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What is the real cost of owning a motor?

01 September, 2018

Rob Wood, ABB’s sales manager for LV motors in the UK, examines the true cost of owning and operating an electric motor over a typical 20-year lifespan. His conclusions are startling.

The purchase price of a new motor is normally less than 3% of the total lifecycle costs of the motor. To see the real cost of any electric motor, therefore, you need to consider the total cost of ownership (TCO):

TCO = purchase price + cost of running + cost of not running.

The cost of running is about 70–95% of total costs and is based on the energy price per kilowatt-hour, and the annual running hours over a 20-year lifespan. The cost of NOT running – or the cost of unplanned production stops – is 2-30% of total costs and is based on one major unplanned motor failure over its lifetime.

When calculating the cost of running, the motor’s efficiency is an important factor. For a 315kW motor with a 95.5% efficiency used in a continuous process, the input power on which you will be charged is 329.8kW (315/0.955). If the energy cost is 11p/kWh, and the motor runs for 8,400 hours per year, then the cost of running the motor over a 20-year lifetime is:

329.8 x 0.11 x 8400 x 20 = £ 6,094,704

Compared to the original purchase cost, the cost of running is extremely high (£18,000 vs £6,094,704).

The cost of NOT running is the cost of unplanned downtime each year. A typical motor used in the oil and gas industry can cost an estimated £220,000 per hour if it fails. Assuming one major breakdown of 10 hours in its 20-year lifespan, the cost of NOT running is £220,000 x 10 = £2,200,000. In a continuous process, a single hour-long production break can cost more than 10 times more than the motor that caused it.

Now the total cost of ownership looks like this:

£18,000 + £6,094,704 + £2,200,000 = £8,312,704.

For every £1 spent on purchasing, it could end up costing you more than £450 to own the motor over its lifetime. Even halving your purchase cost to £9,000, has minimal effect on the TCO. But if you can reduce your running cost and cost of not running by 5%, it will have a significant impact:

5% of £6,094,704 + £2,200,000 = £414,735.00.

Clearly, when purchasing an electric motor, the costs of running and not running should be considered in addition to the purchase price.

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