The true cost of owning an electric motor

Whether a buyer of an electric motor is an end-user or original equipment manufacturer (OEM), price is arguably the number one criteria for making a purchasing decision. Yet, an end-user has a lot more at stake and should be considering, as priority, efficiency, life-time running costs and motor reliability, above all else.

Yet these priorities are rarely discussed by the end-user, even with the OEM supplying the end-product. Part of the reason is that it is rarely the same person who selects the motors and pays the energy bill and the other costs of ownership. Motors may be purchased from capital expenditure (Capex) while the running costs come from a different department controlling operational expenditure (Opex). Until businesses address this anomaly, the true costs of owning a motor are hard to realise.

Another realisation is that all electric motors are not the same. If you need a motor for standby duty on a non-essential application, and it will only be used occasionally, then you certainly don’t need to be investing in quality, or even, for that matter high energy efficiency.

But if you work in process industries, such as oil & gas, pulp & paper or iron & steel, where motors are generally operating throughout the year, then reliability should become the prime part of your buying decision. In some of these industries, downtime of a critical application can cost £10,000+ per hour.

The key is to understand the true "cost of ownership”: the cost of owning a motor throughout its life time. Cost of ownership comprises purchase price, cost of running and cost of not running.

Cost of running

The cost of running is mostly accounted for by the energy consumption. A typical motor in continuous operation will, over a 20 year period, consume more than 400 times its purchase price in energy costs alone. While current efficiency legislation, like EU MEPS, is helping to drive down the cost of running by setting minimum levels, you should always examine the possibility of voluntarily investing more on a premium or super premium motor to reduce your running costs even further.

Cost of not running

The cost of not running is the direct cost to a process industry of lost production due to a motor failure or breakdown. Such costs vary widely, depending on the industry, but typically can average around £100,000 per annum. The cost of NOT running comes down to the reliability of the electric motor.

Do you measure up?

Cost of ownership = Purchase price + cost of running + cost of not running

For example, a 45kW, 4 pole, IE2 motor costing £1400, with 94.1% efficiency and running for 6000 hours per annum would cost £2,460,280 over a 20-year life. This assumes an average electricity price of £0.08 and the average downtime cost per annum of £100,000.

When expressed as purchase price over total cost of ownership the resulting ratio is very small. For example, if the ratio was one, then this would mean that the purchase price was the same as the cost of ownership. But in the above example, you end up with a ratio of 0.0006. Here you can see that for every £1 you invest it could end up costing you in excess of £1000 to own the motor over its lifetime.

Given such a high ratio, why is there so much time and effort exerted in price negotiations? The true cost of owning a motor in a critical continuous process application is far more important than the initial purchase price.