Energy savings and resource efficiency

Business

Case study: Refrigeration

Find out how a mushroom supplier determined that they would be better off by about $340,000 over 15 years if they invested in an energy-efficient system. 

Situation

A mushroom supplier is seeking to replace their old refrigeration compressor equipped chillers. They are considering two options: two 900 kW screw compressor equipped chillers or two 900 kW high-efficiency compressor equipped chillers.

How does the energy-efficient (EE) system compare to the standard system?

Equipment type Standard EE
Cost to install ($) $233,300 $365,500
Operation and maintenance costs ($ p.a.) $16,378 $8,189
Electricity use (kWh p.a.) 767,000 460,000
Equipment life (years) 15 15
Electricity cost reduction in first year from the system ($)   $61,400
Simple payback period for the system (years)   6.9
Simple payback period for the system, with marginal capital1 (years)   2.5

Item  NPV 
Standard system -$1,290,953
EE system -$952,501
Difference $338,452

Financial option selected: Energy-efficient loan.

The company decides to seek an energy-efficient loan to fund its refrigeration upgrade as this financial option results in the highest expected NPV.

 

1This is the payback period for the energy-efficient (EE) option using the difference in capital outlay between the standard and EE equipment, rather than the full capital outlay for the EE equipment.

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Page last updated: 10 December 2015