Calculating Return on Investment (ROI) for Power Quality
With Power Quality, perceived cost is a common concern. Whether investing in metering or software or spending dollars on PQ mitigation equipment, there is a definite perception that power quality is expensive. Meanwhile, codes require some power quality investments to be accepted without hesitation or questioning the fundamental requirements. So, let’s dive in and examine how to calculate the ROI of Power Quality.
2 Common Power Quality Investments
Generators are one of the most common examples of a Power Quality investment. Everyone understands the flow of electricity isn‘t guaranteed. Generators are a life safety code requirement. Local fire departments and codes defined in NFPA 110 typically require occupied buildings them. Power is commonly interrupted (sometimes for hours) during storms, fires, earthquakes, or other emergencies.
Uninterruptible Power Supply (UPS)
UPS devices store electrical energy via chemical (batteries) or rotational (flywheels). However, they are intended to keep the flow of electricity going for the short period of time between the loss of utility power and the generator startup. The loss of power duration typically lasts less than 10 seconds. But, with sensitive loads, even short-duration outages cause damage.
Interestingly, APT sees the oversizing of UPS systems as one of the chief causes of poor power quality inside a facility. If the UPS is not sized to match the load, the output of the UPS no longer is a clean size wave. In extreme cases, the UPS won’t synch with the generator supplying emergency power – resulting in the investment failing to deliver when needed most.
Once you get past these two common Power Quality investments, you can separate further improvements into PQ monitoring and PQ mitigation.
Once investing in power quality monitoring instrumentation, many clients feel shocked after realizing how often events happen. Typically, power quality events happen 2-3 times per month. On average one event per month has an impact on businesses. Customers wouldn’t tolerate twelve impacts per year if they’d known the root cause of their issues upfront.
While installing a PQ meter might seem expensive, the date and time-correlated information provided often pays for the meter within the first year. PQ meters often remain in service for 20 years or more. The investment in quality instrumentation becomes a net positive every year.
Adding specific PQ analysis software is a workload decision.
For instance, after…
- Installing the software
- Connecting to each meter
- Downloading the waveforms
- Summarizing all the meters together for each event
…you spend a significant investment of time. Moreover, this process repeats for every PQ event.
Compared to the cost of a systems integrator installing PQ software on a server…
- Available to the whole company
- Automating reports as events happen
…the same decision becomes clear. PQ investments pay for themselves in the first year of installation.
Investments in mitigation equipment to reduce and monitor power quality events are more specific to the cost of an impact than the investment required.
Putting PQ events in terms of dollars and precisely defining the costs of each outage makes calculating an ROI as simple as creating a Pareto chart of your top ten impacts and addressing them one by one.
Mitigation equipment is quoted very specifically ( such as a Surge Protection Device on your substation or as an UltraCapacitor on the controls circuit of your chiller). So, do yourself a favor and understand (using the data from your PQ meter) exactly which PQ events happen at your site. Be proactive. Know how long and how often these events occur.
When your business cannot define the cost of an outage or a PQ event – that is the real problem.
Team up with someone in your business’s finance or yield department and help put real numbers to interruptions. Be careful when trying to quantify “productivity” losses. You can only count scrap or damaged equipment in your cost of interruption since the business has to pay salaries anyway.
Interested in determining the Return on Investment for Power Quality at your business?
Contact us. APT specializes in the measurement and analysis of power quality and designing the best solution to save you money and maximize your ROI.
Andy Taylor, PE
CEO, Applied Power Technologies, Inc.