How much do compressed air leaks cost your facility?

If you haven’t looked into how much compressed air leaks costs your facility, you’re likely missing out on a significant way to cut costs and improve production. 

For decades, manufacturers and other industrial facilities overlooked compressed air leakage in their operations. That's all changed. Now, not only does conserving this resource help save money. Proactive leak repairs also increase production and enhance quality. 

According to the Department of Energy (DOE), compressed air is among the most expensive energy sources in an industrial facility. The typical system efficiency is only around 10 or 15 percent. Meaning, a one-horsepower compressor can require seven or eight hp of electrical power to operate at 100 pounds per square inch (psig).

Meanwhile, according to the DOE, leaks can waste up to 30% of your compressor

That all means air leakage can be a significant expense for your operation. And the energy savings from detecting and repairing air leaks can amount to thousands of dollars a year. 

In this article, you’ll get an estimate of how much the cost of compressed air leaks affect your bottom line. You’ll also learn a formula to calculate a more accurate figure for your facility. We’ll also look at the other effects from leakage as well as ways to address and prevent this problem. 

Average compressed air leakage costs in industrial settings

The estimate for compressed air leakage costs start small and grows exponentially. Here’s one rule of thumb: A leak is large enough where you can hear the air escaping likely costs you $500 a year. 

It’s also possible (even likely) that there’s more than one leak in your facility. Those costs can add up quickly: 

• A 1/64″ diameter leak translates to about $47/year.
• 1/32” diameter leak leads to roughly $198/year.
• A 1/16” diameter one approximates to $800/year.
• A significant 1/4" diameter leak can cost around $12,812/year.

But leak size isn't the only factor affecting cost. Your compressed air system’s operating hours also affect the leakage rate, which in turn influences the energy cost. 

Compressed air leak cost: formula and calculations

Before calculating compressed air leakage cost, let’s start by understanding how much your air compressor costs to run overall:

Operating costs

The DOE offers this formula to calculate the annual cost of compressed air: 

(bhp) x (0.746) x (# of operating hours) x ($/kWh) x (% time) x (% full-load bhp) 

Motor Efficiency 

In this case:

• bhp is the motor full-load horsepower (check your equipment’s specs)
• .746 is the conversion rate from hp to kw
• % time is the amount of time your system runs at this level
• % full-load bhp is the amount time it runs at this level

Using this formula, a 100 hp compressor that works for 5000 hours annually at a cost of $0.07/kWh, with 93% motor efficiency, running 80% fully loaded and 20% unloaded, would have an annual cost of $24,144.

How much does an air leak cost?

Now, let’s calculate the cost of compressed air leakage in your facility. That formula is: 

(#of leaks) x (leakage rate in CFM) x (Kw/CFM) x (operating hours per year) x (cost per kWh)

The DOE provides a leakage rate chart to determine the CFM based on psig and orifice diameter: 

Source: https://www.energy.gov/eere/amo/articles/minimize-compressed-air-leaks

Using this formula, let’s say you have ten leaks due to sharp 1/16-diameter holes. Your system uses 18 kilowatts/100 cfm. The compressor runs at 80 psig with 7,000 hours of operation per year at $0.07. kWh.

10 x 3.1964 x (18/100) x 7,000 x $0.07 = $7,294.

That's how much you would save by fixing these compressed air leaks.

Other effects of compressed air leakage

The financial impact of compressed air leakage is only a part of the story. Other effects include: 

• Quality drop: Air leaks produce inconsistent pressure in the system, which affects machine performance. These unexpected fluctuations can affect the quality of your output, resulting in substandard or even unusual products. 
• Unplanned downtime: Untreated leaks lead to equipment failure, which halts production. With less efficiency, the system must cycle more frequently, resulting in extra wear and tear. Depending on your production costs, you could lost up to $200 every minute a machine is down. 
• Extra maintenance: Fixing air leaks and other mechanical problems resulting from excess wear and tear requires labor hours. That’s time your maintenance team takes away from routine checks and procedures that prevent other problems. In severe cases, there’s the added cost of overtime for the team to keep up with demand. 
• Wasted energy: With compressed air systems operating at low efficiency, a leak can waste a significant amount of electricity every year. 

Recommendations for an efficient compressed air system

• Identify and repair leaks: While you may be able to hear a leak louder than 60 decibels, most are indiscernible to the senses. That’s especially so in a loud production setting. Ultrasonic leak detectors and air flow meters can monitor your equipment for problems. Models that use a system like IO-Link will also provide real-time data and alert you as soon as there’s a problem. 
• Routine maintenance: Check your system regularly for leaks or signs of stress that may lead to a problem later. Bi-annual inspections are usually sufficient. Or, consider quarterly checks if you have old equipment or have had significant problems in the past.
• Optimization techniques: Increasing air compressor efficiency also cuts down on wear and tear, which in turn prevents leaks from forming. Variable speed drives, adding receivers closer to application points,a sequencer for handling multiple compressors, and periodically evaluating the distribution system's design all help optimize your system. These strategies also cut down on your total energy use, even when everything’s running smoothly.