How a switchgear modernization plan can save your company money while helping create a safer workplace that fully leverages modern technology.?
An estimated 60 percent of circuit breakers in the United States are 30 years or older, according to a report from the U.S. Department of Energy. Industrial properties should be assessing their electrical distribution systems and determining whether they are due to upgrade or modernize. ?
A critical aspect of any facility, switchgear helps to ensure a reliable flow of electricity while protecting people and assets. As it ages, the active components can break down, causing downtime or missed production. According to ARC Strategies, two hours of downtime a month costs a typical plant $2.4 million a year.?
While in some instances, your 20- to 30-year-old switchgear may still perform its original functions, aging switchgear lacks the advanced intelligence that would be considered standard in modern facilities. Fortunately, facility managers have affordable options to modernize older equipment for both its performance and safety.
In most situations, the decision to modernize switchgear is based on financial investment. If a building’s electrical infrastructure is performing as expected, why spend the money to upgrade it? The good news is that in most cases, switchgear modernization costs about 40 percent less than an entirely new equipment installation would cost. This is an important point to keep in mind as you assess your current setup and potential upgrade options.?
For other companies, the decision to modernize comes down to a total cost of ownership (TCO) argument. Much like you wouldn’t continue to funnel money into repairing an older car, continuing to maintain switchgear equipment can be an expensive proposition that doesn’t pay off in the long run.?
There's also the question of the availability of spare parts. A lot of the switchgear equipment that’s being used out in the field right now is very old, which means spare parts are no longer readily available. Like any other electrical component, switchgear also reaches an “end of life,” at which point the original manufacturer no longer supports it with spare parts. This is yet another scenario where modernization often emerges as the best path forward.
CapEx Versus OpEx?
Like anything in life, we get complacent when equipment is working properly and not costing us a lot of money to maintain. Unfortunately, companies that ignore their aging switchgear miss out on the opportunity to leverage the Industrial Internet of Things (IIoT), predictive analytics and connectivity innovations that are embedded in modern-day switchgear solutions.?
Other companies assume that the only option is to “rip and replace” their current switchgear assemblies. In other words, they would have to remove their existing electrical infrastructure in order to replace with new equipment. This is a false assumption, but one that tends to scare companies that lack the annual budgets to pay for such an undertaking. By modernizing some or all of their existing infrastructure, companies can minimize costs while reaping the rewards of having a new, modern switchgear setup. ?
When deciding whether to modernize their switchgear, many companies make their decisions based on the standard “CapEx versus OpEx” argument. An operating expense (OpEx) refers to costs incurred during the day-to-day functioning of a business, while a capital expense (CapEx) covers tangible assets that a company will be using in its operations for a year or more. ?
What many organizations may not know is that CapEx expenses can be “planned,” meaning that the company doesn’t necessarily have to make a large upfront investment in modernization. Instead, spend can be planned over time using a phase-in approach. For example, let’s say there’s a pressing need to replace several circuit breakers.?
As long as the existing equipment still functions properly, there’s no reason to buy all of the circuit breakers at once and take a big financial hit. Instead, the purchases can be spread out over several years and prioritized according to the criticality of the circuit breakers that need to be replaced. Because this switchgear modernization approach incurs lower upfront expenses, it can be more affordable than complete upgrades, whose cost can’t be broken up over time.
To Repair or Replace Switchgear? Five Key Considerations
When considering whether to repair or replace existing switchgear, you should consider the following factors:?
Modernizing existing equipment with the latest state-of-the-art circuit breaker solutions — many of which now incorporate IIoT capabilities — is a viable, cost-effective strategy that many companies choose. This Schneider Electric infographic will help you select the best modernization approach for your operations. It walks you through basic questions like: Should you maintain your current systems? Should you do a complete upgrade? Would your operation benefit from modernization? Should you bring in a consultant to help with the process??
As you go through the assessment process, you’ll also want to gather data about your existing switchgear assemblies, what stage of the lifecycle they’re in, how well they’re operating and whether they’re on routine maintenance contracts (or not). If you’re running an older operation where those records simply aren’t available, then you’ll want to hire a third-party consultant to come in and do a thorough assessment before you launch your modernization effort.?
Getting Your Switchgear Ready for Industrial IoT
Defined by Gartner as “the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment,” IIoT is making its way into commercial operations around the globe. For switchgear users, IIoT provides high levels of visibility into equipment monitoring and allows companies to leverage predictive analytics. This, in turn, helps facilities managers make more informed decisions about their operations.?
Companies that want to take full advantage of IIoT will generally need to upgrade significant portions of their existing facilities’ electrical infrastructures. For example, 30-year-old switchgear that may still be operating as expected won’t likely integrate with an IIoT-enabled device. The communication networks simply didn’t exist in the 1980s, so any upgrade that’s made will only connect a portion of your facility.?
This is an important point to keep in mind as you assess the potential limitations of a switchgear modernization plan. The good news is that there are workarounds for this issue. For example, you might consider upgrading an existing circuit breaker with a direct replacement or retrofill (i.e., where both new and old components are modified to work together). From there, you can install a new circuit breaker that incorporates the modern IIoT technology needed for monitoring, fault detection and alarms.?
Even more importantly, you’ll be able to add wireless thermal monitoring sensors that keep tabs on your switchgear’s temperature and health. Thanks to this continuous monitoring, you may be able to better plan and budget preventative maintenance on your electrical equipment. This gives you the power to decide whether to conduct checks more frequently (say, if the equipment is giving you issues) or less often (if the sensors show that it’s operating as expected).?
Extending the Life of Your Switchgear
When companies modernize their switchgear systems, most of the return on investment (ROI) comes in the form of a smaller upfront investment (versus a complete replacement) and the fact that equipment life can be prolonged. In other words, facility managers don’t have to look at 25-year-old switchgear and say to themselves, “Okay, now we need to make a big investment in order to replace all of these components.” By modernizing, the same facility managers can extend the life of that equipment by as much as 20+ years, in some cases.?
Modernizing also reduces the potential for equipment downtime. For example, installing a newer, more reliable circuit breaker can lessen your concerns over a potential breaker failure, emergency or shutdown. Add IIoT to the equation and you’ll have the potential to know long before any such problem exists and be able to prevent it from happening altogether.?
Finally, because older switchgear may have been manufactured using asbestos or may be lacking arc flash protection, modernizing with new equipment helps companies create a safer work environment for employees.?
These are all important points to keep in mind as you map out and prioritize a switchgear modernization plan that will take your company into 2020, and beyond.?
To learn more about how switchgear modernization could improve power system reliability and lower life-cycle costs in your facility, view Graybar and Schneider Electric’s training webinar “Switchgear: To Maintain or Modernize?” on demand now.
Gabriel Arce is currently a Consulting & Modernization Offer Manager in Field Services at Schneider Electric. Prior to Schneider Electric, Gabriel worked for Toshiba as an Engr. Manager for MV/LV AC induction motors. From 2006-2012, Gabriel was at ABB Inc. as an Estimator, Product Manager, and R&D Manager. From 2004-2006, Gabriel was at Schneider Electric in Application Engineering. Gabriel holds a B.S. in Electrical Engineering UTEP and has been an active IEEE member for 8 years.?