Question

Case Study 1

Chad Pty Ltd (CPL) is preparing to design and implement sustainability systems and processes. You find (as the environmental director) that energy is a key resource for business operations; first for heating water and second for operational and security lighting. Management of these key resources for business operations can save the company money. Therefore the first step is to measure the water flow at the premises and the second step is to calculate the cost of heating water for 250 days each year. The second key resource for business operations is energy for operational and security lighting for 365 days each year. You report directly to William South, the CFO.

The daily rinsing process for fruit and vegetables requires the tap to run for 40 minutes per day and use 11 liters of water flow per minute. The water is heated to 60^oC. The table below provides the number of kWh required to heat one kilolitre of water to various temperatures

Hot Water Temperature	kWh required to make one kilolitre of hot water
45oC	56 kWh
50oC	62 kWh
60oC	77 kWh
70oC	98 kWh

CPL electricity usage for lighting for operational and security purposes is set out below.

Number of lights:	12 lights
Light Wattage per light: (Fluorescent lights)	40 watts or 0.040 kWh Light Wattage:
Electricity cost per kW Light Wattage:	$0.25 /kWh:
Hours of lighting use per day:	18 hours

Required: Please note: all your answers should be to two decimal points (cents)

a. If the business uses water heated to 60^oC, assuming the electricity cost per kilolitre is $0.25 per kWh, calculate the annual electricity cost to the business associated with the heating of water used to 60^o   

b. If the business uses water heated to 50^oC (assuming the electricity cost per kilolitre is $0.25 per kWh), calculate the dollar saving if this lower temperature is used.   

c. You are considering fitting the tap with a flow restrictor that will reduce water flow to 5 litres of water flow per minute. You expect run the tap still for 40 minutes per day. Calculate the electricity cost if the reduced water flow was heated to (i) 60 degrees and (ii) to 50 degrees.

d. Using your working to answer (a), (b), and (c), calculate the energy cost savings from (i) reducing the water flow without reducing the water temperature and (ii) reducing the temperature without reducing the water flow.   

e. Calculate the annual lighting cost for the Arrow Pty Ltd using the following formula

__ lights x ____ kW x _____ $/kWh x ____ hrs x _____ days = $______/yr

f. How much can a business save on electricity costs by using energy-efficient lights if the business replaces the 40-watt fluorescent tubes with 5 watts LED bulbs that could be inserted into 20 light fittings? Each light fitting costs $5 to supply and install.

g. Provide your recommendation(s) to the managing director about what energy reduction activities to implement. Use your answers in a) to f) to support your recommendation to make the greatest combined energy costs savings. Include capital costs (mentioned in (f) above) of installing new light fittings if your calculations show that is the best option.

Answer 1

A	B	C	D	E	F	G
2
3		Hot Water Temperature	kWh required to make one kilolitre of hot water
4		45oC	56 kWh
5		50oC	62 kWh
6		60oC	77 kWh
7		70oC	98 kWh
8
9		a)
10
11		Number of days a year	250
12
13		Time for which tap is run	40	min per day
14		Water flow rate	11	litres per min
15
16		Water Used per day (Litre)	440	=D13*D14
17		Water used per year (Litre)	110000	=D16*D11
18
19		kWh required to make 1000 litre of hot water at 60 deg	77
20
21		kWh required to make 110,000 litre of hot water at 60 deg	8470	=D19*(D17/1000)
22
23		Thus KWh required to heat water annually is	8470
24		Cost per KWh	$0.25	per KWh
25
26		Total annual electricity cost if water is heated at 60 deg	$2,117.50
27
28		b)
29
30		Number of days a year	250
31
32		Time for which tap is run	40	min per day
33		Water flow rate	11	litres per min
34
35		Water Used per day (Litre)	440	=D32*D33
36		Water used per year (Litre)	110000	=D35*D30
37
38		kWh required to make 1000 litre of hot water at 50 deg	62
39
40		kWh required to make 110,000 litre of hot water at 50 deg	6820	=D38*(D36/1000)
41
42		Thus KWh required to heat water annually is	6820
43		Cost per KWh	$0.25	per KWh
44
45		Total annual electricity cost if water is heated at 50 deg	$1,705.00
46
47		Cost Saved	=Cost of heating to 60 deg - Cost of heating to 60 deg
48			$412.50	=D26-D45
49
50		Hence by reducing the temperature from 60deg to 50 deg cost saved is	$412.50
51
52
53		c)
54		Number of days a year	250
55
56		Time for which tap is run	40	min per day
57		Water flow rate	5	litres per min
58
59		Water Used per day (Litre)	200	=D13*D14
60		Water used per year (Litre)	50000	=D16*D11
61		i)
62		kWh required to make 1000 litre of hot water at 60 deg	77
63
64		kWh required to make 50,000 litre of hot water at 60 deg	3850	=D62*(D60/1000)
65
66		Thus KWh required to heat water at 60 deg annually is	3850
67		Cost per KWh	$0.25	per KWh
68
69		Total annual electricity cost if water is heated at 60 deg	$962.50
70		ii)
71		kWh required to make 1000 litre of hot water at 50 deg	62
72
73		kWh required to make 50,000 litre of hot water at 50 deg	3100	=D71*(D60/1000)
74
75		Thus KWh required to heat water annually is	3100
76		Cost per KWh	$0.25	per KWh
77
78		Total annual electricity cost if water is heated at 50 deg	$775.00
79
80		d)
81
82		i)
83		Cost saved by reducing the water flow without reducing the temperature	=Annual cost of Heating water at 60 deg without reducing water flow -Annual cost of Heating water at 60 deg with reduced water flow
84			$1,155.00	=D26-D69
85
86		Hence Cost saved by reducing the water flow without reducing the temperature	$1,155.00
87
88		i)
89		Cost saved by reducing by reducing temperature without reducing the water flow	=Annual cost of Heating water at 60 deg without reducing water flow -Annual cost of Heating water at 50 deg without reducing water flow
90			$412.50	=D26-D45
91
92		Hence Cost saved by reducing by reducing temperature without reducing the water flow	$412.50
93

Formula Sheet

A	B	C	D	E	F	G
2
3		Hot Water Temperature	kWh required to make one kilolitre of hot water
4		45oC	56 kWh
5		50oC	62 kWh
6		60oC	77 kWh
7		70oC	98 kWh
8
9		a)
10
11		Number of days a year	250
12
13		Time for which tap is run	40	min per day
14		Water flow rate	11	litres per min
15
16		Water Used per day (Litre)	=D13*D14	=D13*D14
17		Water used per year (Litre)	=D16*D11	=D16*D11
18
19		kWh required to make 1000 litre of hot water at 60 deg	77
20
21		kWh required to make 110,000 litre of hot water at 60 deg	=D19*(D17/1000)	=D19*(D17/1000)
22
23		Thus KWh required to heat water annually is	=D21
24		Cost per KWh	0.25	per KWh
25
26		Total annual electricity cost if water is heated at 60 deg	=D23*D24
27
28		b)
29
30		Number of days a year	250
31
32		Time for which tap is run	40	min per day
33		Water flow rate	11	litres per min
34
35		Water Used per day (Litre)	=D32*D33	=D32*D33
36		Water used per year (Litre)	=D35*D30	=D35*D30
37
38		kWh required to make 1000 litre of hot water at 50 deg	62
39
40		kWh required to make 110,000 litre of hot water at 50 deg	=D38*(D36/1000)	=D38*(D36/1000)
41
42		Thus KWh required to heat water annually is	=D40
43		Cost per KWh	0.25	per KWh
44
45		Total annual electricity cost if water is heated at 50 deg	=D42*D43
46
47		Cost Saved	=Cost of heating to 60 deg - Cost of heating to 60 deg
48			=D26-D45	=D26-D45
49
50		Hence by reducing the temperature from 60deg to 50 deg cost saved is	=D48
51
52
53		c)
54		Number of days a year	250
55
56		Time for which tap is run	40	min per day
57		Water flow rate	5	litres per min
58
59		Water Used per day (Litre)	=D56*D57	=D13*D14
60		Water used per year (Litre)	=D59*D54	=D16*D11
61		i)
62		kWh required to make 1000 litre of hot water at 60 deg	77
63
64		kWh required to make 50,000 litre of hot water at 60 deg	=D62*(D60/1000)	=D62*(D60/1000)
65
66		Thus KWh required to heat water at 60 deg annually is	=D64
67		Cost per KWh	0.25	per KWh
68
69		Total annual electricity cost if water is heated at 60 deg	=D66*D67
70		ii)
71		kWh required to make 1000 litre of hot water at 50 deg	62
72
73		kWh required to make 50,000 litre of hot water at 50 deg	=D71*(D60/1000)	=D71*(D60/1000)
74
75		Thus KWh required to heat water annually is	=D73
76		Cost per KWh	0.25	per KWh
77
78		Total annual electricity cost if water is heated at 50 deg	=D75*D76
79
80		d)
81
82		i)
83		Cost saved by reducing the water flow without reducing the temperature	=Annual cost of Heating water at 60 deg without reducing water flow -Annual cost of Heating water at 60 deg with reduced water flow
84			=D26-D69	=D26-D69
85
86		Hence Cost saved by reducing the water flow without reducing the temperature	=D84
87
88		i)
89		Cost saved by reducing by reducing temperature without reducing the water flow	=Annual cost of Heating water at 60 deg without reducing water flow -Annual cost of Heating water at 50 deg without reducing water flow
90			=D26-D45	=D26-D45
91
92		Hence Cost saved by reducing by reducing temperature without reducing the water flow	=D90
93