Case Study 1

Chad Pty Ltd (CPL) is preparing to design and implementsustainability systems and processes. You find (as theenvironmental director) that energy is a key resource for businessoperations; first for heating water and second for operational andsecurity lighting. Management of these key resources for businessoperations can save the company money. Therefore the first step isto measure the water flow at the premises and the second step is tocalculate the cost of heating water for 250 days each year. Thesecond key resource for business operations is energy foroperational and security lighting for 365 days each year. Youreport directly to William South, the CFO.

The daily rinsing process for fruit and vegetables requires thetap to run for 40 minutes per day and use 11 liters of water flowper minute. The water is heated to 60^oC. The table belowprovides the number of kWh required to heat one kilolitre of waterto various temperatures

Hot Water Temperature	kWh required to make one kilolitre ofhot water
45oC	56 kWh
50oC	62 kWh
60oC	77 kWh
70oC	98 kWh

CPL electricity usage for lighting for operational and securitypurposes is set out below.

Number of lights:	12 lights
Light Wattage per light: (Fluorescent lights)	40 watts or 0.040 kWh Light Wattage:
Electricity cost per kW Light Wattage:	$0.25 /kWh:
Hours of lighting use per day:	18 hours

Required: Please note: all your answersshould be to two decimal points (cents)

a. If the business uses water heated to 60^oC,assuming the electricity cost per kilolitre is $0.25 per kWh,calculate the annual electricity cost to the business associatedwith the heating of water used to 60^o  

b. If the business uses water heated to 50^oC(assuming the electricity cost per kilolitre is $0.25 per kWh),calculate the dollar saving if this lower temperature is used.  

c. You are considering fitting the tap with a flowrestrictor that will reduce water flow to 5 litres of water flowper minute. You expect run the tap still for 40 minutes per day.Calculate the electricity cost if the reduced water flow was heatedto (i) 60 degrees and (ii) to 50 degrees.

d. Using your working to answer (a), (b), and (c),calculate the energy cost savings from (i) reducing the water flowwithout reducing the water temperature and (ii) reducing thetemperature without reducing the water flow.  

e. Calculate the annual lighting cost for the Arrow PtyLtd using the following formula

__ lights x ____ kW x _____$/kWh x ____ hrs x _____ days = $______/yr

f. How much can a business save on electricity costs byusing energy-efficient lights if the business replaces the 40-wattfluorescent tubes with 5 watts LED bulbs that could be insertedinto 20 light fittings? Each light fitting costs $5 to supply andinstall.

g. Provide your recommendation(s) to the managingdirector about what energy reduction activities to implement. Useyour answers in a) to f) to support your recommendation to make thegreatest combined energy costs savings. Include capital costs(mentioned in (f) above) of installing new light fittings if yourcalculations show that is the best option.