Increase Profitability through Motor Management. Jenny Harvey, CEE

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1 Increase Profitability through Motor Management Jenny Harvey, CEE

2 Do you know how many motors operate in the facility? know how repair/replace decisions are made in the facility? know ways to reduce costs and energy use? 2

3 Motor management can help improve the profitability of commercial and industrial facilities. 3

4 Increasing Profitability through Motor Management Today s Key Ideas: Highlight underlying facts of motor ownership. Understand how motor management can improve a facility s bottom line. Tips and tools for getting started. 4

5 #1 Understand a motor s true costs. According to a DOE Study: 23% of all electricity sold in the U.S. is consumed by motor systems = 679 billion kwh Industrial motor usage could be reduced up to 18% through proven technologies and practices = 122 billion kwh, 81 million tons CO 2 U.S. Industrial Motor Systems Market Opportunities Assessment, 1998 Carbon Dioxide Emissions from the Generation of Electric Power in the US,2000 5

6 Top 20 Opportunities for Potential Cost Savings in Industrial Systems $2.5 $2 $1.5 $1 $0.5 $ Pump System Optimization Energy Efficient Motors & Improved Rewind Practices Compressed Air System Optimization DOE 2004 Industrial Energy Savings Roadmap (Preliminary Results) Billions

7 #1 Understand a motor s true costs. Annual energy costs often 5 times the initial purchase price. Energy often 95% of total lifetime operating costs. Assumes 100 hp motor, 94.5% efficiency, 6,300 hours/year, 18-year life, 7.5 /kwh 7

8 #2 Understand the true cost of electricity. Multiple components contribute to the total cost of energy. These components vary widely across the country. Two primary components are: Energy Charge Demand Charge Lowering overall energy use will reduce energy charges and may save on demand, as well. 8

9 #2 Understand the true cost of electricity. 9

10 #3 Understand the benefits of sound motor management. Consider motors as an asset class, not as individual commodity items. Develop policies based on proactive planning and life-cycle costing to minimize downtime and operating costs. Make these policies routine practice. 10

11 Understanding these facts can help change panic to proactive planning: 1. Energy dominates a motor s lifetime costs. 2. Electricity costs include energy and demand charges. 3. Proactive planning can help minimize costs. 11

12 MDM s Approach to Motor Management Motor Decisions Matter SM is a National Awareness Campaign: Increase commercial and industrial facility managers awareness of motor management opportunities. Increase demand for NEMA Premium motors & best practice motor repair. Encourage facility managers to engage in motor planning. 12

13 Motor Decisions Matter Motor Manufacturers ABB Inc. A.O. Smith Electrical Products Company Baldor-Dodge-Reliance Emerson Motors GE Motors Regal-Beloit Corporation Siemens Energy & Automation TECO-Westinghouse Motor Company Toshiba International WEG Electric Motor Corporation Trade Associations Copper Development Association Inc Electrical Apparatus Service Association National Electrical Manufacturers Association Efficiency Program Administrators Alliant Energy Austin Energy BC Hydro ComEd, a division of Exelon Corporation Los Angeles Depart of Water & Power MidAmerican Energy Company National Grid USA NY State Energy Research & Development Authority Northwest Energy Efficiency Alliance NSTAR Electric & Gas Sacramento Municipal Utility District Southern California Edison Wisconsin Department of Administration Xcel Energy Supporting Organizations Advanced Energy Consortium for Energy Efficiency U.S. Department of Energy Diverse, Non-Commercial Credibility 13

14 What is Motor Management? A set of ongoing policies and practices that help commercial and industrial facility managers proactively plan and effectively manage their motor population reducing equipment downtime and energy costs. 14

15 Proactive Planning 15

16 Motor Inventory and Tracking The building Predictive and Preventive Maintenance Planning blocks Spare Motor Inventory Critical Motors First of a motor Policies Based on Life Cycle Costing - Purchasing - Best-Practice Repair management plan. Proactive Repair/ Replace Decision-making 16

17 Motor Inventory and Tracking The building Predictive and Preventive Maintenance Planning blocks Spare Motor Inventory Critical Motors First Policies Based on Life Cycle Costing - Purchasing - Best-Practice Repair of a motor management plan. Proactive Repair/ Replace Decision-making 17

18 The Building Blocks of a Motor Management Plan Available at 18

19 What are the Barriers to Adoption? Lack of Awareness Misperceptions Energy savings are small Premium-efficient motors are not cost-effective First-cost thinking Motor Availability Purchasing and overhead budgets are separate Like-for-like replacement policies; oversize design policies Lack of (or poor implementation of) corporate energy management policies 19

20 How Can You Overcome These Barriers? Explain the Bottom Line Benefits of Proactive Planning: Reduce Energy Costs Reduce Downtime Improve Reliability Increase Productivity 20

21 Make the Business Case Talking the right language to promote proactive motor management. Bridge the gap between operating benefits and financial benefits. Plant Personnel MDM Tools Senior Management 21

22 Make the Business Case Use this Simple Savings Chart for quick cost comparisons. 22

23 Make the Business Case Use The Approach to demonstrate financial opportunity and to introduce relevant concepts. 23

24 Develop a Plan Start today - visit Download the Motor Planning Kit 24

25 Develop a Plan Decide what strategies make sense for your facility Motor Inventory and Tracking Policies Based on Life Cycle Costing -Purchasing - Best-Practice Repair 25

26 Develop a Plan Explore other tools 26

27 Develop a Plan Tap into key resources

28 Develop a Plan Communicate your decisions 28

29 Find Support from Partners MDM sponsors convey a unified, credible message. 29

30 Get Started Today Understand the key facts of motor ownership and operation Make the business case for proactive planning Develop a motor management plan Find local and national support 30

31 Motor Management is a TEAM EFFORT and a Win-Win situation. 31

32 Contact Information Sponsor Contact List Motor Decisions Matter 32

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