Lifecycle Optimization for Power Plants

Marc Antoine, Luis Ruiz-Escribano ABB Switzerland Ltd, Utility Automation, Baden, CH

Abstract Due to the deregulation in energy markets there is an increased need for asset management tools. The essence of asset management is having the decision-support for finding an optimum between financial performance, operational performance, and risk exposure. Decisions must be made about operating and maintaining infrastructure assets. Hence, the primary goal of an asset management tool is informed decisionmaking, rather than the pure focus on technical performance. A central component in achieving these requirements is the calculation of production costs, taking into account plant depreciation and degradation resulting from this production. This paper describes a decision support system that is based on the optimization of an objective function that includes terms for revenues from energy sales, production costs and plant ageing. Plant ageing is based on lifecycle models that are directly load dependent. The optimization results in a trade-off between maximisation of immediate profits and minimisation of lifetime consumption. The earnings can be achieved by selling energy, or even fuel or emission credits (CO2, SO2, NOx). The Lifecycle Optimizer, presented in this paper, addresses the influence of a given operating mode on the ageing process of the power plant and includes this in the economic optimization. A Model Predictive Control (MPC) and Mixed Logical Dynamic (MLD) approach are used to solve the posed optimization problem.

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Asset management for power plants

As a consequence of the deregulation in the power industry, utility business units have been transformed from cost centers into profit centers. Whereas they previously had a budget and carried out projects, they are now charged with contributing to growth in corporate earnings. Whereas the justification of their budget was mainly based on engineering criteria related to Operation and Maintenance (O&M), they have become increasingly more focused on return-on-investment. The primary task of asset management is to reduce negative surprises by identifying performance problems, improving predictive maintenance, extending asset lifecycles, and most of all, developing solid business plans for investments. Today the utility business faces the challenge of aligning the management of their assets with corporate objectives. This requires engineering and economic tools as well as value-based decision-support. The strategic plan of a company defines the highlevel goals and based on this, the business units setup their operational plans to achieve their targets. The asset manager sits between these functions and must therefore have comprehensive tools for decision-making about assets. The key component in asset management is lifecycle costing, which implies cost minimization starting with the initial investment, continuing through O&M, and ending with recycling or phase-out. This approach requires asset plans to be linked to financial plans. In order to achieve this, the asset manager shall be able to carry out the following tasks:

Monitoring the condition and performance of each asset. Having the key data of all assets available in real-time across the enterprise. Calculating asset lifecycle costs and the impact of asset failure. Linking trading decisions to O&M decisions.

This is only possible through informed decision-making. The asset manager shall not only receive data about specific assets, but shall also be able to translate that data into knowledge.

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1.1

The stakeholders

For complex asset infrastructures such as power plants, the responsibilities can be divided among the following two key persons: The asset owner represents corporate strategy, defines the asset costs and risks the company is willing to accept, and sets the level of expected performance. The asset owner is also responsible for raising and managing capital. The asset manager focuses on decision-making and optimizes asset values in line with corporate objectives. His core competencies are performance analysis, financial analysis, risk management and economic decisions. The asset manager sets the budget and the targets for the trader and the O&M manager in the plant.

Asset management systems

Information management systems are the backbone of asset management. Such systems not only handle data archiving and retrieval but need to offer data analysis tools as well, ranging from condition monitoring, maintenance management, purchase and inventory control, predictive modeling, and decision-making including riskassessment software. Today, the information retrieved through the automation system from the plant floor is usually of technical nature. Knowledge of the influence of some technical facts on the plant floor on the commercial success of the plant lies with the experienced plant manager. If a plant is run on condition based maintenance, where outages are not planned in regular intervals, but depending on the state of the plant, the success of this strategy is highly dependent on the quality of the plant state assessment. But even with a very precise plant state assessment there is room for optimization in this approach. Information on how plant operation influences the plant state is needed. Only with this information, the plant manager has the full picture of the results of his decisions. If we provide a tool which not only analyses the current plant state, but also informs the operator about the influence of his actions on the future plant state, a business decision can be taken on whether to run the plant aggressively and to initiate maintenance earlier, or to run the plant more smoothly and extend the maintenance interval.

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Planning & Scheduling Plant Engineering Business Systems

Process Engineerin g Information Centric Maintenance Design

Asset Optimization

Operations

Field Devices

Figure 1: Seamless integration of plant automation, asset optimization, and collaborative business processes in real-time using IndustrialIT.

IndustrialIT is an architecture which incorporates the features described above: seamless linking of multiple applications and systems in real-time. This could include e.g. process automation, asset optimization and collaborative business processes. It includes functionality ranging from field devices to business systems, focused on decision-support, from the first phases of design, through installation, commissioning, operation, maintenance and asset optimization (Fig. 1). 2.1 Aspect Objects

The two central themes in IndustrialIT are information availability and information integration. This means that information must be available at the right place at the right time independent of where the information comes from. It must be possible to seamlessly integrate the right information from any combination of sources. A well known problem in plant operations as well as asset lifecycle management is that you need a way to keep together, manage, and have access to information about all different aspects of a great number of e.g. plant and process entities. These entities, or real world objects, are of many different kinds. They can be physical process objects, like a valve, or more complex, like a reactor. Other examples are products, material, production orders, batches, customer accounts, etc. Each of these real world objects can be described from several different perspectives. Each perspective defines a piece of information, and a set of functions to create, access, and manipulate this information. We call this an Aspect of the object.
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Aspects, which can be defined as all the real-time information connected to a particular Object, including design drawings, control diagrams, maintenance information, location, quality information and configuration information. In fact, an Aspect can be composed of data and programs performing specific functions. Together, these Aspects form a dynamic 'model object' containing links to all the important information. In IndustrialIT terminology, this is called an Aspect ObjectTM. Once the physical device (object) is put in place in the plant, the operator can simply copy and paste the model Aspect Object into the overall system. No matter where each real object is deployed, one 'click' on the model object provides a link to its Aspect information. The approach to introducing an application such as operational optimization into an existing platform thus centres around one concept define new aspects specific to lifecycle modeling and optimization and attach them to power plant objects. In this way a link between process data and asset management is achieved. Access to the appropriate information in real-time is now one mouse-click away from the user.

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3.1

The Lifecycle Optimizer

Complexity grows

Todays plant manager assumes new responsibilities mostly focused towards the management of more complex business situations. When talking about decisions for plants with a complex configuration (multi-unit plants, multi-plants and multi-product trading, i.e. fuel, power, heat, emissions), finding the operation schedule that provides the optimal economical results cannot be solved without decision-support tools. Decisions support systems for operation of power plants in an economic market are typically based around the concepts of economic commitment and dispatch. The objective of, what hereafter is referred to as operational optimization, is to schedule or commit generating units over a certain horizon such that the difference between operating cost and revenue is minimized. In addition to meeting the expected load, the
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operational optimization problem must take into account requirements such as minimum uptime and downtime of generation units, startup and shutdown times, spinning reserve, and other constraints such as emissions (e.g. CO2, NOx, SO2) and minimum or maximum power output. As indicated above it is important to realize that asset lifetime is a resource that contributes to the cost of operating the power plant and as such should be included in the operational optimization problem. The Lifecycle Optimizer addresses this requirement, i.e. the influence of a given operating mode on the ageing process of the power plant is included with variables considered in the optimization. Two elements are at the core of any operational optimization problem. The first is a model of the plant describing how the plant reacts to various control signals, i.e., an input-output model. The second is an objective function that uses a combination of external variables and variables from the plant model to compute a plant performance measure, e.g., external variables could include the electricity market price and fuel price, and model variables the plant output and fuel consumption. The objective function has the generic form [1]:
t +T

J [u ] =

f (e( , u( )), c( , u( )), q( , u( )), u( )) d

t

where:
T

u: e: c: q:

time optimization horizon; power plant control, for example, generated power and heat; ageing rate of plant components, or more exactly, its dollar effect; cost rates; revenue rates.

There are various techniques for solving this class of optimization problem but one widely adopted by industry to solve control problems of systems subject to input and output constraints is Model Predictive Control (MPC) [2]. The following components are thus required: Process models to describe how fuel is converted into electrical and thermal energy. This gives the traditional plant operating costs. The models take static,

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dynamic and integral factors into account. These factors include, for example, fuel heat consumption, auxiliary power consumption, minimum standstill period, minimum operating time, load gradient limitation, hot start/cold start, limitations on operating time, on production quantities, on startup frequency, and also on emissions (e.g. CO2, NOx, SO2). Component lifetime models to assess stress loading, which in turn is used to compute ageing and lifetime cost. Operation and constraint models for the plant, including the ageing models in this plant. This is achieved in a hybrid systems modeling framework [3] known as Mixed Logic and Dynamic models (MLD). An optimization routine that computes the optimal control sequence using the MPC strategy. Fig. 2 shows an example of optimization results for generated power and corresponding price levels for trading. 3.2 Trading

Trading and asset management have much in common with traditional utility management, such as demand forecasting, lifecycle costing, risk management, performance monitoring, condition-based maintenance, and other aspects. The power of the Lifecycle Optimizer is its ability to integrate these components and optimize the trade-offs between financial performance, operational performance and risk exposure. This can be achieved by: Trading of gas, oil, steam and electricity, including penalties for not matching the objectives. Fuel trading: the trader is able to buy and resell fuel. Fuel balancing: when a gate-close event occurs and the trader still needs to fulfill a diary or subdiary balance of fuel, this may be done through the storage capacity of the fuel network. Power trading: the trader is able to stop power generation in case buying power from other generators and reselling it to the grid is found more profitable.

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Emission trading: the trader is able to stop or reduce power generation in order to comply to emission constraints, or to sell emission permits to others if this is profitable. Choosing different types of contracts, e.g. bilateral, fortnight-, week- or dayahead, block-hour (4h or 6h), hour (1h), half-hour (0.5h) and quarter-hourly (15m) contracts.

Figure 2: Example of optimized plant load profiles and trading prices.

3.3

Ageing

The key stochastic variables for scheduled maintenance are expected life estimations for repair and replacement of major parts. These are based on manufacturer data and calculation methods which take into account equipment load factors such as, e.g. equivalent operation hours, number of startups, etc. For the purpose of lifecycle or ageing modeling two factors are critical. Firstly, the models are required to provide a direct relationship between equipment load and equipment ageing. Ageing in a gas turbine, for example, takes into account effects like firing temperature, fuel type, fuel switch-over, use of power augmentation, trips, startups, etc. Secondly, the models must capture the equipments operating history.
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Finally, for lifecycle optimization purposes, the ageing function is included in the optimization routine. 3.4 Risk estimation

In order to account for the risk of suffering an unplanned outage or the risk of not being able to connect to the grid after a plant shutdown, risk estimation and evolution of the failure probability distribution of individual components are addressed. These risk considerations are condensed as additional terms in the cost objective function and add a tuneable term to penalize events through the optimization. Those terms may depend on factors such as the equipment life already consumed, the time since last shutdown, the weather conditions, etc. The factors are tuneable by the user because taking one or the other decision is affected by the market pressure and by the risk the asset manager or trader is willing to take. Take as an example the decision to shutdown a plant during the weekends. Even if it is clear that shutting down is the best economical solution, the operator could choose not to assume the risk of not being able to provide the committed power to the grid on monday. This could ruin the earning of the week but can be included as a risk term in the cost objective function. In this sense, risk considerations include subjective evaluations by the user but are nevertheless analytically formulated. 3.5 Emissions

Emission trading is playing an increasingly important role in energy markets. If a plant emits less than the level of its allocations, it can sell the additional permits to others that may have emitted more. If it emits more, then it needs to purchase additional permits or pay a penalty. To arrive at an optimal decision the asset manager or trader needs to consider two important factors: Price levels and price volatility. The technical characteristics of the plant.

Decision tools which are based on historic data (looking at the past days, weeks or months) will not be able to capture these factors and therefore disadvantage the competitive position of the plant. This is true for combined cycle power plants, firing
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gas or oil as primary fuel, but is even more important for coal-fired plants because of the problems of coal storage and the difficulties for the trader to unwind a coal position. The Lifecycle Optimizer is able to take such effects into account by including additional terms, related to emission credits and penalties, into the cost objective function. An example of optimized load dispatch, e.g. shutting down the plant for a period of time based on NOx emission trading, is shown in Fig. 3. The influence on profits and losses can be huge, specially in case emission permits have to be purchased and traded. The strength of this approach is the ability to take such a variety of factors into the optimization and calculate the impact on profitability, an impossible task for decision-makers without tool support.

NOx in Flue Gas

Figure 3: Example of optimized load dispatch taking emission constraints into account.

3.6

Mapping Money

The Lifecycle Optimizer approach is intended for decision-makers that economically quantify the effect of plant operation on plant ageing. The result of the optimization is a cost per kW (including ageing costs) and a kW production level, characteristics essential for actions such as bidding into a pool.
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A frequent problem is the lack of equipment manufacturer data required for parametrising the lifetime models. This is overcome by directly mapping the monetary value of such components, based on O&M data such as replacement cost and estimated lifecycle. The additional advantage of this method is the possibility for the asset manager to use his/her preferred accounting method (replacement value, value in the books, etc.). The Lifecycle Optimizer has been installed and successfully tested at Enfield Energy Center Ltd. (UK). The main purpose of this project was to verify the optimization approach, the system design and configuration, as well as the software implementation.

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4.1

Examples
Lifecycle optimum versus Preventive maintenance

In this example we consider the following scenario: the plant outage for inspection and preventive maintenance is scheduled to take place 100 days from now. The inspection threshold is set at 1000 EOH (Equivalent Operating Hours) and the plant is presently at zero EOH. There is a multitude of operating strategies which lead to 1000 EOH in 100 days, e.g. 10 EOH per day, 24 EOH per day for the next 41.6 days, etc. In order to simplify this example, we allocate extremely high costs to overshooting of EOH, i.e. this option will not be optimal. The task is to find an operation strategy resulting in maximum profit over a defined time horizon, and respect the EOH constraint. Note that profit depends on actual energy prices and that revenues are lost in case the plant has not consumed the available EOH. The following cases are considered: The flat solution running constant plant output to satisfy the EOH constraint.

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The manual solution selecting an operating strategy to match the EOH constraint, while simultaneously trying to maximize profit. The strategy is to initially set all hours to minimum production and then increase peak price hours to maximum production until the EOH constraint is met. Note that this assumes lifetime models available, which is usually not the case if the Lifecycle Optimizer is not installed.

The optimal strategy determined by the Lifecycle Optimizer.

The results (normalized) show the advantage of the optimizer approach in terms of Net Present Value (NPV) and profit: Solution method Flat Manual Optimal NPV 100% 109% 111% Profit 100% 108% 109%

4.2

Optimal load scheduling

This example focuses on load scheduling but can also be used for post operation analysis and monitoring. The task is to find the optimal load dispatch strategy of a unit resulting in maximum profit over a defined time horizon, again taking lifecycle costs into account. For the purposes of this analysis three possible operating strategies are compared: Keep the plant on constant base load. Allow the plant to peak during high energy price periods. Allow the plant to follow load in the range 80 to 100 %.

The results (normalized) indicate that, for this example, a peaking strategy increases both income from sales and lifecycle costs, resulting in an increase in net revenues. A load-following strategy reduces both income from sales and lifecycle costs also

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resulting in a higher net revenue. The calculated increases in net revenues reflect an expected upper limit on benefits resulting from the Lifecycle Optimizer. Strategy Base load Peaking Load-following Income from sales 100% 103% 98% Generation cost 100% 103% 96% Lifecycle cost Net revenue 100% 103% 96% 100% 109% 124%

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Conclusions

The use of optimization techniques, risk assessment and information integration are central components of asset management for todays power plants. Decisions are driven by the actual condition and performance of assets. Not meeting corporate objectives such as operating requirements, financial targets and regulations are among the risks which shall be addressed by the asset manager. The objective of Lifecycle Optimization in power plants is to satisfy demand at a minimum cost or, as is more likely in a deregulated market, selecting the production levels given predicted energy prices (i.e. prices at which produced energy can be sold). In either case the requirements are the same decide when to turn equipment on and choose the production levels. A key component resulting from this decision is the information used to formulate bids for submission into a spot market. A Lifecycle Optimization tool is thus a decision tool for plant asset managers and traders operating in a competitive market. The first new element in this approach is the explicit handling of lifecycle models and their inclusion in the optimization routine. The lifecycle models provide a direct relationship between plant load and plant ageing, and capture the operating history of the component. The other new element is the representation of the lifecycle optimization in a hybrid systems modeling framework known as Mixed Logic and Dynamic models (MLD). This enables the economic problem to be solved using Model Predictive Control (MPC) techniques.

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References

[1] E. Gallestey, A. Stothert, M. Antoine, S. Morton, Model predictive control and the optimization of power plant load while considering lifetime consumption, IEEE PE-803PRS (08-2001). [2] E. Camacho and C. Bordons, "Model Predictive Control", Springer 1999. [3] A. Bemporad and M. Morari, "Control of systems integrating logic, dynamics, and constraints", Automatica, Vol. 35, no. 3, pp 407-427, 1999.

Authors:
Marc Antoine was born in Belgium 1959, received his M.Sc. in mechanical engineering at the University of Brussels 1982, research assistant in aerospace & ocean engineering at Virginia Polytechnic Institute USA, joined Brown Boveri Company as development engineer for process computer systems in Switzerland 1985. Senior engineer at ABB Power Generation for plant management systems 1989, development manager for plant monitoring & optimisation systems at ABB Power Automation 1999. Currently product manager for plant automation systems at ABB Switzerland. Luis Ruiz-Escribano was born in Madrid 1974, received his M.Sc. in power engineering at the Polytechnic University of Madrid, research assistant at the Institute of Thermal Power Systems, Technical University of Munich. Joined ABB Power Automation Switzerland in 2001. Currently, system engineer at ABB Switzerland for plant monitoring & optimisation applications.

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