Alternate Energy Systems, Inc.
LPG Vaporizers - LP/Air Blenders - Gas/Gas Blenders - NatGas Backup Systems - PeakShaving Systems
Savings Potential from Standby Plants
How much can you really save if you have a Standby Plant?


While there are many reasons standby systems are used, the principal reason is insurance against interruption of normal NatGas supply. Obviously, the savings from this reason for the installation of a standby plant cannot easily be quantified.

However, just take a short inventory of your most critical plant operations and put monetary amounts to the bullets below.

If NatGas supply is interrupted, what would be your loss/expense for the following

  • Equipment Damage
  • Loss of Production
  • Personnel Expenses
  • Loss of in-process material
  • Costs associated with re-start of production

In many cases, these potential risks are sufficient to justify the installation of a standby/backup system for your NatGas supply.

Another reason for installation of a standby system for your NatGas supply are the incentives that many utility companies offer to industrial customers in the form of "interruptible rates".

Many are not aware that NatGas utilities (local distribution companies [LDC]) purchase or contract from a pipeline, a certain amount of NatGas transportation capacity for a certain period. The contracted capacity has to be sufficient to supply all "firm gas" customers (both residential and industrial) on the coldest day of the year.

By definition, this means that the contracted transportation capacity is under-utilized during the other 364 days in a year.

To better utilize the the contracted transportation capacity, LDCs like to add large gas users as "interruptible" load. If the pipeline capacity that is normally occupied by the interruptible customers is needed to supply gas to "firm" customers, the LDCs ask their interruptible customers to stop using NatGas and to switch to their LP/Air standby system.

As an incentive for these interruptible customers to install a standby system,  the LDCs offer steep discounts on the price of NatGas. The savings are available year-round, regardless whether or not the NatGas is ever curtailed.

Since the "interruptible rate" is enjoyed every day of the year, not just during cold months when gas is most critical, it is possible to amortize the cost of a standby facility, including the installation, over a very short period of time, usually in less than two years.

  With a useful life of a standby system of 15-25+ years, this means that significant energy cost savings are being realized by the owner of the standby system year-after-year, with only upkeep and maintenance as recurring expenses.

The actual savings per cuft or per dekaTherm of NatGas vary largely from country to country, and usually also within a country. As a "rule of thumb", you can expect the rate differential between "firm gas" and "interruptible rate" to be somewhere between 10% and 30%.

For a medium-size user with a monthly NatGas bill of $20,000 this would mean savings between $25,000 and $72,000 per year. Every year, regardless whether or not the NatGas is ever interrupted.

To find out what your potential savings are, contact one of our distributors/installers in your area, or call Alternate Energy Systems.

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