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The Cost of Steam

Companies utilizing steam in their everyday processes should know their correct cost of steam for many reasons, all linking to improvement of the bottom line. This knowledge will allow companies to optimize operations and minimize costs, but many companies are unaware of and don’t account for all factors associated with the cost of steam. Some of these factors include the cost of fuel, steam operating pressure, percentage of makeup water/condensate return, and boiler efficiency. Lower fuel costs and a lower operating pressure will lead to a lower cost, and a higher boiler efficiency will minimize costs as well. Boiler efficiency can be calculated using the ASME boiler performance test code.

There are two methods used to calculate the cost of steam. The true cost of steam is calculated by using the loaded steam cost method. The loaded method provides a more accurate steam cost because it takes into account all aspects and expenses of steam production, rather than just the costs associated with boiler operation (as seen with the unloaded method). The unloaded steam cost method can actually be as low as half the cost found by the loaded cost method. Additional factors included in the loaded method include electrical power, chemicals, water and sewer, emissions payments, labor, management, operations, maintenance, waste disposal, and new projects.

For a more detailed explanation about steam cost calculation, check out the article in Process Heating Magazine.

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