How and where to strike the jackpot when it comes to reducing energy costs

Peter Garforth says mine your conversion losses for value.

By Peter Garforth

Conversion losses are often talked about as if they were an immutable fact of life over which we have little control. Recently I hosted a high school intern who was amazed that 60% of all U.S. energy is used converting fuels to usable energy services. Sometimes we need fresh eyes to remind us of some basics.
If the conversion of energy services to other forms within a typical factory is included, the share of energy lost is even higher. All of these losses are paid for in one way or another on facilities’ energy bills and should be regularly assessed for opportunities for improvement.

The first step should always be to get a “map” of the plant’s energy flows. It is still surprising to see how rarely a Sankey diagram or similar visualization of site energy flow from the utility meters to the building and manufacturing processes is readily available. These “maps” immediately highlight and scale on-site conversion and distribution losses.

Two main sources of potential losses are well-known. Boilers convert fuel oils or natural gas to hot water or steam often distributed over hundreds of feet across the plant. Chillers convert electricity to space cooling or process chilled water, again distributed widely across many plants. Even in this obvious area, a clear understanding of the end-to-end losses of heating and cooling systems will likely highlight areas for deep renovation or equipment replacement.

The next most obvious source of on-site conversion losses is the compressed air networks. Staring with the compressor itself, it’s easy to forget that 85% of the electricity is lost in conversion. The useful 15% is further eroded by distribution losses between the compressor and the end use, where it is not atypical to see up to 50% lost through misuse and leakage. While it makes sense to consider replacing compressor equipment to gain efficiencies, the underlying challenge between conversion loss and useful output remains.

In all buildings, electricity is converted to light, with heat being the main form of conversion loss. When this results in increased ambient temperatures in work areas, the need for cooling may be increased; this in turn will generate more heat conversion loss from the chillers. Replacing aging lighting systems can cut lighting conversion losses by up to 90%.

The energy manager should continually assess the energy conversion and distribution systems for “business-as-usual” updates. However, a more-systemic view of conversion losses will expose more opportunities for improvement.

In many ways, a compressor is both a heat and air generator. It may be relatively easy to include it in the plant’s water heating system, in turn downsizing other heat sources and cooling towers. In a similar way, chillers generate large amounts of rejected heat; this heat, too, can be redirected for use in hot-water networks or for preheating.

All too often, the cost of redirecting recovered heat is compared with the raw price of using localized natural gas alternatives. When viewed as a pathway to downsize equipment, minimize cooling tower use, and optimize electricity consumption while avoiding natural gas or oil use, the economic balance may be different.

In any discussion of conversion losses, the elephant in the room is behind the electricity meter. In most of the world, including in the United States, every unit of delivered electricity creates two units of conversion losses. These are invisible to the consumer, except for their cost on the utility bill. How can a factory reduce these conversion losses?

The first obvious answer is to reduce electricity use, which will have 3-to-1 leverage on conversion-loss reduction. The somewhat bigger-picture solution is to sign up for a high percentage of renewable electricity contracts. The thermal conversion losses of hydro, wind, or solar power are minimal. With the rapidly reducing levelized cost of renewable generation, it’s no surprise that the economics are becoming as attractive as the environmental benefits.

Another approach is to substitute grid electricity with on-site combined heat and power, sized for optimum heat use and consistent with maximum operating hours. This should halve at least some of the factory’s conversion losses.

The effective energy manager will understand that conversion losses are not an inevitable burden but instead can be an efficiency “motherlode” to be mined for opportunity.

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