WIMES LCC MODEL 04 AIR BLOWERS
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1 WIMES LCC MODEL 04 AIR BLOWERS GUIDANCE NOTES ISSUE 1 OCTOBER 2012 Copyright 2012, ESR Technology. All rights reserved. No part of this document may be reproduced in any form electronic or mechanical, including photocopying, recording or any other information storage and retrieval system without permission in writing from the Pump Centre. The Pump Centre is a Centre of Excellence within ESR Technology, one of the UK s leading engineering, safety and risk consultancies. ESR Technology provides independent technical expertise to help its customers ensure asset integrity, improve machine reliability, manage safety and risk and transfer best practice.
2 WIMES LCC MODEL 04 AIR BLOWERS GUIDANCE NOTES Prepared by: R Marlow Pump Centre With technical support and co-operation from the WIMES LCC Working Group consisting of: G Cameron F Davis T White S Hudson R Dorr P Davison M Overy B Spence K Gaunt M Ison M Keen S Whatley M Rush J Wright M Ward Affinity Water Anglian Water Bristol Water Cambridge Water Dwr Cymru NI Water Northumbrian Water Scottish Water Severn Trent Water South West Water Southern Water Thames Water United Utilities Wessex Water Yorkshire Water Please Note This document will be reviewed periodically to take account of feedback from Water Companies and/or Suppliers. If changes to the Specification are necessary, it will be re-issued.
3 WIMES LCC MODEL 04 AIR BLOWERS Page 1 CONTENTS LCC ASSESSMENT 2 Background 2 Guidance 2 General Guidance 2 Detailed Guidance 3 WHOLE LIFE CARBON COSTS 8
4 WIMES LCC MODEL 04 AIR BLOWERS Page 2 LCC ASSESSMENT Background This WIMES Life Cycle Cost (LCC) model is intended for use by Water Companies to enable them to assess different air blower suppliers products on an LCC basis. The LCC of an air blower comprises a number of elements, not all of which are embraced by this model. The reason that some elements are excluded (e.g. installation and commissioning costs, downtime costs, environmental costs, decommissioning and disposal costs etc.) is that, for a given application, these factors would be expected to generate similar costs and their inclusion would not, therefore, assist the process of differentiating between different suppliers products. The elements that are included in the model are as follows: 1. The initial procurement costs, i.e. the purchase price of the blower; 2. The energy costs; and 3. The maintenance costs (planned and unplanned). This model also assesses the carbon footprint of the blower in terms of its electricity consumption and the embedded carbon associated with its manufacture and delivery. Whilst included in the model, the blower carbon costs are presented separately to the main LCC assessment. Guidance General Guidance The following definitions are used in these Guidance Notes: 1. The term Purchaser shall mean the end user of the blower or the end user s nominated representative; and 2. The term Supplier shall mean the supplier of the blower. This LCC model is in the form of a Microsoft Excel spreadsheet. Cells that require parameters to be input by the Purchaser or, alternatively by the Supplier, are highlighted in yellow. All cells that are not highlighted in yellow do not require inputs and are locked. Parameters to be input by the Purchaser are marked (P) and by the Supplier (S). Some of the Purchaser input cells are optional; whereas all of the Supplier input cells require completion. For ease of use, those parts of these Guidance Notes that relate specifically to the Supplier are highlighted in yellow.
5 WIMES LCC MODEL 04 AIR BLOWERS Page 3 Detailed Guidance For ease of reference, the headings used in this Section are identical to those used in the model. 1.0 PERIOD OF ANALYSIS AND BLOWER OPERATION 1.1 Period of Analysis (POA) The Purchaser should input the required period of analysis (POA) in years (up to a maximum of 40 years) in cell E Blower Operation The Purchaser should input the required blower duty in terms of a flow (Nm 3 /hr), differential pressure (bar) and utilisation (%) in cells E21, E22 and E30 respectively. If the blower duty cannot be adequately described by a single operating point, there is the facility to input three additional operating points. The total utilisation should not exceed 100 %. The Supplier should input the blower and motor efficiencies (%) at each of the operating points specified by the Purchaser in cells E24-H24 and E25-H25 respectively. The Purchaser also has the option of inputting the inverter efficiency (if relevant) and details of any other losses in the blower string (e.g. in the supply cable) at each of the operating points in cells E26-H26 and E27-H27 respectively. Based on the flow, pressure, efficiency and utilisation figures input/calculated, the model calculates the following parameters at each operating point: 1. The overall efficiency (%) (E28-H28); 2. The overall power input (kw) (E29-H29); and 3. The blower running time (in hours) over the POA (E31-H31). If more than one operating point has been input, the model calculates the blower power output, overall efficiency and overall power input as weighted averages (E32, E33 and E34). 2.0 BLOWER DETAILS The Supplier should should input the blower designation in cell E LCC ASSESSMENT 3.1 Discount Rate for Net Present Cost (NPC) Calculations The Purchaser may, if required, input a discount rate (%) in cell E44 to enable the model to present the results in the form of a discounted cashflow.
6 WIMES LCC MODEL 04 AIR BLOWERS Page Initial Procurement Costs The Supplier should input the blower list price, discounted if appropriate, in cell E Energy Costs Energy Price and Differential Energy Price Inflation Rate The Purchaser should input the current energy price (p/kwhr) in cell E54 and may, if required, input the differential energy price inflation rate (% per annum) in cell E55. For example, if the general inflation rate is 2.0 % per annum and the energy price is expected to increase at 5.0 % per annum over the POA, a differential energy price inflation rate of 3.0 % per annum should be input in cell E Energy Costs (Assuming no Decrease in Blower Efficiency) Based on the overall power input and running hours figures previously calculated, the model calculates the total energy consumption of the blower over the POA (E59). Using this figure, the energy price and, if appropriate, the differential energy price inflation rate, the model then calculates the energy costs of the blower over the POA (E60). These figures assume that the original efficiency of the blower is maintained over the POA Additional Energy Costs Due to a Decrease in Blower Efficiency The Purchaser may, if required, input a figure for the decrease in blower efficiency per 1000 hrs of operation in cell E64. This figure should be based on the Purchaser s previous operational experience of the performance of similar blowers, if available. The reason that the Purchaser inputs this figure as opposed to the Supplier, is to ensure that a level playing field is maintained when reviewing different Suppliers submissions. The Supplier may challenge this figure, if he considers that the blower being offerred will deliver a significantly better performance than suggested by the figure input by the Purchaser. The Supplier should provide documentary evidence to support this challenge. Based on the initial average overall efficiency figure in cell E33 and the loss in efficiency per 1000 hrs of operation figure in cell E64, the model calculates the following parameters; 1. The efficiency decrease of the blower over the POA (E66); 2. The final efficiency of the blower at the end of the POA (E67); 3. The total energy consumption of the blower over the POA (E68); 4. The total energy costs of the blower over the POA (E69); and 5. The additional energy costs of the blower over the POA due to loss in efficiency (E70).
7 WIMES LCC MODEL 04 AIR BLOWERS Page Effect of Efficiency Restoring Overhauls The Purchaser may, if required, overhaul the blower at regular intervals (running hours) to restore its efficiency back to its original value. If this is the case, the Purchaser should input the overhaul interval (in running hrs) in cell E74. Based on this figure, the model calculates the following parameters: 1. The number of overhauls performed over the POA (F74); 2. The total energy consumption of the blower over the POA (E75); 3. The total energy costs of the blower over the POA (E76); and 4. The energy costs savings resulting from the overhauls (E77). The lower the overhaul interval the greater the energy cost savings. This beneficial effect is obviously offset by the costs associated with blower overhaul and the Purchaser should optimise his maintenance strategy to achieve the lowest overall LCC Energy Costs Summary The energy consumption and energy costs figures that will be used in the LCC assessment are detailed in cells E81 and E84 respectively. These figures obviously depend on whether decrease in blower efficiency and/or the effect of efficiency restoring overhauls have been taken into account during the assessment. The model also calculates the specific energy consumption (kwhr/nm 3 /bar) of the blower in cell E82 based on the following: 1. The total energy consumption of the blower over the POA; and 2. The differential pressure and flow rate at the rated operating point. 3.4 Maintenance Costs Labour Price and Differential Labour Price Inflation Rate The Purchaser should input the current price of labour ( /manhr) in cell E105 and may, if required, input the differential labour price inflation rate (% per annum) in cell E106. For example, if the general inflation rate is 2.0 % per annum and the price of labour is expected to increase at 5.0 % per annum over the POA, a differential labour price inflation rate of 3.0 % per annum should be input into cell E and Planned Maintenance The Purchaser should input the following information: 1. The maintenance activities to be performed on the blower (D113-D120 and D127-D134); and 2. For each of the activities listed, the interval (in running hours or calendar months, as appropriate) between successive bouts of maintenance (E113-E120 and E127-E134).
8 WIMES LCC MODEL 04 AIR BLOWERS Page 6 The reason that the Purchaser inputs this information as opposed to the Supplier, is to ensure that a level playing field is maintained when reviewing different Suppliers submissions. The Purchaser s maintenance strategy will obviously vary based on a number of factors including: 1. The value of the blower; 2. The cost of maintaining the blower; 3. The likelihood of blower failure; 4. The consequences of blower failure; and 5. Previous relevant operational experience. Small, relatively inexpensive blowers and/or blowers which are difficult to gain access to for maintenance may not be subject to any planned maintenance activities (i.e. they will be subject to reactive/breakdown maintenance), whereas large, expensive blowers and/or those that have critical duties, will typically be subject to a range of planned preventative and predictive maintenance activities. For each of the activities listed by the Purchaser, the Supplier should input the following information: 1. The time taken to perform the activity (F113-F120 and F127-F134); 2. The number of staff required to perform the activity (G113-G120 and G127-G134); and 3. The costs of any spare parts associated with performing the activity (H113-H120 and H127-H134). The model calculates a cost to perform each activity and based on the maintenance interval, a total maintenance cost for this particular activity over the POA. The model then sums all of the costs for the individual activities and calculates a total planned maintenance cost (J121 + J135). The Supplier may challenge the Purchaser s proposed maintenance strategy, if he considers that a different approach (in terms of the activities listed and the associated maintenance intervals) will result in a lower planned maintenance cost, provided that this approach will not have an adverse effect on blower availability, asset life or LCC. The Supplier should provide documentary evidence to support this challenge.
9 WIMES LCC MODEL 04 AIR BLOWERS Page Unplanned Maintenance The Purchaser should input the following information: 1. The maintenance activities to be performed on the blower (D141-D148); 2. For each of the activities listed, the interval (in running hours or calendar months, as appropriate) between successive bouts of maintenance (E141-E148 or F141-F148). 3. The time taken to perform the activity (G141-G148); 4. The number of staff required to perform the activity (H141-H148); and 5. The costs of any spare parts typically associated with performing the particular maintenance activity (I141-I148). The reason that the Purchaser inputs this information as opposed to the Supplier, is to ensure that a level playing field is maintained when reviewing different Suppliers submissions. The model calculates a cost to perform each activity and, based on the maintenance interval, a total maintenance cost for this particular activity over the POA. The model then sums all of the costs for the individual activities and calculates a total unplanned maintenance cost in cell K149. The Supplier may challenge the Purchaser s proposed maintenance strategy, if he considers that the blower being offered will not be subject to the unplanned maintenance activities listed e.g. the blower is of an innovative design that does not render it susceptible to blockage at the intervals defined by the Purchaser. The Supplier should provide documentary evidence to support this challenge Maintenance Costs Summary The model sums the planned and unplanned maintenance costs and outputs a total maintenance costs figure in cell E Enhanced Capital Allowance The Supplier should indicate whether or not the blower will qualify for an enhanced capital allowance in cell E156. The Enhanced Capital Allowance (ECA) scheme enables the Water Company to claim 100% first-year capital allowance on the purchase price of the motor (and inverter). For blowers, this will depend on whether or not the motor efficiency is classed as IE3 or greater, in accordance with BS EN (blowers with integral motors e.g. submersible pumps do not qualify for ECA). LCC SUMMARY The results of the LCC assessment are finally summarised, in terms of a current and discounted cost, in cells E195 and E197 respectively. The results of the LCC assessment are also presented in the form of a pie chart (current costs only) and a graph of cost vs. years of operation (current and discounted costs).
10 WIMES LCC MODEL 04 AIR BLOWERS Page 8 WHOLE LIFE CARBON COSTS For ease of reference, the headings used in this Section are identical to those used in the model. 1.0 OPERATIONAL CARBON EMISSIONS The Purchaser should input the current DEFRA greenhouse gas (GHG) conversion factor (kgco 2 e/kwhr) in cell E283. This conversion factor is an annually updated, five year rolling average, which may be obtained from the DEFRA website. It will vary depending on the source of the electricity. The model calculates the operational carbon emissions (tco 2 e) of the blower over the POA in cell E286 by multiplying the GHG conversion factor by the total energy consumption of the blower over the POA (E285). Depending on whether or not the Water Company is a member of the EU Emissions Trading System (EU ETS), the Purchaser should input traded or non-traded carbon values into Table 1, for each of the years comprising the POA. The relevant carbon value data may be obtained from the Department of Energy and Climate Change (DECC) website. The model calculates the operational carbon costs of the blower over the POA in cell E288. For PR09, to avoid double counting, OFWAT has requested that the operational carbon costs should be adjusted by subtracting the climate change levy (CCL) costs from the carbon costs calculated using the traded/non-traded carbon values. The Purchaser should therefore input the CCL rate (p/kwhr) in cell E289; based on this figure and the total energy consumption of the blower over the period of analysis, the model calculates the CCL costs of the blower over the period of analysis in cell E290. The model then calculates the adjusted operational carbon costs in cell E291, by subtracting the CCL costs from the carbon costs calculated using the traded/non-traded carbon values. 2.0 EMBEDDED CARBON EMISSIONS The Supplier should enter a figure for the embedded carbon (tco 2 e) associated with the manufacture and delivery of the blower in cell E308. The model then calculates the cost of this embedded carbon in cell E309 by multiplying this figure by the traded/non-traded carbon value for year 1 of the POA. SUMMARY The results of the whole life carbon costs assessment are finally summarised, in terms of a current and discounted cost, in cells E317 and E319 respectively.
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