**2.2 Case-study: techno-economic model analysis for replacement of HID lamps with LED lamp in oil and gas plant**

In this section, firstly, comprehensive economic study is introduced to replace 241 pieces of 150 W Metal Halide, 103 pieces of 400 W HPS lighting, 20 pieces of 1000 W MH lighting and 162 pieces of 70 W Bollard lighting by equivalent number of LED lighting fittings. Next, economic discussion is to carried out to provide four important economic indicators. Finally, summary, conclusion and recommendation are given.

### *2.2.1 Economic study methodology*

The methodology in this economic study is carried out to estimate the financial benefits of replacement of outdoor HID (High intensity discharge) lights in an oil and gas plant by the equivalent LED (Light Emitting Diodes) lighting fixture. The Study has considered the following factors:

A.Company (Direct) Benefits:

	- d. Natural Gas Sales opportunity
	- e. Pollution Cost

In Company Benefits, calculation for "Luminaire Cost", "Power Consumption" and "Maintenance Cost" are given based on offers and prices collected on 2015– 2016 from different bidders, contractors and suppliers to find the lowest prices.

*Company Benefits*

4 Cost/lamp

a Therefore initial investment for LED

2 No of fixtures in the lighting circuit

3 Total power consumed (kW)

4 Hence total Power consumed per year (kWHr)

8 Average Service life (Hrs)

b Therefore the saving in 10 Years

1 Average Service life (Hrs)

2 Number of Lamps change cycle in 10 Year

4 Cost/lamp

**27**

manpower, crane, dumping etc

manpower, crane, dumping etc. …

**II. POWER CONSUMPTION ANALYSIS S/N Description 150 W MH**

**I. LUMINAIRE PRICE ANALYSIS S/N Description 150 W MH**

*DOI: http://dx.doi.org/10.5772/intechopen.95412*

**Metal Halide [12]**

**Metal Halide [12]**

6 Annual cost 3911.326574 1877.436755

20,000

**\$20,338.90**

**Halide [12]**

Service Life Range 16,000–20,000 60,000–

3 Total No. of Lamps 538 0

7 Service Life Range 16,000–

**S/N Description 150 W MH Metal**

1 Initial Fixture cost \$227.52 \$449.59 2 Total quantity 241 241 3 Total quantity Cost 0 108351.4986

*Economic Applications for LED Lights in Industrial Sectors*

**65 W CREE LED [13]**

**65 W CREE LED [13]**

1 Wattage per fixture 150 72 System Wattage includes losses

241 241

36.15 17.352

5 Cost per kWHr 0.026948229 0.026948229 As agreed with Utility

18,000 80,000

18,000 80,000

60,000– 100,000

> **65 W CREE LED [13]**

> > 100,000

108.9918256 108.9918256 This estimate taking into consideration

0 **\$134,618.53** Additional investment for using LED

145142.25 69668.28 Average daily operating time is considered

2.230555556 0 LEDs have no downtime against MH

108.992 0 The estimate take into consideration

**Remarks**

replacement cost, man power, vehicle, manpower to divert/block traffic, cost of loading/unloading & installation

luminaire.

11 Hours

**Remarks**

lamps which fail arbitrarily

new lamp cost, man power, vehicle, manpower to divert/block traffic, cost of loading/unloading & installation.

In National Benefits, two benefits are considered. First benefit is the gas sales opportunity that will be gained from the reduction of the power consumption in case LED light is used. Natural gas valued using the wholesale price of \$4.618/ MMBtu based on US Energy Information Administration Henry Hub/NYMEX futures prices; Equivalent energy rate of 5.6 ¢/kWhr is used to value the energy produced over 10 years, assuming 1% annual escalation factor and Euro to USD exchange rate of 1.2 [10, 11] Accordingly,

$$\text{AnnualNatural Gas Sales Output} = 1.2 \times 0.056 \times \Delta \text{kWhr} \tag{1}$$

Where Δ kWhr is the reduction in the power consumption.

However, the second benefit is the cost saving due to the reduction of the CO2 emission, and hence less pollution. Carbon credits based on current market is typically 6 euro/ton. Where, CO2 emission is considered to be 0.83 kg/kWh. Assuming Euro to USD exchange rate of 1.2, the annual saving in pollution reduction can be calculated as following [10, 11]:

$$\text{Annual Saving in Population} = \frac{0.83 \times \Delta \text{kWh} \times 6 \times 1.2}{1000} \,\text{s} \tag{2}$$

The economic study is categorized based on HID lamp type that is needed to be replaced in the plant under the study. Typical study is summarized in the following **Table 1** for 150 W Metal Halide luminaire replaced by 65 W GREE LED luminaire. Where.

$$\text{Compancy saving N} = \frac{\text{Annual Compound Paying}}{\text{Total kW for the Replaced HID Light}} \tag{3}$$

$$\text{Total Svaving N} = \frac{\text{Total Net Average Anual Saving}}{\text{Total kW for the Replaced HID Light}} \tag{4}$$

Similar to the typical economic study that is carried out for 150 W Metal Halide lighting, economic study is done for the remaining types of lighting; 103 pieces of 400 W HPS lighting, 20 pieces of 1000 W MH lighting and 162 pieces of 70 W Bollard lighting. Summary Tables (**Tables 2**–**5**) are provided hereinafter to show the Total Benefit and the Economic Analysis for these luminaire types.

Base on the above techno-economic, following **Table 5** is developed to summarize the main project economics indicators that can be used as good guide line for future similar projects that consider the replacement of HID lighting by LED Lighting.

#### *2.2.2 Economic discussion*

Based on the Saving Norm calculated for individual luminaire type in the above from **Tables 1**–**4** the Global Saving Norm can be calculated based on the following Eq.:

$$\text{Global Saving Norm} = \frac{1}{n} \left( \sum\_{1}^{n} Norm\_{n} \right) \tag{5}$$

Where "n" is the number of replaced lighting types in the study. Using Eq. (7), the calculated Global Company Saving Norm is (355.19\$/kW).



From **Table 2**, it can be concluded that replacement of HPS lighting by LED lighting have the highest Total Net Average Annual Saving. Therefore, it is highly recommended to use LED lights instead of HID lights in industrial lighting

It is also observed from **Table** 4 that replacement Bollard Light Lamps by LED Lamp has highest economic value because of the very short lifetime Bollard Light

applications.

**29**

**Table 3.**

Lamps compared with LED lifetime.

**S/N Description 150 W MH Metal**

*DOI: http://dx.doi.org/10.5772/intechopen.95412*

**LED/Annual Company Net Saving**

**LED/Annual Company Net Saving**

**kW (6) [10]**

**Percentage**

**Total Benefits:**

Economic Analysis

**Total Benefits:**

**Economic Analysis**

**Table 1.**

**Table 2.**

*Economic Analysis*

**Total Saving Norm = Total Net Average Annual Saving/**

*Economic Applications for LED Lights in Industrial Sectors*

**Company Payback Period in Years (Initial investment for**

**Company Annual Return on Investment "ROI" in**

**Total Payback Period in Years (Initial investment for**

*Replacement of 400 W HPS lighting with (100–130) W CREE LED.*

*Replacement of 1000 W MH lighting with (426) W CREE XAX LED.*

**Halide [12]**

**Total Annual Return on Investment "ROI" in Percentage 9.29%**

*Summary of economic study for replacement of 150 W metal halide luminaire by 65 W LED luminaire.*

**Total Net Average Annual Saving \$14,899.66** Company Saving Norm = Annual Saving / kW (3) [10] \$184.02 Total Saving Norm = Annual Saving / kW (4) [10] \$360.29

Payback Period in Years 4.632 Year Annual "ROI" in Percentage 21.59%

**Total Net Average Annual Saving \$2543.09** Company Saving Norm = Annual Saving / kW (3) [10] \$ 107.15 Total Saving Norm = Annual Saving / kW (4) [10] \$127.15

Payback Period in Years 10.93 Years Annual "ROI" in Percentage 19.15%

**65 W CREE LED [13]**

**Remarks**

**\$345.83**

**11.27 Years**

**8.88%**

**10.77 Years**


**Table 1.**

*Summary of economic study for replacement of 150 W metal halide luminaire by 65 W LED luminaire.*


#### **Table 2.**

*Replacement of 400 W HPS lighting with (100–130) W CREE LED.*


**Table 3.**

*Replacement of 1000 W MH lighting with (426) W CREE XAX LED.*

From **Table 2**, it can be concluded that replacement of HPS lighting by LED lighting have the highest Total Net Average Annual Saving. Therefore, it is highly recommended to use LED lights instead of HID lights in industrial lighting applications.

It is also observed from **Table** 4 that replacement Bollard Light Lamps by LED Lamp has highest economic value because of the very short lifetime Bollard Light Lamps compared with LED lifetime.


**3. Smart LED lighting system used for long -roads with low-traffic**

Various road classifications are existed in terms of traffic flow. Principal arterials, minor arterials, rural collectors, local roads and very low-volume roads. The last is what our concern in this section. Statistically, for low-traffic roads the flow rate of the vehicles is assumed to be 400 vehicles per day [14]. In these roads, even simple lighting system is not installed mostly, and authorities rely on vehicle lights to illuminate the roads, which putting people life and valuable product passing in these roads under the risk. The main reason of non-lighting system is the desired of saving electrical energy. The main reason of non-lighting system is the desired of saving electrical energy. However, continuously lightened fully roads cause wastage of electricity, as only one vehicles may appear every three or four hours and even more during the night time. Each of these two scenarios are contradicting and are

Several researchers did some projects and published their work related to this topic, however, none of them has considered the lighting automation system on low traffic road. Articles are mainly related to smart or automated main street lighting systems or parking areas. In the following paragraphs, several researches' results is

Some studies proposed a suggestion to use two sensors in order to consume less power with maximized efficiency of a system [15]. Light Dependent Resistor (LDR) sensor is utilized to measure the sun light intensity to control the switching action of LED streetlights, and Passive Infrared Resistor (PIR) motion sensor is used for changing the intensity of LED light when there is no motion of object in the street at mid-night, then all the streetlights are dimmed. However, [16] indicates that LDR and PIR sensor are used for same purpose, but without dimming the light, just switched on or off. In [17], the author worked on this topic using Infrared Resistor (IR) sensors which measure the heat of an object as well as detects the motion, in contrast to previous researchers did. They developed the system using Arduino Uno

Another research effort offered Zigbee Based Smart Street Light Control System Using LabVIEW. Here, movement is detected by motion sensors, communication between lights is enabled by Zigbee technology. So, when a passer-by is detected by a motion sensor, it will communicate this to neighboring streetlights, which will brighten so that people are always surrounded by a safe circle of light [19].

Another author developed Intelligent Street Lighting System Using GSM technology. The aim is to achieve the energy saving and autonomous operation on economical affordable for the streets by installing chips on the lights. These chips consist of a micro-controller along with various sensors like CO2 sensor, fog sensor, light intensity sensor, noise sensor and GSM modules for wireless data transmission and reception between concentrator and PC. The emissions in the atmospheres would be detected along with the consumption of energy and any theft

Automatic street-light control system using wireless sensor networks is also proposed in some design. The system contains lamp station and base station [21]. Each lamp station consists of Arduino Uno board as microcontroller, PIR sensor, emergency switch, LDR sensor, nRF24L01 transceiver, ultrasonic sensor, relay, LED light and a solar panel as energy source. The base station consists of Raspberry

Pi as processor, nRF24L01 transceiver, and a GSM module. The automatic

**for remote industrial plant**

*DOI: http://dx.doi.org/10.5772/intechopen.95412*

*Economic Applications for LED Lights in Industrial Sectors*

**3.1 Survey and problem definition**

extremely significant issues.

of electricity [20].

**31**

discussed, and main points are drawn into attention.

R3 while [18] achieved the same by Raspberry Pi 3 micro controller.

#### **Table 4.**

*Replacement of 70 W bollard lighting with (34) W CREE EDGE LED.*


**Table 5.** *Project economics.*

In **Table 4**, project main economic indicators are illustrated with very attractive total payback period of 8.654 years and Project Annual Return on Investment of 11.55% which is higher approximately 10 times than the international bank rate for dollar deposit. This indicator supports the decision of investment in such scope of work.

In this Section, comprehensive economic study is carried out to calculate the Global Saving Norm for the replacement of High-intensity discharge lamps with different types by LED lamp in an Oil and Gas plant, which includes also the operational cost per year. The study considered Company direct benefits and National indirect benefits in evaluating project economic indicators and in calculating the Global Saving Norm as well. The result is compared and validated with previous research effort. Four important economic indicator were provided in this Section; Global Total Saving Norm (\$433.37/kW), Global Company Saving Norm (\$355.19/kW), typical total payback period of (8.654 year) and typical Project Annual Return on Investment of (11.55%). These four figures are important for both project decision makers and for cash-flow controllers.

#### *2.2.3 Summary and conclusion*

In Section 2 of this chapter, comprehensive economic study is carried out to calculate the Global Saving Norm for the replacement of High-intensity discharge lamps with different types by LED lamp in an Oil and Gas plant as "Case Study" representing industrial plant. The analysis considered Company direct benefits and National indirect benefits in evaluating project economic indicators and in calculating the Global Saving Norm as well. Four important economic indicator were provided in this Section; Global Total Saving Norm (\$433.37/kW), Global Company Saving Norm (\$355.19/kW), typical total payback period of (8.654 year) and typical Project Annual Return on Investment of (11.55%). These four figures are important for both project decision makers and for cash-flow controllers.
