Deregulation around the world is driving the popularity of small-scale distributed generation schemes in industrial and CHP applications. Advanced automation tools offer opportunities for reducing costs and ensuring reliability.


Figure 1. General scheme of CHP plant and user
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The on-going process of deregulation in the world’s electrical markets is changing the way the major market players are operating. The structure and functions of major energy firms involved in the market is shifting and as a result, the identification and development of promising business strategies is now the main challenge for top management.

The changes associated with deregulation and liberalization have also brought new market opportunities for energy service providers, both in supplying basic energy services, and in supplying more advanced energy solutions customized for the needs of well defined consumer markets.

The market for basic energy services is a typical low profile market, where the only players having a real competitive advantage are the power generation manufacturers and the Operation and Maintenance (O&M) operators. However, the market for advanced energy-related services, which today represents the cutting edge of the energy business, is more interesting.

The use of high level automation tools permits the successful implementation of such advanced services in reliable and customizable packages, fully integrated into plant management strategies.

Remote concepts


Figure 2. Control areas for the plant-user system
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Constant research and development activities geared towards the improvement of product efficiency and the reduction of operating costs in power plants is pushing towards the automatic management of unmanned, or partially manned, industrial power plants.

The need to reduce operating costs is as significant as access to the plant in question when the environmental conditions surrounding the plant become more difficult and onerous. So it is not surprising to find that the strategy of unmanned industrial power plants was first developed to control off-shore plants and installations in deserts or the Arctic area.


Figure 3. Economic model for the proposal and engineering phases
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The design of a new unmanned plant or the modification of an existing one to an integrated remote management functionality requires a considerable effort involving several interconnected disciplines.

The most important feature of a control system which is dedicated to the management of an unmanned plant is reliability and, therefore, the constructive and architectural aspects of the automation system need to be carefully designed. Unmanned plants also need to maintain high levels of operating security (fail-safe philosophy), more than standard manned plants, but at the same time, they need to guarantee an adequate production continuity (fault-tolerant philosophy).

An unmanned plant generally needs remote monitoring of its own operation and so the communication technologies to be used by the automation system must be carefully considered.


Figure 4. Integration between CMMS package and the external world
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The distributed generation solutions that have become possible through deregulation and CHP (combined heat and power) plants, are particularly suited to such unmanned plant applications described above. The future CHP market will probably include a ‘network’ of small unmanned plants (less than 10 MW each) for which it will be necessary to use a remote management strategy.

A general simplified scheme that represents the situation involving a remote control centre, CHP plants and final users is illustrated in Figure 1. In this figure, the control centre represents the monitoring system of the whole system made by CHP plant users. The monitoring system can be divided into two areas: one area is specific to the CHP plants’ monitoring and control and the other one is specific for the users’ monitoring, as illustrated in Figure 2.

Future trends

CHP plants can, in the most suitable cases, reduce a consumer’s total energy costs by up to 40 per cent. But it is important to stress that CHP is not viable at all sites and further that a poor choice of technology could result in inefficient and uneconomic operation. It is therefore quite important to build a clear picture of what specific factors determine the profitability of a CHP scheme.

The development of an accurate, reliable economic model is necessary for any sector where a potential market for CHP exists. Conventional economic models have a number of limitations, particularly where the situation involves a high degree of risk and uncertainty. The suggested approach shows how decision analysis techniques can be combined with a conventional spreadsheet to overcome these weaknesses.

The same type of consideration is valid for the difficulties in managing the relationship with customers for a scope of supply containing a complete package with integrated process and control solutions.

A possible CHP development could be along the following lines:

  • An EPC (engineering, procurement and construction) company can start offering integrated solutions for small CHP plant.
  • The EPC company could obtain great advantages in having an integrated approach to support this activity from the initial proposal until the plant start-up. The workflow followed during the building of a CHP plant is shown in Figure 3.

The following factors must be considered before a decision to construct a plant is made:

  • Economic and financial data
  • Environmental data
  • Legislation in the nation where the plant will be built
  • Engineering data (maintenance, costs, efficiency of different generators, etc.)
  • Competitors

This data is considered, based on the experience of project engineers, in order to convince the customer of the future revenues and costs (in an empirical way), and to aid project development.

Very often, however, professional experience must be relied upon in the decision-making process, and while this is important, it can make the process more complex.

There are two key parameters that will become more important in the future, but they are hard to understand in depth. They are:

  • Maintenance planning – plant cost and future maintenance cost.
  • Environmental impact – this can be a barrier to entry or result in taxation.

A good solution to these problems is to design and develop new methodologies to collect all this different data, from economic to legislative, from engineering to environmental, in order to identify which are the high priority specifications.

With this approach it is necessary to use only economic theories and not process simulation or other technical approaches. It is therefore only a high level description of revenues and costs.

Management support

This new scenario for the CHP and distributed generation market is able to offer a wide variety of opportunities related to the profitable management of CHP plants.

But to realise a modern and profitable management of a distributed power plant network, powerful IT support is needed. This will enable the operator to perform fast and reliable control of all the factors involved, including:

  • The switching on and off of a single CHP plant in the case of a “global problem” which is affecting plant operation.
  • The assimilation of economic parameters coming from energy and fuel markets for example, information on energy and fuel trading.
  • Cha0nging the CHP mix in terms of kWh, kCal and refrigeration unit depending on the seasonal typical demand and the changes coming from the on-line consumption of the final users.
  • The management of plant diagnostic and maintenance functions to ensure a maximum level of plant efficiency.
  • Metering management for invoicing final users.

The complexity of the presented scenario together with the competitive level of the distributed generation and CHP markets, highlight the necessity of being supported by a Decision Support System (DSS) in managing this type of business.

For the functionality provided by such an approach to be attained, complete integration with an automation base system needs to be guaranteed.

On-line optimization

Industrial plants and automation in the process industry are characterized by a high building and functional complexity. The strong interaction among the process units and, in same cases, the exchanging of intermediate products with other plant parts, constitute very complex constraints for plant efficiency.

Apart from the process technology and the training of the operators, the control system is the main lever that can be used in pursuing the optimization of power plant management.

On-line optimization techniques require reliable and accurate measures in order to define the process working point. Diagnostic criteria are able to evaluate the reliability of the process by signalling when maintenance is required. This helps to avoid sub-optimal operation.

The normal periodical maintenance intervals only partially satisfy the plant’s needs. They are defined according to temporal default statistical parameters of the different process components and they don’t take into account the information coming from the field instrumentation that should also be considered. Moreover, the maintenance standard schedule rarely fits the fast-changing marketing conditions that often require maintenance actions to be carried out during periods of low load.

The possibility of being able to collect process signals, integrating them with information coming from dedicated devices and correlating them with the building information of the monitored electromechanical components, allows the operator to carry out a “predictive” maintenance, based on the data interpretation, during low load periods. The consequences of such an approach also have an impact on the plant logistics, scheduling of the resources and reduction of the spare parts stock.

Maintenance support

Nowadays, it is possible to find a great quantity of automation-based systems of different size and power (DSC/PLC) and also a wide variety of Computerized Maintenance Management Systems (CMMS) in the automation market. These can perform several functions, including:

  • Asset management
  • Implementation of logistic processes
  • Spare parts management
  • Maintenance team management
  • Economical and maintenance reporting

To perform their functions, CMMS packages need to receive real-time information from the automation base system used to implement control strategies at the bottom level of the pyramid of control.

Moreover, CMMS typically presents a wide level of opening towards external business management systems using, for example, Web technologies. A typical structure of the interconnection between CMMS packages and the external world is shown in Figure 4.

When a customer needs to implement a certain set of functions using a CMMS package, the automation system integrator must develop an integrated application to completely satisfy customer needs.

This development activity requires the execution of several engineering steps:

  • Part of implementation depends on the specific automation base system and CMMS package selected
  • Another portion depends on the specific family of industrial plants
  • The last part depends on the specific plant especially for the detailed customer requirement in terms of maintenance philosophy.

Future developments

From the automation technologies viewpoint, the future scenario for CHP plants foresees a “distribution of unmanned plants” and not a “set of distributed plant”. In this scenario, every single plant has its own local control system (i.e. PLC) to manage the normal plant working and a remote SCADA to execute monitoring and advanced automation functions.

In the above scenario, it seems reasonable to foresee that the general automation architecture will remain quite similar to the present one: critical decisions will be taken by the local control system (PLC), and the remote SCADA will perform monitoring and remote control.

The network performance, in terms of bandwidth and frequency requirements, will also probably remain similar to present ones. This is true, obviously, only for the information strictly connected with the management of CHP plants. For other type of exploitations of fast network, modern and powerful communication techniques will be necessary.

In addition, the CHP local control functions, in terms of control of process components, will probably remain the same as they are now. In terms of “process component management functions” (i.e. boiler management or turbine control), currently available market solutions are able to meet present needs.

However, smart metering devices could cause a limited revolution in CHP plant automation and management.

Main future developments therefore include the following:

  • Strong support to obtain fast and correct evaluation of the investment appraisal and the consequent detailed plant selection is needed
  • The wide exploitation of advanced automation functions to cut managing costs and to improve earnings will be driven by increasingly competitive markets.
  • There will be wide use of decision support systems for CHP management
  • The use of predictive and on-line plant optimization diagnostic information will help to reduce maintenance costs
  • There will also be a wide and increased use of maintenance management systems.