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What’s the latest trend in power generation? Lowering risk.

image credit: Life Cycle
Randy Heisler's picture
Vice President Life Cycle Engineering
  • Member since 2020
  • 1 items added with 2,317 views
  • Mar 23, 2021
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This item is part of the Special Issue - 2021-03 - Power Generation, click here for more

It’s nothing new for power generation companies to monitor current risks to the business. Assessing risk has always been an integral activity for most companies. But if Covid-19 has taught us anything, it is that bad things can happen unexpectedly. And recent severe weather in California and Texas has placed new emphasis on the importance of fully understanding how prepared an organization is for any number of risks. The risk categories for power producers are significant:   

  • Global warming and climate change
  • A rapidly changing industry
  • Cyber threats
  • Regulation and public policy
  • Tariffs and trade tension
  • Talent retention and new hires
  • Catastrophic events

Some risks seem hard to foresee, hard to control, and some are out of our control. Risks such as regulations and cyber threats that can have major effects on our business, are difficult and expensive, if not impossible to mitigate. Many risks hide beneath the surface and take some digging to uncover. As we know, the Titanic was sunk by what they could not see.

Companies are starting to look at risks that they have not looked at before, which is pointing them to evaluate their risks on a whole new level. They are adjusting their risk threshold to recognize that the likelihood for “high impact-low probability” events is higher than previously thought, and that even one event can have rippling, catastrophic consequences. They are looking more critically at some common assumptions in their risk assessments and how they can address those risks to ensure business continuity across their value streams. They are building stakeholder relationships in disaster preparedness and business continuity so that they can be proactive before these events occur, and not have to take forced actions like shedding load.

Asset reliability, for good reason, has come to the forefront. It is one of those risks that has been under the radar, or having reliable assets was taken for granted. Due to the recent events in California and Texas, many power generation companies and utilities are realizing the importance of their asset management practices, and are now assessing their asset reliability risks.

Professionals concerned about the ability of their operating assets to perform as expected are asking these questions:

  • Are my assets designed for reliability?
  • Am I purchasing parts and materials that have the longest lifecycle with the lowest lifecycle costs?
  • Am I storing my parts properly per best practice guidelines?
  • Am I operating my equipment properly?
  • Am I properly maintaining my assets?
  • Are my assets prepared for the changes in climate that we are seeing?

Power generation companies are looking for guidance from international standards like ISO 55000. The standard outlines the need to develop an Asset Management Policy and Strategy that focuses on how assets are being maintained. This upfront work sets the stage for a focused asset management improvement program that can reduce risks to the operation and ensure reliable power to customers.

The framework below is an example of some key elements that should be part of an Asset Management System.

 

There are many aspects to an Asset Management Policy and Strategy such as aligning leadership, and preparing for changes in how the organization will need to function in the future. Some key components of a comprehensive Asset Management Strategy and Policy are:

Value Recognition – What value are you expecting to receive from your assets?  Value is defined by the stakeholders and can be tangible or intangible.

Risk Based – What methods are needed to evaluate and manage risk across the value streams?

Optimization – What expertise is needed to develop optimization strategies?

Aligned Objectives – How do you ensure alignment between organization strategy and asset management strategy? 

Asset Life Cycle – How should you determine where to spend time and money on asset maintenance, in relationship to the failures that are occurring?

Once an asset management policy and strategy is in place, we need to start digging into the details on how it can be realized. Let’s first start by asking ourselves some questions:

  • Have we determined which of the assets are most critical?
  • Do we know how and why the equipment is failing?
  • Are we doing the proper maintenance on the equipment?
  • Are we operating the equipment properly?

The risk mitigation effort should start by determining which of our assets are most critical to the business. Some may say that everything is critical, but that is rarely true. A somewhat scientific approach is needed to rank the assets by order of importance to the operation’s objectives. This can be accomplished by using a matrix that contains the proper risk parameters. These can vary by operation but most are fairly standard across industries. Involving a cross-functional group to work through this exercise can ensure that equipment criticality can be determined accurately. This work can also cascade down to the parts level so that critical spares can be procured or available when needed.

Some factors to consider are:

  • Mission impact 
  • Safety impact    
  • Environmental impact   
  • Single point failure         
  • Preventive maintenance cost    
  • Corrective maintenance cost      
  • Reliability            
  • Spares lead time              
  • Asset replacement value             
  • Planned utilization                          
     

Once asset criticality has been determined, a control strategy can be developed for the highest ranking assets. The control strategy for these assets is best determined by doing a Failure Mode Effects Analysis or commonly referred to as a FMEA. The FMEA determines how the asset could fail so that proper time-based or condition-based tasks can be performed at the proper interval to prevent or predict failure. This exercise takes a deep look into the effect on operations if the asset’s function is lost, and the conditions that cause it to fail. This careful analysis includes evaluating these elements:

Functional Failure - List the situation in which the functions would be considered lost. Most functions will have more than one loss condition

Potential Failure Mode(s) - The manner by which a possible failure is observed; it generally describes the way the failure occurs or its observable characteristics

Potential Effect(s) of Failure - Describe what will happen if the failure mode occurs

Potential Cause(s) of Failure - Try to anticipate the cause of the failure mode described

Current Controls - What are we doing now (the current state) that prevents, mitigates, or detects the previous cause

Current Process Frequency – How frequent are the current process controls done?

Once failure modes are known, an equipment maintenance plan can be developed to mitigate these failure modes through the correct preventive and predictive tasks. Equipment maintenance plans are tasks that are specific to the equipment type and its components, as shown below:

 

Once an EMP is created, the identified tasks can be created and executed at designated intervals. As an example, winterization tasks should get scheduled during late summer and early fall. These types of proactive activities prevent weather-related failures from occurring. Some parts of the country were not previously concerned about freezing temperatures, but that is changing. Flood-protection activities are also needed in areas where flooding did not occur before.

An even more proactive approach is designing new equipment for reliability. Other potential areas typically included as part of developing a strong asset management strategy include implementing best-practice work management processes, optimizing the current EAM system, improving the maintenance parts procurement and storage practices, and instituting best practice operator care practices.

Conclusion

Eliminating asset failures is a key component to eliminating risks to the business. This must be part of any comprehensive risk assessment and should be recognized as a now-required investment, but with significant returns. Focusing on the reliability of our power generation assets will keep many of those unexpected “bad things” from happening.

 

Randy Heisler's picture
Thank Randy for the Post!
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Matt Chester's picture
Matt Chester on Mar 24, 2021

You bring up the role of international standards, but are there any challenges using those based on the unique energy market arrangements that exist from one country to the next? 

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