A Highly Successful Method To Reduce The Energy Cost For Small, Mid-Size And Large Laundry Operations
- Created on Tuesday, 02 July 2002 13:08
- Written by Staff
Next to personnel, the cost for energy (natural gas) is typically the second largest expense in most laundry operations. While the reduction of personnel costs has been successfully addressed through automation for many years, only the largest laundry operations have been able to take advantage of highly discounted natural gas rates offered by most utilities to customers with standby systems.
The recent surge in gas prices, combined with gas distribution systems that are stretched to the limits of their capacities, and the de-regulation of the natural gas utilities in many states, has the gas utilities looking for ways to optimize the load-distribution in their systems to the highest-possible level, year-round. This has lead to an increase in their willingness to allow more and more of their customers to switch to the so-called “interruptible rate”.
The total cost of natural gas to the end user contains three main components: the commodity cost (natural gas), the pipeline transportation cost, and the cost for the infrastructure at the customer’s site (gas meter). The pipeline transportation cost is paid to the pipeline operator and is fixed throughout a contract-period, regardless how much gas the operator actually transports for the utility. The utility is obligated to “buy” enough pipeline capacity to satisfy the demand on the coldest day of the year when all of their customers consume maximum gas. Naturally, this leads to gross under-use of the purchased pipeline capacity on all other days.
To fill the idle capacity throughout the year, utilities are looking for large users (i.e. laundries with loads of 10 MMBTU/h or more), offering them steep discounts on the natural gas price. Typical discounts range between 25% and 35%, but can go as high as 50%. In return for this year-round discount, customers must agree to be “interrupted” when the utility needs the pipeline capacity for domestic customers or other, non-interruptible users.
To be eligible for the discount rate, users must have a backup system in place which is capable of supplying energy during interruptions.
While most boilers can be operated on gas or fuel oil, there is only one viable alternative for gas?operated dryers and steam tunnels: a propane/air system that generates a mixture of propane gas and air (Synthetic Natural Gas, SNG) that is directly compatible and interchangeable with natural gas. The advantages of these systems are obvious: energy in the form of liquid propane can easily be stored on-site; the SNG “looks” to the laundry equipment just like natural gas; no changes in the equipment configuration are necessary; the switch from natural gas to SNG is seamless and happens in a matter of seconds; SNG is clean; there are no environmental concerns (unlike fuel oil, propane is considered by the EPA to be an environmentally friendly fuel); and the cost of SNG is often the same as natural gas, sometimes even lower.
Packaged SNG standby systems are available for capacities from 7 MM BTU/h to over 300 MM BTU/h. They consist of the propane storage tank, a transfer pump, a vaporizer, and the propane/air mixer. Depending on necessary site work, installation is often accomplished within a few days, and typical amortization times are between one and two years. To minimize out-of-pocket expenses, attractive leasing packages are available. These packages are optimized so that the leasing rates are lower than the savings from the discounted gas rate, providing the laundry operator with instant cost savings and an increase in cash flow.
Quick Rinse - News From Around The World
Faultless Laundry Spending $12 million on New Plant
ST. LOUIS, Mo. — Faultless Laundry Co. is spending almost $12 million on a facility to accommodate its growing St. Louis business which has grown from 28 million pounds to 36 million pounds due to a new contract. Faultless serves more than 30 acute hospitals and over 400 retail medical locations in the St. Louis and Kansas City areas.