Understanding steam costs for energy conservation projects

The evaluation of energy conservation projects involving steam savings requires that the cost of steam be known. While it is straightforward in principle to calculate the heat load and steam flowrate corresponding to an energy conservation project, it is much less straightforward to calculate the cost of steam saved for the economic evaluation of projects. Various simplified methods for steam costing used in practice can be grossly misleading and lead to incorrect evaluation of the economics of energy conservation projects. This paper demonstrates the complexity of costing steam for complex utility systems. It shows that true steam costs can only be evaluated by an optimization model of the whole utility system. Two plots of marginal steam cost profiles and cumulative cost profiles for different steam savings are developed to help understand the cost reduction of steam savings.