POWER-GEN Americas exposes soft domestic market, overseas opportunities

Competition is seen throughout the electricity industry as power generation attains a global market mind-set

By Ann Chambers

Assistant Editor

POWER-GEN Americas, held toward the close of 1995, saw the end of another stagnant year in the US market, and the beginnings of rumors that the industry is pushing its luck. Several speakers at the conference voiced concerns regarding the domestic freeze, which is now creating dwindling capacity reserves and increasing likelihood of reliability problems, or even “brownouts.”

US firms heavily entrenched in the international market are balancing their budgets by taking advantage of the opportunities overseas. Those playing only the waiting game at home are showing signs of wear and tear.

The conference felt the slowdown somewhat this year, with attendance falling from nearly 14,000 to around 13,000. Organizers attribute the light attendance both to siting and the industry slowdown. The 1995 POWER-GEN Americas was held for the first time in Anaheim, Calif., which put its beautiful weather on display for the entire conference. More than 850 exhibitors from the worldwide power generation industry were on hand, displaying their wares or services. The conference included a Latin American forum and an NIS forum, which will be reported in detail in the May/June issue of Power Engineering International. POWER-GEN Americas will return to Orlando, Fla., Dec. 4-6, 1996.

Edward K. Aghjayan, City of Anaheim general manager of public utilities, in his welcome address at POWER-GEN, confirmed that electricity has been prompted by competition from the beginning. Anaheim celebrated the centennial of its electricity system in 1995. Aghjayan noted the first system was installed with a cost of $7,000 in 1895. It had a 500-light capacity. Impetus for the project came from local businesses that needed electricity to extend their hours and compete with other electrified towns in the area. By the time the original system was complete, demand already exceeded capacity.

Thomas Page, San Diego Gas and Electric chairman and CEO, said the obstacles are not insurmountable. “There is a need to change, to shift from asset-based business to outcome-based business. We need to give more importance to ideas and intellectual capital.” He also said rates need to be altered to become performance based. Page predicted the separation of generation from other functions, with an ensuing reduction of players on the generation side.

William Brian, Edison Electric Institute vice president, said, “It`s not necessary to speculate about the future impact of competition on the electric industry. Just look around. Competition is here. The future is now.” Thousands of utility and non-utility generators produce and sell electricity in the United States, and since the introduction of the Energy Policy Act, hundreds of new wholesale generators and power brokers have appeared. “Through the first six months of 1995, marketers sold almost 7 million MWh of electricity, and this from an industry that didn`t even exist 10 years ago,” he said. “In fact, over the past five years, almost 50 percent of the new generation has been constructed by non-utility generators.” One response to change that is easily seen is the falling price of electricity, that has dropped 25 percent nationally since 1982. “Electric utility companies today do not just see themselves as the seller of a commodity, they`re becoming much more customer oriented, and they increasingly define themselves as a core-service energy provider,” Brian said.

Timothy D. Statton, Bechtel Power Corp.`s incoming president, captured the crowd`s attention by declaring what he sees as the “7 deadly sins” of the international power arena. They are:

1. Pride. It is imperative to remember that all projects, to be successful, must be viewed as local, regardless of where they are sited. “We can try to force our offerings–whatever they may be–on the market or we can tailor them to the market.”

2. Envy. Companies must not envy their competitors` return on expenditures. “Everywhere you look these days, the euphoria of limitless opportunities based simply on demand statistics has been replaced by the hard reality that all of us are in for a long and incredibly competitive fight.”

3. Greed. The global economy is recovering from the 1991 recession, and emerging countries are looking for local partnering and reasonable price tags. “Succeeding in the new international marketplace means being realistic about your expectations–and being prepared to share the rewards of your success.”

4. Sloth. The key to success is more than a competitive price or project experience. It is also more than a good reputation. “The winners will be, or have partners who are: highly integrated, globally networked, broad-based with respect to skills and offerings, and financially sound.”

5. Gluttony. “Most of us have a long way to go before this becomes an issue. We don`t need to worry about getting fat at the international buffet.”

6. Lust. “Don`t fall in love with your project, or your contract, or anything else … Know beforehand when to walk so you don`t make the decision based on emotion.”

7. Anger. Every country is in a different stage of transition with its own particular requirements and ground rules. “Try not to take it personally when it takes five years to close a job. And when your developer says the project will close next quarter–that`s fine, but don`t book it.”

Statton noted that the unifying characteristic to avoiding these “sins” is flexibility. All regions are different, and to succeed in them companies and individuals must quickly adapt.

Current power plant performance

Daniel Glorian, Electricite de France Statistics Department director, offered an overview and predictions on the outlook of thermal generating plan performance on a global basis. “It is generally recognized that power plants that achieve good technical operating results in the long term generate electrical power both economically and reliably. Furthermore this performance is usually accompanied by high standards of safety for nuclear power units and excellent protection of the environment,” he said. Proven plant designs and high-quality manufacturing and construction are “vital” to guaranteeing good operating results.

Ten performance indicators for nuclear power plants have been chosen by the Institute of Nuclear Power Operations and the International Union of Producers and Distributors of Electrical Energy (UNIPEDE) following a two-year evaluation and revision period. The indicators are intended to enable assessment of the performance of each nuclear plant in the areas where operators must closely monitor results: safety, quality of service to the grid, industrial safety, and radiation protection of personnel and environmental protection. The 10 indicators are:

1. unit capability factor;

2. unplanned capability loss factor;

3. industrial safety, lost-time accident rate;

4. thermal performance;

5. safety system performance,

6. unplanned automatic scrams per 7,000 hours critical;

7. fuel reliability;

8. chemistry index;

9. collective radiation exposure; and

10. volume of low-level solid radioactive waste.

The World Association of Nuclear Operators is gathering and reporting data, and considering other factors to add to the list. Currently, a majority of nuclear plant operators supply data for at least seven of the 10 indicators.

“These indicators are useful when shortcomings are perceived, and when they are needed to enable effective and measurable experience feedback,” Glorian said. “The policy of monitoring trend tables has already been implemented in several countries, such as the United States, Sweden, the United Kingdom and France.” EDF publishes a brochure each year to allow plant managers to position their plants` performance in specific areas, compared with the statistical record achieved by similar plants.

UNIPEDE has also created a database for conventional fossil-fuel plant performance. Main participants in this program to date are European countries. The performance indicators for this program are:

– unit capability factor;

– unplanned capability loss factor;

– unplanned automatic grid separations per 7,000 hours of operation;

– successful start-up rate; and

– industrial safety, lost-time accident rate.

The 400 participating nuclear plants had a unit capability factor median value of 81 percent, and an unplanned capability loss factor of around 2.5 percent for the 1990 to 1995 timespan. The results reflect the time lost to planned outages for inspection and refuelling, with safety requirements particularly noted.

“The possible paths for progress in overall availability performance must be explored by optimizing the duration and the frequency of planned outages,” he said. “Indeed, the results obtained in certain European countries confirms this. It is true that unplanned capability loss during the operating program can be further improved, the expected 1 to 2 percent gain remains modest.” Glorian added that the results “clearly confirm” that a PWR or BWR nuclear reactor, with refuelling during plant outage, would be able to achieve an average capacity factor of at least 80 percent.

The studies on fossil-fuel plant performance revealed a 77 percent availability factor over the past 30 years for steam turbines. During the 1991 to 1993 period, availability rose to 81 percent on average for the 1,877 units in approximately 30 participating countries.

“It is interesting to note how similar these results are to those achieved by nuclear power plants, with comparable prospects for improvement,” he said. “Safety, if it is well managed at the design, operating and maintenance stages, is not a factor with an impact on capability.”

Prevention

Preventing unplanned equipment failures and subsequent outages while increasing plant availability and capacity factors are critical to the long-term profitability and performance of independent power producers (IPP), according to Gary Hilberg, North American Energy Services` Technical Services manager, and Fred Barber, COGEN Technologies` Camden Plant operations supervisor, in their presentation during the POWER-GEN conference.

Three factors are pushing IPPs toward formal preventive maintenance (PM) programs. One is the contractual penalties to be faced if they fail to meet availability and capacity requirements. Another factor is the additional cost associated with planning inefficiencies and work force utilization associated with forced outages and unplanned corrective maintenance actions. The third is reputation.

“Most power plant operators understand that an effective PM program is important to the successful long-term operation of a power generating facility,” the paper stated.

A PM program can be implemented in five phases. They are:

1. Planning. This phase includes researching plant operating conditions and vendor-recommended PM actions, then integrating these factors with plant historical information. The facility`s technical documentation is also studied and evaluated. Documenting unique facility operating and environmental requirements, such as the operating profile, outage scheduling, contract and permit limitations, meteorological conditions, and air quality, is considered critical.

2. Categorization. To help manage the multitude of PM actions, and to ensure that only pertinent data is recorded, each PM action should be categorized from critical to minor. This process should involve the plant maintenance and operations staff.

3. Procedure Development. In this phase, the research from the planning phase is consolidated into procedures, stand alone documents stating specific actions and requirements in detail for a mechanic or technician to complete the task without further research or assistance. All procedures should be reviewed by the facility`s management team. Next, operator checklists for each procedure should be developed. A PM database can be established from these documents.

4. Implementation. This is considered the most critical stage, because plant personnel are the key to a successful PM program. All staff involved in PM must be trained, both in the steps of maintenance, but also the benefits of a well-executed PM program. Administration of the program should be taught at this stage. A detailed and comprehensive annual PM schedule for all plant systems and equipment should be developed at this stage.

5. Feedback. This phase begins after system implementation, and is then the “pulse” of the system. Continual reviews of procedures, plant performance, frequency and number of corrective actions, and ratio of preventive actions to corrective actions should be conducted. Information gathered through these reviews should then be incorporated into the PM program.

For the authors of the PM paper, the benefits of a PM program have been seen in three areas: long-term equipment reliability, availability and performance; correct and timely execution of planned maintenance action; and a reduction of overall maintenance costs through improved productivity with minimized unplanned outages.

“While proper scheduling of required PM actions is important to the long-term operation of a facility, the safe and proper completion of each PM action is an integral part of the entire process. The maintenance supervisors at all the facilities agree that the procedures contained in their databases contribute to the consistent and proper completion of PM actions. An additional benefit is that newer personnel can quickly and effectively contribute to the maintenance effort by following the procedures,” the paper stated.

People power

Companies that empower their employees by equipping them with knowledge and confidence in turn develop a rich internal resource that quickly pays for itself, according to “People–the cutting edge in power generation,” a paper by M.J. Boswell and S. Hankal sponsored by the Global Utilities Institute. Three top ways to optimize use of personnel were discussed in the paper. They are: case studies, benchmarking and international information exchange.

Using case studies to train people is a tool first developed at Harvard University in the United States. Employees are provided with a realistic problem and the information required to make an informed decision. The exercise is used to simulate situations that occur in a plant and will result in an outage. In case studies, participants have the time to make good decisions without the time pressure that would exist in a crisis. The goal must be considered when developing a case study. This tool can be used to teach people to assume duties typically associated with other departments to provide an overlap in training and ability, to expose procedures that are redundant and then eliminate them, or to streamline tasks and improve information flow between work groups.

Benchmarking is a way to measure one group`s performance in a single task or task set against the performance of a similar group. A utility faced with a variety of options in a maintenance task recently studied other stations that had experienced similar problems. “Rather than spending large amounts of time and money to develop efficient maintenance methods, they went straight to the source. They implemented what had already been proven to work well,” the paper stated. “Like using case studies, benchmarking is easily tailored for specific problems such as outage performance. Eliminating intrinsic sources of frustration and poor performance is a way to give employees the tools they need to do their jobs well.”

International information exchange can be a valuable tool for utilities needing experts in specific areas. In an exchange program, an engineer or manager spends time abroad working at a peer plant, attending seminars or getting one-on-one instruction from a recognized expert. “The individual becomes a specialist in an area where the home utility has been particularly weak or troubled. In addition, a powerful technology network between the participating utilities has been established,” the paper stated.

A look ahead

The POWER-GEN series of technical conferences and shows will next be seen at POWER-GEN Europe in Budapest, Hungary, June 26-28, 1996. POWER-GEN Asia will next be held in New Delhi, India, Sept. 17-19, 1996.

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Visitors from around the globe gravitated to the many working models and display items on the exhibit floor at POWER-GEN Americas `95, which showcased more than 850 manufacturers, suppliers, vendors and service organizations.

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Approximately 13,000 industry professionals enjoyed a sunny week in California during POWER-GEN America`s visit to Anaheim, Calif., home of the original Disneyland theme park.

`Project of the Year` Awards presented

Awards for the Power Engineering International (PEI) and Power Engineering (PE) magazines` “Project of the Year” Awards were presented during POWER-GEN Americas `95, with Mr. Yong-Taek Park, general manager of the Nuclear Power Consulting Department at Korea Electric Power Corp. (KEPCO) accepting for his firm–the only international award-winning project. KEPCO won an award for its Yonggwang Nuclear Power Units 3 and 4. Unit 3 is reported to be the most advanced nuclear unit on-line in the world. Unit 4 was scheduled for completion in December 1995. Sargent & Lundy, Chicago, Ill., USA, and Korea Power Engineering Co. (KOPEC) were jointly responsible for the architect-engineering for the two units, which were selected for the award by an independent panel of judges.

Equipment for the units was manufactured in more than eight countries using specifications developed from US codes and standards. Allowances were made for the use of other international standards shown to meet specific technical requirements. Major equipment suppliers for the Yonggwang project were: KOPEC, Korea Heavy Industries and Construction Company Ltd., Korea Nuclear Fuel Co., Korea Atomic Energy Research Institute, Hyundai Engineering and Construction Company Ltd., Sargent & Lundy, Asea Brown Boveri-Combustion Engineering and General Electric Co.

The suppliers for the winning projects were presented their awards at a special luncheon and project awards were presented by Robert Smock, PEI and PE publisher, during the opening keynote session of the technical conference.

US-based award-winning projects were Lee County Solid Waste Resource Recovery Facility in Florida and the Logan Generating Plant in New Jersey. The Logan plant is owned by U.S. Generating Co. The Lee County facility was designed, constructed, operated and maintained by Ogden Martin Systems Inc. Major vendors receiving awards for this project were: Ogden Martin Systems of Lee Inc.; Martin GMBH, Distral Energy Corp.; Mitsubishi Heavy Industries Limited and ABB Environmental Systems.

Vendor awards for the Logan Generating Plant project were given to: Bechtel Power Corp.; Foster-Wheeler; ABB Flakt; Glegg Water Conditioning Inc. and Westinghouse.

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Mr. Yong-Taek Park accepts a “Project of the Year” award on behalf of (KEPCO),which was presented for the company`s Yonggwang Nuclear plant, Units 3 and 4.

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Psychrometric Systems Inc. and GEC Alsthom Power Generation, gold and silver sponsors of the conference, received commemorative plaques during the POWER-GEN keynote session.

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Major vendors for Power Engineering and Power Engineering International`s award-winning projects were presented individual awards at a special luncheon held the opening day of the conference.