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On-site gas generation: when it beats buying cylinders and tankers

A short guide to on-site nitrogen and oxygen generation: how PSA plants work, what to compare, and when making gas on site is cheaper than buying it in.

What on-site generation means

Instead of buying nitrogen or oxygen in cylinders or by tanker, you produce it where you use it from compressed air. The most common method is pressure swing adsorption (PSA), which separates the gas from air using a bed of adsorbent material, and the plant runs on electricity and compressed air.

Where it makes sense

Sites with steady daily use usually gain the most: food packaging, pharma and chemical processing, electronics, heat treatment, and any plant that blankets tanks with nitrogen. If use is occasional or very small, cylinders may still be cheaper once you count the plant cost.

What to compare

Look at the purity you really need, the flow rate, the delivery pressure and the running hours per day. Higher purity costs more energy per unit of gas, so asking for more purity than the process needs raises the running cost for no benefit.

Work out the real cost

Compare the cost per cubic metre of bought gas, including delivery, rental and handling, with the cost of making it: electricity, maintenance, filter and adsorbent replacement, and the plant itself spread over its life. A simple payback calculation usually shows quickly whether the case holds.

Do not forget the utilities

The plant needs clean, dry compressed air, a receiver tank, power and some floor space. Poor air quality shortens adsorbent life, so the compressor, dryer and filters deserve as much attention as the generator.

Plan for backup

Most sites keep a small cylinder or liquid backup connected through a changeover, so production continues during maintenance or a fault.

If you are weighing on-site generation for your plant, we can review your gas use and give you a straight answer on whether it pays.

Published 2026-10-26 by ERGNA Engineering. This is general information, not a design or a legal opinion.