A paper that explained the implications of overhauling gas turbine-based power plants under the then new UK power trading arrangements.

1. Overhauling CCGTs Under NETA
Shaun West
Technical Services Manager
Innogy plc
© Innogy 2001

2. Outline
Commercial and technical considerations
Timing
Inspections and overhauls
Return to service
Decision making
Planning for the unplanned
Opportunity maintenance
Competency and resource management
Summary
© Innogy 2001

3. Considerations
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4. Considerations
© Innogy 2001

5. Commercial Considerations
Use forward gas and power curves to
identify best outage period
Consider optimising with other plant in
portfolio to maximise gross margin
Need to consider effect of plant outage
overrun
– risk of late return to service
– risk of failure after return to service
© Innogy 2001

6. Typical Forward Curves
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G as Price (p/therm )
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Month Month Month Month Month Month Month Month Month Month Month Month Month
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Electricity Price (£/MW h)
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7. Commercial Considerations
Identification of optimum outage timing
– period of low power price following
predicted return to service date
– period of high predicted gas price during
outage
This period could be during the winter as it
is the difference between the two forward
curves!
© Innogy 2001

8. Optimising with a Portfolio
Level of ‘spare’ capacity
Risk (probability) of overrun
Cost of holding back other plant in reserve
Self-insure
– without ‘self-insurance’ financial penalties
maybe high
Market instruments to cover risk?
– few and often expensive (ACE and
Innogy in UK)
© Innogy 2001

9. Technical Considerations
It is important not to replace components
before life is consumed
– need to consider repair/replace
strategies
Need to keep account of plant life usage
– typically in terms of EOH
– also condition based
Leads to understanding ‘engineering deficit’
– how rapidly the plant wears out
© Innogy 2001

10. Technical Considerations
Timing
– will overhaul teams be available?
– will parts be at site?
– spares?
Schedules
– is the interval between overhauls
sufficient for refurbishment and
procurement of long-lead items?
© Innogy 2001

11. Outage Timing
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12. Planning - the timing
What do the forward curves look like?
When will plant life (EOH) be consumed?
– based on base-load and flexible
operation
What is the ‘risk’ of flexible operation?
– sell gas, frequency response, etc
What are the costs of running past the
overhaul interval
– will blades be fit for refurbishment?
© Innogy 2001

13. Summer vs Winter Outages
Innogy’s outage season starts in February
and finishes in November
Summer 2000 large availability payments
Winters are now warmer and wetter - less
power demand
Gas prices now pegged to oil
– high fuel costs in winter
© Innogy 2001

14. Conclusions
Use of forward curves for fuel and power
suggests that we will move to 12 month
outage season
Better consumption of component life
– leading to lower cost per EOH
Risk - the UK will push F-class
technologies harder than any other market
in the world
© Innogy 2001

15. Inspections and Overhauls
© Innogy 2001

16. Planning the Outage
It is vital that planning considers
– scope
– outage duration and outage period
– staff resources
– equipment
© Innogy 2001

17. Scope of Overhaul
What is a standard overhaul?
– what is the value of extending the
overhaul to do more work
– value in the marginal cost increase
Innogy no longer does ‘A’ inspections on
13E2 gas turbines
Innogy carries out extended ‘B’ inspections
on 13E2 within the standard period
© Innogy 2001

18. Scope of Overhaul
Innogy has undertaken
– reduced scope ‘C’ inspections - following
a ‘B’ inspection
– standard scope ‘C’ inspections - due to
need to generate
– extended scope ‘C’ inspections - due to
need to overhaul
© Innogy 2001

19. Duration
Scope of work defines the overhaul plan
The plan identifies the critical path
Optimising the critical path reduces the
overhaul duration and overrun risks
Validity of the plan is dependent on:
– staff resources
– equipment
– lay-down area
– documentation
© Innogy 2001

20. Staffing
Availability of:
– overhaul teams (fitters, lagging,
scaffolding, C&I, welders, etc)
– own maintenance team
– OEM or other competent engineers
– re-commissioning engineers
© Innogy 2001

21. Culture
‘One team - one goal’ culture for all
involved
– station staff, technical contract
engineers, trade/craft contract staff
H&S - paramount
QA - good job first time
Innovation - how can ‘we’ do it better next
time?
© Innogy 2001

22. Equipment
Availability of equipment:
– additional vane carriers or combustors
– specialist tooling
– up-ending facilities and transport
– cranage
– lay-down areas
Must identify all critical items on the
overhaul plan
© Innogy 2001

23. Lay-down Plans
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24. Documentation
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25. Documentation
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26. Return to Service
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27. Rapid Return to Service?
What value?
– power contracts (generation)
– gas arbitrage (sell gas on)
– options (power/gas swaps) and services
– market volatility
More products to sell
Value is greater the earlier the date is
known
© Innogy 2001

28. Rapid Return to Service?
Drivers for shorter overhaul durations
Overhaul period
Overhaul duration
Late shut down to
take advantage of
high power prices
© Innogy 2001
Overhaul is completed
but gas price is high
and traded
Plant returns to
service when
power price is high

29. Generation and Options
Value of gas trade - 400p
Value of option - 50p
25
Price £
20
15
Option
10
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0
0
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3
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Contract date
© Innogy 2001
5
6
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30. Rapid Return to Service
Important to reduce overhaul duration
OEM’s durations are not ambitious
– different drivers and don’t understand the
power market
Profitability may be increased even though
the outage costs more
– 24/7 working
– onsite machining ‘insurance’
© Innogy 2001

31. Returning to Service
Re-commissioning is now key
– don’t forget the C&I!
Must minimise exposure to the balancing
market
– must not trip whilst on load
– must come to load in a predicable
manner
Some benefits with aggregation
© Innogy 2001

32. NETA - balancing market
penalties
Trip exposes operator to system buy price
– typically £2-1000/MWh, average
£100/MWh
– 680MW x 3.5h = 2,380MWh
– 2,380MWh x £100/MWh = £238,000
– gas trade 42,000 therms at 20p/therm
– revenue of gas = £23,000
– deficit generated of £200,000
Less risk prior to gate closure
© Innogy 2001

33. Benefits of Aggregation
Reduces exposure to the balancing market
Larger the number of units the lower the
exposure the the balancing market
Costs associated with over and under
generation
To make best use of aggregation need
better than half-hour trading resolution
© Innogy 2001

34. Planning for the Unplanned
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35. Planning for the Unplanned
Inspections of plant always reveal
something unexpected
But power plants always run with broken
parts!
Question - when can I run on and when do
I have to replace?
© Innogy 2001

36. Commercial-technical
Dilemma
The business plan for the station is most
often held at a senior level
The budget for the station is most often
devolved downward
Dilemma - the financial year based budget
holder may have a detrimental effect on
the commercial long-term performance
Trading makes the dilemma even more
difficult to resolve!
© Innogy 2001

37. Run/no-run?
Row-one blade tip missing
Cracking is found in blades
Retaining pin has come loose but not
damaged turbine
Fretting and overheating of burner plates
© Innogy 2001

38. Row-one Blade Tip Missing
© Innogy 2001

39. The Story….
OEM - shut-down and install new
Generator’s position - high pool price, no
blades available, must generate
Vibration levels within acceptable levels
Engineering advice taken - O&M
procedures put in place
The machine ran on for six weeks with
blades poor condition
© Innogy 2001

40. Generator Transformer
Failure
© Innogy 2001

41. The Story….
Issue - main transformer failure, average
failure rate once every ten years
Problem - not cost effective to hold spare,
major loss of output if fails, 18-month
delivery times
Solution - condition monitoring, insurance
for business interruption, spare’s
insurance
© Innogy 2001

42. Cracking on Turbine Blades
© Innogy 2001

43. The Story….
Concern - vanes burning due to insufficient
cooling
OEM - only half-set of vanes available
Owner - need to operate for at least six
months
Operator - O&M procedures put in place
based on Engineering advice
Outcome - machine operated successfully
for six-months
© Innogy 2001

44. Generator Earth Fault
© Innogy 2001

45. The Story….
Issue - rewind of stator three- to sixmonths
Problem - total loss of generation, not cost
effective to hold spares, long lead times
Solution - condition monitoring, business
interruption insurance and spare’s
insurance
© Innogy 2001

46. Lost Retaining Pin
© Innogy 2001

47. The Story….
Concern - minor inspection showed that
the pin was missing
OEM - no new pins available for six-weeks
Owner - need uninterrupted operation for
next six weeks
Solution - installed modified re-engineered
design suitable for six-months operation
© Innogy 2001

48. Fretting and Overheating
© Innogy 2001

49. The Story….
Concern - minor inspection revealed
excessive fretting and burning
OEM - should not happen
Owner - needed uninterrupted operation
for next twelve months
Solution - installed modified refurbished
design suitable to reduce fretting damage
and overheating
© Innogy 2001

50. Decision Making
© Innogy 2001

51. Run/no-run Decisions
Who makes the decision?
– OEM/competent engineer?
– owner/banks?
– insurers?
– O&M contractor?
– trader?
All should be considered to some degree
Driving factor is to keep the plant available
© Innogy 2001

52. Run/no-run Decisions
‘We need to have a
decision - NOW!’
‘There are high
prices available we’re loosing
opportunity’
‘I don’t want to know
the technical details..’
© Innogy 2001
‘What’s the risk of
running on?’
‘How long can
we run safely
for?’
‘How long will it take
to fix and how much
will it cost’

53. Run/no-run Decisions
Problem with making these decisions
– best placed engineer is not the holder of
the station business plan
– holder of station business plan can
understand the consequences but
understands less the reasons
Joint decision is therefore necessary
– but must be made on equal basis
– but quickly!!
© Innogy 2001

54. Planning for the Unplanned
© Innogy 2001

55. Planning for the Unplanned
Before considering unplanned outages it is
important to remember
– insurers do not like surprises
– surprises are expensive
How can the number of surprises be
minimised?
© Innogy 2001

56. Planning for the Unplanned
Before any outage a number of scenarios
should be considered
The scenarios should cover the major risks
to outage duration
A number of mitigation strategies should
then be formulated
Formalise risk process will aid the
development of the strategies
© Innogy 2001

57. Mitigation Strategies
Plant condition monitoring to ensure ‘no
surprises’
Regular visual and NDT inspections
‘Spares club’ to reduce the cost of
emergency spares from the OEM
Source of independent engineering advice
to
– challenge the OEM
– provide O&M practices to manage the
problem
© Innogy 2001

58. Planning for the Unplanned
Sometimes when it’s broken ‘it really is
broken’
Important to have relationships with
service providers to enable rapid stripdown and re-build
– outage contractors
– independent technical advice
– parts suppliers (own, new or club)
– de-stacking
– stator re-winding
© Innogy 2001

59. Opportunity Maintenance
© Innogy 2001

60. Opportunity Maintenance
It is important to identify repairs and
maintenance with a fast turn-around to
"hit" during small scale outages
Ensures that annual plant availability is
maximised
Allows plant to maintained safely and
effectively
But ‘if it ain’t broke don’t fix it’
© Innogy 2001

61. Opportunity Maintenance
Can be simple to identify
– NGC working on lines and limiting export
– TransCo limiting gas off-take
– full shut-down for DCS up-grade
– high fuel prices
Can be difficult to resource
Important to plan early so that resources
are available
© Innogy 2001

62. Making the Most of the
Opportunities
Good work management system required
– keeps list of defects
– produces lists of spares
– instructs contractors
– raises permits and work instructions for
signing
Could be paper-based but integrated
system offers significant benefits
© Innogy 2001

63. Competency and Resource
Management
© Innogy 2001

64. Competency and Resource
Management
Staff and contractors come and go….
……..but the power station will remain
Lessons learnt must be remembered if the
power plant is to remain competitive
This responsibility does not just rest with
the management team
Responsibility rests with the whole O&M
team
© Innogy 2001

65. Competency
Need to define what competencies must
be held by the O&M team
Need to measure the competencies
Important to manage the risk of losing
‘critical’ staff member without losing
competency
– develop other staff
– identify potential recruits
© Innogy 2001

66. Competencies
The main competencies that are required
to maintain and overhaul a CCGT are
– E,C&I
– mechanical
Specialist competencies would (normally)
be contracted
Specialist labour (fitters, riggers, welders,
etc) would be contracted
© Innogy 2001

67. Competencies
E,C&I
– HV - generator, transformers, switch yard
– MV/LV - motors, distribution, actuators
– control systems
– instrumentation
Mechanical
– gas turbine
– steam turbine
– HRSG
– balance of plant
© Innogy 2001

68. Competencies
Start here to identify
and measure your
competencies
Identify
competency needs
Measure
competency level
Identify personal
training requirements
Training ‘on the job’ or formal
© Innogy 2001

69. Summary
© Innogy 2001

70. Summary
Commercial and technical considerations
– identifies when the ‘best’ period for the
outage
Inspections and overhauls
– read the OEM’s book but remember it’s
only guidance
Return to service
– making the plant available is valuable,
even if you do not generate
© Innogy 2001

71. Summary
Decision making
– difficult decisions require both technical
and commercial input
Planning for the unplanned
– plan for the unplanned and reduce the
unexpected surprises
Opportunity maintenance
– balance maintenance with ‘if it isn’t
broken don’t fix it’ approach
© Innogy 2001

72. Summary
Culture
– ‘one team’
– ownership of outcomes
Competency and resource management
– what’s needed, where is it, how best to
develop it?
© Innogy 2001

73. Questions?
© Innogy 2001