Spend more, save even more

With over 90% of the life-cycle costs of the life-cycle costs associated with fixed-speed pumps being due to energy consumption, the case for variable-speed pumps, which can achieve energy savings of 20 to 50%, is strong indeed.
Value engineering can offer significant benefits for organisations looking to improve energy efficiencies from their building systems, argues LEE TABBATTIt may surprise some that the idea of value engineering dates back as far as the Second World War. Faced with shortages of labour, material and components, the ever-innovative team at General Electric looked for ways in which they could overcome these challenges while maintaining a certain level of quality. Over time, the team observed that the substitutions made often reduced costs, improved the product, or both. What began as an accident of necessity evolved into the systematic process we now know as value engineering. Deliver value Much has changed since the war years. New innovations, technologies and techniques have come (and, in many cases, gone), but the requirement to deliver value has remained. Despite this heritage, there remains much debate around the term ‘value engineering’. Some end users fear that it is just yet more management speak — a tool used by consultants and manufacturers for extracting more money from them for the latest component or technology. Others understand the theory, but struggle to find the resource to put it into practice. Many readily embrace the discipline as a part of their everyday process. But across the board, increasing awareness of the impact of energy consumption on the bottom line has lead to value engineering coming to the fore again. Pressure No one can have failed to notice the pressure being placed on business to address our spiralling energy consumption. Buildings are the biggest fossil fuel polluters in the UK, responsible for nearly half of all carbon-dioxide emissions. According to Carbon Trust research, wasted energy due to poor energy efficiency cost UK businesses £570 million this summer alone. Each year in the UK, more than £13 billion is spent on energy for non-domestic buildings, but by adopting improvements in energy management, it is estimated that most commercial buildings in the UK could save 15 to 20% of their annual energy spend. Combine such savings with the damaging impact of wasted energy on the bottom line and competitiveness from soaring energy prices, and it is plain to see why energy conservation is high on the business agenda. It is easy for Government, consultants and boards to tell businesses that they need to be more efficient. The reality for those at the sharp end can be somewhat daunting, however. Modern buildings are complex, and while turning the heating down a degree or two and encouraging users to turn off equipment and lights that are not in use can provide a quick fix, more often than not, identifying and addressing core areas of inefficiency — such as the performance of components within service systems — is time consuming and expensive. Life-cycle costs Inefficiencies typically result from the ongoing running costs of components, including energy usage and maintenance or wear and tear. Yet, when specifying building-services systems, much attention is focused on capital cost without taking in to account lifecycle costs. It is in this situation where value engineering can reap dividends. Taking pumps as an example, significant savings can often be achieved by replacing fixed-speed devices with variable-speed models. Fixed-speed pumps are invariably specified at a duty greater than that actually required to do the job, for the simple reason that load calculations always err on the side of caution and are rounded up rather than down. The net result is a pump that operates beyond what is required, using more energy than is necessary. Variable-speed pumps work at the load required and can be controlled by variations in pressure, temperature, flow, differential pressure and other measurable parameters. Not only do such pumps achieve energy savings of 20 to 50%, but they also enable other components in the system to function at maximum effectiveness. Bearing in mind that over 90% of the lifecycle costs of fixed-speed pumps are related to energy consumption, you would think that the case for variable-speed pumps is obvious. Common objection However, a common objection against using high-technology products is their relatively high capital cost. The role of value engineering in this scenario is to identify the role of a single component within the overall system and understand how the specification of that component can affect other components and achieve lower lifecycle costs. Life-cycle costing is an integral part of value engineering. Initial product cost must be viewed as only one component of a much bigger picture; the lowest initial outlay does not necessarily offer the best value to the client. For example, given that the cost of a pump is typically less than 20% of the total life costs, an expert evaluation can provide the business cases needed to justify higher initial capital expenditure by proving the lower lifecycle costs. A recent study by a pump manufacturer found that very considerable benefits can be realised from the implementation of variable-speed pumps. The study involved replacing fixed-speed pumps in an existing system with variable-speed models. While the cost of the more sophisticated system was about three times greater than the fixed-speed solution, the vastly reduced energy consumption gives a predicted life-cycle cost over 20 years for the variable-speed system of just 40% that of the fixed-speed design. Such is the vast improvement in energy efficiency that the simple payback for the extra capital and maintenance cost is probably less than a year. There are situations where fixed-speed pumps remain a valid option. In some applications, particularly on smaller commercial and domestic installations, the savings that can be achieved from a variable-speed model are not sufficient to justify the higher capital investment. In other applications, it is possible to engineer a fixed-speed pump so that it operates at the correct load for the application in question. This option creates a component that while being more expensive than a standard fixed-speed model is significantly less than an equivalent variable-speed model — and still goes a long way towards reducing lifecycle energy wastage. The downside to an engineered component, however, is the reduced flexibility it offers in terms of being able to adjust its duty according to seasonal or operational fluctuations in demand. Value engineering provides the information from which an informed decision can be made. Financial implications Manufacturers and contractors are increasingly likely to be asked about the long-term financial implications of the solutions they are recommending. Being able to answer these questions clearly, concisely and persuasively will be a differentiator between those who are doing business as usual and those who are determined to help their clients get better value from building services. Energy efficiency is good for the environment and good for UK business. Value engineering, far from being a buzzword, is a logical path to achieving it. Lee Tebbatt is national sales manager at AMS Pumps. AMS Pumps is part of BSS Industrial, a major distributor of heating and pipeline solutions in the UK.
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