2003: Industrial Motor system optimization projects in the US: An impact study

This study examines data from 41 industrial motor system optimization projects implemented between 1995 and 2001 that were developed into DOE case studies to determine the effect of the energy savings brought about by such projects. The study calculates aggregate energy savings, the net present value (NPV) of project savings, the internal rates of return of project cash flow (IRR) for each project as well as for all projects aggregated together and for projects having large capital expenditures versus those in which the systems were optimized primarily with engineering changes. Finally, the study makes some rough estimates of possible energy savings throughout US industry. For this study, projects are considered financially worthwhile if the NPV of the project savings over a 10-year project life is greater than the project cost. Because the simple payback criterion is the norm in the DOE case studies, it is used as a complementary measure of success. The initial results suggest that the NPV for most of the projects savings in the sample are positive with 10 and 15-year project lives and that many are even positive with 5-year project lives. For projects involving large capital purchases a project life of 10 years is required for a positive NPV while for projects that primarily involve engineering changes a positive NPV was achieved with a 5-year project life. This suggests that motor system optimization projects do not necessarily require large capital expenditures to achieve substantial energy savings