide energy savings through the use of high-efficiency motors. Energy savings of the order of two per cent can typically be achieved by incorporating MEPS compliant high-efficiency motors into an application. However, much greater energy savings can be obtained by optimising the drive-train as a whole. An additional nine per cent can be achieved by implementing accurate drive configuration and speed control matched to the application—while an astounding 20 per cent energy saving can be obtained by optimising the mechanical portion of the drive system.

Optimised system design must be coupled with smart operation to achieve maximum energy efficiency, as a significant portion of energy wastage is a result of inefficient operation.

In order to realise the efficiency improvements possible through smart design and operation on the factory floor, there needs to be a mindset shift within the Australian industrial sector, to consider the total cost of ownership of equipment. In many companies, purchasing decisions are still solely based on capital equipment cost, not taking into account the energy efficiency or ongoing operating expenses.

In most cases, the purchase cost of motors and drives equipment itself equates to just 2.5 per cent of the total motor life-cycle costs (see illustration), while energy consumption can constitute up to 96 per cent of these expenses.

With energy prices set to rise in the near future, this 96 per cent is only going to become more important; therefore, by selecting equipment based on total lifecycle cost – rather than simply capital cost – a more energy-efficient drive solution can be implemented.

Furthermore, optimising the energy efficiency of each individual system component and combining the drive technology to match the specific application will achieve additional energy savings, and provide a valuable contribution to the economic bottom line.

SEW-Eurodrive Pty Ltd
Ph: 03 9933 1000
www.sew-eurodrive.com.au