Marketing Tools


Application Markets

A market assessment of natural gas engine-driven compressors was completed by Ray Tison, Ross Nigro, and Robert Sprafka of East Ohio Gas in May, 1996 for the American Gas Association. The report documenting their work is titled “Market Assessment of Natural Gas Engine-Driven Rotary Screw Air Compressors in the United States and Canada.”

The information presented below is excerpted from this report. The report reviewed the current compressor marketplace, the history of marketing engine-driven compressors, and the factors affecting the current economics of the air compressor market. Also presented are projections of future market size, regions of the U.S. and Canada which have the highest market potential, and some simple screening tools to qualify prospective sites.

Some of the more important market statistics are summarized as follows. Rotary screw compressor sales comprise 80% (on a dollar basis) of the 25 hp to 300 hp compressor market. Approximately 16,500 units were shipped in 1995 with small compressors dominating the market. This information is summarized in the two figures below. More than 50% of sales are 50 hp and greater; the focus for the Natural Gas Engine-Driven Air Compressor Consortium. In 1995, 31 natural gas units were shipped, 40 units were estimated for 1996. With an annual growth rate of 1.5% of the electric market, engine-driven compressor sales could be 325 units per year in the year 2001.


U.S. Rotary Screw Air Compressor Shipments



Electric Rotary Screw Air Compressors

Screening Tools

Analysis Scenarios were performed on nine distinct market segments in various areas of the country with different gas and electric rates. The nine segments included combinations of small, medium, and large facilities operating for one, two, and three shifts. The results of the analyses provided the energy cost data required for the simple screening tool.

The simple screening tool was designed with the assumption that the simple payback on the installation of a natural gas engine-driven compressor must be three (3) years or less. Using this criteria, the hurdle rates shown in the figure below may be used as to determine where an engine-driven air compressor makes sense.


Electric Rate Hurdle Criteria

For projects to be located in California, baseload hurdles require an additional penny per kWh to cover the costs of meeting stringent air quality requirements. For heat recovery applications or very low gas costs, a penny per kWh may be subtracted from the hurdle rates.

The figure below is a sample map from the Market Assessment Study showing favorable areas for gas engine-driven compressors based upon these hurdle rates. The “value index” referenced in this exhibit represents the displaceable portion of the electric rotary screw compressor market. Hence, a value index of 0.75 to 1.0 indicates that 75% to 100% of the market could be captured by engine-driven compressors. In this exhibit, the criteria is a three year acceptable payback with heat recovery used. It can be seen that areas of the northeastern and southwestern U.S. are generally good candidates for engine-driven compressor systems.


Areas of Favorable Rates for Engine-Driven Compressors, Three Year Accepted Payback and Heat Recovery Installed

This simple screening tool is useful for a general look at the market; however, a detailed analysis should be performed using site-specific information to verify applicability in most cases.

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