By Byron Raal, Founder and Editor of Compressed Air Solutions
When Australia talks about demand-side resources, the same shortlist comes up every time: home batteries, electric vehicles, smart appliances, maybe a virtual power plant stitched across the suburbs. It’s a good list. It is also missing one of the largest controllable industrial loads almost nobody outside a plant room ever thinks about: Compressed air.
Walk into almost any Australian factory and somewhere behind the production line there is a compressor room, quietly converting electricity into pressurised air for tools, actuators, packaging lines and conveyors. Federal equipment guidance puts compressed air at up to 30% of a site’s electricity use, and the Australian Alliance for Energy Productivity’s site data puts the median at about 16%. Across food and beverage, plastics, metals, and timber production, it is routinely one of the largest electrical end uses in the building.
It is also one of the least efficient uses of electricity on the bill. Compression is thermodynamically brutal: 80-90% of the electrical energy that goes into a compressed air system is lost, mostly as heat, before a single tool fires. The 10-20% that survives as useful pneumatic energy then has to cross the plant’s pipework, and that is where the second loss layer starts.
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Efficiency loss through leaks
Leaks. The US Department of Energy’s compressed air program puts leakage at 20-30% of a system’s output in plants that have never run a leak survey, and auditors routinely find worse. The numbers sound abstract until you cost a single hole. A 3mm leak on a 7 bar line wastes between about $3,400 and $6,800 a year at a 30c retail tariff, depending on operating hours; large users on contract rates pay less per unit, so scale the figure to your own rate. Leak flow scales broadly with orifice area, so doubling the hole’s diameter roughly quadruples the loss. Most unaudited plants are carrying dozens of them.
Put the two together and the picture at a typical site is stark: if compressed air is 16% of electricity use and a quarter of it leaks, around 4% of every kilowatt-hour the plant buys is going through holes in pipework. Sites vary, but the direction is consistent, and the waste hides well. There is no line on the electricity bill for compressed air, let alone for the share that leaks, and it rarely gets watched even where it is metered. The loss is inaudible over plant noise, invisible in the accounts, and continuous.
For the energy sector, this is the interesting part. Demand-side programs spend real money chasing flexible and avoidable load, and here is a category of pure waste, large enough in aggregate to matter to networks and demand-side planning, that asks nothing of the customer’s production schedule. Fixing a leak does not defer load to overnight or interrupt a shift. It deletes demand at every hour of the day, peak included, and keeps it deleted for as long as the plant runs a basic leak program. The white certificate schemes in New South Wales and Victoria already pay for exactly this kind of permanent demand reduction; the rest of the demand-side conversation barely mentions it. In a grid paying for new transmission, storage and peaking capacity, the cheapest megawatt is still the one a factory stops wasting.
What’s the solution?
The fixes are unglamorous and fast. A walk-through ultrasonic leak survey finds and tags leaks in a day, and because the saving starts the moment a fitting is tightened or a coupling replaced, payback on a leak program is typically measured in weeks. Over-pressure is the next lever: every extra bar of system pressure adds roughly 6-8% to compressor energy, often quoted at about 7, and many plants run a bar or more above what the equipment needs because nobody has tested the floor. Then there is idle running, compressors left loaded over breaks and weekends serving nothing but the leaks.
A structured assessment under ISO 11011, the standard for scoping and measuring compressed air audits, typically finds 20-35% of system energy in recoverable savings, and the heat that compression throws off can often be recovered for space or water heating on top.
Efficiency schemes have started to notice. Compressed air system upgrades, leak repair, and pressure reduction sit on the New South Wales eligible equipment lists, and compressed air featured in recent federal energy efficiency grant rounds for small and medium manufacturers. The engineering is about as low-risk as efficiency gets. What is missing is attention. Compressed air sits in a blind spot between the energy manager, who sees a single electricity total, and the maintenance team, who hear hissing and call it normal.
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That blind spot says something about industrial demand more broadly. The energy transition debate treats industrial load as a fixed quantity to be supplied, shifted or stored against. A meaningful slice of it is none of those things. It is waste with no constituency, no dashboard and no advocate, sitting behind roller doors in every industrial estate, costing plants money every hour and adding load the grid then has to carry.
The demand-side conversation should make room for it. Not because compressed air is exotic, but precisely because it is not. It needs no new technology, no tariff reform, and no behaviour change from a single household. It needs plant managers to ask one question, what is our compressed air actually costing us, and a system that treats the answer as seriously as it treats a battery on a suburban wall.
The first factory to ask usually finds the equivalent of a small generator running flat-out, year-round, to feed holes in a pipe. Deleting it is the easiest energy project in the building.
Compressed Air Solutions is an independent, vendor-neutral reference on compressed air for Australian industry. It does not sell or install equipment.
