Investment and Operational Costs

Utility costs, either investment or operational, are among those expenses that actually no one wants to afford. The reasons for that rely on the simple fact that although utilities systems are vital for any industry, their usages, in most of the cases, just represent costs in the company balance. The same thing happens in households, commercial users etc. The only exception is the investment a utility company does, because in this case, utilities production is the very product of the company, its revenue source.

No matter what priority position any utility product or system may have in a company, the smaller the investment or operational cost, the better for results. On average, utility investments may comprise around 25% of the production facility initial capital cost, while utility operational costs can account for approximately one third of energy-related expenses. And the conception of production plant from the drawing-board can significantly increase or reduce the share of utility costs in the whole life span of the industry.

If the process design is more heat integrated, meaning that input and output process flows were conceived to have an optimized heat exchanging network, utilities demands tend to be minimal, either hot or cold. Generation and distribution requirements for these utilities are diminished, implying that utility investment and operational costs share tends to be reduced, in the overall industry capital expenditure. The natural consequence is a general reduction in utility costs. Taking steam demand as an example, less steam also signifies less water demand, fewer chemicals, less piping, smaller boilers and decrease in size of all ancillary equipment and systems. Smaller size means less area for equipment, pipes etc, suggesting that more space should be available for core processes. Needless to say that with smaller utility systems, their operation becomes simpler and resource requirements, like personnel and especially money, in general diminish. And these spare resources can be directed towards core business production.

It is important to emphasize one point mentioned at the beginning. Utilities systems are a priority only in a utility company, where it is the core business. In all others, it can be a sensitive part of the process, but usually doesn't pay the bills. If it is working and supplying demand, it is just fulfilling its purpose; if not, it is impairing the plant's ability to carry out its mission, jeopardizing profitability and subsistence. So, it is possible to conclude that utilities are among those basic resources that hardly anyone pays attention to, except when a shortage happens. But, if appropriately managed, they can help make the difference to results, through energy efficiency.

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