NERC GADS Benchmarking Workshop 2011

Using Reliability Data to
Improve Power Plant Improve Power Plant

Performance
NERC-GADS Workshop
presented by Robert R. (Bob) Richwine presented by Robert R. (Bob) Richwine
Reliability Management Consultant
Richwine Consulting Group, LLC
Oct 27, 2011
Workshop Agenda
I. Background and Case Study I. Background and Case Study
II. Common Elements in Successful Programs
A. Awareness Phase A. Awareness Phase
B. Identification Phase
C. Evaluation Phase
D. Implementation Phase
III. Transforming to a Market-Driven Business g
Environment
Richwine Consulting Group, LLC 2
Background
From a 2006 Wall Street Journal article
Business today is awash in data and data
h crunchers
Only a few companies use data as a strategic Only a few companies use data as a strategic
weapon
The ability to collect, analyze and act on data is the
essence of a companys competitive advantage
Survey Results in WSJ
450 executives; 370 companies; 35 countries;
19 industries
Identified a strong link between extensive and
sophisticated use of analytics and sustained
high performance high performance
T f i i 5 ti Top performing companies were 5 times
more likely to single out analytics as critical
to their competitive edge
to their competitive edge
4
A substantial gap exists between actual
and potential performance
Potential Performance
Actual Performance Actual Performance
The Worldwide Value of Closing the
Gap (WEC estimate)
E i Economic
US$80 Billion per Year
Environmental
1 Billion Tons of CO
2
Reduction
per Year and Proportional Reductions per Year and Proportional Reductions
of Other Emissions
Source of Performance Variation
Variation of performance due to Variation of performance due to
Technology/mode of operation = 20-25 %
Human factors/management = 75-80 % Human factors/management = 75-80 %
C fi d b Confirmed by
Analytical studies (Reference 2)
Practical experiences
Closing the Gap
Better Use of Reliability Data is a Key Factor in
Achieving and Sustaining Top Performance
NERC-GADS
The NERC-GADS system is the premier reliability
data collection and analysis system worldwide data collection and analysis system worldwide
NERC has been collecting power plant reliability data
in the GADS format for 30 years in the GADS format for 30 years
An increasing number of international companies
have begun using the NERC-GADS system to collect
and analyze their plants performance
The World Energy Council has adapted NERC-GADS
for international use for international use
NERC-GADS
Some companies have used the GADS database in
innovative ways to help them achieve top innovative ways to help them achieve top
performance of their generating plants
NERC created the Generating Availability Trend
Evaluation (GATE) working group to analyze Evaluation (GATE) working group to analyze
reliability trends and their causes
A new NERC-GATE type group is now being
organized organized
GATEs publications can be found on NERCs
website at www.nerc.com
The World Energy Council has summarized many of The World Energy Council has summarized many of
the GATE studies and has published them, along with
other similar studies on its website at
www worldenergy org www.worldenergy.org
30+ WEC Published Case Studies
Objective Demonstrate that the value Objective Demonstrate that the value
of performance data is far greater than
the cost of collecting the data plus the the cost of collecting the data plus the
risk of sharing the data
www worldenergy org www.worldenergy.org
Click on Performance of Generating Plant
under Work Programme under Work Programme
Click on Performance of Generating Plant on
right side of page right side of page
Click on Case Studies
WEC Case Study Topics include the
Use of Data in:
Performance
Improvement
B h ki
Maintenance Planning
Risk Management
Benchmarking
Configuration
Optimization
Catastrophic
Event Reduction
Optimization
Generation Planning
O ti
Life Management
Equipment Design
Operations
Goal Optimization
Peak Season
Performance
Southern Company Experience
May 2004 WEC Case Study (Ref 4)
Alabama
Power
Georgia
Power
Mississippi
Power
Gulf
Savannah
Electric
Gulf
Power
Southern Company Headquarters
Atlanta, GA, USA
Southern Company
Coal-Fired Power Stations
Equivalent Availability Factor (EAF) q y ( )
Trend
9 3
9 5
S o u t h e r n C o m p a n y W o r l d
8 3
8 5
8 7
8 9
9 1
9 3
7 3
7 5
7 7
7 9
8 1
6 5
6 7
6 9
7 1
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
Reasons for Performance Decline
I bilit t id d t Inability to provide adequate
resources to power stations
See May 2004 WEC-PGP case study
and Ref 4 for detailed discussion of and Ref 4 for detailed discussion of
other reasons including:
Limited use of performance data p
Southern Company Coal-Fired
Power Stations
Equivalent Availability Factor (EAF) Trend
9 5
1 0 0
S o u t h e r n C o m p a n y W o r l d
q y ( )
8 5
9 0
9 5
7 5
8 0
6 0
6 5
7 0
6 0
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
Reasons for Improved Performance
H i ht d f ti t Heightened awareness of executive management
of the need for performance improvement
C it t f dditi l f Commitment of additional resources for
performance improvement
S M 2004 WEC PGP t d d R f 4 f See May 2004 WEC-PGP case study and Ref 4 for
other reasons including:
Improved data collection analysis and application of results Improved data collection, analysis and application of results
Performance Improvement Benefits
Savings of >US$1 billion (1991$) per year equaled:
~12 percent of Annual Revenue
~100 percent of Net Income (Profit)
Annual avoided emissions included
seven million tons of CO
2
e per year at
2
p y
NO EXTRA COST!
Availability Improvement at Other
Generating Companies
PREPA Puerto Rico +25%
NEES USA +13%
ESB Ireland +10%
ESKOM South Africa +20%
Observations
E h / t f it t f Each company/country faces its own set of
challenges, constraints, and opportunities
No single program is optimal for e er No single program is optimal for every
company/country
There are common elements within each There are common elements within each
successful program
Common Elements In Successful
Improvement Programs
January April 2003 WEC Case Studies y p
Performance
Improvement
Performance Improvement Process
Phase 1 - Awareness
Benchmarking
Forecasting
Communications
Awareness
January 2003 WEC Case Study
Benchmarking
April 2002 WEC Case Study April 2002 WEC Case Study
August 2002 WEC Case Study
September 2003 WEC Case Study September 2003 WEC Case Study
ASME technical papers (Ref 5,6)
Unit Level Benchmarking Unit Level Benchmarking
The First Step in Improving Plant Performance The First Step in Improving Plant Performance
Wh B h ki ? Why Benchmarking?
Set realistic, achievable goals
Id if b f i l i Identify best areas for potential improvement
Give advance warning of threats
T d k l d d i ith Trade knowledge and experience with peers
Quantify and manage performance risks
Create increased awareness of the potential for Create increased awareness of the potential for
and the value of increased plant performance
Reliability Benchmarking Process
Id tif li bilit i bl t d th Identify reliability variables to measure and the
databases required
Select peer power plants having similar design or mode Select peer power plants having similar design or mode
of operations characteristics
Compare the candidate power plants reliability against
these peer plants
25 Richwine Consulting Group, LLC
Reliability Benchmarking Process
Identify reliability variables to measure and the Identify reliability variables to measure and the
databases required:
Typical Reliability Variables Typical Reliability Variables
Equivalent Availability Factor (EAF)
E i l t F d O t R t (EFOR) Equivalent Forced Outage Rate (EFOR)
Scheduled Outage Factor (SOF)
and increasingly, and increasingly,
Equivalent Forced Outage Rate Demand (EFORd)
Benchmarking Process
Select peer power plants having similar
design or mode of operations
h t i ti characteristics:
Selection Procedure (NERC/Richwine developed) Selection Procedure (NERC/Richwine developed)
Advanced statistical methodology
Has been applied numerous times over the Has been applied numerous times over the
past 20 + years at companies and countries
around the world
Peer Selection Criteria
Large Population
NERC-GADS Data Base
5000 + units
Exact Match
x
x
x
x x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Number of Exact Matches 0 Number of Exact Matches 0
Exact Matches Large Population
Must Balance Criteria Must Balance Criteria
Etc
Etc.
Etc.
Etc.
Vintage
Firing
Fuel
ASSUME
Etc.
g
Duty
Boiler
Manufacturer
Etc
Age
Manufacturer
Turbine
Criticality
Etc.
Etc.
Size
Draft
Turbine
Manufacturer
Etc
Etc.
Etc.
Etc.
Vintage
Firing
Fuel
ANALYSIS
Etc.
Duty
Boiler
Manufacturer
Etc
Age
Manufacturer
Turbine
Criticality
Etc.
Etc.
Size
Draft
Turbine
Manufacturer
Significance Testing Significance Testing
Subcritical Supercritical Cyclic Duty Baseload Duty
EFOR EFOR EFOR EFOR
Peer Groups Select Criteria
Fossil Units
All Fossil Units
CRITICALITY
Sub Super
CRITICALITY
MODE OF OPERATION
VINTAGE
Cycling
<1972
Baseload
Size
Draft Type
Fuel
Boiler Mfr.
Draft Type
Size
1972
Fuel Size
Does Peer Selection Make a Difference?
SUPERCRITICAL TECHNOLOGY
EARLY VINTAGE RECENT VINTAGE
EFOR(mean) 15.60% 9.68% EFOR(mean) 15.60% 9.68%
EFOR(median) 12.17% 8.08%
EFOR(best quartile) 8.14% 5.47%
EFOR - PLANT A
OLDCRITERIA NEWCRITERIA % difference OLD CRITERIA NEW CRITERIA % difference
(Coal; 100-199MW)
mean 6.47% 5.53% -14% mean 6.47% 5.53% 14%
median 4.78% 5.07% +6%
best quartile 2.65% 3.26% +23%
EFOR - PLANT B
OLD CRITERIA NEW CRITERIA % difference
(Coal; 800-1300MW)
mean 5.83% 7.63% +31%
Median 4.55% 5.87% +29%
best quartile 2.70% 3.97% +47%
Reliability Benchmarking Results
30 Peer Units
P it l ti it i Peer unit selection criteria
Subcritical
Reserve shutdown hours less than 963 hours Reserve shutdown hours less than 963 hours
per year
Natural boiler circulation Natural boiler circulation
Primary fuel = coal
Single reheat g
Net output factor greater than 85.6%
Peer Unit EFOR Distribution
100
70
80
90
100
C
E
N
T
40
50
60
70
A
T
I
V
E

P
E
R
C
10
20
30
40
C
U
M
U
L
A
0
10
0 1 2 3 4 5 6 7 8 9 10 11
EFOR ( %) EFOR ( %)
Peer Unit SOF Distribution
100
70
80
90
R
C
E
N
T
40
50
60
U
L
A
T
I
V
E

P
E
R
10
20
30
C
U
M
0
0 5 10 15 20
SOF ( %)
Peer Unit EAF Distribution
100
70
80
90
R
C
E
N
T
40
50
60
U
L
A
T
I
V
E

P
E
R
10
20
30
C
U
M
0
70 75 80 85 90 95 100
EA F ( %)
Conclusions
Benchmarking is helping utilities Benchmarking is helping utilities
Set goals
Develop incentives e e op ce t es
Identify improvement opportunities
Quantify and manage risks
Create increased awareness of the potential for and
the value of increased plant performance
Proper peer group selection is essential
Forecasting
Statistics Versus Probability
Statistics Yesterdays actual results
P b bilit T di t d lt Probability Tomorrows predicted results
Forecasting Performance
September 2002 WEC Case Study
Southern Companys historic plant EFORs
trends were used as projections
Comparison of actual EFORs to projected
EFORs (statistical process control) showed a
need for improved forecasting methodology
New forecasting methodology was developed
using multi-variable regression techniques
that showed great potential
EFOR
ACTUAL
- EFOR
PREDICTED
Forecastings Basic Principle
Past Conditions Future Conditions Past Conditions
Past Results
Future Conditions
Future Results Past Results Future Results
Predicting EFOR
Most Important Parameters (from statistical
l i ) analysis)
Lagging Equivalent Forced Outage Hours
Lagging Service Factor
Current Year Planned Outage Hours
Lagging O&M Spending
Current Year O&M Spending p g
Fuel Type
Other Factors
Other Factors
47
EFOR
ACTUAL
- EFOR
PREDICTED
Other Forecasting Example
New Technology learning curve Supercritical
Ref 7
November 2002 WEC Case Studyy
Applies learning curve theory to historic EFORs Applies learning curve theory to historic EFORs
to forecast expected improved in new
technology performances
gy p
49
Outage Rates versus Year
of Initial Operation
Other Forecasting Example
Estimating a Generating Plants Future Estimating a Generating Plants Future
Maintenance Cost
October 2003 WEC Case Study & Ref 8 October 2003 WEC Case Study & Ref 8
Uses probabilistic forecasting techniques to
estimate the range of future cost (O&M + g (
Retrofit Capital, recurring and non-recurring)
and its probability distribution
Results used by many organizations including
operations & maintenance, resource planning,
generation planning and finance generation planning and finance
Communications
Communications to all stakeholders,
especially employees, is vital to clearly show p y p y , y
the GAP between your plants reliability
compared to the best performers in their peer
group
Phase 2 - Identification
February 2003 Case Study
Identification Phase Part 2
Problem Area Identification
Goal To identify problem areas with best payback potential
Component Benchmarking
High Impact Low Probability Event Reduction
February 2002 WEC Case Study & Ref 9
Trend Analysis WEC Case Studies:
March 2002 Peak Season Reliability (Ref 10) y ( )
June 2002 Availability Following Planned Outages (Ref 11)
December 2002 Reliability Versus Demand
Three options for peer group selection:
# 1 U t i f it l l # 1 Use components in peer group from unit-level
benchmarking peer group analysis (but this will exclude
many valid peer components)
#2 Perform a similar analysis to that described in the
unit-level benchmarking but using component design
and operational data for analyzing and selecting peer
( b i d i groups (can become very expensive and time
consuming)
#3 Use a combination of experience and engineering
judgment with unit-level peer group analysis results
(recommended)
Compare the performance of each
/ system/equipment to its peer distribution
The system/equipment with the largest
percentile gap between its performance and
th b t i l i it h ld b the best in class in its peer group should be
a high priority system to study
Component Unavailability
Steam Turbine
S te a m T u r b i n e U n a v a i l a b i l i ty
5 0
6 0
7 0
8 0
9 0
1 0 0
P
e
r
c
e
n
t
0
1 0
2 0
3 0
4 0
5 0
C
u
m
u
l
a
t
i
v
e
0 2 4 6 8 1 0 1 2 1 4 1 6
Un av ailab ilit y ( P e r ce n t )
Component Unavailability
All Boiler Tube Leaks
B o i l e r T u b e L e a k U n a v a i l a b i l i ty
5 0
6 0
7 0
8 0
9 0
1 0 0
P
e
r
c
e
n
t
0
1 0
2 0
3 0
4 0
5 0
C
u
m
u
l
a
t
i
v
e
0 2 4 6 8 1 0 1 2 1 4 1 6
Boiler Tube Leaks vs. Steam Turbine
B o i l e r T u b e s an d S t m T u rb i n e U n a v a il a b i l it y
8 0
1 0 0
c
e
n
t
2 0
4 0
6 0
C
u
m
u
l
a
t
i
v
e
P
e
r
c
0
0 2 4 6 8 1 0 1 2 1 4 1 6
C
S tea m Tu r b i n e B o i l er Tu b es
C t U l d I t Component Unplanned Improvement
Unavailability Potential Rank
BT leaks 1% #1
Turbine 0.5% #2 Turbine 0.5% #2
B o i l e r T u b e s an d S t m T u rb i n e U n a v a il a b i l it y
8 0
1 0 0
c
e
n
t
2 0
4 0
6 0
C
u
m
u
l
a
t
i
v
e
P
e
r
c
0
0 2 4 6 8 1 0 1 2 1 4 1 6
C
S tea m Tu r b i n e B o i l er Tu b es
Improvement Potential Ranking
Component Unplanned Improvement Peer Improvement
Unavailability Potential Rank Percentile Potential Rank Unavailability Potential Rank Percentile Potential Rank
BT leaks 1% #1 50
th
#2
Turbine 0.5% #2 80
th
#1
Component Unavailability p y
Waterwall Tube Leaks
B o i l e r W a te r w a l l T u b e L e a k s
5 0
6 0
7 0
8 0
9 0
1 0 0
P
e
r
c
e
n
t
0
1 0
2 0
3 0
4 0
5 0
A
C
u
m
u
l
a
t
i
v
e
0 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2
Un av ailab lit y ( P e r ce n t )
Component Benchmarking p g
Nuclear Reactor Only
Nucl ear Reactors Onl y Vs. Total Nucl ear Uni ts y
2005-2009
90
100
60
70
80
90
t
,

%
Total Unit
20
30
40
50
P
e
r
c
e
n
t
Total Unit
Reactor Only
0
10
0 5 10 15 20 25 30
U l d O t F t (UOF) Unplanned Out age Fact or (UOF)
Balance of Plant
Bal ance of Pl ant Vs. Total Nucl ear Uni ts
2005-2009
90
100
60
70
80
90
t
,

%
Total Unit
20
30
40
50
P
e
r
c
e
n
t
Total Unit
Balance of Plant
0
10
20
0 5 10 15 20 25 30
Unplanned Out age Fact or (UOF)
Hydro Turbines
Hydro Turbi nes Onl y Vs Total Hydro Uni ts (No PS) Hydro Turbi nes Onl y Vs. Total Hydro Uni ts (No PS)
2005-2009
90
100
60
70
80
90
t
,

%
Total Unit
20
30
40
50
P
e
r
c
e
n
tTotal Unit
Turbine only
0
10
0 10 20 30 40 50 60 70 80 90 100
Unplanned Out age Fact or (UOF) Unplanned Out age Fact or (UOF)
B l f Pl t Balance of Plant
Bal ance of Pl ant Onl y Vs. Total Hydro Uni ts (No PS)
2005-2009
90
100
50
60
70
80
e
n
t
,

%
Total Unit
10
20
30
40
P
e
r
c
e
Balance of Plant
0
10
0 10 20 30 40 50 60 70 80 90 100
Gas Turbines in Combined Cycle Blocks
Combi ned Cycl e Bl ocks Vs. CC Gas Turbi nes y
2005-2009
90
100
50
60
70
80
n
t
,

%
Block
10
20
30
40
50
P
e
r
c
e
GT Only
0
10
0 5 10 15 20 25 30 35 40
Heat Recovery Steam Generators
Combi ned Cycl e Bl ocks Vs HRSGs Combi ned Cycl e Bl ocks Vs. HRSGs
2005-2009
90
100
60
70
80
90
n
t
,

%
Block
20
30
40
50
P
e
r
c
e
n
HRSG
0
10
0 5 10 15 20 25 30 35 40
CC Steam Turbines
Combi ned Cycl e Bl ocks Vs. Steam Turbi nes
200 2009 2005-2009
90
100
50
60
70
80
e
n
t
,

%
Block
St T bi
10
20
30
40
P
e
r
c
e
SteamTurbine
0
0 10 20 30 40
Unplanned Outage Fact or (UOF)
Is Your Power Plant Headed for a HILP??
How to Avoid, Detect or Mitigate
High Impact Low Probability (HILP) Events
R b t Ri h i Ri h i C lti Robert Richwine Richwine Consulting
Michael Curley NERC
G. Scott Stallard Black & Veatch
What is a HILP?
High Impact Low Probability Event
Happens infrequently but results in extended
unplanned outages
Sometimes called First Time Event
(at least the first time it has happened at your ( pp y
plant)
Similar to the concept described in Nassim p
Talebs book The Black Swan: The Impact of
the Highly Improbable
Typical HILPs Typical HILPs
Turbine Water Induction
Boiler Explosions
Generator Winding Failures
Many, many others
HILP Reduction Programs
Some companies have successfully
reduced their HILP frequencies and/or
magnitudes with a formal HILP Reduction
P i NERC GADS d t Program using NERC-GADS data.
NERC-GADS database contains ~30 years
of detailed design and reliability data from
5 100 ti it ith id over 5,100 generating units with a wide
variety of technologies.
HILP Effect on Forced Outage Rate (FOR)
FOR made up of two type of events
Routine expected events with small/medium
outage consequences
Unexpected major events with large outage Unexpected major events with large outage
consequences
Should separate these two elements of FOR
when benchmarking reliability and
establishing reliability improvement establishing reliability improvement
programs
Benchmarking two units Forced
Outage Rate (FOR) - Example
Unit A Unit B
FOR 10% 10% FOR 10% 10%
Fewer, smaller
events but 1
Type of Outages
Many small
events
events but 1
major event of
3 weeks length Type of Outages events 3 weeks length
" Normal" FOR 10% ~4%
Benchmarking two units
Forced Outage Rate (FOR)
Implications
1) The two units have had very different failure
modes
2) We should adapt our benchmarking analysis
and improvements efforts to account for
th diff these differences.
HILP Reduction Program
Step 1 Select the best peer group for benchmarking against
your unit y
Step 2 Find the peer groups HILP contribution to FOR or
EFOR and compare to your units HILP contribution
St 3 P i iti th HILP bl Step 3 Prioritize the peer groups HILP problem areas
Step 4 Review GADS root cause information
Step 5 Assess your plants susceptibility to HILPs Step 5 Assess your plant s susceptibility to HILPs
Step 6 Identify options to address HILPS
Step 7 Evaluate and select HILP reduction options p p
Step 8 Track results of implemented options, compare to
expectations and feedback into program to improve the
process process
Step 1 Select Peer Group
It is vital to select the best peer group It is vital to select the best peer group
You dont want to be comparing apples to
oranges
Actually, the best we can usually do is
compare apples to oranges at least they are
b th f it both fruit
If you dont go through an valid peer selection
process you might be comparing apples to process you might be comparing apples to
zebras
Step 2 Compare Unit to Peer
Groups HILP Contribution to FOR
Using NERCs pc-GAR software calculate FOR
Using NERCs pc-GAR-MT software determine
the number of full forced outage hours with
outage durations greater that the value you outage durations greater that the value you
define as a HILP (typically greater than 1 week
or longer) g )
Using the HILP full forced outage hours
calculate the FOR due to HILPs
Compare the units HILP contribution to FOR to
its peer groups
f f
Repeat for your companys fleet
80
Step 3 Prioritize the Peer Groups
HILP Problem Areas
Using pc-GAR-MT and excluding non-HILP
t ( ti f th ft ) il events (an option of the software) compile a
frequency chart of HILP cause codes that
the peer group has experienced the peer group has experienced
Use the frequency chart to focus on the
most likely HILP areas for your unit y y
Consider exporting the files from pc-GAR-
MT to a spreadsheet for easier manipulation
and more detailed analysis as well as
graphical reports
Step 4 Review GADS Root Cause Data
GADS input contains an optional 80 character free-
format data field, often containing valuable data
regarding the outages.
Alth h t tl il bl i GAR Although not currently available in pc-GAR or pc-
GAR-MT, Mike Curley, Manger of NERC-GADS
Services can advise you on how to retrieve this Services, can advise you on how to retrieve this
information.
Reviewing this data for HILP events can indicate g
the root causes of events that your units peer
group has experienced and can point you in
di ti f i it tibilit
directions for assessing your units susceptibility
to those HILPs.
82
Step 5 Assess Your Units
Susceptibility to HILPs
HILP susceptibility is usually the result of several
factors occurring together
Assessing HILP risk must rely on a structured
process focusing on if these factors could exist
Catalogue key HILP events and the circumstances
th t ld i d th HILP that could induce the HILP
Evaluate your unit to determine if these
circ mstances are present s ch as eq ipment circumstances are present such as equipment
condition, O&M experiences & practices, QA, etc.
Create a scorecard to quantify the level of HILP
Create a scorecard to quantify the level of HILP
risk 83
Step 6 Identify Options to
Address HILPs
HILP reduction options are usually very
specific to the issue
HILP reduction options should consider
ways to:
Prevent the HILP
Detect the HILP event early so as to minimize
downstream damage
Mitigate the impact of an undetected HILP Mitigate the impact of an undetected HILP
Step 7 Evaluate and Select HILP
Reduction Options
Sufficient information should be gathered to
be able to forecast the effect of each option
An economic analysis for each option should
be done to:
Justify
Time
P i iti Prioritize
Using the option evaluations and considering
the fact of limited company resources (time the fact of limited company resources (time,
money, manpower) the best set of options
should be chosen for implementation
should be chosen for implementation
85
Step 8 Track Results, Compare to
Expectations & Feedback
Monitor the actual results of each
implemented HILP improvement option and
compare to expected results
Compare the fleets FOR trend due to HILPs
over time
Feedback successes and failures into the
HILP reduction program to learn from past
i d i th experiences and improve the process
Conclusions & Recommendations
HILPs Happen!!
No power plant in immune to HILPs
While your staff must react to the problems
of the day some resources should be
devoted to searching for cost-effective ways
t t d t t iti t HILP to prevent, detect or mitigate HILPs
Addressing HILP causes and seeking
l ti b f HILP i solutions before a HILP occurs is a proven
way to move from a fire-fighting to pro-active
style of management
style of management
87
Trend Analysis
EFOR Following Planned Outages
WEC June 2002 Case Study
NERC-GATE Study
R f 11 Ref 11
EFOR Following Planned Outages
Week Following Schedule Outage
EFOR Following Planned Outage Trend
If your plants exhibit this trend you can seek y p y
cost-effective ways to reduce this unreliability
If you cannot find ways to reduce the
problem, you can incorporate this tendency p , y p y
into the dispatch optimization process
(perhaps by not scheduling outages at two
major units back-to-back or some other
planning/scheduling method)
Trend Analysis
Forced Outage Rate versus Demand
WEC December 2002 Case Study
Forced Outage Rate Versus Demand
Trend
Forced Outage Rate Versus Demand
Trend
High Output Factor (maximum generation
most of the time) units have fewer failures but
take more time to repair
Low Output Factor (often generating at
minimum and load-following) units have more
failures but take less time to repair
If your staff is aware of these trends they may
have ideas to address these issues
Trend Analysis
Peak Season Reliability
WEC M h 2002 C St d WEC March 2002 Case Study
NERC-GATE Study
Based upon a study originally performed at Southern p y g y p
Company that resulted in a 1% reduction in its reserve
margin criteria with no reduction in customer service
reliability (a $100 million savings)
Aging Versus Reliability
WEC July 2004 Case Study
Aging or Vintage which is most responsible for
differences in boiler tube leak rates?
WEC November December 2003 Case Study WEC November, December 2003 Case Study
Identification Phase - Part 2
Solution Option Identification
For Each Problem Area
Conduct Failure Modes and Effects Analysis
D t i C Determine Consequences
Identify Technologically Feasible Alternatives
Pl t & G l Offi St ff Plant & General Office Staff
Successful implementations at other plants
Vendor recommendations Vendor recommendations
Research organizations recommendations (EPRI)
Other outside sources
Common Elements Phase 3 - Evaluation
March 2003 Case Study
Retrofit Capital Project
Evaluation Process
Elements of an Evaluation Analysis
1) IMPACT A di ti f diff i f t l t 1) IMPACT A prediction of difference in future plant
performance if the project is implemented versus if it is not
implemented (this is the primary place in an evaluation
h NERC GADS i i l bl ) where NERC-GADS is invaluable).
2) WORTH of PERFORMANCE IMPROVEMENT An
estimate of the value to the company resulting from a
change in the units performance
3) COST The total budget cost including equipment
procurement and installation costs and should include all
financing charges financing charges
Capital Project
Evaluation Process Typical Impacts
Future with/without the project
(positive/negative)
Availability Availability
Efficiency
O & M Savings (or increased cost)
A ili P R i t Auxiliary Power Requirements
Maximum or Minimum Capacity
Environmental
Other quantifiable impacts
Intangibles
Impact Data Sources
Knowledgeable plant and support staff
Engineering staff
Plant data !!! (NERC-GADS)
Industry data !!! (NERC-GADS)
Manufacturers and consultants Manufacturers and consultants
Other projects results
Test Results
Oth Other
Capital Project Evaluation Process
Justification Justification
Timing
P i iti ti Prioritization
Capital Project
Evaluation Process Part 1
Justification - The first (and easiest) Justification The first (and easiest)
obstacle a project must pass
Addresses the question Are the total Benefits
f thi j t t th it t t l C t ? of this project greater than its total Costs?
A variety of financial terms can be used
Net Present Value Net Present Value
Internal Rate of Return
Payback Period
Life Cycle Benefit to Cost Ratio Life Cycle Benefit to Cost Ratio
Others
Capital Project
Timing The second obstacle a project must
overcome overcome
Addresses the question If a project is justified, when
should it be implemented .
Many wear-out project need to have this analysis
performed based on their technical risk profile
All projects should be timed based on their economic All projects should be timed based on their economic
risk profile
Capital Project
Prioritization - The third (and hardest) Prioritization The third (and hardest)
obstacle a project must overcome
Addresses the question If the company does
not have all of the resources (money, time,
manpower) necessary to implement all of the
justified projects that should be done this year,
which projects will hurt the least to delay? which projects will hurt the least to delay?
Operations & Maintenance
Economic Decision Analysis
Companys business economics applied to
day-to-day O&M decisions
Helps identify the best economic option for
recovering from abnormal conditions
Helps identif the best economic option for Helps identify the best economic option for
establishing normal O&M programs
O&M Decision Analysis
Problem solution steps
Define problem and identify viable options
Quantify technical consequences of options
Combine technical consequences with
companys economics
Evaluate results and incorporate into decision
O&M Decision Example
Leaking Feedwater Heater
P bl Problem
Tube failure in 7A feedwater heater
Requires isolation of 6A & 7A heaters
1% efficiency loss during isolation
Solution Options
1) Remove unit from service immediately, locate and plug leaking
tube
2) Wait until weekend to repair
3) Wait until next planned outage and imbed repair
4) Wait until next forced outage of sufficient duration to imbed 4) Wait until next forced outage of sufficient duration to imbed
repair
Consequences Consequences
Option 1- repair immediately
48 hour outage during high demand period g g g p
Overtime labor cost of $1000
Start-up cost of $20,000
T t l t $217 000 Total cost = $217,000
Option 2- repair during weekend
48 hour outage during lower demand period
Overtime labor cost of $1000
Start-up cost of $20,000
1% efficiency penalty until weekend 1% efficiency penalty until weekend
Total cost = $137,000
Option 3 -repair during next planned outage
1% efficiency penalty until next planned outage 1% efficiency penalty until next planned outage
No outage cost since repair will be embedded in
planned outage
T t l t $202 000 Total cost = $202,000
Consequences
Option 4- repair during next forced outage
1% ffi i lt til t 48 h t 1% efficiency penalty until next 48 hour outage
uncertain when next 48 hour outage will occur
NERC-GADS data for your unit & peer units can help
quantify the uncertainty range
Total cost range = $0 - $202,000 Total cost range $0 $202,000
maximum cost of $202,000
break even point in 8 weeks
What would YOU decide?
Option 1 (repair now) - $217,000
O ti 2 ( i d i k d) $137 000 Option 2 (repair during weekend) - $137,000
Option 3 (repair during P. O.) - $202,000
Option 4 (repair during F O ) $0 $202 000 Option 4 (repair during F.O.) - $0-$202,000
If the same event happened at a different time the
following economic results could happen:
Option 1- repair now $ 75,000
Option 2- repair during weekend $ 90,000
Option 3- repair during next PO $450,000 Option 3 repair during next PO $450,000
Option 4- repair during next FO $0-$450,000
N h t ld d id ??? Now what would you decide???
Operations & Maintenance
Economic Decision Analysis
Applications
Maintenance
Reactive (e g planned outage extension) Reactive (e.g. planned outage extension)
Proactive (e.g. condition directed maintenance)
Operations
Reactive (e.g. tube leaks)
Proactive (e.g. pump operations) Proactive (e.g. pump operations)
Common Elements Phase 4
Implementation April 2003 Case Study
Implementation
Project choice (economic plus intangibles) j ( p g )
Financing
Goal selection
Monitor actual results and compare against
expected results
Awareness
Implementation
Goal Setting Case Studies Goal Setting Case Studies
May & June 2003 Are Reliability Measures May & June 2003 Are Reliability Measures
Unreliable?? (Ref 12)
July 2003 Planned vs. Unplanned Outages -
Effects on Goals (Ref 13)
Are Reliability Measures Unreliable?
Factors EAF, FOF, etc.
Factors use the entire time period as the
denominator without regard to unit demand
EXAMPLE: Peaking Gas Turbine
100 hrs/year demand 00 s/yea de a d
25 forced hours during demand
EAF = 99.71%
FOF = 00.29%
Are Reliability Measures Unreliable?
FOR EFOR FOR, EFOR
In Example
FOR = EFOR = 25% FOR = EFOR = 25%
In reality the GT is likely to have had many more In reality the GT is likely to have had many more
FOH reported since GADS counts all forced outage
hours, not just ones during demand periods.
Therefore act al EFOR statistics are m ch higher Therefore, actual EFOR statistics are much higher,
often 60% +.
Equivalent Forced Outage Rate
Demand (EFORd)
Markov equation developedin 1970s Markov equation developed in 1970 s
Used by the industry for many years
PJ MI nterconnection (20 years) PJ M Interconnection (20 years)
Similar to that used by the Canadian Electricity
Association (20 years) Association (20 years)
Being use by the New York ISO, ISO New
England, and California ISO.
Now a part of IEEE standard 762 & NERC-GADS
EFORd Equation:
EFORd=[f(FOH) +fp(EFDH)] * 100% EFORd [f(FOH) + fp(EFDH)] 100%
[SH + f(FOH)]
Where: f = (1/r)+(1/T)
(1/r)+(1/T)+(1/D) (1/r)+(1/T)+(1/D)
fp = SH/AH
r=FOH/(#of FOH occur.) r FOH/(# of FOH occur.)
T= RSH/(# of attempted Starts)
D=SH/(#of actual starts)
D SH/(# of actual starts)
121
EFORd Concept
Equation is complex, but concept is simple
O Reported Forced Outage Hours are reduced
Reduction % is the ratio of Reserve Shutdown
Hours to the Service Hours in the time period Hours to the Service Hours in the time period
This is an approximation (since actual
demand hours are not collected by NERC) demand hours are not collected by NERC)
that estimates the hours of forced outage
during demand periods
Advantage We can calculate historic EFORd
without collecting new data!!!
Example of EFORd
EFOR vs EFORd
3000
35.00
40.00
45.00
,

%

EFOR range from 3 9 to 42 4%
1000
15.00
20.00
25.00
30.00
O
R

&

E
F
O
R
d
,
EFOR, range from 3.9 to 42.4%
EFORd, range from 3.9 to 10.6%
0.00
5.00
10.00
2
1
.
7
0
2
1
.
7
0
2
1
.
7
0
2
1
.
7
0
2
1
.
7
0
2
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.
7
0
2
1
.
7
0
2
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.
7
0
2
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.
7
0
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.
7
0
2
1
.
7
0
2
1
.
7
0
2
1
.
7
0
2
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.
7
0
2
1
.
7
0
2
1
.
7
0
E
F
O
7
6
2
7
1
2
6
6
2
6
1
2
5
6
2
5
1
2
4
6
2
4
1
2
3
6
2
3
1
2
2
6
2
2
1
2
1
6
2
1
1
2
6
2
1
2
Reserve Shutdown Hours
EFOR - demand
For units with zero Reserve Shutdown Hours For units with zero Reserve Shutdown Hours
(RSH), EFOR and EFORd have the same value.
For units with high RSH, EFOR will have an
unrealistically high value compared to EFORd
Because EFORd comes closer than EFOR to
ti th it i bilit t d representing the units inability to produce
power when needed, I recommend that EFORd
be used for all generating units in your fleet be used for all generating units in your fleet
Goal Setting
Planned versus Unplanned Outages
WEC JULY 2003 Case Study & Ref 13
F t d f l d t l d For every extra day of planned outage, unplanned
outages only were reduced by 0.6 of a day
This suggests that planned outages should be gg p g
minimized in order to maximize availability
However, planned outages almost always occur during
the non-peak season when financial consequences are the non-peak season, when financial consequences are
much lower by as much as 75% (compared to an average
peak season day)
Th f th t t th t ill lt i th l t t Therefore, the strategy that will result in the lowest cost
of electricity is to maximize planned outages (within
reason) so as to minimize the expensive forced outages
Implementation
Monitor Actual Results and Compare Monitor Actual Results and Compare
Against Expected Results
September 2002 Case Study Predicting Unit p y g
Reliability
Feedback Into Awareness, Identification &
Evaluation Phases
Common Elements
JanuaryApril 2003 Case Studies
P f Performance
Improvement
Performance Improvement Programs
Successful Performance Improvement Programs
(PIP) utilize a systemic approach to improving plant (PIP) utilize a systemic approach to improving plant
performance, tailored to each companys unique set
of constraints and opportunities
There are many diverse elements that must be
integrated together
Th NERC GADS d t t i k t f The NERC-GADS data system is a key aspect of
many of these elements
GADS in Successful Performance
Improvement Programs
Awareness
Unit Benchmarking Unit Benchmarking
Forecasting
Communications
Identification Identification
HILP Benchmarking
Trend Analysis Trend Analysis
Evaluation
Proposed Projects Impact
Implementation Implementation
Goal Selection
Results Monitoring and Comparison to Expectations
Feedback into Process Feedback into Process
The Future
Transforming to a Market-Driven
Business Environment
The Future
Is Not
What It
U d T Used To
BBe
Increasing Increasing
Competition
Is The Future
Of O I d t Of Our Industry
Past Business Environment
Regulated with Suppressed Competition
Basic Equation was
Cost (prudent) + profit (mandated) = Price
Management Decision Focus was to
AVOID RISK!! AVOID RISK!!
Evolving Business Environment
Market-Driven with Increased Competition
Basic Equation is
Price (market) Cost (total) = Profit
Management Decision Focus is to
Identify Quantify and Manage Risk Identify, Quantify and Manage Risk
Example 1 of Reward/Risk Decisions
You are playing a video poker jacks or better game p y g p j g
You bet $5
You are dealt the 10, jack, king and ace of hearts and the
queen of spades
The reward for a straight is $20
The reward for a royal flush is $2000
Should you
1) keep the five cards you are dealt for a sure $20 payoff? 1) keep the five cards you are dealt for a sure $20 payoff?
2) discard the queen of spades, hoping for the queen of hearts
for a possible $2000 payoff?
Video poker example analysis
Risk = $5
Reward Reward
Option 1 - $20 @ 100% probability = $20.00
Option 2 - $2000 @ 1/47 probability = $42.55
Reward/Risk
Option 1 - $20/$5 = 4
Option 2 $42 55/ $5 = 8 51 (Actually better since Option 2 - $42.55/ $5 = 8.51 (Actually better since
other winning cards could be drawn; i.e. a different
heart for a flush or a different queen for a straight)
Example 1A of Reward/Risk Decisions
You are playing a video poker jacks or better game p y g p j g
You bet $5
You are dealt the 9, 10, jack, king of hearts and the
queen of spades
The reward for a straight is $20
The reward for a straight flush is $250
Should you
1) keep the five cards you are dealt for a sure $20 payoff? 1) keep the five cards you are dealt for a sure $20 payoff?
2) discard the queen of spades, hoping for the queen of hearts
for a possible $250 payoff?
Example 1A of Reward/Risk Decisions
Video poker example analysis
Risk = $5
Reward
$ $ Option 1 - $20 @ 100% probability = $20.00
Option 2 - $250 @ 1/47 probability = $5.32
Reward/Risk Reward/Risk
Option 1 - $20/$5 = 4
Option 2 - $5.32/ $5 = 1.06 (Actually, slightly better
since other winning cards could be drawn; i e a since other winning cards could be drawn; i.e. a
different heart for a flush or a different queen for a
straight)
You are at a horse track with $100 in your pocket
Your instructions are to bet $10 on one horse to win in
each of 10 races each of 10 races
You will be graded on how many times you cash a
winning ticket (this is analogous to a regulated, risk-
adverse business environment)
What is your best betting strategy??
Horse Track Reward/Risk Example
Risk-Adverse Winning Strategy
Below are the horses in the first race and the odds that they will win
the race (as set by the track handicapper) ( y pp )
Horse Odds
Secretariat (favorite) 2-1
Whirlaway 4-1 y
Citation 5-1
Gallant Fox 7-1
Alysheba 8-1 Alysheba 8 1
Seattle Slew 10-1
Northern Dancer 12-1
Swaps 15-1 Swaps 15 1
War Admiral 17-1
Aristides 20-1
Which horse would you bet on? Which horse would you bet on?
Risk-Adverse Winning Strategy
As the famous sportswriter, Grantland Rice said, the
race doesnt always go to the swiftest, but thats the race doesn t always go to the swiftest, but that s the
way to bet!
The best strategy is maximize the number of times you
pick a winning horse is to bet the favorite ! pick a winning horse is to bet the favorite !
This virtually guarantees that you will cash a winning
ticket the most times (versus other betting options)
However you will almost certainly walk out of the track However, you will almost certainly walk out of the track
with less than $100 in your pocket (the total payoff on
the times when the favorite wins is not enough to
counteract the times it doesnt win). But how much counteract the times it doesn t win). But how much
money you end up with is not the way you will be
graded, so you dont care.
Risk-Manage Winning Strategy
This time you will be graded on how much
f 10 money you have at the end of the 10 races
In this case you must first handicap
( ti t th t dd ) h h h (estimate the true odds) each horses chance
of winning its race using all available and
relevant data about each horse such as past relevant data about each horse, such as past
performance, previous workout times,
jockeys success rate track conditions etc jockey s success rate, track conditions, etc.
But you will not simply bet on the horse with
the best chance of winning its race!! the best chance of winning its race!!
Risk-Manage Winning Strategy
Instead, you will now compare each horses
f ff true odds of winning against the pay-off as
noted on the tote board just prior to the race
Y h ld th b t th h ith th You should then bet on the horse with the
highest pay-off to true odds ratio the Reward
to Risk ratio to Risk ratio
Risk-Management Winning Strategy
Below are the horses in the first race and the odds that they will win the race
(as set by the track handicapper) and the payoff rates (as set by the betting
public) public)
Horse Odds Payoff Reward/Risk Ratio
Secretariat (favorite) 2-1 1.5/1 0.75/1
Whi l 4 1 6/1 1 5/1 Whirlaway 4-1 6/1 1.5/1
Citation 5-1 10-1 2/1
Gallant Fox 7-1 10-1 1.43/1
Alysheba 8-1 4-1 0.5/1 y
Seattle Slew 10-1 17-1 1.7/1
Northern Dancer 12-1 20-1 1.67/1
Swaps 15-1 25-1 1.67/1
War Admiral 17 1 30 1 1 76/1 War Admiral 17-1 30-1 1.76/1
Aristides 20-1 35-1 1.75/1
Which horse would you bet on?
Risk-Management Winning Strategy
Example
You estimate that the horse with the best chance of winning g
(Secretariat) will win one out of two times (against this field of horses
on this track on this night)
However, since many people are betting on this horse to win, the
payoff will only be 1.5-1 if it wins p y y
Therefore, since the reward to risk ratio is only 0.75, this would not be
a good bet
Another horse that you have handicapped (Citation) at 5-1 has a payoff
of 10-1 since not many people bet on it of 10 1 since not many people bet on it
Therefore, its reward to risk ratio is 10/5 (or 2/1) making it an excellent
bet
You should anticipate having $200 in your pocket after 10 races if you
bet on Citation ($100 profit) but only $75 if you bet on Secretariat ($25 bet on Citation ($100 profit) but only $75 if you bet on Secretariat ($25
loss)
This is actually how people make a living at a horse track they are
betting that they can make better choices of where to invest their
money than the other people at the track that day money than the other people at the track that day
Power Plant Management
using Reward/Risk Decision-Making
Identify multiple solution options for any
particular issue particular issue
Use all relevant data (especially NERC-GADS
data for reliability effects) to estimate each data for reliability effects) to estimate each
options impact
Estimate each options reward/risk ratio p
Consider Reward/Risk Ratio in decision-
making
Compare results against expectations and
improve future decision-making
Need Better
Key Performance Indicators (KPI)
EFOR (demand) ( )
Commercial Availability
Un-weighted
weighted
Market-Based KPIs
May & June 2003 Case Studies y
Demand EFOR EFOR (demand) Demand EFOR EFOR (demand)
Developed for non-base loaded units
Approximates the reliability of a unit during
demand periods demand periods
Commercial Availabilityy
Un-weighted measures a units availability
only during demand periods
Weighted measures a units availability only Weighted measures a unit s availability only
during demand periods and weights each
hours impact by the units net value during
that hour
Commercial Availability
Commercial Availability (CA) is a relatively new y ( ) y
performance metric that has become very important at
many market-based generating companies and other
companies who wish to minimize their cost of electricity companies who wish to minimize their cost of electricity
CA combines the generating plants technical availability
with the economic consequences of its availability (or
unavailability)
For more information see the Synopsis of the 2004 WEC-
PGP paper Performance of Generating Plant: New PGP paper Performance of Generating Plant: New
Realities, New Needs published on the WEC website
and the May and June 2003 WEC-PGP case studies
Why was Commercial Availability Why was Commercial Availability
Created? Created?
Traditional availability indicators such as Equivalent Traditional availability indicators such as Equivalent
Availability Factor are sometimes inadequate or even
misleading
A il bilit i di t d d th t id d An availability indicator was needed that provided a
direct linkage between the plants availability and the
companys electricity costs (or profits) p y y ( p )
Commercial Availability (CA) was created to meet
that need
Why are Traditional Availability Why are Traditional Availability
Indicators Sometimes Inadequate? Indicators Sometimes Inadequate?
There are often large differences in the economic
consequences of an unexpected outage at a power
plant p
They economic consequences vary from season to
season, day to day, and from hour to hour.
This is most obvious in generators used primarily in
peaking applications, but is also true for more base
loaded fossil, hydro and even nuclear plants oaded oss , yd o a d e e uc ea p a ts
(although to a lesser degree).
Variation in Financial Impact of Variation in Financial Impact of
Outages Outages
E l Example
A pin hole leak is detected in a boiler tube at a base-
loaded unit on a weekday
Option 1 Remove the unit from service
immediately in order to minimize the damage and
outage time outage time
Option 2 Wait until the weekend to remove the
unit (when the hourly economic consequences are
less) but expect to have a longer outage less) but expect to have a longer outage
Variation in Variation in Technical Impact
of Outages of Outages
High or Low Demand Period
Option 1 1 day outage 0 27% reduction in EAF Option 1 1 day outage - 0.27% reduction in EAF
Option 2 2 day outage 0.54% reduction in EAF p y g
Variation in Variation in Financial Financial Impact Impact
of Outages of Outages
Low Demand Period Increased Cost or Lost Profits
Option 1 (1 day outage during week)- $115,000 p ( y g g ) ,
Option 2 ( 2 day outage on weekend)-$184,000
High Demand Period Increased Cost or Lost Profits
Option 1 (1 day outage during week)- $354 000 Option 1 (1 day outage during week)- $354,000
Option 2 (2 day outage on weekend)- $265,000
Traditional Indices Traditional Indices
None of the traditional performance metrics are
adequate to indicate or reflect the economic optimal
d i i decision
The term Commercial Availability (CA) was created to The term Commercial Availability (CA) was created to
address the problem
Commercial Availability Commercial Availability
Simple Concept
O d fi iti i th ti f t l fit ( One definition is the ratio of actual profit (gross
margin) delivered by a plant relative to its
potential profit if it had been able to deliver p p
every MW-HR required
Other definitions are being used at different
companies around the world companies around the world
Commercial Availability Calculation Commercial Availability Calculation
Example 1 ( 300MW unit for 10 random hours in year)
Hour G M EAF G M Hour G. M. EAF G. M.
potent actual CA = $72000/$73500 X 100 = 98.0%
1 $ 3000 1 $ 3000 EAF = 7/10 X 100 = 70%
2 $ 0 1 $0
3 $ 1500 0 $0 Lost Margin = $73500-$72000
4 $ 6000 1 $6000 = $1500
5 $12000 1 $12000 5 $12000 1 $12000
6 $24000 1 $24000 EFORd = 1/7 X 100 = 14.3%
7 $18000 1 $18000
8 $ 9000 1 $ 9000
9 $ 0 0 $ 0
10 $ 0 0 $ 0
Total $73500 $72000
Commercial Availability Calculation Commercial Availability Calculation
Example 2 (same as example except available in all hours but
hour 6)
Hour G. M. EAF G. M.
potent actual CA = $49500/$73500 = 67.3%
1 $ 3000 1 $ 3000 EAF = 9/10 = 90%
2 $ 0 1 $ 0
3 $ 1500 1 $ 1500 Lost Margin = $73500-$49500
4 $ 6000 1 $ 6000 $ 24 000 4 $ 6000 1 $ 6000 = $ 24,000
5 $12000 1 $12000
6 $24000 0 $ 0
7 $18000 1 $18000 EFORd = 1/7 = 14.3% $ $
8 $ 9000 1 $ 9000
9 $ 0 1 $ 0
10 $ 0 1 $ 0
Total $73500 $49500 Total $73500 $49500
Commercial Availability Commercial Availability
vs. EAF & EFORd vs. EAF & EFORd
EXAMPLE 1 EXAMPLE 2
Lost Margin = $1500 Lost Margin = $24000
EAF 70% EAF 90% EAF = 70% EAF = 90%
CA = 98% CA = 67.3%
EFORd = 14.3% EFORd = 14.3%
Benchmarking Commercial Benchmarking Commercial
Availability Availability
Cannot benchmark directly except against your own
units and their trends
Can benchmark indirectly using
diti l b biliti l conditional probabilities plus your
plants actual economics
Conditional Probability Conditional Probability
When required (thats the conditional part)
what is the likelihood (thats the probability part) that
the unit will be able to generate at its rated capacity
Conditional Probability has been shown to vary
depending upon the plants economic necessity!
(WEC March 2002 case study)
(1-EFORd) is a good metric for Conditional Probability
Conditional Probability Conditional Probability
Using reliability data from the GADS g y
database we can determine frequency
distributions of Conditional Probability
(C.P.) for the peer group of each individual ( ) p g p
unit (1-EFORd)
There will be different probability
distributions during different demand distributions during different demand
periods (peak/non-peak season, day/night,
weekday/weekend day, etc.)
Selecting each units optimum CA goal will Selecting each units optimum CA goal will
start with these C.P. distributions
Setting Commercial Availability Goals Setting Commercial Availability Goals
Using Conditional Probabilities Using Conditional Probabilities
From the example of 10 random hours we might choose From the example of 10 random hours we might choose
Conditional Probability Goals CPG as:
Hours 1,2,3,4 = 92% (hours of mid expected value)
Hours 5 6 7 8 = 98% (hours of high expected value) Hours 5,6,7,8 = 98% (hours of high expected value)
Hours 9,10 = 90% (hours of low expected value)
These might be the best quartile reliabilities (1-EFORd)
of the peer group for each demand period of the peer group for each demand period
U i C di i l P b bili i U i C di i l P b bili i Using Conditional Probabilities Using Conditional Probabilities
The gross margin goal (GMG) for each hour is calculated
b lti l i h h C diti l P b bilit G l by multiplying each hours Conditional Probability Goal
(CPG) by that hours Gross Margin Potential
Note: If the unit has other value to the company in
addition to gross margin (such as ancillary power) that
value should be incorporated value should be incorporated
U i C di i l P b bili i U i C di i l P b bili i Using Conditional Probabilities Using Conditional Probabilities
H GMP $ CPG GMG $ Hour GMP-$ CPG GMG-$
1 3000 .92 2760
2 0 .92 0
3 1500 92 1380 3 1500 .92 1380
4 6000 .92 5520 CA Goal = 71400/73500
5 12000 .98 11760 = 97.1%
6 24000 .98 23520 6 24000 .98 23520
7 18000 .98 17640
8 9000 .98 8820
9 0 .90 0
10 0 .90 0
Total 73500 71400
Commercial Availability Goal Commercial Availability Goal
EXAMPLE 1 EXAMPLE 2 EXAMPLE 1 EXAMPLE 2
Lost Margin = $1500 Lost Margin = $24000
EAF = 70% EAF = 90%
EFORd = 14.3% EFORd = 14.3%
CA = 98% CA = 67 3% CA 98% CA 67.3%
Goal CA = 97.1% Goal CA = 97.1%
Setting Commercial Availability Goals
Using Conditional Probabilities
1) Id if i d i & i l 1) Identify your units design & operational peers
2) Calculate the probability distribution of these units
Conditional Probabilities during their demand
periods that are similar to yours.
3) Estimate your units Optimum Economic
Conditional Probabilities during each demand g
period (often the top quartile or top decile C.P. of
your peers).
4) Apply those Conditional Probability goals to your ) pp y y g y
units economics (forecast or actual) using
whatever definition of Commercial Availability you
choose
Setting Commercial Availability Goals
Using Conditional Probabilities
Although this process might seem complicated
remember the following: g
For every complex,
difficult to understand, hard problem,
there is a simple, easy to understand,
WRONG solution!!
Commercial Availability Implications Commercial Availability Implications
See WEC Case Studies for May & June 2003
Benchmarking
Design Changes
Goals Systems
D i i A l i ( ti & ti ) Decision Analysis (proactive & reactive)
Impact on traditional performance metrics
Perception by other stakeholders Perception by other stakeholders
Commercial Availability Implications
Technology tells us what can be done
WHILE
Economics tells us what should be done
While
Economics tells us what should be done
BUT BUT
Politics tells us what will be done
Optimum Economic Availability
WEC July 2002 case study
In order to maximize profitability each generating
plant must seek to optimize (not simply maximize)
its performance
In addition to the WEC July 2002 case study an In addition to the WEC July 2002 case study an
article by Robert Richwine was published in Power
Magazine in 2004 that more fully describes this
concept (Ref 14)
Optimum Economic Availability Optimum Economic Availability
Availability 100% Availability 100%
Top Quartile
Frontier
A il bilit 100% Availability 100%
Total O&M Cost
$ Cost of
Unavailability
$ Cost Of
Unavailability
Availability 100%
Total O&M Cost +
Unavailability Cost
Total O&M Cost
$ Cost of
Unavailability
Unavailability Cost
$ Cost Of
U il bilit Unavailability
Availability 100%
Total O&M Cost +
Unavailability Cost
Total O&M Cost
$ Cost of
Unavailability
y
$ Cost Of
Unavailability
Availability 100%
Total O&M Cost +
Unavailability Cost
Total O&M Cost
$ Cost of
Unavailability
$ Cost Of
Unavailability
Total O&M Cost Target
Unavailability
Availability 100%
Top Quartile
Frontier
Reactive Proactive
A il bilit 100% Availability 100%
Total O&M Cost +
Unavailability Cost
Total O&M Cost
$ Cost of
Unavailability
Proactive Cost Target
Reactive
Proactive
Proactive Cost Target
Reactive Cost Target
Availability 100%
Future - Market Oriented System
Consequences
More revenue uncertainties
More cost uncertainties
More risk
More opportunities
Summary
Change is occurring everywhere
Changes are not the same everywhere
Company specific programs should be
developed and implemented that will allow
each company to anticipate and respond
i kl t it i t f h quickly to its unique set of changes
The companies that are best able to respond
t k t i d d ill b th to market-induced pressures will be the
survivors
Performance Improvement
Better Use of Reliability Data will be a Key
Factor in Achieving and Sustaining
Optimal Performance
Using Reliability Data to Improve
Power Plant Performance
References (copies available upon request)
1) World Energy Council case studies
www.worldenergy.org www.worldenergy.org
2) Optimizing O&M Cost to Maximize Profitability
3) NERC-GATE trend studies www.nerc.com
4) Performance Improvement at Southern Company
5) Peer Unit Benchmarking
6) Establishing Goals using Statistical Benchmarking 6) Establishing Goals using Statistical Benchmarking
7) Predicting Future Plants Reliability Using Learning
Curve Theory
References (copies available upon request)
8) Predicting Long Range Plant Maintenance Cost
9) Is Your Plant Headed for a HILP? )
9) Seasonal Performance Trends
10) Availability Following Planned Outages
12) R li bilit M U li bl It Ti f 12) Reliability Measures Unreliable Its Time for a
Change
13) Planned vs. Unplanned Outages: The Economic ) p g
Impact of Selecting Availability Goals
14) Maximizing Plant Availability May Not Optimize Plant
Economics Economics
Presented by
Robert R. (Bob) Richwine
R li bilit M t C lt t Reliability Management Consultant
RRR2@bellsouth.net
1 678 231 3606 +1-678-231-3606
Atlanta, Georgia, USA 30076

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