On the Road to 2005

Environmental executives predict what we will find on our journey during this new year.

• By Angela Neville
• Jan 01, 2005

Each January, Environmental Protection asks leading environmental professionals to predict what trends they see for the coming year. The participating executives come from diverse backgrounds and this year tackle such subjects as marketing U.S. environmental goods and services abroad and the growing impact of Internet-based applications on environmental software.

The Asian Market: Business Opportunities for U.S. Companies
By Stephen Blocki, PE

A trend that has been slowly evolving for several years that I now see growing rapidly in the near future is the opportunity presented by the Asian pollution control market. The opportunity stems from rapidly increasing sales, substantial cost savings through low-cost-country fabrication, and from utilizing licensee business models to adjust very quickly as niche opportunities change.

Increasing sales revenue in Asia will be a trend for two basic reasons. Multinational companies are rapidly building facilities in Asia, and, for the most part, are installing pollution controls to meet U.S. standards. Once the expansion of these multinational facilities slows, similar standards will be applied to some extent to local Asian companies. Both steps present a sales opportunity for established equipment companies. Growth could increase initially in China and South Korea.

Whether supplying domestically or to Asia, fabricating basic equipment components in low-cost-countries such as China will result in substantial cost reductions, and will therefore be an increasingly significant trend. Even when including added costs to oversee the work, as well as increased freight, the savings are usually significant. Quality control is a nonfactor if only generic components such as vessels or sheet metal components are fabricated overseas.

I also see the licensee business model as a growing trend in the Asian markets -- most likely Japan -- since domestic suppliers typically have greater market access. Overseas business opportunities tend to arise or subside more quickly than in the United States due to less stable national economies, as well as accelerated efforts to catch up to competing countries. Suppliers must be able to respond quickly to capitalize. The licensee business model means that specialist companies in the United States supply strategic knowledge and key parts, while licensee partners located locally in Asia seek out opportunities, sell the equipment, then provide as much local content as possible. Because of the flexibility of the licensee model and the low overhead necessary to implement, companies can respond rapidly to market change.

Driving a Point: Software is No Longer like a Car
By Lawrence Goldenhersh, JD

Whether it was done during the heyday of "mainframe computing" or during the enlightened age of the personal computer, the purchase of software has always been like buying a car: the product is "old" as soon as you buy it and, with time, it is very, very costly and increasingly more difficult to maintain.

Internet-based applications have changed all of this by allowing the conversion of software from a "thing" a company buys to a service a company can order.

With Internet-based applications such as the Enviance System, companies can order precisely the amount of computing power they need, adjust the computing power upward or downward to match the company's needs at the time, avoid the need to buy and maintain hardware, and leave behind the worries about hardware and software obsolescence. In addition, powerful Internet tools now allow companies to connect these new Internet applications with their existing systems, avoiding the need to abandon the older systems in which they have invested considerable sums of money. This ability to connect the new with the old, allows a company to phase in the replacement of older systems with the Internet-based services, creating an ever growing set of best of breed applications that scale to the precise needs of the business.

This "software as a service" trend is also fundamentally improving the ability of the company-buyer to ensure that the software lives up to the promises that drove the company to purchase the software in the first place. As a service, the software is consumed by the company every day, and every day the software service provider is obligated to honor the promises it made about the service. In this situation, the risk of nonperformance is shifted from the company-buyer, who is paying as it goes, to application provider, who faces cancellation for failure to perform. The closer company-provider relationship also accelerates customer-driven innovation, again benefiting the company-users.

Given the rapidly accelerating rate of change being driven by the Internet, it will not be long before the traditional view of software as a "thing" will melt into history, joining the answering machine and the car phone. At that point, traditional software, like the classic car, will be something that will be owned and maintained by enthusiasts as a weekend hobby, leaving the work to be done by the Internet-based applications purchased as services.

Energy Conservation through More Efficient Motors
By John Malinowski

Brownouts, rolling blackouts, electric utility rates up 53 percent -- all of these things have happened in the last several months and will continue until we energy consumers do something about it. The utilities cannot construct generating facilities as fast as we can change our consumption habits. Even in refineries where co-generation is used for power, energy conservation is more important today than ever.

Electric motor-driven industrial equipment consumes 63 percent of the energy used in U.S. industry according to a U.S. Department of Energy (DOE) report published in 1998. This energy consumption may be reduced by as much as 18 percent if companies adopted "proven efficiency technologies and practices." Much of the savings can come from installing new premium efficient motors in place of older, less efficient designs.

If we were to survey motors used in U.S. industry today, according to DOE data, only about 10 percent of the motors comply with the minimum efficiency levels mandated by the Energy Policy Act (EPAct) that took effect October 1997. Motors with significantly higher efficiency levels above EPAct standards are available for even more energy savings. If we reduced consumption by even half of the 18 percent possible, what would that do to the over-taxed capacity of the utilities?

Cost of Operation
We should consider the lifetime cost of using an electric motor. You will see that its purchase price is miniscule compared to the overall cost of its use. The lifetime cost of the motor includes original purchase price, usually one rebuild, and its electric consumption. On a typical motor operated at full load for 24 hours a day, the purchase price is about 2 percent with the rewind at 0.7 percent of the total lifetime cost. Electricity cost to operate the motor is 97.3 percent of the total.

Consider that a typical 50-horsepower motor costs $25,000 to operate continuously for a year at full load $0.07/killowatt-hour (KWH). Even slight efficiency improvements can result in significant savings. Although $0.07/KWH has been the average nationwide cost of electricity, it has risen since the 1998 DOE report. Costs in California are $0.10 and predicted to go to $0.15/KWH. This clearly shows the fact that investing in a higher efficiency motor up front will pay dividends for years to come.

Let's think about plant maintenance. When an electric motor is taken from service for maintenance, many motors less than 50 to 75 horsepower are simply replaced rather than rebuilt. Larger motors are usually rebuilt, if possible. Before rebuilding, look at the efficiency level of the motor. Is the old motor's efficiency close to what is available today in a premium efficiency motor? If not, why even rebuild it?

Now think about being even more proactive in the search for energy savings. A plant survey and inventory of the motors used, their efficiency, and their duty cycles will begin the process. If motors are not used continuously, change-out to a more efficient motor may not be justified. For those continuous duty motors, premium efficient motors may pay for themselves in energy savings in a matter of months.

Size the Motor for the Application
When using electric motors, over-sizing the motor for an application is not always the best policy when trying to conserve energy. While the oversized motor may run cooler and last longer, it consumes more energy than a motor correctly sized for the application. Premium efficiency motors have flatter efficiency curves and tend to hold their high efficiency levels even at light loads as compared to pre-EPAct level motors and even EPAct level motors.

Some additional considerations about using an oversized motor are its higher initial purchase price, a larger starter is required, and it has higher peak inrush currents. The oversized motor also can produce higher starting torques that may cause additional stress, wear, and tear on the driven equipment. These factors probably outweigh the cooler running motor.

Adjusting the Motor Speed for Greater Energy Savings
The greatest potential for energy savings may be in the utilization of adjustable speed drives, up to 60 percent in some applications. For example, heating and cooling systems can have an adjustable speed drive (ASD) installed to control the fan speed. Instead of operating the motor at a fixed speed and adjusting the airflow by means of dampers and vanes, the motor speed would be adjusted to control airflow. Lowering the motor speed saves significant energy and can be done automatically when the ASD is interfaced with the heating and cooling system control.

Rebates Offer Additional Help
With our government becoming more involved in setting energy guidelines, more efficient electric motors will become more commonplace. The DOE is also looking at other auxiliary equipment such as compressors and pumps where higher efficiencies will result in the need for less power to be used to drive them.

The Consortium for Energy Efficiency (CEE) has developed motor efficiency guidelines that are higher than what the government mandated in EPAct. CEE efficiency levels have been adopted by many utilities as their benchmark for qualifications on motor rebate programs. Check with your local utility on the availability of a rebate program- many offer rebates that amount to 5 to 15 percent of the purchase price of a new premium efficient motor. Most programs also cover addition of Adjustable Speed Drives.

Co-generation Profits
Many refineries utilize co-generation as a source for steam and electrical power. Surplus power is often sold to the utilities. With the high costs of electricity today, this surplus energy is becoming more of a potential profit center. By utilizing energy efficient motors and drives to reduce the refinery's internal consumption, more surplus energy can be made available for resale.

John Malinowski is a drives specialist at Baldor Electric Co. in Fort Smith, Ark. He can be reached by phone at (501) 648.5909 or via e-mail at john_malinowski@baldor.com.

This article originally appeared in the 01/01/2005 issue of Environmental Protection.