Cost of Compressed Air

How much does compressed air cost to generate? Compressed air systems often make up a significant percentage of the total electricity consumed by a typical manufacturing facility. Use our compressed air cost calculator below to calculate annual power consumption and costs for your compressed air system. 

Hidden costs related to compressed air generation — such as leaks and system inefficiencies — can drive up energy consumption and operating costs for your industrial air compressor. Understanding where these costs are and taking steps to minimize them can significantly reduce daily operating expenses and the total lifetime cost of ownership for your system. See below for tips to help you reduce energy costs and total cost of ownership for compressed air. 

Understanding the Factors That Influence Compressed Air Costs

When calculating the cost of compressed air, it’s important to look beyond the initial capital expense for the compressor. For industrial compressors — such as reciprocating, rotary vane and rotary screw air compressors — the initial purchase price is only a fraction of the total cost of ownership (TCO). It’s also important to consider daily operating costs and maintenance when calculating the compressed air cost for a typical industrial facility.

Equipment

The initial cost of buying the air compressor system is typically 12% to 15% of the total cost of ownership. This includes the purchase price, installation, piping, electrical work, and any other setup costs. The exact amount can vary depending on the type of compressor (rotary screw, reciprocating, oil-free), its size, and any additional components required for the system. Some things to keep in mind when selecting compressed air equipment: 

• It’s important to choose the best industrial air compressor for your application. Rotary screw compressors have a higher up-front cost than reciprocating compressors but are preferred for continuous, high-volume applications due to their reliability and efficiency. Oil-free compressors can cost quite a bit more than their oil-lubricated counterparts but may be advisable for applications requiring ultraclean air. 
  
• There is often a tradeoff between initial purchase price and operating costs. For example, a variable speed drive (VSD) air compressor may cost more upfront but can save money in the long run by reducing electricity costs for compressed air production. 
  
• Right-sizing your compressed air equipment will reduce your lifetime equipment costs. Purchasing a compressor with higher horsepower (HP) than needed will needlessly drive up costs. On the other hand, if you are anticipating increased needs in the future, it may pay off to invest in excess capacity upfront instead of purchasing a whole new compressor later. 
  

Operation

Operating costs, dominated by electricity usage, account for the largest share of the TCO for the typical compressed air system. According to studies from the U.S. Department of Energy and Compressed Air Challenge, energy use alone typically accounts for 70% to 75% of TCO (and can be even higher if inefficiencies such as air leaks and pressure problems are not addressed). Regular energy audits and efficiency improvements can help reduce this significant portion of the TCO. Factors that influence energy use include: 

• Airflow and pressure: The higher the airflow (cubic feet per minute, or CFM) and pressure (pounds per square inch, or PSI) needed for your application, the more energy the system will consume. For instance, raising pressure from 90 to 100 PSI can lead to a significant spike in energy costs.
  
• Equipment efficiency: A more efficient system will require less electricity to generate the same amount of compressed air, which can drastically reduce energy costs over time. For example, if your compressed air demand fluctuates, a VSD compressor can cut electricity costs by 30% to 70%. 
  
• Air leaks: Most industrial facilities develop leaks in compressed air piping and connections over time. Even small leaks can waste up to 30% of compressed air, driving up energy costs. Regular detection and repair are key to efficiency.
  
• System design: Poorly designed piping with long runs or many bends can cause pressure drops, forcing the compressor to work harder and consume more energy.
  
• Load and duty cycle: A compressor that runs continuously when demand doesn’t require it wastes energy. VSD compressors can match air supply to demand, reducing usage.
  
• Waste heat: Up to 90% of energy used by compressors is converted into heat. Heat recovery systems can capture this waste heat energy for other purposes, lowering costs.
  
• Control systems: Advanced control systems optimize compressor operation by ensuring only necessary units run, reducing overall energy consumption.
  

Maintenance 

Maintenance costs typically make up about 8% to 12% of TCO. This includes routine tasks such as filter changes, lubrication, and cleaning, as well as repairs or part replacements due to wear and tear. Preventative maintenance is key to avoiding breakdowns, which can lead to downtime, reduced productivity, and expensive repairs. A well-maintained compressor will operate more efficiently and have a longer lifespan, helping to keep overall maintenance costs lower in the long run.

Calculate Your Compressed Air Costs

Use our compressed air cost calculator to estimate annual electricity costs for your system.  

To manually calculate the cost of generating compressed air (in terms of electrical power consumption), follow these steps and use the following formula:

1. Determine energy usage: Start by finding the energy consumption of your air compressor, usually provided in kilowatts (kW). For example, a 100-horsepower (HP) compressor typically uses around 74.6 kW (1 HP = 0.746 kW). (If you have multiple compressors or use a VSD air compressor, use the typical running HP for your system during normal operations.) 
   
2. Adjust for duty cycle: The duty cycle represents the percentage of time the air compressor is running versus being idle. For example, a compressor with a 60% duty cycle runs 60% of the time and rests 40% of the time. Multiply the power consumption by the duty cycle percentage to find the actual energy use.
   
3. Operating hours: Calculate the number of hours your compressor operates. For instance, if it runs 8 hours a day, 5 days a week, that’s 40 hours per week, or 2,080 hours per year.
   
4. Electricity rate: Check your local electricity rate, usually expressed in kilowatt-hours (kWh). For example, if your rate is $0.10 per kWh, use this for your calculations.
   
5. Cost formula: Multiply the power consumption (kW) by the number of operating hours and the electricity rate to calculate the total energy cost.
   

Cost = Power Consumption (kW) × Duty Cycle (%) x Operating Hours × Electricity Rate ($/kWh)

Example: If your 100HP compressor uses 74.6 kW, runs for 2,080 hours a year, has a 60% duty cycle, and electricity costs $0.15 per kWh:

Cost = 74.6 kW × 0.60 × 2,080 hours × $0.15/kWh = $13,965/year

If the system runs 8,000 hours per year, costs will be: 

Cost = 74.6 kW × 0.60 × 2,080 hours × $0.15/kWh = $53,712/year

Need help with the compressed air cost calculator? Talk to the experts at Fluid-Aire Dynamics! 

Strategies to Reduce the Cost of Compressed Air

Reducing the cost of compressed air starts with understanding your system and implementing targeted strategies. From upgrading equipment to optimizing your existing system, small changes can lead to significant savings in energy and maintenance expenses. Below are key strategies to help you lower compressed air cost while maintaining performance.

Energy-Efficient Equipment

Upgrading to modern, energy-efficient air compressors can provide substantial cost savings over time. Variable Speed Drive (VSD) compressors, in particular, adjust the compressor’s electric motor speed to match fluctuating demand, cutting electricity costs by as much as 30-70%. These compressors reduce energy waste by eliminating the need for full-power operation during low-demand periods, making them an ideal solution for systems with variable compressed air needs.

Additionally, consider upgrading older or less efficient compressors to newer models with higher electric motor efficiency. Many energy providers offer rebates or incentives for purchasing energy-efficient equipment, further reducing the upfront costs of these upgrades. Investing in energy-efficient air compressors not only lowers operating costs but can also reduce your facility’s environmental footprint.

System Optimization

Optimizing your compressed air system is another powerful way to cut costs, save energy and improve overall efficiency. 

• One of the most effective measures is leak detection and repair. Air leaks can waste up to 30% of the total compressed air output, significantly increasing electricity consumption. Regularly conducting system audits and repairing leaks can provide an immediate reduction in energy costs.
  
• Pressure optimization is another key factor. Running your system at a higher pressure than needed leads to increased energy consumption. For every 2 PSIG of unnecessary pressure, your energy use can increase by 1%. 
  
• Right-sizing your air compressors to match your system’s actual air demand also plays a crucial role in efficiency. An oversized compressor will cycle on and off more frequently, leading to energy waste and increased wear on the equipment. By adjusting the pressure settings and right-sizing your compressor, you can minimize waste and ensure the system runs efficiently.
  
• Another key area to consider is distribution system design. Many older systems use a linear or branched design, which can lead to pressure drops and inefficiencies. Upgrading to a more efficient loop-style distribution system can improve airflow consistency, reduce pressure fluctuations, and lower energy consumption, especially in larger facilities with high air demand.
  
• Capturing waste heat from your compressed air system is an often-overlooked optimization strategy that can lead to significant energy savings. Up to 90% of the energy used by compressors is converted into heat, which is typically lost. By installing a heat recovery system, you can repurpose this energy for other processes, such as heating water or warming your facility, further reducing your overall energy costs and improving the efficiency of your operation.
  

Air Storage 

Integrating compressed air storage tanks into your system can improve stability and reduce costs. Storage tanks act as buffers, holding compressed air and releasing it when demand spikes. This helps to reduce compressor cycling and maintain steady pressure levels throughout your system, preventing the need for the compressor to constantly start and stop.

By reducing the frequency of compressor cycling, storage tanks lower energy consumption and wear on the compressor, extending the equipment’s lifespan. Additionally, maintaining consistent pressure levels across the system helps improve the performance of air-powered tools and machines and provides consistent pressure to pneumatic controls, reducing inefficiencies and production delays.

Preventative Maintenance 

Preventative maintenance (or preventive maintenance) is essential to ensuring long-term savings in both energy and repair costs. Regular tasks such as replacing filters, lubricating moving parts, and checking for wear can keep your system operating efficiently. Neglecting maintenance can lead to clogged filters, higher pressure drop, and friction in moving parts, causing the system to work harder, use more energy, and be prone to breakdowns.

The cost of unexpected breakdowns, including downtime and emergency repairs, far outweighs the relatively low cost of preventive maintenance. A well-maintained air compressor system will not only last longer but will also run more efficiently, reducing your total operating costs. Scheduling regular maintenance checks and addressing small issues before they become major problems can save you significant amounts of money in the long run.

The Value of a Compressed Air Audit

A professional compressed air audit is one of the most effective ways to uncover hidden inefficiencies in your system. Experts can identify air leaks, pressure imbalances, and equipment issues that may be driving up your energy costs without you realizing it. By analyzing your specific facility’s needs, an audit can provide customized recommendations that target these inefficiencies, helping you reduce energy consumption and cut costs.

The insights gained from a compressed air audit allow you to take control of your system’s performance and maximize savings. Many companies see a significant return on investment through reduced energy usage and improved equipment lifespan.

Fluid-Aire Dynamics offers full system audit services, including data logging studies, leak detection and repair, and system optimization recommendations to reduce the cost of compressed air. We can help you find energy-saving opportunities and even find energy incentives from your power company to help cover the costs. 

Contact us for a compressed air audit and start saving today!