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When making any investment decision, particularly when purchasing high-value processing equipment, capital cost is usually one of the first things to be considered. But a far more accurate metric is the Total Cost of Ownership (TCO) or Total Expenditure (totex). This applies as much to heat exchangers and thermal processing systems as any other piece of equipment.

Matt Hale

A focus on capital cost (capex) is inevitably linked with the payback period, which is determined by how long the new equipment will take to recover the initial outlay in terms of increased profitability or cost savings. In some countries, like the UK, there is a general expectation that key business investments should have a payback period of two years or less, even though in most cases the anticipated working life of the new asset is far in excess of this. In contrast, many European-based businesses expect a payback period of between three and five years, which helps account for their higher levels of investment, automation and productivity.

However, there are many other factors which will affect the payback period, most of which are related to operating costs (opex). One of the most important for thermal systems is energy cost, together with any efficiency savings (such as the use of HRS corrugated tube technology or heat recovery and regeneration) which can help to reduce this. Other factors include operational efficiency gains (e.g. more product per line or time period), market demand, input costs, etc.

Because both capital and operating costs contribute to the time taken to achieve a return on investment, more businesses are realizing the benefits of assessing the total cost of ownership (TCO) or Total Expenditure (totex); but when doing so, it is important to appreciate the difference between the two. In general terms, TCO is a general financial concept that accounts for all direct and indirect costs of an asset over its entire lifecycle, whereas totex is a specific term, particularly used in regulated industries like the water sector, that consolidates capex and opex into a single overall budget.

Having said that, both concepts can be used to assess the total costs of an operation (including investment in assets, energy, inputs, labor, maintenance, marketing, etc.) and therefore allow for a more realistic view of the overall financial benefits from investing in equipment and an improved evaluation of the overall return on investment. Focusing on short payback can lead to compromises being made in terms of equipment design and purchasing, resulting in decisions which do not offer the best long-term value for the business. Any investment in heat exchangers or processing systems should be based on it providing the right solution for a business’s technical needs or long-term strategy; not simply because the purchase price fits into an arbitrary payback period.

Whatever the investment decision, the following factors all contribute to TCO over the lifetime of any asset and should be discussed with your heat exchanger supplier to ensure their suggested solution provides real value.

1. Purchase price – In most situations, the purchase price only accounts for between 10-20% of the total cost of ownership of a pasteurization system for example. Solely focusing on this can mean that companies end up investing in a heat exchange solution which may not be fit for purpose.
2. Cleaning and maintenance – Fouling from viscous products and materials can severely reduce the thermal efficiency of heat exchangers, in turn increasing energy and operational costs. Choosing a solution which minimizes fouling, such as HRS’s corrugated tube technology or Unicus or R Series scraped surface heat exchangers, will reduce cleaning costs while maintaining productivity.

Heat exchangers should also be designed so that necessary routine maintenance can be performed as quickly and efficiently as possible. For example, many models of HRS heat exchangers are available with removable tubes (denoted with the letter R in the series name), making inspection and maintenance easy. At the same time, well designed corrugated tube or scraped surface heat exchangers often require less maintenance (such as seal replacement) than many plate or spiral heat exchangers.

1. Speed of changeover – The longer a line or treatment plant is out of action between different products, the greater the financial impact – which can be magnified for businesses with lots of short runs or product changeovers. Well-designed systems will minimize the amount of lost product or the need for complex pigging systems. Integrated (and standalone) clean-in-place (CIP) solutions provide thorough but rapid cleaning, together with the necessary traceability records for hygienic applications such as food, drink and pharma production.
2. Customization – Even when based around a standard model of heat exchanger, aspects such as size, heat transfer, pressure drop, orientation and more should be carefully calculated for each individual situation. Tailoring systems to meet specific briefs also ensures they are designed with efficiency in mind from the outset, both in terms of operational energy efficiency, but also material utilization and cost.
3. Process control systems – The controls which regulate and monitor the processes involved in heat exchange systems are not only essential in ensuring the equipment operates reliably and efficiently, but they also improve levels of operational knowledge, process management and operational efficiency. Process controls also need to operate reliably over the working life of the equipment of which they are a part, so choose tried and tested systems from established manufacturers such as Siemens and Allen-Bradley Products.
4. Energy efficiency – Because heat exchangers are usually employed for energy intensive operations, the largest operating costs are usually related to energy, such as the gas, electricity or other fuel used to heat (or cool) the service fluid. This means that energy efficiency is a key factor when choosing a heat exchanger. A difference of 5-10% in thermal efficiency will quickly translate into direct savings in energy or running costs, and for heat exchanger systems, could be the biggest factor in determining both payback period and TCO.

In order to prevent a focus on short-term returns and over optimistic payback periods from hindering business growth and preventing investment, it is more important than ever to consider all the benefits of new investments in thermal processing equipment across the entire life of the machinery, and within the context of the overall business.