Thermal Insulation Association of Canada

While an economic recovery in the United States remains tepid despite relatively positive economic news for the first few months of 2010, commodity prices have rebounded significantly. Energy prices for oil and industrial natural gas are substantially higher than their 2009 lows. High energy prices could undermine any sustained recovery and especially dampen any rebound for manufacturers already battered by the recession. Faced with uncertain energy prices for the foreseeable future, manufacturers and energy managers may want to consider options to reduce price volatility in their energy supply inputs. They may not be in a position to invest in a capital project that uses up scarce resources during a slow business climate. They may likewise need options that generate a payback under short time horizons. One such (often overlooked) energy efficiency strategy option is mechanical insulation.

To corporate energy or plant managers, mechanical insulation may not evoke the same excitement as other industrial systems with gauges and other electronic monitoring controls. However, mechanical insulation's low-tech benefits are hard to ignore. First, they come in countless commercial and industrial applications. They can cover vessels, ducts, boilers, and piping and can crosscut numerous industries. Systems cover both hot and cold scenarios and can ensure thermal, acoustical, and personnel safety.

If wide application of mechanical insulation systems doesn't generate interest in itself, then one should consider the effect they can have on the annual operating budget. Often, mechanical insulation systems have a payback period of 12 months or less, which equates to a 100% annual return. Recently, the U.S. Department of Energy's Industrial Technologies Program (ITP) has been working with the National Insulation Association (NIA)—a long-time partner of ITP—to specifically analyze Save Energy Now energy audits and extrapolate information to put mechanical insulation's benefits into context. Together, ITP and NIA analyzed over 700 Save Energy Now assessments conducted since 2006. Though the audits focused on mechanical insulation for just process heating and steam systems and not insulation's wider potential application for the reviewed plants, savings were significant. Across small, medium, and large plants, mechanical insulation improvements had an approximate 9–12-month payback period. Clearly, mechanical insulation upgrades have the potential to save large quantities of energy and even larger amounts over wider applications, especially considering the opportunities in the commercial market.

Mechanical insulation systems are also among the few manufactured products that save more energy than it takes to produce them. NIA estimates that over a 20-year lifespan, mechanical insulation systems save between 140 and 500 times the energy that it takes for manufacturers to produce them.

Despite the belief that mechanical insulation is not an "exciting" subject, NIA's Executive Vice President and CEO Michele Jones recently said, "It is essential to begin thinking differently about mechanical insulation and the value it can provide." During construction of a new facility, it could be dangerous to consider mechanical insulation under "economic thickness" calculations, given that energy prices have risen substantially over the last 10–20 years. Original cost assumptions may change as energy has become more expensive. Furthermore, value engineering "mechanical insulation almost always means compromising the insulation thickness, changing the materials or system (a cheaper substitute), or eliminating the insulation." The problem with this is that with insulation reduced, "the equipment works harder, thus increasing operating costs" and decreasing the equipment's operating life. You may end up paying more by not investing up front. Usually, insulation is thought of as an expense. Instead, managers should think of it as an investment with returns often in under a year.

Thankfully, resources exist to help facility managers make smart mechanical insulation investments to their systems. Of course, ITP's Save Energy Now assessments can analyze insulation improvements for industrial heating and steam processes. The National Institute of Building Sciences has a mechanical insulation design guide containing several free online calculators (http://www.wbdg.org/design/midg.php). The North American Insulation Manufacturers Association has a free software tool called 3E Plus, available for download online at http://www.pipeinsulation.org. This program can eliminate the complexity in determining the appropriate insulation thickness. It can calculate British thermal units saved, cost of reduction, the available return-on-investment opportunity, and emissions savings for gases such as nitrogen oxide and carbon dioxide. This tool can also analyze the upgrade-versus-replace scenario for a potential project.

Other resources may become more widespread as mechanical insulation gains more attention. Adding insulation beyond what is required by ASHRAE 90.1—the American Society of Heating, Refrigerating and Air Conditioning Engineers' Standard 90.1 (Energy Standard for Buildings Except Low-Rise Residential Buildings) and one of the most recognized building energy standards—has real benefits, and ASHRAE is reviewing higher insulation levels for its next update. Looking to secure Congressional funding, NIA and the International Association of Heat and Frost Insulators and Allied Workers are working together to launch a national education and awareness campaign to promote mechanical insulation as a cost-effective energy-saving option for industry. An initial scope of work for such a program is in development with ITP. Through this program, there will be Webinars—some of which ITP may host—videos, and other marketing efforts to increase the awareness of mechanical insulation's benefits.

"Mechanical insulation is one of the best-kept secrets in energy efficiency, and we need to turn it into one of the first things people think about when they want to save money. It not only saves energy but reduces greenhouse gas emissions and extends the life of equipment. The numbers speak for themselves—we just need to get the word out," says Glenn Frye, president of NIA.

More information can be found at www.insulation.org

PATRICIA WILLIAMS
staff writer

The National Trade Contractors Coalition of Canada (NTCCC) is “encouraged” by response from politicians both at Queen’s Park and in Ottawa to its campaign for enactment of prompt payment provisions.

The coalition of nine national trade organizations is preparing draft prompt payment provisions for review by the Ontario government in the wake of meetings at the legislature in late April.

In Ottawa, changes have been suggested to the federal government contract form to include provisions for trade contractor payments. Currently, the payment clause deals only with the relationship between government and the general contractor.

The coalition last month joined forces with the Building and Construction Trades Department for meetings on the Hill with dozens of MPs and cabinet ministers.

NTCCC spokesman Richard McKeagan said the coalition is encouraged by the fact “that there seems to be an interest in Ontario on the part of MPPs and some fairly senior officials in working with the industry to try and get prompt payment provisions legislated.

“On the federal side, what is also encouraging is that a lot of the politicians that we visited agreed that prompt payment for all industries was extremely important and that they would promote some sort of regulation change to encourage prompt payment to subcontractors.”

Prompt payment is one of the most significant issues facing trade contractors.

During the normal course of business, a trade contractor carries substantial upfront costs, which have “an obvious impact” on all areas of their business when payment is delayed, the coalition said.

“The payment status quo is clearly is not working.”

Bob Blakely, director of Canadian affairs at the Building and Construction Trades Department in Ottawa said his organization supports the prompt payment concept in addition to “fair and appropriate” contractor prequalification processes and no bid shopping.

“It’s pretty tough to run a business when somebody is stretching payment out to 120 days,” said Blakely, whose office is an umbrella group for 14 affiliated AFL-CIO unions in Canada.