Calculating Savings

How to calculate the savings

The actual savings that can be achieved from upgrading an existing motor to a new (MEPS 2006 compliant) motor will depend on a number of variables, including the:

• Relative efficiencies of the existing and new motors;
• Maintenance and rewind history of the existing motor;
• Motor annual operating hours;
• Cost of electricity;
• Motor repair cost versus replacement costs;
• Type of application; and,
• Applicable bounty.

Relative efficiencies of the existing and new motors

Motors are typically designed to operate at peak efficiency somewhere between 75% and full load.

The efficiency curve of older motors is typically more convex (i.e. the efficiency curve exhibits a more distinct peak and drops off either side of the peak), whereas the MEPS 2006 compliant motors have a flatter efficiency curve. Therefore you need to know more than just the full load efficiencies of the old and new motors when estimating electricity savings.

When estimating the likely savings from replacing an old motor, it is important to know what point to choose on the efficiency curve to make the efficiency comparison. For example, the efficiency difference between an existing and replacement motor can be 2% more when operating at 60% of full load (a typical loading) than when operating at full load.

To estimate the savings requires knowledge of the relative motor efficiencies at the appropriate motor load. Efficiency data from a number of old motor catalogues are available from Data sheets for old motors.

Maintenance and rewind history of the existing motor

The majority of older motors have required repair at some stage during their service.

As motors age the insulation degrades and at some point an electrical failure will occur that requires the stator to be rewound.

Overseas research has shown that a loss of motor efficiency (below its original design efficiency) is the most likely outcome from rewinding. The amount of efficiency loss is dependent on the skill and experience of the rewinder and the quality of the repair process.

When estimating the energy savings, an allowance must be made for degradation of motor efficiency as a result of being rewound.

Motor repair is likely to increase motor losses by approximately 8%. For example, a motor that is 90.0% efficient (and therefore has 10.0% losses) before repair is likely to be 89.2% efficient (10.8% losses) after repair. For more information see http://easa.com/indus/rwstdy1203.pdf.

Motor annual operating hours

The annual cost of operating a motor is directly related to the motor’s annual operating hours. The cost benefit of upgrading an existing motor to a MEPS 2006 compliant motor will increase with operating hours.

When calculating the annual electricity usage cost of a motor you need to know the motor’s:

• shaft power;
• annual operating hours;
• operating load;
• efficiency; and,
• electricity unit cost.

The annual electricity usage operating cost of an electric motor can be calculated as:

Electricity cost =	kW (shaft) x operating load (%) x annual operating hours x electricity cost ($/kWh)
	Efficiency at operating load (%)

Note that this calculation converts the shaft power (or dataplate power) to power demand by dividing the shaft power by the motor efficiency.

To calculate the annual savings from replacing an old motor with a more efficient MEPS 2006 compliant motor, subtract the annual electricity cost of the new motor (calculated using its higher efficiency level) from annual electricity cost of the old motor.

Normally this calculation will be used with the assumption that both motors operate at the same operating load, and an average annual electricity tariff applies.

The benefit of the replacement is seen when you multiply the annual savings by the 15 to 20 years life of the motor.

Cost of electricity

Care needs to be taken to select the appropriate unit cost of electricity. Some electricty companies have price structures that have separate energy and demand charges. Where that is the case, you need to add both components to calculate the cost that should be used in the annual cost calculation.

Motor repair versus replacement costs

The cost benefit of replacing an existing operational motor with a new MEPS 2006 compliant motor is strongly dependent on the cost of the new motor. Be sure that a quoted motor price has received the maximum discount to which you are entitled.

In the majority of cases, the Bounty payment will result in the purchase of a replacement MEPS 2006 compliant motor being more cost effective than repair. The simple payback period will typically be less than one year.

The net benefit of replacing an old operating motor with a MEPS 2006 motor, compared to an alternative of doing nothing, can be seen by calculating the simple payback period for the replacement.

Simple payback period (years)	=	Cost of replacement motor – Bounty payment
		Estimated annual operating cost saving

If the alternative is to repair a failed motor, the simple payback period (relative to that repair) can be calculated as:

Simple payback period (years)	=	Cost of replacement motor – cost of repair – Bounty payment)
		Estimated annual operating cost saving

This calculation assumes that the motor repair will return it to same efficiency level as it had immediately prior to failure.

Type of application

The small speed differences that can exist between old and MEPS 2006 compliant motors may have an impact on energy use (particularly for fan and pump applications). However, the potential increase in energy use from such speed differences are generally more than offset by the efficiency improvement gained by replacing an old motor with a MEPS 2006 motor.

See Variations in Motor Speed for a more detailed discussion.

Applicable Bounty

The Bounty payable is dependent on the size of the motor being removed and whether the motor has failed or is operational at the time. For more details, see Bounty payments.