WIMES LCC MODEL 03 POSITIVE DISPLACEMENT PUMP UNITS

GUIDANCE NOTES
ISSUE 1 FEBRUARY 2011
Copyright 2011, ESR Technology. All rights reserved. No part of this document may be reproduced in any form electronic or mechanical, including photocopying, recording or any other information storage and retrieval system without permission in writing from the Pump Centre.

The Pump Centre is a Centre of Excellence within ESR Technology, one of the UKs leading engineering, safety and risk consultancies. ESR Technology provides independent technical expertise to help its customers ensure asset integrity, improve machine reliability, manage safety and risk and transfer best practice.

WIMES LCC MODEL 03 POSITIVE DISPLACEMENT PUMP UNITS

GUIDANCE NOTES

Prepared by:

R Marlow

Pump Centre

With technical support and co-operation from the WIMES LCC Working Group consisting of: F Davis/ T Smith T White P Davison R Aubry M Overy B Spence K Gaunt M Kinsey M Keen S Whatley M Rush D Hewerdine J Wright M Ward Please Note This document will be reviewed periodically to take account of feedback from Water Companies and/or Suppliers. If changes to the Specification are necessary, it will be re-issued. Anglian Water Bristol Water NI Water Dwr Cymru Northumbrian Water Scottish Water Severn Trent Water South West Water Southern Water Thames Water United Utilities Veolia Water Wessex Water Yorkshire Water

WIMES LCC MODEL 03 POSITIVE DISPLACEMENT PUMP UNITS CONTENTS LCC ASSESSMENT Background Guidance General Guidance Detailed Guidance WHOLE LIFE CARBON COSTS

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LCC ASSESSMENT Background

This WIMES Life Cycle Cost (LCC) model is intended for use by Water Companies to enable them to assess different positive displacement pump unit suppliers products on an LCC basis. The LCC of a positive displacement pump unit comprises a number of elements, not all of which are embraced by this model. The reason that some elements are excluded (e.g. installation and commissioning costs, downtime costs, environmental costs, decommissioning and disposal costs etc.) is that, for a given pumping application, these factors would be expected to generate similar costs and their inclusion would not therefore assist the process of differentiating between different suppliers products. The elements that are included in the model are as follows: 1. The initial costs, i.e. the purchase price of the pump; 2. The energy costs; and 3. The maintenance costs (planned and unplanned). This model also assesses the carbon footprint of the pump unit in terms of its electricity consumption and the embedded carbon associated with its manufacture and delivery. Whilst included in the model, the pump unit carbon costs are presented separately to the main LCC assessment.

Guidance General Guidance

The following definitions are used in these Guidance Notes: 1. The term Purchaser shall mean the end user of the pump unit or the end users nominated representative; and 2. The term Supplier shall mean the supplier of the pump unit. This LCC model is in the form of a Microsoft Excel spreadsheet. Cells that require parameters to be input by the Purchaser or, alternatively by the Supplier, are highlighted in yellow. All cells that are not highlighted in yellow do not require inputs and are locked. Parameters to be input by the Purchaser are marked (P) and by the Supplier (S). Some of the Purchaser input cells are optional; whereas all of the Supplier input cells require completion. For ease of use, those parts of these Guidance Notes that relate specifically to the Supplier are highlighted in yellow.

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Detailed Guidance
For ease of reference, the headings used in this Section are identical to those used in the model. 1.0 PERIOD OF ANALYSIS AND PUMP UNIT OPERATION 1.1 Period of Analysis (POA) The Purchaser should input the required period of analysis (POA) in years (up to a maximum of 40 years) in cell E16. 1.2 Pump Unit Operation The Purchaser should input the required pump duty in terms of a flow (l/s), differential pressure (bar) and utilisation (%) in cells E21, E22 and E30 respectively. If the pump duty cannot be adequately described by a single operating point, there is the facility to input three additional operating points. The total utilisation should not exceed 100 %. The Supplier should input the pump and motor efficiencies (%) at each of the operating points specified by the Purchaser in cells E24-H24 and E25-H25 respectively. The Purchaser also has the option of inputting the inverter efficiency (if relevant) and details of any other losses in the pump string (e.g. in the supply cable) at each of the operating points in cells E26-H26 and E27-H27 respectively. Based on the flow, pressure, efficiency and utilisation figures input/calculated, the model calculates the following parameters at each operating point: 1. The overall efficiency (%) (E28-H28); 2. The overall power input (kW) (E29-H29); and 3. The pump unit running time (in hours) over the POA (E31-H31). If more than one operating point has been input, the model calculates the pump power output, overall efficiency and overall power input as weighted averages (E32, E33 and E34). 2.0 PUMP UNIT DETAILS The Supplier should should input the pump unit designation in cell E38. 3.0 LCC ASSESSMENT 3.1 Discount Rate for Net Present Cost (NPC) Calculations The Purchaser may, if required, input a discount rate (%) in cell E44 to enable the model to present the results in the form of a discounted cashflow.

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WIMES LCC MODEL 03 POSITIVE DISPLACEMENT PUMP UNITS 3.2 Initial Procurement Costs

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The Supplier should input the pump unit list price, discounted if appropriate, in cell E48. 3.3 Energy Costs 3.3.1 Energy Price and Differential Energy Price Inflation Rate The Purchaser should input the current energy price (p/kWhr) in cell E54 and may, if required, input the differential energy price inflation rate (% per annum) in cell E55. For example, if the general inflation rate is 2.0 % per annum and the energy price is expected to increase at 5.0 % per annum over the POA, a differential energy price inflation rate of 3.0 % per annum should be input in cell E55. 3.3.2 Energy Costs (Assuming no Decrease in Pump Unit Efficiency) Based on the overall power input and running hours figures previously calculated, the model calculates the total energy consumption of the pump unit over the POA (E59). Using this figure, the energy price and, if appropriate, the differential energy price inflation rate, the model then calculates the energy costs of the pump unit over the POA (E60). These figures assume that the original efficiency of the pump unit is maintained over the POA. 3.3.3 Additional Energy Costs Due to a Decrease in Pump Efficiency The Purchaser may, if required, input a figure for the decrease in pump efficiency per 1000 hrs of operation in cell E64. This figure should be based on the Purchasers previous operational experience of the performance of similar pumps, if available. The reason that the Purchaser inputs this figure as opposed to the Supplier, is to ensure that a level playing field is maintained when reviewing different Suppliers submissions. The Supplier may challenge this figure, if he considers that the pump being offerred will deliver a significantly better performance than suggested by the figure input by the Purchaser. The Supplier should provide documentary evidence to support this challenge. Based on the initial average overall efficiency figure in cell E33 and the loss in efficiency per 1000 hrs of operation figure in cell E64, the model calculates the following parameters; 1. 2. 3. 4. 5. The efficiency decrease of the pump unit over the POA (E66); The final efficiency of the pump unit at the end of the POA (E67); The total energy consumption of the pump unit over the POA (E68); The total energy costs of the pump unit over the POA (E69); and The additional energy costs of the pump unit over the POA due to loss in efficiency (E70).

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WIMES LCC MODEL 03 POSITIVE DISPLACEMENT PUMP UNITS 3.3.4 Effect of Efficiency Restoring Overhauls

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The Purchaser may, if required, overhaul the pump unit at regular intervals (running hours) to restore its efficiency back to its original value. If this is the case, the Purchaser should input the overhaul interval (in running hrs) in cell E74. Based on this figure, the model calculates the following parameters: 1. 2. 3. 4. The number of overhauls performed over the POA (F74); The total energy consumption of the pump unit over the POA (E75); The total energy costs of the pump unit over the POA (E76); and The energy costs savings resulting from the overhauls (E77).

The lower the overhaul interval the greater the energy cost savings. This beneficial effect is obviously offset by the costs associated with pump unit overhaul and the Purchaser should optimise his maintenance strategy to achieve the lowest overall LCC. 3.3.5 Energy Costs Summary The energy consumption and energy costs figures that will be used in the LCC assessment are detailed in cells E81 and E84 respectively. These figures obviously depend on whether decrease in pump unit efficiency and/or the effect of efficiency restoring overhauls have been taken into account during the assessment. The model also calculates the specific energy consumption (kWhr/Ml/bar) of the pump unit in cell E82 based on the following: 1. The total energy consumption of the pump unit over the POA; and 2. The differential pressure and flow rate at the rated operating point. 3.4 Maintenance Costs 3.4.1 Labour Price and Differential Labour Price Inflation Rate The Purchaser should input the current price of labour (/manhr) in cell E105 and may, if required, input the differential labour price inflation rate (% per annum) in cell E106. For example, if the general inflation rate is 2.0 % per annum and the price of labour is expected to increase at 5.0 % per annum over the POA, a differential labour price inflation rate of 3.0 % per annum should be input into cell E106. 3.4.2 and 3.4.3 Planned Maintenance The Purchaser should input the following information: 1. The maintenance activities to be performed on the pump unit (D113-D120 and D127-D134); and 2. For each of the activities listed, the interval (in running hours or calendar months, as appropriate) between successive bouts of maintenance (E113-E120 and E127-E134).

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The reason that the Purchaser inputs this information as opposed to the Supplier, is to ensure that a level playing field is maintained when reviewing different Suppliers submissions. The Purchasers maintenance strategy will obviously vary based on a number of factors including: 1. 2. 3. 4. 5. The value of the pump unit; The cost of maintaining the pump unit; The likelihood of pump unit failure; The consequences of pump unit failure; and Previous relevant operational experience.

Small, relatively inexpensive pump units and/or pump units which are difficult to gain access to for maintenance may not be subject to any planned maintenance activities (i.e. they will be subject to reactive/breakdown maintenance), whereas large, expensive pump units and/or those that have critical duties, will typically be subject to a range of planned preventative and predictive maintenance activities. For each of the activities listed by the Purchaser, the Supplier should input the following information: 1. The time taken to perform the activity (F113-F120 and F127-F134); 2. The number of staff required to perform the activity (G113-G120 and G127-G134); and 3. The costs of any spare parts associated with performing the activity (H113-H120 and H127-H134). The model calculates a cost to perform each activity and based on the maintenance interval, a total maintenance cost for this particular activity over the POA. The model then sums all of the costs for the individual activities and calculates a total planned maintenance cost (J121 + J135). The Supplier may challenge the Purchasers proposed maintenance strategy, if he considers that a different approach (in terms of the activities listed and the associated maintenance intervals) will result in a lower planned maintenance cost, provided that this approach will not have an adverse effect on pump unit availability, asset life or LCC. The Supplier should provide documentary evidence to support this challenge.

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WIMES LCC MODEL 03 POSITIVE DISPLACEMENT PUMP UNITS 3.4.4 Unplanned Maintenance The Purchaser should input the following information:

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1. The maintenance activities to be performed on the pump unit (D141-D148); 2. For each of the activities listed, the interval (in running hours or calendar months, as appropriate) between successive bouts of maintenance (E141-E148 or F141-F148) . 3. The time taken to perform the activity (G141-G148); 4. The number of staff required to perform the activity (H141-H148); and 5. The costs of any spare parts typically associated with performing the particular maintenance activity (I141-I148). The reason that the Purchaser inputs this information as opposed to the Supplier, is to ensure that a level playing field is maintained when reviewing different Suppliers submissions. The model calculates a cost to perform each activity and, based on the maintenance interval, a total maintenance cost for this particular activity over the POA. The model then sums all of the costs for the individual activities and calculates a total unplanned maintenance cost in cell K149. The Supplier may challenge the Purchasers proposed maintenance strategy, if he considers that the pump unit being offered will not be subject to the unplanned maintenance activities listed e.g. the pump unit is of an innovative design that does not render it susceptible to blockage at the intervals defined by the Purchaser. The Supplier should provide documentary evidence to support this challenge. 3.4.5 Maintenance Costs Summary The model sums the planned and unplanned maintenance costs and outputs a total maintenance costs figure in cell E152. 3.5 Enhanced Capital Allowance The Supplier should indicate whether or not the pump unit will qualify for an enhanced capital allowance in cell E156. The Enhanced Capital Allowance (ECA) scheme enables the Water Company to claim 100% first-year capital allowance on the purchase price of the motor (and inverter). For pump units, this will depend on whether or not the motor efficiency is classed as IE3 or greater, in accordance with BS EN 60034-30 (pump units with integral motors e.g. submersible pumps do not qualify for ECA). LCC SUMMARY The results of the LCC assessment are finally summarised, in terms of a current and discounted cost, in cells E195 and E197 respectively. The results of the LCC assessment are also presented in the form of a pie chart (current costs only) and a graph of cost vs. years of operation (current and discounted costs).

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WHOLE LIFE CARBON COSTS

For ease of reference, the headings used in this Section are identical to those used in the model. 1.0 OPERATIONAL CARBON EMISSIONS The Purchaser should input the current DEFRA greenhouse gas (GHG) conversion factor (kgCO2e/kWhr) in cell E283. This conversion factor is an annually updated, five year rolling average, which may be obtained from the DEFRA website. It will vary depending on the source of the electricity. The model calculates the operational carbon emissions (tCO2e) of the pump unit over the POA in cell E286 by multiplying the GHG conversion factor by the total energy consumption of the pump unit over the POA (E285). Depending on whether or not the Water Company is a member of the EU Carbon Emissions Trading Scheme (ETS), the Purchaser should input traded or non-traded carbon values into Table 1, for each of the years comprising the POA. The relevant carbon value data may be obtained from the Department of Energy and Climate Change (DECC) website. The model calculates the operational carbon costs of the pump unit over the POA in cell E288. For PR09, to avoid double counting, OFWAT has requested that the operational carbon costs should be adjusted by subtracting the climate change levy (CCL) costs from the carbon costs calculated using the traded/non-traded carbon values. The Purchaser should therefore input the CCL rate (p/kWhr) in cell E289; based on this figure and the total energy consumption of the pump unit over the period of analysis, the model calculates the CCL costs of the pump unit over the period of analysis in cell E290. The model then calculates the adjusted operational carbon costs in cell E291, by subtracting the CCL costs from the carbon costs calculated using the traded/non-traded carbon values. 2.0 EMBEDDED CARBON EMISSIONS The Supplier should enter a figure for the embedded carbon (tCO2e) associated with the manufacture and delivery of the pump unit in cell E308. The model then calculates the cost of this embedded carbon in cell E309 by multiplying this figure by the traded/non-traded carbon value for year 1 of the POA. SUMMARY The results of the whole life carbon costs assessment are finally summarised, in terms of a current and discounted cost, in cells E317 and E319 respectively.

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