Industrial enterprises across the world could save billions of pounds on electricity bills by implementing variable speed drives (VSDs) on motors in their production environment.

A new report from Siemens Financial Services (SFS) has calculated that up to £2,512m of energy cost savings could be gained in UK industry with the full implementation of VSDs over the next five years.

Europe’s industrial giant Germany could see larger gains of up to £5,193m, more than double the potential savings in the UK. This SFS report, which quantifies potential energy efficiency gains from VSD implementation, highlights just one of several energy efficiency initiatives that could lead to substantial cost savings in the industrial sector.

VSDs optimise the voltage and frequency supply to an industrial motor to change its speed of operation, rather than the traditional method of ‘choking’ constant speed motors, thus greatly reducing consumption of electricity.

In the EU, electric motor driven systems account for approximately 70% of total industrial electricity consumption. In light of the fact that over 95% of the lifetime costs of an industrial motor is the cost of the electricity it consumes, the case for implementing VSDs becomes all the more compelling.

Even though not all motors are applied to variable speed processes, it is estimated that between 50-70% of industrial processes would benefit from this technology. Currently, the global penetration of VSDs (as a proportion of installed motors) is still low, so there is still a long way to go in realising its full energy and cost saving potential.

Darren Riva, head of Energy Efficiency Financing for Siemens Financial Services in the UK, commented, “In light of the steady upward trajectory of electricity prices, greater energy efficiency is becoming an urgent concern for industrial organisations as escalating energy costs will erode profit margins and damage competitiveness.

“The magnitude of the estimated potential savings enabled by VSDs presents an extremely compelling business case for industrial companies to invest in this power saving technology.

“More importantly, keeping in mind that VSD is just one of the many possible energy efficiency initiatives that industrial companies can adopt, the true potential for energy and costs savings in industry is very large indeed.

“The uncertain economic situation in Europe and the restricted access to traditional finance have prompted many companies to defer their investment intentions. However, companies can easily overcome this financial barrier by using alternative methods to fund energy efficient equipment upgrades.

“Asset financing techniques such as leasing and renting aim to offset the monthly cost of the new equipment against the energy savings it delivers across the financing term, effectively making the investment zero net cost or even cash positive.

“Even when a project cannot completely offset the equipment upgrade with energy efficiency cost savings, the financing arrangement can nevertheless subsidise the larger part of the upgrade cost. As up to date equipment may not only reduce energy costs but also boost productivity and extend manufacturing capability, leading to improved revenues and margin, manufacturers should leverage such alternative financing solutions to capture the significant potential cost savings hidden in the industrial processes.”

The most receptive applications for VSDs tend to be pumps, fans and centrifugal compressors, although worthwhile savings may even be achieved on more demanding applications such as mixers, centrifuges, reciprocating compressors and extruders.

In addition to providing substantial energy reduction, other VSD benefits include soft start-up of the equipment, reduced current on starting, reduced mechanical stress and high power factor. Correctly designed VSD systems typically reduce energy consumption between 20% and 70%, depending on the application.