1 2 3 4 5 6 7 8 9 Start at the centre of the service demand is the need Service is more than simply To identify the Energy Serv - What do I want to do wi - What requires the compr - What is the fundamental An example of a compressed one belt and drop it on ano Then, for each Energy Servi - Do I really need (paid - Is there another way o - Can I use a less energ - What is the minimum sp - Can I reduce (increase required? Start at the point of energ conversion system(s) – this Is the technology that is c eliminated or replaced by a Can the system be designed Identify the most efficient satisfy each service demand Are there opportunities to integrity (elimination of l Is there scope for technica boilers, chillers etc.) to chips etc.)? Finally, are there O&M or h resources?
Transcript
1
2
3
4
5
6
7
8
9
Start at the centre of the Onion (see diagram below) by identifying the relevant Energy Service. An energy service demand is the need for a specific level of work or activity to be performed. However, an Energy Service is more than simply 'Compressed Air'.
To identify the Energy Service, ask yourself: - What do I want to do with the compressed air? - What requires the compressed air? - What is the fundamental piece of work that I want compressed air to do?
An example of a compressed air related Energy Service might be: to produce a vacuum to pick up a product from one belt and drop it on another.
Then, for each Energy Service, ask yourself: - Do I really need (paid-for) energy to deliver this energy service? - Is there another way of delivering the output that requires using less or no energy? - Can I use a less energy intensive alternative? - What is the minimum specification required? - Can I reduce (increase) pressures, temperatures, run times, flowrates, currents etc. to reduce the energy required?
Start at the point of energy service demand and work back upstream through the energy distribution and conversion system(s) – this is consistent with the energy efficiency hierarchy.
Is the technology that is currently satisfying each energy service demand appropriate? Or can it be eliminated or replaced by a more effective alternative?
Can the system be designed better?
Identify the most efficient / optimum operational control parameters for the most effective technology to satisfy each service demand. Can cycle times be adjusted?
Are there opportunities to distribute the energy more efficiently, e.g. insulation, improved structural integrity (elimination of leaks), isolation etc.?
Is there scope for technical or operational modifications to the energy conversion systems (compressors, boilers, chillers etc.) to reduce the consumption of energy resources (natural gas, gasoil, electricity, wood chips etc.)?
Finally, are there O&M or housekeeping actions that can be taken to reduce the consumption of energy resources?
###
###
The following Onion diagram illustrates this approach and also identifies some best practice energy savings measures at different 'layers'. Simple energy saving calculation sheets for each of these measures are included in this spreadsheet.
SEAI operates an accelerated capital allowance (ACA) scheme, which is a tax incentive for companies to purchase energy efficient equipment. It allows companies to write off 100% of the purchase value of specified energy efficient equipment in the year of purchase. To see which equipment qualifies for ACA and to find out more go to www.seai.ie/aca or click on the graphic below. There is also useful technical information available on the qualifying equipment. There is also an ACA worksheet in this spreadsheet.
Housekeeping
Repair LeaksOperation & Maintenance
Control Systems
VSD Control
Variable Inlet Volume
Plant Design
Energy Efficient Motor
Multiple-stage Compressor
ProcessTechnology
Reduce pressure
What do I want to do with the compressed air?What requires the compressed
air?What is the fundamental piece of
work that I want compressed air to do?
Do I really need energy to deliver
this energy service?Is there another way of delivering the output that requires using less
or no energy?Can I use a less energy intensive
alternative?What is the minimum specification required?
Energy Service
Compressed Air Systems- The "Onion" Approach to Improving Energy Efficiency
Start at the centre of the Onion (see diagram below) by identifying the relevant Energy Service. An energy service demand is the need for a specific level of work or activity to be performed. However, an Energy Service is more than simply 'Compressed Air'.
To identify the Energy Service, ask yourself:- What do I want to do with the compressed air?- What requires the compressed air?- What is the fundamental piece of work that I want compressed air to do?
An example of a compressed air related Energy Service might be: to produce a vacuum to pick up a product from one belt and drop it on
Then, for each Energy Service, ask yourself:- Do I really need (paid-for) energy to deliver this energy service?- Is there another way of delivering the output that requires using less or no energy?- Can I use a less energy intensive alternative?- What is the minimum specification required?- Can I reduce (increase) pressures, temperatures, run times, flowrates, currents etc. to reduce the energy required?
Start at the point of energy service demand and work back upstream through the energy distribution and conversion system(s) – this is consistent with the energy efficiency hierarchy.
that is currently satisfying each energy service demand appropriate? Or can it be eliminated or replaced by a more
designed better?
Identify the most efficient / optimum operational control parameters for the most effective technology to satisfy each service demand. Can cycle times be adjusted?
Are there opportunities to distribute the energy more efficiently, e.g. insulation, improved structural integrity (elimination of leaks), isolation
Is there scope for technical or operational modifications to the energy conversion systems (compressors, boilers, chillers etc.) to reduce the consumption of energy resources (natural gas, gasoil, electricity, wood chips etc.)?
O&M or housekeeping actions that can be taken to reduce the consumption of energy resources?
The following Onion diagram illustrates this approach and also identifies some best practice energy savings measures at different 'layers'. Simple energy saving calculation sheets for each of these measures are included in this spreadsheet.
SEAI operates an accelerated capital allowance (ACA) scheme, which is a tax incentive for companies to purchase energy efficient equipment. It allows companies to write off 100% of the purchase value of specified energy efficient equipment in the year of purchase. To see which equipment qualifies for ACA and to find out more go to www.seai.ie/aca or click on the graphic below. There is also useful technical information available on the qualifying equipment. There is also an ACA worksheet in this spreadsheet.
Housekeeping
Repair LeaksOperation & Maintenance
Control Systems
VSD Control
Variable Inlet Volume
Plant Design
Energy Efficient Motor
Multiple-stage Compressor
ProcessTechnology
Reduce pressure
What do I want to do with the compressed air?What requires the compressed
air?What is the fundamental piece of
work that I want compressed air to do?
Do I really need energy to deliver
this energy service?Is there another way of delivering the output that requires using less
or no energy?Can I use a less energy intensive
alternative?What is the minimum specification required?
Energy Service
Estimate Your Savings
Parameter Example Your Data Unit Comment
Motor Power : 600.00 600.00 [kW] Sum of all compressor, cooling fan and dryer motor ratings
Motor Efficiency : 90% 90% [%] Weighted average combined motor efficiency (default = 90%)
% Full Load : 90% 90% [%] Estimate of average percentage motor load factor (default = 65%)
Pressure Reduction : 7.00 3.00 [bar] Average reduction in discharge pressure set-point
: 5,040,000 5,040,000 [kWh/y]
% Savings : 45.5% 19.5% [%] = (Pressure Reduction [bar]) x (6 - 7% saving per bar)
Annual Energy Savings : 2,293,200 982,800 [kWh/y] = (Annual Energy Consumption [kWh]) x (% Savings [%])
Average Electricity Price : €0.140 [€/kWh] Insert from Energy Bills Analysis Tool
Annual Cost Savings : €321,048 €0 [€/y] = (Annual Energy Savings [kWh/y]) x (Average Electricity Price [€/kWh])
Additional Information & Tips
Compressed Air- Reduce System Pressure
If pressure is set higher than needed then energy is being wasted. The discharge pressure set point range should be set to the minimum level needed for process air requirements.
What Does this Sheet Do? Calculates the energy savings achievable by reducing the discharge pressure.
Rule of Thumb: Every 1 bar in pressure reduction produces a 6-7% energy saving.
Annual Energy Consumption
= (Motor Power [kW]) / (Motor Efficiency [%]) x (% Full Load [%]) x (Operation Hours [h])
Payback: Depends on the number of problems in the system & additional controls required (if any); could be < 1 year.
In undertaking this opportunity, the discharge pressure should be stepped down in small increments (e.g. 1/4 bar) and the performance of critical end users should be carefully monitored. Continue reducing the pressure and monitoring until a problem arises. At that time, correct the problem at its point of origin and resume the procedure of decreasing pressure incrementally. When all problems are located and repaired, raise the pressure range set point back up by a small amount (e.g. 0.15 bar) and stop the process at this new optimum setting. The whole process may take several weeks.
The saving calculated above does not include the fringe savings which could be expected (reduced leaks, reduced component maintenance, etc.).
It is a common finding in audits to identify a situation where an end user is utilising unregulated compressed air. A pressure regulator is a device utilised to limit the maximum end of line pressure and is generally placed in the distribution system immediately upstream of end users. Without this device, the energy users utilise the maximum system pressure resulting in increased wear and tear; higher maintenance costs; and a shorter operational lifetime. In addition, local pressure reduction reduces artificial demand (leakage and other parasitic loads).
If a situation occurs where one specific end user is dictating the pressure of the entire system, it is often more economic to replace or modify this component rather than increase the system pressure. For example, the bore of a solenoid stem could be increased, or the gear ratios can be changed, or similar mechanical advantages could be exploited before taking the easier, but more financially costly, route of increasing compressor discharge pressure at the generation station. Other possible solutions include boosters immediately upstream of the end users or a dedicated high pressures system.
Source: SEAI Energy Agreements Programme 2007 Compressed Air Technical Guide
A first cut estimate of the percentage of air leaked in a system can be calculated using the following method.
% of Air Leaking = (Time in Operation x 100 ) / ( Time in Operation + Time not in Operation )
The above formula can be modified to calculate the rate of air leakage, giving:
Estimate Your Savings
Parameter Example Your Data Unit Comment
: 200 [l/s]
Time on Load 3 [min] Time interval for compressor to load
Time off Load 10 [min] Time interval for compressor to unload
% Air Leaks : 23% #DIV/0! [%] = (Time on Load [min] x 100) / (Time On Load [min] + Time Off Load [min])
Air Leakage rate : 46 #DIV/0! [l/s] = (% Air Leaks [%]) x (Rated Free Air Delivery [l/s])
Average Electricity Price : €0.140 [€/kWh] Insert from Energy Bills Analysis Tool
: €4,523.08 #DIV/0! [€/y] = (Approximate Energy Wasted [kWh/y]) x (Average Electricity Price [€/kWh])
Additional Information & Tips
Compressed Air- Energy Wasted from Leaks
Leaks are an unfortunate but regular feature in compressed air distribution networks. Typically, the energy requirements served by a compressed air system are intermittent in nature; however leaks are constant and potentially significant. The monetary cost of leaks can be quite startling, and surprising. In order to move forward with any leak reduction programme, it is important to benchmark the current leakage rate. The extent to which a compressed air system is leaking can be easily determined during non-production hours through assessment of Monitoring & Targeting (M&T) data (if present) or through manual pressure indicator readings in the distribution network with some quick calculations.
Method : During a period where there is no demand for the compressed air allow the compressor to build up the system pressure until it reaches the shutoff point. Then, for a given period of time (e.g 30 minutes), record the time the compressor runs for and the time that it is shut off. The percentage of air that is leaking from the system can be estimated using the following formula.
Rate of air leakage [l/s] = (Rated F.A.D of Compressor [l/s] x Time On Load [sec]) / (Time on Load [sec] x Time off Load [sec])
What Does this Sheet Do? Calculates the energy savings associated with reducing leaks in a compressor system.
Rule of Thumb: % of Air Leaking = (Time in Operation x 100 ) / ( Time in Operation + Time not in Operation ).Every 1 l/s of air leakage wastes about 700 kWh per year.
Rated Free Air Delivery (FAD)
Rated Free Air Delivery rate of the compressor (200 l/s typical for a 75kW Compressor)
Approximate Energy Wasted
Approximate Energy Cost of Leakage
Payback: Due to the large savings associated with a regular Leak Detection Programme, the potential savings associated with this opportunity to save energy often results in payback periods of less than 1 year.
Leakage can occur at any point in a compressed air system, but the most common culprits include piping joints, drains, relief valves, drain valves, flexible hose pipes, filter and lubricator units, pressure regulators, condensate traps and thread sealants. The best means of locating compressed air leaks is an ultrasonic acoustic detector capable of identifying the high frequency noise synonymous with compressed air leaks. When this technology is not available, simpler methods such as applying soapy water to the distribution network and waiting for bubbles to form is just as
A leak reduction program will involve identification (tagging), tracking, repairing,
The most valuable tool in combating leakage in the system are personnel who should be brought onboard and actively engaged in the programme. Plant personnel will often become actively engaged in a leak reduction programme. Knowing that a reduction in leaks will lead to a more comfortable working environment will often result in more active involvement from personnel. The goal of any programme is to make individual departments responsible for usage. Accordingly, flow to these departments should be monitored to ensure that area ownership is taken. Facilities utilising significant volumes of compressed air should aggressively engage in a Leak Detection Programme and carry out a bi-annual compressed air leakage survey. Finally, it is important to bear in mind that one of the most effective means of reducing compressed air leakage is to reduce the distribution pressure.
Fixing the leaks is often as simple as tightening connections or applying sealant at strategic points. However leaks will be found that require the replacement of faulty components. In all instances, select the highest quality fittings, disconnects, hoses, tubes, etc. and install them as appropriate with high quality thread sealant. A 10% reduction in leakage, which is a modest target for leakage in any system, would often be gained as a result of carrying out an intensive leak reduction programme.
Source: SEAI Energy Agreements Programme 2007 Compressed Air Technical Guide
Estimate Your Savings
Parameter Example Your Data Unit Comment
Motor Power : 111.90 [kW] Motor rating of compressor that can be Switched Off
Motor Efficiency : 92% [%] Motor efficiency for compressor that can be Switched Off (default = 92%).
Average Electricity Price : €0.140 [€/kWh] Insert from Energy Bills Analysis Tool
Annual Cost Savings : €71,519 #DIV/0! [€/y] = (Annual Energy Savings [kWh/y]) x (Average Electricity Price [€/kWh])
Additional Information & Tips
Compressed Air- Savings from Reducing Leaks
Leaks are an unfortunate but regular feature in compressed air distribution networks. Typically, the energy requirements served by a compressed air system are intermittent in nature; however leaks are constant and potentially significant. The monetary cost of leaks can be quite startling, and surprising.
What Does this Sheet Do? Calculates the energy savings achievable by switching off a top-up (trim) compressor after eliminating leaks (because the compressor is no longer required).
Rule of Thumb: Leakage levels at facilities are typically as high as 20-30% and levels as high as 50% are notunusual. The leakage percentage will be below 10% in a well-maintained system.
The most energy will be saved if there are multiple compressors and repairing leaks results in enough air load reduction to shut down one partly-loaded compressor. For variable speed or systems with a lot of storage, the percentage savings will approximate the percentage of capacity (l/s) reduced.
Average Part Load Condition
Average compressor loading expressed as a percentage of the rated capacity (l/s or CFM). (Default: Modulating machines = 70%; Load/unload with little storage = 70%; Load/unload with a lot of storage = 40%; Variable inlet volume = 40%; VSD = 20%)
Annual Operation Hours Saved (Off)
= (Motor Power of Compressor that is turned Off [kW]) / (Motor Efficiency [%]) x (Average Part Load of Compressor [%]) x (Annual Operating Hours [h])
Payback: Due to the large savings associated with a regular Leak Detection Programme, the potential savings associated with this opportunity to save energy often results in payback periods of less than 1 year.
In order to move forward with any leak reduction programme, it is important to benchmark the current leakage rate. The extent to which a compressed air system is leaking can be easily determined during non-production hours through assessment of Monitoring & Targeting (M&T) data (if present) or through manual pressure indicator readings in the distribution network with some quick calculations.
Leakage can occur at any point in a compressed air system, but the most common culprits include piping joints, drains, relief valves, drain valves, flexible hose pipes, filter and lubricator units, pressure regulators, condensate traps and thread sealants. The best means of locating compressed air leaks is an ultrasonic acoustic detector capable of identifying the high frequency noise synonymous with compressed air leaks. When this technology is not available, simpler methods such as applying soapy water to the distribution network and waiting for bubbles to form is just as effective.
A leak reduction program will involve identification (tagging), tracking, repairing,recording and verification.
The most valuable tool in combating leakage in the system are personnel who should be brought onboard and actively engaged in the programme. Plant personnel will often become actively engaged in a leak reduction programme. Knowing that a reduction in leaks will lead to a more comfortable working environment will often result in more active involvement from personnel. The goal of any programme is to make individual departments responsible for usage. Accordingly, flow to these departments should be monitored to ensure that area ownership is taken. Facilities utilising significant volumes of compressed air should aggressively engage in a Leak Detection Programme and carry out a bi-annual compressed air leakage survey. Finally, it is important to bear in mind that one of the most effective means of reducing compressed air leakage is to reduce the distribution pressure.
Fixing the leaks is often as simple as tightening connections or applying sealant at strategic points. However leaks will be found that require the replacement of faulty components. In all instances, select the highest quality fittings, disconnects, hoses, tubes, etc. and install them as appropriate with high quality thread sealant. A 10% reduction in leakage, which is a modest target for leakage in any system, would often be gained as a result of carrying out an intensive leak reduction programme.
Estimate Your Savings
Parameter Example Your Data Unit Comment
Motor Power : 111.90 [kW] Compressor motor rating
Motor Efficiency : 92% [%]
% Full Load : 65% [%] Estimate of average percentage motor load factor (default = 65%)
Average Electricity Price : €0.140 [€/kWh] Insert from Energy Bills Analysis Tool
Annual Cost Savings : €1,555 #DIV/0! [€] = (Annual Energy Savings) x (Average Electricity Price [€/kWh])
Additional Information & Tips
None
Compressed Air- High Efficiency Motor
Compressors usually do not come with high efficiency motors as standard; however, they are often offered as options. If the compressor will have long annual run hours, then a high efficiency motor may be more economical.
What Does this Sheet Do? Calculates the energy savings achievable by using a high efficiency motor instead of a standard motor.
Rule of Thumb: A high efficiency motor will typically be 1.5% more efficient than a standard compressor packaged motor.
Compressor motor efficiency Included with the standard compressor package (default = 92%).
= (Motor Power [kW]) x (% Full Load [%]) x (Operation Hours [h]) x ((1/Compressor Motor Efficiency [%]) - (1/(Compressor Motor Efficiency [%] + 1.5%)))
Payback: Base loaded machines that operate close to full load for more hours annually will show quicker returns on the investment in the high efficiency motor than trim machines that operate fewer hours annually.
Estimate Your Savings
Parameter Example Your Data Unit Comment
Motor Power : 111.90 [kW] Compressor motor rating
Motor Efficiency : 92% [%] Compressor motor efficiency (default = 92%).
% Full Load : 65% [%] Estimate of average percentage motor load factor (default = 65%)
13% [%] 6% for Reciprocating Compressor; 13% for Rotary Screw Compressor
Annual Energy Savings : 90,033 #DIV/0! [kWh/y]
Average Electricity Price : €0.140 [€/kWh] Insert from Energy Bills Analysis Tool
Annual Cost Savings : €12,605 #DIV/0! [€] = (Annual Energy Savings) x (Average Electricity Price [€/kWh])
Additional Information & Tips
Compressed Air- Multiple-stage Compressor
Normally buyers may select between a single-stage and a two-stage machine when purchasing an air compressor. In most cases, multiple-stage compression results in more efficient operation. Multiple-stage means that the final discharge pressure is generated over several steps. Efficiency is significantly increased as a result of the cooling of air between stages, thereby reducing the volume and work required to compress the air. In the case of reciprocating compressors, each stage usually requires a separate cylinder, and in rotary screw compressors, each requires a separate rotor disc; in either case the air is passed though the stages in succession.
What Does this Sheet Do? Calculates the energy savings achievable by using a multiple stage compressor instead of a single stage compressor.
Rule of Thumb: Two-stage reciprocating compressors are ~6% more efficient than single-stage reciprocating compressors and two-stage rotary screw compressors are ~13% more efficient than single-stage versions.
% Savings overSingle- stage:
= (Motor Power [kW]) / (Motor Efficiency [%]) x (% Full Load [%]) x (Operation Hours [h]) x (% Savings over Single-stage)
Payback: The premium paid for equal power, two-stage machines will be 30 to 40%. However, the two-stage machine will have more capacity (l/s) than the same power, single-stage machine. Therefore sometimes a smaller power two-stage machine can be used instead of the larger power single-stage machine for the same job, resulting in an effective cost premium of less than 30%.
Rotary Screw Compressors are the most common compressors used in industry today and do have many inherent advantages over reciprocating compressors including a lower capital cost; lower maintenance costs; smaller size and reduced vibration and noise. Two stage rotary screw compressors may not be available for sizes smaller than ~75 kW.
Reciprocating compressors were historically the most commonly used compressors. However, the higher capital and maintenance costs have reduced their market dominance in recent years. Despite this, it is generally accepted that multi-stage version of these units are the most efficient compressor type.
Centrifugal compressors are generally only suitable for high volume applications with little variance in the demand load. These compact units are available in two, three and four stage compression technology. Generally centrifugal compressors are three stage units – which tend to be more efficient than rotary screw compressors – with inherent efficiencies approaching those of double-acting reciprocating compressors.
Annual Energy Savings : 164,348 #DIV/0! [kWh/y] = (Average Power Saving [kW]) x (Annual Operating Hours [h/y])
Average Electricity Price : €0.140 [€/kWh] Insert from Energy Bills Analysis Tool
Annual Cost Savings : €23,009 #DIV/0! [€/y] = (Annual Energy Savings [kWh/y]) x (Average Electricity Price [€/kWh])
Additional Information & Tips
Compressed Air- VSD for Part Load Control
Traditionally, a number of compressors provide the base load at a facility with one compressor providing top up. A standard compressor operating in this top up mode cannot ramp up and down to track transient demands; airflow is typically controlled by a valve that modulates between open and closed positions. Unfortunately, this method results in a higher discharge pressure, lower part load efficiencies, and increased overall power consumption. Accordingly, a strong economic case can often be made for installation of Variable Speed Drive (VSD) motor for the compressor at facilitates displaying inherently variant demand profiles for the top up compressor.
What Does this Sheet Do? Calculates the energy savings achievable by using a Variable Speed Drive (VSD) instead of inlet modulation control.
Rule of Thumb: The percentage power savings derived from using VSD compressor control rather than inlet modulation control is expressed approximately by: Power Savings = 70% (100% - % Rated Flow)
Compressor motor efficiency Included with the standard compressor package (default = 92%).
Average Part Load Condition
Average compressor loading expressed as a percentage of the rated capacity (l/s or CFM)
= (Motor Power [kW]) / (Motor Efficiency [%]) x 70% x (100% - Average Part Load Condition [%]) x VSD Efficiency [%]
Payback:
Capable of being fitted to reciprocating, rotary vane and screw machines, VSD motors control over a close pressure band minimising artificial demand and the need for control valves. These units are capable of a more dynamic air discharge to meet the demand at the required pressure. It does this by varying the speed of the compressor motor, which dramatically reduces energy consumption. In addition, the compressor is enabled with software to sense when it should be taken offline. Other benefits include reduced wear and tear of the compressor; compressor lifecycle extension; and increased compressor stability due to smooth start-ups.
VSD motors can be integrated into existing machines however VSD controllers and motors supplied in conjunction tend to offer superior performance.
If a unit is likely to be operated at 100%, a VSD compressor should not be procured; tests have shown a performance reduction in VSD compressors when 100% loaded. From experience, a case can often be made for the installation of a VSD compressor when loads for the top-up compressor lie in the 30-70% range.
Annual Energy Savings : 110,054 #DIV/0! [kWh/y] = (Average Power Saving [kW]) x (Annual Operating Hours [h/y])
Average Electricity Price : €0.140 [€/kWh] Insert from Energy Bills Analysis Tool
Annual Cost Savings : €15,408 #DIV/0! [€/y] = (Annual Energy Savings [kWh/y]) x (Average Electricity Price [€/kWh])
Additional Information & Tips
None
Compressed Air- Variable Inlet Volume for Part Load Control
Traditionally, a number of compressors provide the base load at a facility with one compressor providing top up. A standard compressor operating in this top up mode cannot ramp up and down to track transient demands; airflow is typically controlled by a valve that modulates between open and closed positions. This control scheme is applied to rotary screw compressors, but is an inefficient means for controlling compressor output for displacement compressors. Most manufacturers offer options in the larger compressors (>75 kW) that have more efficient part load characteristics. In one model, which is the variable inlet volume model, the length of the compression chamber is effectively decreased by the use of internal valves, allowing the compressor to reduce airflow quite efficiently down to about 50% of rated full flow capacity.
What Does this Sheet Do? Calculates the energy savings achievable by using variable inlet volume control instead of modulation control.
Rule of Thumb: The percentage power savings derived from using variable inlet volume compressor control rather than inlet modulation control is expressed approximately by: Power Savings = 45% x (100% - % Rated Flow)
Compressor motor efficiency Included with the standard compressor package (default = 92%).
Average Part Load Condition
Average compressor loading expressed as a percentage of the rated capacity (l/s or CFM)
= (Motor Power [kW]) / (Motor Efficiency [%]) x 45% x (100% - Average Part Load Condition [%])
Payback:
Accelerated Capital Allowance (ACA)
Estimate Your Savings
Parameter Example Your Data Unit Comment
: €100,000 [€] See www.seai.ie/aca for details of qualifying equipment
Corporation Tax Rate : 12.5% 12.5% [%]
: €98,438 €0 [€]
: €87,500 €0 [€]
: €10,938 €0 [€]
Discount Rate : 9.0% [%] The Discount Rate used by your business
€9,426 €0 [€]
€12,500 €0 [€]
Additional Information & Tips
In addition to saving money by operating more energy efficient equipment, you can improve cashflow by investing in equipment that qualifies for the Accelerated Capital Allowance (ACA) scheme operated by SEAI. This is a tax incentive for companies to purchase energy efficient equipment. To see which equipment qualifies for ACA and to find out more go to www.seai.ie/aca or click on the graphic below. There is also useful technical information available on the qualifying equipment.
What Does this Sheet Do? Calculates the Cashflow savings achievable by availing of Accelerated Capital Allowances for qualifying energy-efficient equipment.
Rule of Thumb: ACA allows companies to write off 100% of the purchase value of specified energy efficient equipment in the year of purchase.
Capital cost of Qualifying Equipment
Actual Year 1 Net Cashflow without ACA
Standard capital allowance allows firms to write off 1/8 of capital cost against tax each year (for 8 years)
Actual Year 1 Net Cashflow with ACA
Accelerated capital allowance allows firms to write off ALL of capital cost against tax in first year
Year 1 Saving in Net Cashflow
= (Actual Year 1 Net Cashflow without ACA) - (Actual Year 1 Net Cashflow with ACA)
PV of standard Capital Allowance
Present Value (PV) to your business of the Standard Capital Allowances, i.e. no ACA
PV of Accelerated Capital Allowance
Present Value (PV) to your business of the Accelerated Capital Allowances, i.e. with ACA
With the standard capital allowance for plant and machinery, the tax saving is spread equally over eight years and therefore also subject to typical monetary devaluation. With the ACA, it is all recovered in the first year, resulting in direct cash flow benefits without degradation of value with time.
In summary, the ACA benefits you by ensuring:
- increased opportunities for further investment- a shorter break-even period on the investment- a higher return on the investment- lower ongoing energy costs through using energy-efficient equipment- a marketing edge through being environmentally friendly- a higher real value on capital allowance return in an inflationary market
Remember that these savings are in addition to the operational savings (energy, € and environmental) associated with using energy efficient equipment.
Source: www.seai.ie/aca
Energy MAP Tool Version History
Version Description of Modification(s) Date
1.0 Draft for Review 5/19/2008
1.1 Release for Energy MAP Day 2 5/19/2008
1.2 Limited cell protection 5/22/2008
1.3 12/18/2008
2.0 Final - for publication 6/9/2009
3.0 Final - updated links and logos to reflect SEAI rebranding 10/5/2010
Addition of "What does this Sheet Do?"Addition of ACA linkAddition of sheets: ACA, Leaks - Energy Wasted
