Wednesday, January 03, 2007

Beware of "Fugitive" Energy Costs

As the life-blood of industry, energy transforms raw materials into the final products we consume. The same characteristics that make energy valuable—as heat, pressure, and motive power—also make it potentially destructive. This premise allows us to discuss the concept of fugitive energy.*

To begin this discussion, consider the total volume of fuel and power purchased by a facility. From that delivered total, some energy will be used, and some will be wasted. Focus now on the waste: as fuel is converted to heat, and as heat and power are converted to work, some energy simply dissipates to the atmosphere. Energy is wasted when machinery is left running while not actively producing products. But energy is not only “lost to thin air.” Because it dissipates in the form of heat and friction, energy also contributes to the destruction of the machines and fixtures through which it travels. This is referred to here as “fugitive energy.”

Examples of fugitive energy are many. They include the corrosion of the interior of metal smokestacks attributable to fossil fuel combustion gasses that condense to form acids. Undissolved gasses in boiler feedwater promote similar corrosive effects inside steam distribution hardware. Energy is misapplied as “water hammer” when high-pressure steam collides with stagnant water in a distribution main. Water hammer can rip pipes and valves from their moorings with force that can injure or kill bystanders. Poor electric power quality can cause motor drives to overheat and fail prematurely. Pumps rigged to run at full capacity over the weekend (so that maintenance crews won’t have to get up during the football game) are sustaining additional friction that will shorten their operating life. Inefficient light fixtures expend unwanted heat while also causing air conditioning systems to work longer, consume more energy, and fail earlier.

The pecuniary implications of fugitive energy are several fold. A proper accounting only begins with the value of wasted energy purchases. It also includes the premature depreciation of equipment, wasted material and works-in-process, settlement costs associated with personnel injuries, fines assessed when fossil fuel emission limits are exceeded, and the interest costs (and lost revenues) attributable to downtime. Consider also the floorspace given up to equipment that is oversized or redundant. In many instances, the right-sizing of energy-using equipment will reduce energy costs and relinquish floorspace to more productive uses. Floorspace wasted this way also adds to fugitive energy costs.

Industry is generally familiar with energy risk imposed by forces external to their facilities. These include volatile energy price performance, inconsistent quality of energy commodities, discontinuous supply, and technological change. Contrast this to fugitive energy, which is a self-imposed risk suffered by facilities that delay, defer, or otherwise ignore potential energy improvements. Fugitive energy is the kind of energy risk that industry should be most able to control, or in other words, the dollar losses that should be easiest to avoid.

*Thanks to Bill Adams of Flowserve for introducing me to this concept.



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