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All geysers will have standing losses according to how effective their insulation is. There's several things that can alter this effectiveness. If the insulation material gets wet either due to the geyser standing outside in the rain / irrigation spray or there's a leaking fitting on top or a leaking cylinder for example then the insulation will not be as effective as it should be.
Everyone should fit a geyser blanket and insulate the first couple of meters of hot and cold pipework. This will pay for itself in a few months of electricity savings.
The work the geyser does would be the same in both cases. It would mak no difference if you heat the larger amount of water to a lower temperature or heat a smaller volume of water to a higher temperature.
The thing that swings it is that the standing losses costs through the cylinder insulation will be far higher if the temperature of the stored water is higher. Set the geyser at 55 Celsius maximum.
A standard digital thermostat does exactly the same as a mechanical one that's originally supplied with the geyser. The only difference is that it uses an electronic probe to sense temperature. You may be able to achieve a smaller differential with an electronic thermostatcwhich might reduce 'overshooting' but this will mean that the element on/off cycle times will be faster and thermostat wear and tear will be greater, mean failure time will be less.
There are electronic temperature controllers (PID) that are predictive in nature. They look at the speed that the temperature is rising or falling aswell as usage trends and make decisions about whether the element should be 'on' or 'off'. These are expensive, complicated and will only save small amounts of energy in an application such as a domestic geyser.
Feeding the initial cold water from the pipework back into the geyser won't save much electrical energy. This cold water will cost almost the same to reheat as new cold water would cost. It would save water possibly, if you were in the habit of running water to drain until it comes hot, but at the expense of a complex plumbing installation and relatively complicated controls. I've not come across the system you describe but it sounds like it would be more suited to new installations rather than a retrofit option.
Hope this helps
Andy
*EDIT*
Sorry about the double post, I got overexcited and jumped in too quick, I didn't see the OP was about restaurants.
I have profiled the energy consumption of numerous commercial restaurants with a view to cutting consumption and the conclusions are almost always the same.
Diachroic 50 watt downlights have been all the rage for the past few years but they are a killer when it comes to the electricity bill. Some restaurants can have in excess of 150 downlights @ 50 watts each often with inductive transformers. If you're being billed in kVAh then they cost a fortune to run and then some. As mentioned above there are LED alternatives that will fit in the same fittings but often the light output, illumination angles and colour frequency of these can be an issue, not to mention the initial cost of re-lamping. There are also compact fluorescent alternatives you might prefer. Both LED and CFL are available in dimmable models but they're difficult to find and expensive. Sometimes they specify that you must use a leading edge or trailing edge dimmer so try one first before you commit to boxes full of them. Note that most LED and CFL globes (bulbs) are not dimmable, if it doesn't say it's dimmable on the box then assume it isn't until proven otherwise. Another word of warning, the cheaper LED lamps with multiple LED's inside them run multiple LED arrangement on a single internal driver which over drives the remaining LED's when the first one goes down so complete failure rapidly follows. Stick to recognised brand names even if they are double the price.
Air conditioning costs a fortune to run, make sure it's turned off overnight. If you have large open doorways to outside areas then install air curtains to keep the cold in and the heat out. Finally the kitchen has an extraction hood that sucks out large quantities of air. If you don't have a supply air system installed to replace this air back into the kitchen then you will be sucking out the airconditioned air from your restaurant. You should have fresh air supplied back into the kitchen to he tune of 90% of the extracted air. (The 10% difference is to keep the kitchen at negative pressure for fire safety purposes.)
Refrigeration costs can be reduced. Make sure that all fridge and freezer doors close properly and the latches work. Keep the door seals in good condition and replace them sooner rather than later if they're damaged. If you have a freezer room then get the defrost cycles optimized. Only use glass dorr fridges if you really need them, if you have them make sure the fluorescent lighting tubes inside them are in polycarbonate sleeves. Empty all under-bar and display fridges into the coldroom at night and switch them off. This can also make a morning stock take easier and improve FIFO procedures.
Insulate geysers and put them on timer clocks.
Stop sloppy procedures like staff using running hot water to defrost food. We've seen this on several occasions and apart from being in breach of HACCP regulations they will empty several geysers of hot water to defrost one box of fish.
Install the push button type taps in the bathrooms, they're more hygienic and stop kids leaving them on.
Make sure extract canopy and supply air fans and air-con switch off at night.
Optimise your morning switch-on and night time switch-off procedures for the kitchen equipment.
Don't leave the restaurant lighting on overnight as security lighting.If you need lights at night install a more efficient option.
Unfortunately solar and other alternative or renewable energy systems aren't a practical option for commercial restaurants at the moment.
Everyone should fit a geyser blanket and insulate the first couple of meters of hot and cold pipework. This will pay for itself in a few months of electricity savings.
The work the geyser does would be the same in both cases. It would mak no difference if you heat the larger amount of water to a lower temperature or heat a smaller volume of water to a higher temperature.
The thing that swings it is that the standing losses costs through the cylinder insulation will be far higher if the temperature of the stored water is higher. Set the geyser at 55 Celsius maximum.
A standard digital thermostat does exactly the same as a mechanical one that's originally supplied with the geyser. The only difference is that it uses an electronic probe to sense temperature. You may be able to achieve a smaller differential with an electronic thermostatcwhich might reduce 'overshooting' but this will mean that the element on/off cycle times will be faster and thermostat wear and tear will be greater, mean failure time will be less.
There are electronic temperature controllers (PID) that are predictive in nature. They look at the speed that the temperature is rising or falling aswell as usage trends and make decisions about whether the element should be 'on' or 'off'. These are expensive, complicated and will only save small amounts of energy in an application such as a domestic geyser.
I heard a while ago someone invented a way to re-use water expelled from the geyser when initially opening it. Where is this technology? Why does is always take years to get something to the public 
The therory is that there is a pipe flowing from you tap back to the geyser, which is actuated thermally. If you open the hot water tap, you dont want or need the cool initially heated water, so you don't see any water coming out. The water is pushed back into the geyser (luke warm already compared to cold water) and decreasing the energy needed to heat up the water again. Once the water is hot enough to actuate the valve, it slowly switches and you get only hot water (exactly what you wanted). This saves you water and electricity. No real $ value at first, but over a years usage I believe it would definately be worth while.
The therory is that there is a pipe flowing from you tap back to the geyser, which is actuated thermally. If you open the hot water tap, you dont want or need the cool initially heated water, so you don't see any water coming out. The water is pushed back into the geyser (luke warm already compared to cold water) and decreasing the energy needed to heat up the water again. Once the water is hot enough to actuate the valve, it slowly switches and you get only hot water (exactly what you wanted). This saves you water and electricity. No real $ value at first, but over a years usage I believe it would definately be worth while.Hope this helps
Andy
*EDIT*
Any tips for reducing electricity costs or alternatives? In the restaurants the fridges pull huge power and naturally lights, air con and small appliances. At R20 000 a month and looking like R30 000 thats a whack of cash. Any ideas? Solar power, candles anything I will take it!!!!
I have profiled the energy consumption of numerous commercial restaurants with a view to cutting consumption and the conclusions are almost always the same.
Diachroic 50 watt downlights have been all the rage for the past few years but they are a killer when it comes to the electricity bill. Some restaurants can have in excess of 150 downlights @ 50 watts each often with inductive transformers. If you're being billed in kVAh then they cost a fortune to run and then some. As mentioned above there are LED alternatives that will fit in the same fittings but often the light output, illumination angles and colour frequency of these can be an issue, not to mention the initial cost of re-lamping. There are also compact fluorescent alternatives you might prefer. Both LED and CFL are available in dimmable models but they're difficult to find and expensive. Sometimes they specify that you must use a leading edge or trailing edge dimmer so try one first before you commit to boxes full of them. Note that most LED and CFL globes (bulbs) are not dimmable, if it doesn't say it's dimmable on the box then assume it isn't until proven otherwise. Another word of warning, the cheaper LED lamps with multiple LED's inside them run multiple LED arrangement on a single internal driver which over drives the remaining LED's when the first one goes down so complete failure rapidly follows. Stick to recognised brand names even if they are double the price.
Air conditioning costs a fortune to run, make sure it's turned off overnight. If you have large open doorways to outside areas then install air curtains to keep the cold in and the heat out. Finally the kitchen has an extraction hood that sucks out large quantities of air. If you don't have a supply air system installed to replace this air back into the kitchen then you will be sucking out the airconditioned air from your restaurant. You should have fresh air supplied back into the kitchen to he tune of 90% of the extracted air. (The 10% difference is to keep the kitchen at negative pressure for fire safety purposes.)
Refrigeration costs can be reduced. Make sure that all fridge and freezer doors close properly and the latches work. Keep the door seals in good condition and replace them sooner rather than later if they're damaged. If you have a freezer room then get the defrost cycles optimized. Only use glass dorr fridges if you really need them, if you have them make sure the fluorescent lighting tubes inside them are in polycarbonate sleeves. Empty all under-bar and display fridges into the coldroom at night and switch them off. This can also make a morning stock take easier and improve FIFO procedures.
Insulate geysers and put them on timer clocks.
Stop sloppy procedures like staff using running hot water to defrost food. We've seen this on several occasions and apart from being in breach of HACCP regulations they will empty several geysers of hot water to defrost one box of fish.
Install the push button type taps in the bathrooms, they're more hygienic and stop kids leaving them on.
Make sure extract canopy and supply air fans and air-con switch off at night.
Optimise your morning switch-on and night time switch-off procedures for the kitchen equipment.
Don't leave the restaurant lighting on overnight as security lighting.If you need lights at night install a more efficient option.
Unfortunately solar and other alternative or renewable energy systems aren't a practical option for commercial restaurants at the moment.
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