Search for what a compressed air leak costs and you'll land on a calculator, a chart, or a rule of thumb. Almost all of them are American. They're built around US industrial electricity prices, which have sat somewhere around 7 to 14 cents a kilowatt-hour for years. Plug an Australian site's leak into that formula and you get a number that's real, defensible, and wrong for where you actually operate.
The physics of a leak doesn't change at the border. A hole is a hole, and the air escaping through it costs energy to have compressed in the first place. What changes is the price of that energy. In Australia, commercial and industrial electricity costs materially more than the US figures baked into most of these tools.
The number that actually matters: your effective rate
Australian commercial electricity tariffs vary by state, retailer, and contract, and the headline usage rate on a bill (the cents-per-kilowatt-hour line item) often sits lower than people expect, sometimes in the high teens or low twenties. That's the number a lot of quick estimates use, and on its own it already beats the US figure most calculators assume.
But a usage rate in isolation understates what a kilowatt-hour actually costs a mid-size industrial site. Most commercial and industrial customers in Australia are also billed a demand charge: a separate fee based on the highest rate of power draw recorded during a billing period, charged in dollars per kW regardless of how many hours that peak lasted. Add a reasonable allocation of that demand charge across your actual consumption and the effective cost per kilowatt-hour for a mid-size Australian manufacturer commonly lands somewhere between 28 and 36 cents, sometimes higher, depending on load factor and contract structure.
That's the number a leak should be costed against. Not the line item on page one of the bill: the number you get when you divide the whole electricity spend by the whole electricity consumed.
A leak doesn't know what your usage rate is. It only knows what your bill actually works out to per kilowatt-hour, demand charges included.
Working the numbers: orifice size to annual cost
The starting point for any leak-cost estimate is the same everywhere: an orifice size, a supply pressure, and a compressor efficiency figure to convert the lost air into the electrical energy it took to compress. A commonly used rule of thumb for a rotary screw compressor at 100 PSI (6.9 bar) is somewhere around 4 to 5 CFM of free air delivery per kilowatt of input power, depending on the machine's age, control strategy, and how close it's running to full load.
From there the arithmetic is straightforward: CFM lost, divided by that CFM-per-kW figure, gives you the kilowatts a leak is costing around the clock. Multiply by your effective rate and by the hours the compressor actually runs (not the hours the plant operates, since compressed air systems on cyclical duty may load and unload rather than run continuously) and you get an annual dollar figure.
Here's what that looks like across a spread of common orifice sizes, run at 5,000 hours a year (a typical two-shift operation) and at three points across the realistic Australian effective-rate range:
| Leak size | Approx. CFM lost | Annual cost at $0.28/kWh | Annual cost at $0.32/kWh | Annual cost at $0.36/kWh |
|---|---|---|---|---|
| 1/16″ | 6.5 | $2,020 | $2,310 | $2,600 |
| 1/8″ | 26 | $8,080 | $9,240 | $10,400 |
| 1/4″ | 104 | $32,320 | $36,960 | $41,600 |
| 3/8″ | 234 | $72,800 | $83,200 | $93,600 |
| 1/2″ | 415 | $129,100 | $147,540 | $166,000 |
These are modelled figures, using 4.5 CFM per kW as the mid-point of the compressor-efficiency rule of thumb, the same basis this site's own calculator uses. They're directional, not a substitute for a measured figure at your site. But they illustrate the point: at Australian rates, even a leak the size of a pinhole is not a rounding error, and the sites carrying dozens of them at once are carrying a genuine line item they haven't named.
The demand-charge problem nobody models
Here's the part that most leak-cost content (American or otherwise) skips entirely. A single leak rarely sets a new demand peak on its own; most industrial compressors are already running close to their typical load, and one more small hole in the network doesn't usually push the whole plant's power draw to a new high. What it does is add continuously to the baseline kilowatt-hours a compressor has to deliver, every hour it's leaking, whether the plant is at full production or sitting idle overnight.
On a site with a genuine demand-charge component, that baseline draw still gets billed at the full effective rate (energy charge plus its share of the fixed demand cost), not the lower headline usage rate. That's the gap between what a quick American-style estimate shows and what actually shows up on an Australian power bill. It's not that leaks cause demand spikes. It's that the true cost per kilowatt-hour on a bill with demand charges is higher than the number most people plug into a calculator, and a 24/7 leak accumulates against that higher number every single hour of the year.
What this means for a maintenance budget
None of this requires new instrumentation or a change to how a plant runs. It changes what number goes in front of a leak when someone has to decide whether it's worth fixing now or leaving until the next shutdown. A leak costed at a US rate looks like a minor annoyance. The same leak costed at an honest Australian effective rate (usage plus its share of demand charges) often looks like a line item with its own return-on-investment case, independent of anything else on the maintenance list.
That's also why a single modelled number, however carefully built, is still a model. It assumes a compressor efficiency figure, an hours-of-operation figure, and an effective rate that's close enough to yours to be useful, not a measurement of your actual leak, on your actual air, at your actual site.
Why the real number is a multiple, not a single leak
Every figure above is costed against one leak. That's useful for understanding the mechanics, but it understates the actual exposure on almost any industrial site, because leaks don't occur one at a time: they accumulate across years of vibration, thread wear, and hose fatigue until a plant is carrying dozens of them simultaneously, most below the threshold where anyone would notice by ear.
This is where the US-vs-Australia pricing gap compounds into something bigger than a per-leak comparison suggests. A site carrying twenty leaks in the 1/8 inch range, each individually a modest cost, is looking at an annual figure in the low six figures once run through an honest Australian effective rate, a number that changes the conversation from "is this worth fixing" to "how quickly can this be scheduled." The per-leak table above is the building block. The total on an unmanaged site is usually the number that actually gets a repair budget approved.
Run your own numbers against the site's ROI calculator, which uses Australian rate assumptions by default, and lets you adjust the leak size, the rate, and how many leaks you're carrying to see how the total moves. For where leaks actually accumulate on a typical plant, see the 12 places a leak hides.