Assess the Benefit

Analyze the Energy and Cost Savings for the EMO

Perform a Life Cycle Cost Analysis for the EMO - Base Case Conditions

Perform a Life Cycle Cost Analysis for the EMO - Pesimistic Case

Perform a Life Cycle Cost Analysis for the EMO - Optimistic Case

Greenhouse Gas (GHG) Factors

 EMO Cost Savings Analysis #1 Compressor Control & Heat Recovery

Existing Conditions
Presently there are three 50 HP packaged air compressors supplying air to the main plant and process areas. These
compressors are operating under individual control with cascaded pressure settings. During the audit it was
observed that two compressors often operate when one unit can meet the demand for air. The 3rd unit is backup.
The heat from the air cooled compressors is currently exhausted from the compressor room year round.

Proposed Conditions
Install a sequencing controller to dispatch the 3 compressors, in sequence upon demand for air, indicated by a
pressure sensor in the air main to the plant. It is expected that this will result in only one air compressor operating at
full load, while the second compressor will only operate during peak air demand periods, estimated to be less that
10% of the time. Second, install a simple system of ductwork and dampers to direct the heat compressor cooling air
into the plant during the heating season or exhaust outside during non-heating periods.

Expected Energy & Cost Savings

Electricity
Reduce the use of the second compressor at a measured load of 30 kW for 5000 hours per year

Demand Savings 0 kW
Energy Savings 150,000 kWh ( 30 kW for 5000 hours / year )

Incremental Cost of Electrical Energy $0.07 /kWh

Incremental Cost of Electrical Demand $8.20 /kW

Annual Electricity Cost Savings $10,500 /year

GHG Factor for Electricity …. in: Ontario 0.276 eq kg CO2 per kWh
Greenhouse Gas Reduction 41,400 eq kg CO2

Natural Gas
The remaining compressor heat will contribute at least 40 kW to space heat for 6 heating months per year

Reduced Heating Load 176,000 kWh ( 40 kW for 4400 hours / year )

Heating System Efficiency 75%
Reduction in Fuel Energy 234,667 kWh

Fuel Type (units) Natural Gas m3

Energy Content of Natural Gas 10.6 kWh/m3
Incremental Cost of Natural Gas 0.25 /m3

Saved 22,081 m3
Annual Gas Cost Savings $5,520 / year

1.9 eq kg CO2 per m

3
GHG Factor for Natural Gas
Greenhouse Gas Reduction 41,953 eq kg CO2

Total Cost Savings $16,020 /year

Total GHG Reduction 83,353 eq kg CO2 per year
 EMO Life Cycle Cash Flow Analysis Base Financial Case

Costs for Period 0 1 2 3 4 5 6 7 8 9 10

Capital Cost $50,000
Maintenance $200 $204 $208 $212 $216 $221 $225 $230 $234 $239 $244
Asset depreciation
Lease costs
Taxes
Insurance
Labour
Other
Sub-total Costs $50,200 $204 $208 $212 $216 $221 $225 $230 $234 $239 $244

Savings for Period

Electricity $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500
Gas or Fuel $5,535 $5,535 $5,535 $5,535 $5,535 $5,535 $5,535 $5,535 $5,535 $5,535 $5,535
Water
Maintenance
Taxes
Insurance
Labour
GHG Factors
Sub-total Savings $16,035 $16,035 $16,035 $16,035 $16,035 $16,035 $16,035 $16,035 $16,035 $16,035 $16,035

Net Cash Flow ($34,165) $15,831 $15,827 $15,823 $15,819 $15,814 $15,810 $15,805 $15,801 $15,796 $15,791
Net Project Value ($34,165) ($18,334) ($2,507) $13,316 $29,134 $44,948 $60,758 $76,563 $92,364 $108,160 $123,951

Discount Rate 15.00%

Discounted Cash Flow ($34,165) $13,766 $11,967 $10,404 $9,044 $7,862 $6,835 $5,942 $5,165 $4,490 $3,903

Net Present Value (NPV) : $45,215 Internal Rate of Return (IRR) : 45% Simple Payback (yrs) : 3.1

Notes:
Maintenance costs are adjusted for an inflation at a rate of 2% per year.
 EMO Life Cycle Cash Flow Analysis Pessimistic Case

Costs for Period 0 1 2 3 4 5 6 7 8 9 10

Capital Cost $50,000
Maintenance $200 $204 $208 $212 $216 $221 $225 $230 $234 $239 $244
Asset depreciation
Lease costs
Taxes
Insurance
Labour
Other
Sub-total Costs $50,200 $204 $208 $212 $216 $221 $225 $230 $234 $239 $244

Savings for Period

Electricity $10,500 $10,290 $10,084 $9,883 $9,685 $9,491 $9,301 $9,115 $8,933 $8,754 $8,579
Gas or Fuel $5,535 $5,424 $5,316 $5,209 $5,105 $5,003 $4,903 $4,805 $4,709 $4,615 $4,522
Water
Maintenance
Taxes
Insurance
Labour
GHG Factors
Sub-total Savings $16,035 $15,714 $15,400 $15,092 $14,790 $14,494 $14,204 $13,920 $13,642 $13,369 $13,102

Net Cash Flow ($34,165) $15,510 $15,192 $14,880 $14,574 $14,274 $13,979 $13,691 $13,408 $13,130 $12,858
Net Project Value ($34,165) ($18,655) ($3,463) $11,417 $25,991 $40,264 $54,243 $67,934 $81,342 $94,472 $107,330

Discount Rate 15.00%

Discounted Cash Flow ($34,165) $13,487 $11,487 $9,784 $8,333 $7,096 $6,044 $5,147 $4,383 $3,732 $3,178

Net Present Value (NPV) : $38,506 Internal Rate of Return (IRR) : 42% Simple Payback (yrs) : 3.2

Notes:
Electricity and natural gas savings are adjusted for deflation at a rate of -2% per year, while maintenance is inflated by 2% per year.
 EMO Life Cycle Cash Flow Analysis Optimistic Case

Costs for Period 0 1 2 3 4 5 6 7 8 9 10

Capital Cost $50,000
Maintenance $200 $204 $208 $212 $216 $221 $225 $230 $234 $239 $244
Asset depreciation
Lease costs
Taxes
Insurance
Labour
Other
Sub-total Costs $50,200 $204 $208 $212 $216 $221 $225 $230 $234 $239 $244

Savings for Period

Electricity $10,500 $10,710 $10,924 $11,143 $11,366 $11,593 $11,825 $12,061 $12,302 $12,548 $12,799
Gas or Fuel $5,535 $5,646 $5,759 $5,874 $5,991 $6,111 $6,233 $6,358 $6,485 $6,615 $6,747
Water
Maintenance
Taxes
Insurance
Labour
GHG Factors
Sub-total Savings $16,035 $16,356 $16,683 $17,016 $17,357 $17,704 $18,058 $18,419 $18,788 $19,163 $19,547

Net Cash Flow ($34,165) $16,152 $16,475 $16,804 $17,140 $17,483 $17,833 $18,189 $18,553 $18,924 $19,303
Net Project Value ($34,165) ($18,013) ($1,539) $15,266 $32,406 $49,889 $67,722 $85,911 $104,465 $123,389 $142,692

Discount Rate 15.00%

Discounted Cash Flow ($34,165) $14,045 $12,457 $11,049 $9,800 $8,692 $7,710 $6,838 $6,065 $5,379 $4,771

Net Present Value (NPV) : $52,642 Internal Rate of Return (IRR) : 48% Simple Payback (yrs) : 3.1

Notes:
Electricity and natural gas savings and maintenance costs are adjusted for inflation at a rate of 2% per year.
Greenhouse Gas Factors Menu

Emission Factors for ''Indirect Emissions'' (Electricity)

kg CO2 eq/kWh kg CO2 eq/kWh
Province/Territory 1990 1997 1998 1999 2000 2001 2002 2003 2004 Active
Alberta 0.926 0.956 0.944 0.902 0.882 0.848 0.849 0.898 0.861 0.882
British Columbia 0.019 0.017 0.027 0.019 0.036 0.052 0.018 0.021 0.024 0.036
Manitoba 0.026 0.007 0.03 0.019 0.031 X X X X 0.031
New Brunswick 0.348 0.484 0.484 0.426 0.433 X X X X 0.433
Newfoundland and Labrador 0.044 0.029 0.023 0.022 0.021 X X X X 0.021
NWT / Nunavut, Yukon 0.295 0.371 0.359 0.341 0.292 0.288 0.261 0.257 0.249 0.292
Nova Scotia 0.724 0.717 0.724 0.727 0.759 X X X X 0.759
Ontario 0.204 0.174 0.233 0.237 0.276 0.263 0.259 0.302 0.222 0.276
Prince Edward Island 1.25 1.39 2.91 1.89 1.12 X X X X 1.120
Quebec 0.011 0.002 0.009 0.006 0.002 0.002 0.002 0.009 0.008 0.002
Saskatchewan 0.765 0.882 0.891 0.878 0.84 X X X X 0.840

Notes: X - Denotes confidential values

Source: Environment Canada's National Inventory Report 1990-2004 - Greenhouse Gas Sources and Sinks in Canada;
Annex 9: Electricity Intensity Tables

Emission Factors for Selected Thermal Fuels

Fuel Factor Unit of MJ
Type eq kg CO2 per unit (1) Measure per Unit (2)
Natural Gas 1.9 m3 38.26
#2 Oil 2.84 litres 38.55
#6 Oil 3.11 litres 40.5
Propane 1.53 litres 25.31

Notes: Fuel type #2 Oil factors are the average of Light Fuel and Diesel
Sources: (1) Environment Canada's National Inventory Report 1990-2004 - Greenhouse Gas Sources and Sinks in Canada;
Annex 13: Emission factors
(2) Statistics Canada - Catalogue no. 57-003, Text table 1 - Energy Conversion Factors