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Buy a Variable Frequency Drive and Save Energy NOW
Imagine for a moment this idyllic situation; you buy shares in a company where the return is guaranteed. People would queue up to invest their money in this new, risk free, stock market. Although such utopian circumstances don't apply to the FTSE, they do apply to variable frequency drive (VFD). However, there isn't a queue to buy these energy saving devices; perhaps because of a lack of understanding of the ROI they can deliver. This paper explains why this is set to change for the Facilities Management industry.
Installing a VFD is the closest thing industry has to signing up for free money. Variable frequency drives can reduce the energy bill on your application or system by more than their own capital cost in a relatively short period. Furthermore, like our utopian stocks, a variable frequency drive will pay yearly dividends - in the form of reduced energy bills. As energy prices continue to soar, the ROI on a variable frequency drive application increases in proportion to the bill.
However, there are a number of companies in the Facilities Management industry who haven't yet taken advantage of this technology and it's worth exploring why.
The first reason is capital expenditure. The global financial meltdown prompted many businesses to freeze any form of investment; even investment with a guaranteed return.
It may also be that the decision makers within these reluctant Facilities Management companies have examined the business model for variable frequency drives in the past, at a point when the payback wasn't as appealing as it is now. However, things have changed significantly in recent years. Energy prices have increased at an incredible rate, while the cost of a variable frequency drive has actually remained stable over the last decade. This means that, as things stand at the moment, payback can be achieved quicker than ever, often in less than one year.
The second reason for the relatively slow uptake of variable frequency drives is rooted in the internal issues encountered in Facilities Management organizations. There can be a lack of collaboration between the senior manager, accountant or purchasing team who manage the energy bill and the maintenance specialist who understands the potential savings.
Traditionally, the person responsible for paying the energy bill would just change supplier if the costs get too high. Ironically, the maintenance team would be able to recommend a solution which could reduce the bill by up to 50%. However, because maintenance and FM specialists are not the ones in control of the budget, the company misses out on the savings. This translates to the energy saving technologies being hard to implement and make use of.
We believe that the supply chain bears part of the blame for the Facilities Management industry's lack of confidence in variable frequency drives. In the majority of cases, buying teams look for a solution to a HVAC problem, for instance, in the form of a complete system. As a result, consultants and systems integrators will compete on sale price, but not on the overall system cost including energy consumption. This means that variable frequency drives are often regarded as non-essential optional extras. However, 90% of the lifetime cost of an ac motor comes from its energy consumption. Thus, it's clear to me that the energy cost of a system should be the first thing a buying team look for in a quote as it may well be the single item that most effects the bottom line over time.
This is particularly true in facilities applications, such as air conditioning, spas, pools, heating and ventilation applications, where pumps and fans are widely used for liquid and air movement. In these kinds of applications, turning down the speed by 20% can translate to a 50% energy saving in a fan, for example. This problem is exacerbated by the fact that ac motors are often over specified by consultants and systems integrators, so they can cope with worst case scenarios. Adding a variable frequency drive wouldn't remove this ability to manage in extremes, it will just reduce its cost on a day to day basis; it's an investment decision that shouldn't require an extended period of due diligence.
The cost of energy is important, but the security and continuity of energy is crucial for many Facilities Management sectors. Maintaining a reliable energy supply requires both businesses and individuals to consume less - and this is exactly what variable frequency drives can help process companies achieve. Put simply, variable frequency drives can be seen as a form of insurance against future energy price increases. They both reduce the bill in proportion to its overall size and they improve the long term business model of the energy industry by increasing the likelihood that it will be able to help the Government meet its energy reduction targets.
The good news is that there are some consultants and systems integrators out there who have started to use the energy efficiency of the equipment they provide as a selling point. The ones that are doing it sooner rather than later are differentiating themselves on the market by being more helpful to the customer and providing a more rounded service. Here at Gozuk, we would like to see this become the norm. If facilities managers become more aware of the money saving opportunities, then they will ask for smarter solutions; this will cause consultants to react accordingly.
Equally, buying teams and purchasing departments are starting to understand that it's the overall system cost that is important, not the purchase price alone. Recent economic turbulence has resulted in closer inspection of how money is being spent and a more discerning decision making process. variable frequency drives can be a key part of the economy recovery for the Facilities Management industry.
It is reasonable to assume that the subsequent Directive developments planned for 2015 and 2017 will increase them further. The call for higher levels of energy efficiency has been made loud and clear, however, one must bear in mind that variable frequency drives are not the panacea to all problems. Variable frequency drive are not suitable for all types of motor applications, so engineers should always consult the Gozuk website or other specialist resources provided by the supplier when specifying one.
In conclusion, the evidence is clear; variable frequency drives are one of the lowest risk investments Facilities Management pie can make to bring its environmental and economic goals a step closer to fruition. If you are part of a buying team, or working at management level for a Facilities Management company that uses substantial amounts of energy, then variable frequency drives could be a viable solution to provide significant energy savings in many ac motor applications. All you need to do is adjust the way you view the system cost of each solution you buy, where lifetime cost is considered over purchase cost.
Installing a VFD is the closest thing industry has to signing up for free money. Variable frequency drives can reduce the energy bill on your application or system by more than their own capital cost in a relatively short period. Furthermore, like our utopian stocks, a variable frequency drive will pay yearly dividends - in the form of reduced energy bills. As energy prices continue to soar, the ROI on a variable frequency drive application increases in proportion to the bill.
However, there are a number of companies in the Facilities Management industry who haven't yet taken advantage of this technology and it's worth exploring why.
The first reason is capital expenditure. The global financial meltdown prompted many businesses to freeze any form of investment; even investment with a guaranteed return.
It may also be that the decision makers within these reluctant Facilities Management companies have examined the business model for variable frequency drives in the past, at a point when the payback wasn't as appealing as it is now. However, things have changed significantly in recent years. Energy prices have increased at an incredible rate, while the cost of a variable frequency drive has actually remained stable over the last decade. This means that, as things stand at the moment, payback can be achieved quicker than ever, often in less than one year.
The second reason for the relatively slow uptake of variable frequency drives is rooted in the internal issues encountered in Facilities Management organizations. There can be a lack of collaboration between the senior manager, accountant or purchasing team who manage the energy bill and the maintenance specialist who understands the potential savings.
Traditionally, the person responsible for paying the energy bill would just change supplier if the costs get too high. Ironically, the maintenance team would be able to recommend a solution which could reduce the bill by up to 50%. However, because maintenance and FM specialists are not the ones in control of the budget, the company misses out on the savings. This translates to the energy saving technologies being hard to implement and make use of.
We believe that the supply chain bears part of the blame for the Facilities Management industry's lack of confidence in variable frequency drives. In the majority of cases, buying teams look for a solution to a HVAC problem, for instance, in the form of a complete system. As a result, consultants and systems integrators will compete on sale price, but not on the overall system cost including energy consumption. This means that variable frequency drives are often regarded as non-essential optional extras. However, 90% of the lifetime cost of an ac motor comes from its energy consumption. Thus, it's clear to me that the energy cost of a system should be the first thing a buying team look for in a quote as it may well be the single item that most effects the bottom line over time.
This is particularly true in facilities applications, such as air conditioning, spas, pools, heating and ventilation applications, where pumps and fans are widely used for liquid and air movement. In these kinds of applications, turning down the speed by 20% can translate to a 50% energy saving in a fan, for example. This problem is exacerbated by the fact that ac motors are often over specified by consultants and systems integrators, so they can cope with worst case scenarios. Adding a variable frequency drive wouldn't remove this ability to manage in extremes, it will just reduce its cost on a day to day basis; it's an investment decision that shouldn't require an extended period of due diligence.
The cost of energy is important, but the security and continuity of energy is crucial for many Facilities Management sectors. Maintaining a reliable energy supply requires both businesses and individuals to consume less - and this is exactly what variable frequency drives can help process companies achieve. Put simply, variable frequency drives can be seen as a form of insurance against future energy price increases. They both reduce the bill in proportion to its overall size and they improve the long term business model of the energy industry by increasing the likelihood that it will be able to help the Government meet its energy reduction targets.
The good news is that there are some consultants and systems integrators out there who have started to use the energy efficiency of the equipment they provide as a selling point. The ones that are doing it sooner rather than later are differentiating themselves on the market by being more helpful to the customer and providing a more rounded service. Here at Gozuk, we would like to see this become the norm. If facilities managers become more aware of the money saving opportunities, then they will ask for smarter solutions; this will cause consultants to react accordingly.
Equally, buying teams and purchasing departments are starting to understand that it's the overall system cost that is important, not the purchase price alone. Recent economic turbulence has resulted in closer inspection of how money is being spent and a more discerning decision making process. variable frequency drives can be a key part of the economy recovery for the Facilities Management industry.
It is reasonable to assume that the subsequent Directive developments planned for 2015 and 2017 will increase them further. The call for higher levels of energy efficiency has been made loud and clear, however, one must bear in mind that variable frequency drives are not the panacea to all problems. Variable frequency drive are not suitable for all types of motor applications, so engineers should always consult the Gozuk website or other specialist resources provided by the supplier when specifying one.
In conclusion, the evidence is clear; variable frequency drives are one of the lowest risk investments Facilities Management pie can make to bring its environmental and economic goals a step closer to fruition. If you are part of a buying team, or working at management level for a Facilities Management company that uses substantial amounts of energy, then variable frequency drives could be a viable solution to provide significant energy savings in many ac motor applications. All you need to do is adjust the way you view the system cost of each solution you buy, where lifetime cost is considered over purchase cost.
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