Purchasing new equipment — whether it is an entire industrial drying system or a new water heater for your home — is no small feat. Many factors should be considered.
Most people know to evaluate factors that demand large capital investments — land, buildings, installation or construction, and the equipment itself — when making a big purchase. Often times, however, long-term considerations such as operational costs, energy consumption, maintenance requirements and equipment longevity are not given enough weight. While budget might direct you to the system with the lowest initial capital cost, you could overlook a system with lower annual operating expenses. The former system may seem like the cost-effective choice, but the latter could save more money overall throughout the life of the system.
To help optimize industrial drying equipment purchases, it is important to understand factors that affect equipment operation costs. Taking these factors into consideration can help identify whether spending more in capital cost would provide a justifiable return.
Energy consumption is the fuel usage and electrical power needed to run the system. Some systems may be powered by fuels like biomass or waste heat, but for the purpose of this article, I’ll look at natural gas and electricity.
Fuel consumption is one of the first aspects of operational costs you should consider. While commodities’ prices change frequently, fuel prices historically show an upward trend. As fuel prices continue to rise, you will see greater savings with a more energy-efficient system.
To put the cost analysis in perspective, consider the concept of a tankless water heater. A key feature of the technology is the design conserves natural gas, thereby lowering the consumer’s gas bill. While tankless water heaters have a higher capital cost, the savings they generate can provide payback in just a few years. According to EnergyStar.gov, some tankless water heater models can save a family of four about $95 per year, or $1,800 over the life of the water heater.
Applying similar logic to drying systems, some dryer models can be considered the tankless water heaters of rotary drum drying systems; in that, they provide a much lower energy cost per pound of water evaporated. Table 1 provides a hypothetical example of how much additional energy consumption can cost.
Dryer manufacturers should be able to provide prospective users with energy usage estimates. Using resources from the U.S. Energy Information Administration, the processor or dryer manufacturer can estimate fuel usage and tailor the calculations to the energy prices in a given state. The table demonstrates how much money increased fuel consumption can cost. For example, a difference in fuel usage by 7 million BTU per hour could add an additional $200,000 per year in operating expenses. Over five years, that adds up to more than $1 million. Evaluating the system’s lifespan can help a user determine if the extra savings will cover the additional capital expense. (The longer the life of the system, the more payback you will see.) Longevity is the key to maximizing your return on investment.
Some drying systems have been in operation for more than 20 years. Referring back to our comparison to tankless water heaters, the U.S. Department of Energy notes the lifespan of a tankless water heater can be 25 to 50 percent longer than a conventional storage heater. Likewise, it is important to invest in a drying system that is durable and will last a number of years. It is always recommended to ask your prospective dryer company for references. Talking to customers that have owned and operated a similar dryer system for more than five years will give you insights on maintenance requirements and basic durability. Remember though, to capitalize on the life of your dryer, it is important that maintenance is performed routinely.
This natural gas combustion chamber with associated rotary drum dryer system has been in service for over 20 years, maximizing return on investment by maximizing longevity.
Maintenance is a sizable factor in estimating operating costs. Working with a trusted maintenance provider can help determine what maintenance is necessary. For example, some companies recommend checking ductwork for buildup annually. With other dryer systems, the ductwork can go more than five years without needing to be fully cleaned. In some cases, equipment life can be extended by retrofitting supports. For instance, if your existing rotary dryer drum is showing signs of stress such as cracking, stiffening rings can extend its life until you are ready to invest in a new system.
While predicting maintenance costs may be difficult, the best way to gauge a system’s quality is to talk to companies currently operating that manufacturer’s equipment. Ask manufacturers for a list of references. Dryer owners and operators can tell buyers firsthand about the system reliability and ease of maintenance. Beyond seeing equipment in operation, take time reaching out to those who have owned and operated that company’s equipment for at least five to 10 years. They will have a good idea of what maintenance is required and how often it is needed.
Operational Budget Considerations
Be sure to consider what your specific needs are when trying to decide on which dryer manufacturer to choose. Using the water heater example, from an energy use standpoint, it might not make sense for a single person to invest in a tankless water heater. A single person uses a fraction of the hot water (and, in turn, energy) a family of four would use.
The same idea goes for a drying system: If you have a small amount of product, it will be harder for operational and capital costs to compete. Consider the energy cost percentage of processing your product. With the lower energy advantage, less of your profit goes to energy costs. Theoretically speaking, if there is a 5 percent difference in the percentage cost of energy, you would not see a great savings with a small capacity, but the larger capacity would show a greater return. For example, saving 10 percent on a $100 purchase ($10), would not be as enticing as saving 10 percent on a $1,000 purchase ($100).
To start looking at the percent of revenue your energy costs, you will need to look at your operational budget. Creating an operational budget is just as important as a capital budget. An operational budget is where you will plan for energy and maintenance costs. In some cases, you might need a larger capital budget to see year-after-year savings on energy and maintenance. Savings can be upwards of $100,000 per year (refer to the energy cost savings table).
Table 1. A less efficient or optimized dryer can require higher fuel consumption, which can increase overall energy operating costs.
Laying out project energy and maintenance costs can give you a better look at projected long-term savings. Going with a lower capital-cost system, whether or not it uses more energy, might save money in the beginning. If it needs extensive repair or even replacement after five to 10 years, however, the capital money saved is essentially lost. Considering these numbers can help justify a larger capital budget.
When you are in the market for a new drying system, remember to review the operational and maintenance costs. While it may seem difficult to justify a larger upfront capital cost, natural gas and energy consumption along with maintenance could be the key to maximizing your return on investment. Additionally, a more expensive system may have a longer lifespan, further increasing your savings. Review your operational budget carefully. In some cases, spending extra money to invest in a system with a higher capital cost but lower operating expenses can pay off in the long run.