improve your bottom line

Fix air leaks and improve your bottom line

Compressed air systems are in nearly every industrial facility in the United States, and the undeniable fact about those systems is: they all have leaks. The U.S. Department of Energy, supported by countless system audits, estimates the average leakage rate is 25 percent. In fact, some plants lose as much as 80 percent of their compressed air to leaks. So, if compressed air systems account for an estimated $5 billion per year in energy costs, that equates to a large amount of energy needlessly wasted and millions (if not billions) of dollars spent on lost air. In addition to added energy consumption, leaks also cost compressed air users by impacting productivity and equipment life.

The cost of leaks

Leak reduction is one of the most cost-effective steps a plant can take to immediately reduce energy costs, improve profitability, and reduce its carbon footprint. Let’s take a closer look at how leaks can translate to large amounts of energy and money being wasted on a daily basis:
1. Wasted electricity. Compressed air leaks are simply demands for air that create no value. Further, they consume flow needed by other productive uses. This often results in significantly decreased pressure at these points of use. To compensate, some users will then turn up the pressure at the compressor, which only makes things worse since a leak will waste more air at higher pressure. We can calculate the annual energy cost for each individual leak with the following formula:
Annual cost of a leak = Leakage rate (cfm) x kW/cfm x operating hours x $/kWh.
Now let’s look at some examples assuming a typical compressor efficiency of 18kW/100cfm (.18kW/cfm), an electric rate of $0.05 per kWh, 100 psig and nearly continuous operation:
  • 1/16″ leak @ 100 psig = 6.5 cfm x .18 kW/cfm x 8,000 hours x $0.05 per kWh => $468 per year
  • 1/8″ leak @ 100 psig = 26 cfm = x .18 kW/cfm x 8,000 hours x $0.05 per kWh => $1872 per year
  • 1/4″ leak @ 100 psig= 104 cfm = x .18 kW/cfm x 8,000 hours x $0.05 per kWh => $7488 per year
Again, the above examples are the cost per leak. It’s easy to see how the total annual cost of all system leaks quickly adds up.
2. Reduced productivity. Excessive leaks can also cause system pressure to fluctuate, which can cause air-operated equipment to not perform as intended. High scrap rates and automatic equipment shutdown are common symptoms of this problem. A leaky system is also ill-prepared to take on additional capacity when surges in production and growth occur, since the system is already working harder than necessary to meet existing production demands.
3. Increased service costs. Maintaining pressure in a leaky compressed air system requires the compressor to run more. More run time means more frequent maintenance and possibly reduced equipment life. The more you have to repair a compressor, the more (often unscheduled) downtime that compressor will have, further reducing productivity. Ultimately, you may end up replacing the compressor sooner because it’s continually working harder than necessary, thus reducing the overall service life of the system.

Find and fix leaks

Too many users simply accept leaks as an unavoidable aspect of compressed air, just a cost of doing business. While it may not be practical to eliminate all leaks, it is not difficult to greatly reduce them. First, you must find them. There are three common methods of leak detection: listening and feeling, the soapy water technique, and ultrasonic leak detection. (Learn more about each method by downloading Kaeser’s white paper on leak detection.)
A leak detection audit creates your action plan, but it is the repairs that will actually create the cost savings. This may seem obvious; however, all too often plants conduct or pay for a leak study and do little with it. Without the follow up, the leak detection is just another cost.
Your goal is to reduce total leakage to less than 10 percent of your total compressed air production. The good news is that the Pareto Principle (80-20 rule) applies: even just fixing the top 20 percent of the leaks can reduce the total compressed air leakage by 80 percent or more.
Start with the big leaks first. Repair main-system leaks during scheduled downtime. If an area can be by-passed during a repair, downtime isn’t necessary.
It’s important to recognize that leak detection and repair is an ongoing program. It will never be “one and done.” As a system ages or is changed, new leaks can occur in areas throughout the system, or previously repaired leaks may need further attention. Having a leak detection audit performed every 6 to 12 months as part of your ongoing efforts will keep you focused on the biggest leaks. Work with whoever performs your leak detection audit to determine the best frequency of future audits for your plant. He or she can help you establish a program that continues to maximize plant productivity and profits through leak detection and repair.
Plant employees also play an important role in your leak detection and repair program. In many cases, even when the audit is contracted out, the repairs are assigned to plant staff. But even if an outside party handles the repairs, employees at all levels should be educated and encouraged to report leaks as they detect them. Oftentimes employees may be aware of leaks but do not realize the financial impact the leaks. Overall profitability should be everyone’s concern, so underscoring the benefits of eliminating leaks and dedicating resources to the task is critical.
An ongoing leak detection audit and repair program will quickly pay for itself through energy savings (and may even be subsidized by local utility incentive programs). Equally important, you will likely see benefits from reduced downtime and better running production equipment. All of these contribute to a stronger bottom line.

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