News

Posted On: 11/27/2005

Performance contract pays off for painting operation

An Ohio-based painting cabinetry company operates several abatement systems, all regenerative thermal oxidizers (RTOs). RTOs are particularly effective for process streams with low solvent loading. They often are chosen because their superior heat recovery characteristics compared to other types of oxidation systems significantly lower operating costs.

But three existing units were burning too much natural gas and using a substantial amount of electricity. While the equipment was meeting government standards, as the years went by it was consuming an increasing amount of energy.

The RTOs are connected to several pieces of equipment including spray booths, coating ovens and a variety of smaller pollution sources. They were installed by Salem Environmental, which was purchased by Dürr Environmental and Energy Systems (www.durrenvironmental.com) in 1998. Over time, overspray from the paint booths contributed to plugging, resulting in a significant reduction in fuel efficiency. This is normal during the equipment life cycle.

“We know they were wasting all types of money,” says Steve Blocki, Dürr general manager. “We went in there with the goal of convincing them that it would really end up costing them nothing to overhaul the units based on the energy savings this would incur.

“We explained to the client that cleaning out as well as rebuilding the units with more efficient heat exchange ceramics would, in the end, not cost them any more money,” says Blocki. “Dürr calculated the savings and took a portion of that savings as our payment. In return, we gave the client complete maintenance services for the life of the contract -- in this case, five years -- which equated to having one of our people there 20 to 40 hours a week at no additional charge. In effect, they gained an in-house plant expert for the life of the contract at no additional cost. This was in addition to the complete rebuilds.”

Before the rebuilds, natural gas and electricity meters were installed to measure baseline utility consumption. The improvements were made during plant downtime, and the meters are used once a month to determine the actual savings.

In these types of reconditioning projects, the major components that get replaced include the ceramic media, media bed support structures, valves, burner components, fans and motors, PLCs and graphic displays, variable-frequency drives, expansion joints and hydraulic and pneumatic systems.

Depending on the contract, the plant often keeps the first portion of the savings, up to a guaranteed savings value. Savings above the guarantee are paid to the installer, up to a predetermined savings target. When the contract expires, typically after four or more years, the plant keeps all the improvements and all the savings.

Performance contracts make the contractor -- not the plant -- responsible for making the predicted savings a reality. Any shortfall impacts the contractor, so the plant no longer has to evaluate the accuracy of assumptions and calculations.

An additional benefit of performance contracting can be repairs done on the side. When the system modifications are being installed, it is relatively inexpensive to make other necessary repairs on items such as insulation and burners. System improvements such as valve or control upgrades can also be funded by the savings guaranteed to the plant.

Dürr sells this type of service under its “The TOTAL Solution” program, which features payment based on customer’s realized energy savings. “No one else is doing it,” says Blocki. “In selling this service, we have to get the customer to understand that it’s in their best interest, as well as ours, to generate cost savings through making the equipment as energy-efficient as possible. It places both of us on the same side of the business equation.”

For the painting cabinetry company, the total cost savings was in the $1 million per year range, spread out over the four units. Most of the savings resulted from cleaning out the units and installing efficient heat-exchange ceramics.

“The best type of customer for this type of contract is one that has an old system that’s become fuel-inefficient,” Blocki adds. “It’s the perfect model for the customer. If you’re paying too much to run these things, it really comes down to getting a better, more efficient system without incurring any additional costs.”