Summer Internship Report
on
Efficiency Improvement by Asset Optimization Program and
Strengthening Operation and Maintenance Practices of Captive
Power Plant
Under the Guidance of
Ms. Rachna Vats,
Senior Fellow, NPTI, Faridabad
&
Mr. Bimalendu Mohapatra
AGM, Asset Optimization
Sterlite Energy Limited, Jharsugda
At
Sterlite Energy Limited, Jharsugda
Submitted by
Sanjeev Kumar Mahato
ROLL NO: 77
MBA (Power Management)
Sector-33, Faridabad, Haryana-121003 (Under the Ministry of Power, Govt. of India)
Affiliated to
Maharshi Dayananda University, Rohatak
Acknowledgement
I would like to extend warm thanks to all the people who had been associated with me in
some way or the other and helped me avail this opportunity for my summer Internship on the topic
“Efficiency Improvement by Asset Optimization Program and Strengthening Operation
and Maintenance Practices of Captive Power Plant”.
I acknowledge with gratitude and humanity my indebtness to my Summer Internship Project
guide Mr. Bimalendu Mohapatra, AGM- Asset Optimization, Ms. Arpita Roy, Assistant Manager and the
Technical Team for providing me excellent guidance, material and motivation under whom I completed
my summer internship at Sterlite Energy Limited.
I would like to thank Mrs. Manju Mam, Deputy Director, NPTI Faridabad for her support
and guidance throughout the project duration.
I would like to thank Mr. S.K. Choudhary, Principal Director (CAMPS) and my project guide
Ms. Rachna Vats, Senior Fellow, NPTI Faridabad who always assisted me in every possible manner.
Sanjeev Kumar Mahato
Summer Interns
NPTI, Faridabad
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Declaration
I Sanjeev Kumar Mahato, Roll No. 77, student of 3rd semester MBA (Power
Management) of the National Power Training Institute, Faridabad, hereby declare that the
Summer Internship Report entitled “Efficiency Improvement by Asset Optimization
Program and Strengthening Operation and Maintenance Practices of Captive Power
Plant” is an original work and the same has not been submitted to any other institute for the
award of any other degree.
A seminar presentation of the training report was made on 4nd September, 2013 and
the suggestions approved by the faculty were duly incorporated.
Presentation In-charge
(Faculty)
Signature of the Candidate
Counter Signed
Director/ Principal of the Institute
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Executive Summery
This report is result of efforts to understand key performance indices in Thermal
Power Plant & an attempt to improve them as a student of NPTI during a summer internship
project. Following paragraphs outline summary of background, analysis & recommendations
of the study.
Considering the demand for power in India, commissioning new plants at
approximately Rs. four billion per MW could prove a costly proposition, at this juncture as
the simpler solution of making considerable amount of power available through energy
efficiency improvement, could be an attractive option. In fact, one percent efficiency
improvement would render a reduction of about 3% coal consumption and a consequent
emission reduction as well. India has an installed capacity of 211 766MW (as on January 31,
2013) of which the Thermal share is 141714MW (66%). It is worth considering that even a
1% reduction in auxiliary power consumption from the existing levels would yield 9900MU
of energy annually, worth Rs. 29700 Crs (@ Rs.3 / KWh).
Coal-based thermal power stations are the leaders in electricity generation in India.
This study basically deals with analyzing two of many vital parameters of thermal power
plant – Station heat rate & auxiliary power consumption. These parameters vary widely
across plants and regions, but remain within a wide range, indicating a substantial scope for
increasing thermal power generation in the country, with improved application of existing
technology and without employment of additional resources. The western region is
technically more efficient than other regions and young plants are more efficient than their
old counterparts. We hope that the findings will prove useful to management in devising
appropriate strategies to improve station heat rate and auxiliary power consumption and
altogether generation as a whole.
In this context it becomes imperative to assess the performance and efficiency of coal
based thermal power plant in India. The power plant is considered inefficient if the plants
existing resources or inputs are utilize sub optimally as a consequence of which plants power
generation is less than its potential or maximum possible generation.
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This report analyze as the key performance index (KPI) of Independent Power Plant
(IPP) of Sterlite Energy Limited (SEL) specially concentrating on station heat rate (SHR).
The report also takes stock of in house asset optimization program of SEL named ‘Arohan’.
This asset optimization program aims to achieve not only synergies of energy efficiency but
overall optimization of organizations tangible as well as intangible assets. Optimizing assets
of the organization not only supports exponential business growth but also provides congenial
work atmosphere. It also helps and designing frame work for various regulatory and safety
compliance and engaging employs for proactive initiative.
It is observed that improving performance of power plants through interventions
aimed at strengthening O&M practices, coupled with required rehabilitation and life
extension interventions is perhaps the quickest and least cost alternative for augmenting
availability of power in the Indian context. It is estimated that the availability of power in the
country can be enhanced by more than 17 percent (as against peak energy deficit of 9
percent) if all the available generation units can be utilized at an average PLF similar to
NTPC units through rehabilitation combined with better O&M practices. Although such high
levels of performance may be difficult to achieve throughout the country. The potential
benefits of focusing on improved power plant performance are clearly immense. Improved
O&M practices are also necessary to sustain the performance of rehabilitated power plants as
well as new power plants. Government of India initiatives in this regard (Perform Archive
and Trade (PAT) Program) also amply demonstrates the potential operational as well as
financial benefits.
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List of Figures
Figure 2-1: Power Generation Mix……………………………………………………………… 10
Figure 2-1: Private participation in Power Generation and its increasing trend………………… 11
Figure 2-3: Plant Load Factor Trends…………………………………………………………….11
Figure 2-4: PLF comparison of different sectors…………………………………………………12
Figure 3.1: APC Elements…………………………………………………………………………19
Figure 3.2: APC Breakup………………………………………………………………………….19
Figure 3.3: APC Equipment Consumption..……………………………………………………….20
Figure 3-4: Replacement Analysis………………………………………………………………...23
Figure 4.1: Asset Optimization Framework………………………………………………………26
Figure 4-2: DMAIC Steps…………………………………………………………………………27
Figure 4-3: Plant Load Factor Trends…………………………………………………………….29
Figure 4-4: DMAIC Status Report ……………………………………………………………….29
Figure 4-5: Specific Oil Consumption…………………………………………………………….30
Figure 4-6: DMAIC Status of Specific Oil Consumption………………………………………..31
Figure 4-7: Trends of Station Heat Rate.…………………………………………………………31
Figure 4-8: DMAIC Status of Station Heat Rate………………………………………………….32
Figure 4-9: Trends of APC………………………………………………………………………..33
Figure 4-11: DMAIC Status of Auxiliary Power Consumption………………………………….34
Figure 4-12: Trends of Critical Equipment Availability.…………………………………………35
Figure 4-13: Status Report for Critical Equipment Availability………………………………….35
Figure 4-14: Trends of Station Availability………………………………………………………36
Figure 4-15: Spider Diagram of Process Management……………………………………………37
Figure 4-15: Spider Diagram of Process Management……………………………………………39
Figure 4-16: Performance Diagram of Process Management…………………………………….41
Figure 4-17: Enablers and Results of Process Management……………………………………...41
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Figure 5-1: SHR Deviation in Private Sector Power Plant……………………………………….44
Figure 5.2: Performance Improvement Program…………………………………………………46
Figure 5.3: Content Framework of a typical power plant knowledge management platform……53
Figure 5.4: Proactive Maintenance Management System ………………………………………..55
Figure 5.5: Maintenance Process Enhancement Steps……………………………………………56
Figure AIII-1: PAT mechanism and structure……………………………………………………77
Figure AIII-2: Setting up the Target Heat Rate ………………………………………………….78
Figure AIII-3: Methodology for target setting……………………………………………………79
Figure AIII-4: Decision making process under PAT…………………………………………….80
Figure AIII-5: Decision making process-II………………………………………………………81
Figure AIII-6: Decision making process- III …………………………………………………….81
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List of Tables
Table 2-1: The Growth of power generation in various FYP…………………………………….. 9
Table 2-4: Manpower requirement during the 12th FYP………………………………………... 14
Table 2-2: The energy demand and gap in the year 2012-13…………………………………..... 13
Table 3-1: APC Bench Mark………………………………………......………………………….18
Table 4-1: Auxiliary Power Consumption....…..............................................................................32
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Contents
Acknowledgement .................................................................................................................................. i
Declaration............................................................................................................................................. ii
Executive summery .............................................................................................................................. iii
List of Figures ........................................................................................................................................ v
List of Tables ........................................................................................................................................ vi
Abbreviation ......................................................................................................................................... ix
1 Introduction ........................................................................................................................................ 1
1.1 Problem Statement ........................................................................................................................ 2
1.2 Objective ....................................................................................................................................... 3
1.3 Scope ............................................................................................................................................. 3
1.4 Company Profile ........................................................................................................................... 4
1.4.1 Business of the organization .................................................................................................. 5
1.4.2 Global and Domestic Market ................................................................................................. 5
1.4.3 Orissa Opportunity ................................................................................................................. 6
1.4.4 VAL Uniquely Positioned to Deliver .................................................................................... 6
1.4.5 Project and Products .............................................................................................................. 7
2 Review of Indian Power Generation Sector..................................................................................... 8
2.1 Indian Economy & Power Requirement ....................................................................................... 8
2.2 Power Generation in India ............................................................................................................ 9
2.3 Growth in Capacity Addition since 6th FYP ................................................................................. 9
2.3.1 Trend in Typical Installed Capacity Dominance of Thermal ................................................. 9
2.3.2 Public Vs Private Sector Increasing Role of Private Sector ................................................ 10
2.3.3 Performance Trends: PAF/PLF/Efficiency .......................................................................... 11
2.3.4 Trends in Demand Supply Gap ............................................................................................ 13
2.3.5 Increasing shortage of skilled workforce ............................................................................. 13
2.3.6 Changes in technology and increasing foreign suppliers ..................................................... 15
2.4 Emerging Needs of Generation Sector ........................................................................................ 15
2.5 Introduction to a potential solution ............................................................................................. 16
3 Efficiency Improvement .................................................................................................................. 17
3.1 Introduction ................................................................................................................................. 17
3.2 Auxiliary Power Consumption (APC) ........................................................................................ 18
3.2.1 APC Indian Scenario............................................................................................................ 18
3.2.2 APC Elements ...................................................................................................................... 19
3.2.3 APC Breakup ....................................................................................................................... 19
3.2.4 Factors Affecting APC ......................................................................................................... 20
3.2.5 APC Consumption Reduction Measures ............................................................................. 21
4 Asset Optimization ........................................................................................................................... 25
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4.1 Introduction ................................................................................................................................. 25
4.2 What is asset optimization? ......................................................................................................... 25
4.3 Needs of Asset Optimization ...................................................................................................... 25
4.4 Asset Optimization Framework .................................................................................................. 26
4.4.1 DMAIC Project Manager ..................................................................................................... 27
4.4.2 Key Performance Index of Asset Optimization ................................................................... 28
4.4.3 Process Management ........................................................................................................... 37
4.4.4 Enablers ............................................................................................................................... 39
5 Strengthening Operation & Maintenance Practices in Coal Fired Power Plant in India ......... 42
5.1 Introduction ................................................................................................................................. 42
5.2 Background ................................................................................................................................. 45
5.3 Key Technical Problem Area of O&M Practices in India .......................................................... 47
5.4 Developing and Implementing a Performance Improvement Programme .................................. 58
5.5 Enhancement of Operational Practices ....................................................................................... 62
5.6 Enhancement of Plant Maintenance Practices ............................................................................ 64
5.7 Generation Planning and Plant Level Budgeting ........................................................................ 67
6 Conclusion & Recommendation ..................................................................................................... 71
Annexure-I ........................................................................................................................................... 72
Annexure-II ......................................................................................................................................... 74
Bibliography ........................................................................................................................................ 82
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Chapter-1
Introduction
This report aims to give an overview of status of efficiency improvement initiatives
undertaken in Vedanta Aluminium Ltd.
The Indian economy has experienced unprecedented economic growth over the last
decade. Today, India is the fourth largest economy in the world, driven by a real GDP growth
of above 6% in the last 5 years (7.5% over the last 10 years). In 2011 itself, the real GDP
growth of India was 5th highest in the world, next only to Qatar, Paraguay, Singapore and
Taiwan.
Sustained growth in economy comes with growth from all sectors, among which
growth in infrastructure sector is a key requirement for growth in sectors with in
manufacturing and services. Within infrastructure, growth in power sector is one of the most
important requirements for sustained growth of a developing economy like India.
Government utility companies, with only three major private sector generation and
distribution companies, traditionally ran the Indian electric power sector until the mid1990s.
Since then the Indian government has pursued a policy of deregulation by opening it to
private sector investment and separating generation from transmission and distribution of
electricity. While there were many goals, a primary objective of this policy was to ensure a
reliable supply of electricity to consumers at affordable prices.
Deregulation was intended to reduce or eliminate the electricity deficit, improve the
financial performance of the State Electricity Boards (SEBs), and reduce the government’s
outlay for construction of new electricity supply and subsidies. After almost two decades of
reforms, however, the supply and demand gap of electricity widened over the years. In 1990-
91, the electrical energy deficit was around 7.7%, and by 2008-09 it grew to 11.1%. The peak
power deficit, however, reportedly declined from around 18% in 1990-91 to 11.9% by 2008-
09 (CEA, 2009).
India faces formidable challenges in meeting its energy needs and providing adequate
energy of desired quality in various forms to users in a sustainable manner and at reasonable
costs. India needs to sustain 8% to 10% economic growth to eradicate poverty and meet its
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economic & human development goals. Such economic growth would call for increased
demand for energy and ensuring access to clean, convenient and reliable energy for all to
address human development. To deliver a sustained growth of 8% through 2031, India would,
in the very least, need to grow its primary energy supply by 3 to 4times and electricity supply
by 5 to 7 times of today’s consumption.
By 2031-32 power generation capacity would have to increase to 778095MW and
annual coal requirement would be 2040mt, if we don’t take any measures to reduce
requirement. Along with quantity the quality of energy supply has to also improve. The
energy challenge is of fundamental importance to India’s economic growth imperatives.
Energy Efficiency could provide the quickest, cheapest and most direct way to turn
these challenges into real opportunities. Rapid growth of any economy requires huge
quantum of energy resources.
India has an installed capacity of 211 766MW (as on January 31, 2013) of which the
Thermal share is 1,41,714MW (66%). It is worth considering that even a 1% reduction in
auxiliary power consumption from the existing levels would yield 9900MU of energy
annually, worth Rs. 29700 Crs (@ Rs.3 / KWh).
Improving energy efficiency can have many benefits; some of them are as follows:
A. Meeting global emission reduction targets
B. Meeting global energy saving commitments
C. Ensuring sustainable economic growth
1.1 Problem Statement:
Unprecedented fuel hike and importance of equipment’s life assessment and subsequent
extension have become extremely important concerns for thermal power stations. Present
work is aimed at energy conservation in thermal power plants and also focusing on increasing
the life of boiler components by conducting heat transfer analysis. Energy conservation in
thermal power plant can be done by:
Decreasing energy input i.e. coal input by better combustion efficiency.
Efficient heat utilization
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For this purpose, heat transfer analysis of a thermal power station was quite necessary and
this is done by taking a reference unit and doing studies along with the energy audit team.
Most of the Indian thermal power stations are producing power at very high heat rate at one
hand and falling in preventing the life deteriorating conditions on the other hand. Exhaustive
studies of different parameters of a thermal power plant will be done for efficiency
improvement resulting in energy conservation. This may result in costly fuel saving and
better capacity utilisation of a reference unit.
1.2 Objective:
Efficiency Improvement of a coal based thermal power plant using Asset
Optimization and Strengthening Operation and Maintenance Practices in Coal Fired Thermal
Power Generating Station in India.
1.3 Scope:
Efficiency Improvement of a coal based thermal power plant can be achieved through,
Station Heat Rate Reduction
Auxiliary Power Consumption Reduction
Implementing Asset Management frame work
Basic Equipment Care
Process Management (PM) and Condition Based Monitoring (CBM)
Contractor Performance
Spare Parts Management
Budget Cost Control
Standard of Performance (SOP) Compliance
Maintenance Facility
Safety & Regulation
Goal Deployment
Continuous Improvement
Reward and Recognition
Organization Performance Management
Skill Development
Operation and Maintenance Practices
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1.4 Company Profile:
Vedanta Aluminium Ltd is an associate company of the
London Stock Exchange listed, FTSE 100 diversified resources
group Vedanta Resources Plc. Originally incorporated in 2001,
VAL is a leading producer of metallurgical grade alumina and other aluminium products,
which cater to a wide spectrum of industries.
VAL has carved out a niche for itself in the aluminium industry with its superior
product quality based on state-of-the-art technology. The firm operates a 1 mtpa greenfield
alumina refinery and an associated 75 MW captive power plant at Lanjigarh in the state of
Orissa. Plans are afoot to increase the capacity of the Lanjigarh refinery significantly to 5
mtpa. This is in line with VAL’s strategy to promote Lanjigarh as a self sustained
manufacturing unit in terms of cost advantage and resource availability.
VAL has invested in a 0.5 mtpa aluminum smelter and 1215 MW captive power plant
supported by highly modern infrastructure at Jharsuguda, Orissa. In addition to this,
construction of 1.1 mtpa aluminium smelter expansion project at Jharsuguda is under process.
The company intends to expand the fully integrated aluminium smelting capacity to around
2.6 mtpa in near future.
Jharsuguda is also the site of the 2400 MW Independent Power Plant being set up by
group company Sterlite Energy Ltd to meet the growing demand for power from both urban
and rural consumers.
The idea of sustainable development is deeply ensconced in VAL’s business ethos.
VAL is committed to the socio-economic transformation of local communities residing
around the plant sites and undertakes several initiatives to promote sustainable development.
The firm has focused on developing modern health amenities, educational facilities for
children and skill development programmes for adults. Several other programmes have been
undertaken to enhance health and sanitation, promote livelihood generation and improve
infrastructure in the villages surrounding Jharsuguda and Lanjigarh. The firm believes that its
development initiatives will encourage a dedicated team of self motivated individuals to
participate and drive the company’s growth in the future.
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1.4.1 Business of the Organisation:
Vedanta Aluminium Ltd., an associate company of diversified resources group
Vedanta Resources Plc, leverages its strategic location and cutting edge technology to
deliver world class products. Operative in Orissa, which has huge bauxite and coal
reserves, VAL leverages its accessibility to cheap, skilled labour and vast captive
mineral resources to work out a favourably low production cost structure. This is in
line with Vedanta Resources’ objective of claiming a position in the top decile of
global low cost aluminium producers. VAL’s diversified and de-risked project
development strategy and its fully integrated operational structure, which includes
mining to smelting/refining and power generation, equips it to meet the growing
global and domestic demand for aluminium.
1.4.2 Global and Domestic Markets:
VAL is positioned to make a significant contribution to global aluminium
demand, which is expected to increase substantially over the next few years. The
rapid growth of the emerging nations led by China and India and the concomitant
growth in aluminium demand in these countries is expected to benefit VAL.
Vedanta
Resources
Konkola
Copper
Mines
Vedanta
Aluminium
Sterlite
Industries
Madras
Aluminium
Sesa
Goa
Cairn
India
Limited
Bharat
Aluminium
Zinc –
India
(HZL)
Skorpion
&
Lisheen
Black
Mountain
Sterlite
Energy
Australian
Copper
Mines
Liberia
Iron Ore
Assets
79.4% 70.5% 54.6% 94.8% 55.1% 40.1%
51.0% 64.9% 100% 74% 100% 100%
51%
29.5% 3.6% 18.7%
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Aluminium consumption in BRIC nations alone is expected to increase at a CAGR of
9% over the period 2007-2020 while global aluminium consumption is anticipated to
more than double from 38 mt to 78.5 mt over the same period. India’s demand for
aluminium is expected to touch 2.5 mt by 2015.
India is positioned to become one of the world’s largest producers of
aluminium, with the 5th largest reserves of bauxite globally of 2.3 billion tonnes and
the 4th largest reserves of coal worldwide of over 250 billion tonnes. The domestic
market is currently growing at a robust pace, which augurs well for VAL. The firm
would benefit from the continued market expansion, which would help it tap a wide
range of new business segments. Increasing investments in the Indian power sector
coupled with rising consumerism have driven growth in industries such as packaging
and consumer durables. VAL, with its superior product portfolio, is competitively
positioned to take a lead in catering to these industries.
1.4.3 The Orissa Opportunity:
VAL is located in the heart of Orissa, which has abundant mineral reserves
including bauxite and coal. The state has as much as 1.7 billion tonnes of the
country’s total 3.3 billion tonnes of bauxite reserves. The optimal location of VAL
affords an easy reach to recoverable bauxite deposits of over 900 mt within 60 km
radius of Lanjigarh, the location of its greenfield alumina refinery. The bauxite variety
here boasts of low reactive silica content, adaptability to low temperature and low
pressure digestion, which entail low cost and high quality alumina production. VAL is
further aided by availability of ample reserves of coal (62 billion tonnes) and low cost
of power generation.
1.4.4 VAL-Uniquely Positioned to Deliver:
With a highly qualified and technologically advanced research and development
wing, VAL has acquired comprehensive expertise at producing high quality products.
Supported by state of art facilities, competitive intelligence and resource utilisation,
VAL takes pride in an unparalleled track record of project delivery and
implementation. The firm benefits from teams with proven project handling expertise
which hugely reduces risk of execution. This ensures strict adherence to international
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time and cost benchmarks, which raises VAL above competitors. The experienced in-
house project management teams have implemented the 1.0 mtpa alumina refineries
and the associated 75 MW captive power plant at Lanjigarh and 0.5 mtpa Greenfield
Aluminium Smelter with a 1215 MW captive power plant at Jharsuguda.
1.4.5 Projects and Products:
VAL is making huge investments to expand capacities of existing plants in order to
address growing industry demand. Expansion of the Jharsuguda aluminium smelter
plays a pivotal role in VAL’s growth strategy. The firm has started construction of a
new 1.1 mtpa aluminium smelter at Jharsuguda which would expand smelting
capacity from 0.5 mtpa to 1.6 mtpa in near future. For this, VAL has channelized
funds towards the commissioning of additional units of power. At Lanjigarh, plans
have been made to enhance capacity of the alumina refinery from 1 mtpa to 5 mtpa. In
addition to this, total captive power generation capacity is also expected to be
increased to 300 MW in near future. Responding to the global demand pattern for
aluminium, VAL has recently diversified its product portfolio to cater to a wide range
of industrial sectors. VAL specialized in manufacturing aluminium ingots until 2008-
09. The firm has now extended its production proficiency in the field of billets and
wire rods though ingots remain the chief product offering.
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Chapter-2
Review of Indian Power Generation Sector
2.1 Indian Economy & Power Requirement:
India experienced unprecedented economic growth of 8%1 for the last several years.
Even after factoring recent developments in global economy & local scenario, India is likely
to maintain 9%2 economic growth over 12th FYP. These growth rates are fairly higher than
the economic growths observed in developed world and they are likely to increase our energy
requirement at even higher rate.
India is currently facing energy shortage of 8.5% and peak shortage of 10.3%3. As per
the 12th FYP, India’s energy demand will grow 6% per annum and we would require installed
power generation capacity of about 100 Gigawatts (GW). The power requirement, besides
economic growth, is also driven by Government’s aim to provide “power for all”.
Given the above scenario, it is becoming increasingly important for India to operate
existing generation assets at peak of their capacity besides new capacity additions. A number
of plants today are running at sub-optimal plant load factor (PLF) levels due to various issues
like fuel shortages, unplanned shut-down due to poor maintenance and time taken to rectify
the problems. While, we have observed improvements in Plant Load Factor (PLF) of
generating plants (from 57.1% in year 1992-93 to 75.1% in year 2010-114), still there is
significant improvement possible.
1 Report of the working group on power for 12th plan 2 Report of the working group on power for 12th plan 3 National Electricity Plan (volume 1) Generation Report, January 2012 4 CEA: Operation performance of generating stations in the country during the year 2010-11.
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2.2 Power Generation in India:
The capacity addition during the 11th five year plan FYP has been the highest till date
in any FYP. As on 31st March 2012 the total generation stood at 199877.03 MW5 as per the
CEA report. The details of this generation capacity based on type of generation capacity and
ownership of generation capacity is outlined in the following diagram.
Power Generation in India:
Plan/Year Thermal
Nuclear Hydro RES Total Coal Gas Diesel Total
End of 6th FYP 26311 542 177 27030 1095 14460 0 42585
End of 7th FYP 41237 2343 165 43745 1565 18308 18 63636
End of 8th FYP 54154 6562 294 61010 2225 21658 902 85795
End of 9th FYP 62131 11163 1135 74429 2720 26269 1628 105046
End of 10th FYP 71121 13699 2102 86915 3900 34654 7761 132330
End of 11th FYP 112022 18381 1200 131603 4780 38990 24503 199877
Table 2-1 The Growth of power generation in various FYP
Further analysis of Indian power generation sector over a period of time
reveals following fundamental trends:
I. Trend in Type Installed Capacity: Dominance of Thermal
Thermal power plants comprised nearly 66.9 % of its generation capacity as on 31st
January 20136. In the 11th FYP also the thermal capacity addition (coal + gas + diesel) was the
highest of around 141713.68 MW. This indicates that thermal power generation has been a
dominant source of electricity.
In the near future, about 100 GW of generation capacity is expected to be
added in 12th FYP and out of this 63781 MW is thermal generation capacity. This
dominance of the thermal power plants will continue in the electrical power sector.
5 CEA: Growth of installed capacity since 6th FYP. 6 CEA: Annual Report 2011-12, Growth of installed capacity since 6th FYP.
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Fig. 2-1: Power Generation Mix
II. Public Vs Private Sector: Increasing Role of Private Sector
Indian economy in general and power sector in particular has seen
liberalization and implementation of enabling framework to allow private sector
participation. The key developments which encouraged private sector participation in
power generation are a) de-licensing of power generation in Electricity Act 2003, b)
competitive bidding framework for power procurement c) Open access & framework
for power trading/power exchanges d) escrow mechanism for addressing of credit
risks in power generation etc. All these factors have lead to significant interest of
private sector in power generation.
20%
2%
12%
66%
Generation MW
Hydro Nuclear RES Thermal
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Following chart depicts growth of private sector in power generation space7.
The private sector accounted for only 14 % of the total installed capacity as of March 2008.
Presently, the private partnership in generation has increased to 29.49% (January 2013)8. The
private sector accounts for 62,459.24 MW of generation capacity out of 211766.22 MW.
III. Performance Trends: PAF/PLF/Efficiency
Historically, performance of the power plants in India has been poor in terms
of plant availability (PAF), generation (PLF) and efficiency terms. Recent trends
indicate improvement in performance with average PLF of 70.76% in FY12-13 from
57.1% in FY 91-929.
Figure 2-3: Average Plant Load Factor
7 MoP: Report of The Working Group on Power for Twelfth Plan (2012-17).
8 CEA: January,2013 report of Installed capacity of all utilities across the country. 9 CEA: Operation performance of generating stations in the country during the year 2010-11.
1934.8
16227
42131
10th FYP 11th FYP 12th FYPproposed
Generation addition in Private Sector
31%
40%
29%
Installed Capacity (January 2013)
Center State Private
65.00%
70.00%
75.00%
80.00%
Average PLF
Average PLF
Figure 2-1: Private participation in Power Generation and its increasing trend.
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Though the performance appears to be improving, a detailed analysis reveals
that improvement is mainly driven by increasing private sector participation and
improved performance of the central sector plants. However, the power plants under
the state sector lag behind these two significantly. The sector wise PLF data10 (as on
April, 2012) from CEA indicates following:
Figure Error! No text of specified style in document.-2: PLF comparison of different sectors
As indicated in the above chart, the state sector plants are operating at very
low load factors. The state sector currently accounts for 43 % of the total installed
capacity. This indicates that even a 5% improvement in state sector plant utilization
would add generation equivalent to 4300 MW of capacity. The plant utilization can be
improved through improved availability of plants. This would require proactive
maintenance practices to bring down unscheduled breakdown of the equipments,
thereby increasing the plant availability. Thus increasing the plant availability will
help in increasing the plant utilization and so its generation.
10 CEA report : All India plant load factor ( % ) during apr.12
76.68
69.31
81.47
72.53
82.21
71.67
82.13
75.21
Centre State Private All india
Plant Load Factor (PLF) april 2012
Projected Achieved
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IV. Trends in Demand Supply Gap
As per CEA report the energy availability in the country has increased by
5.6% in 2010-11, while the peak demand met has increased by 6% during the same
period. Despite the increase in availability, India faced an energy deficit of 8.5% and
a peak deficit of 10.3% in 2010-11. In 2009-10 energy deficit was 11% and peak
demand deficit was 11.9%. It is expected that the energy deficit and peak deficit will
rise to 10% and 13% respectively in 2011-1211.
The assessment of the anticipated power supply position in the Country during
the year 2011-12 has been made taking into consideration the power availability from
various stations in operation and fuel availability.
Forecast of power requirement and deficit for year 2012-1312:
Energy Demand Peak Demand
Requirement Availability Deficit Demand Met Deficit
MU MU % MW MW %
Total 998114 911209 8.7 135453 123294 9.0
Table 2-2: The energy demand and gap in the year 2012-13
The above data indicates that we will continue to face energy shortages for
foreseeable future.
V. Increasing shortage of skilled workforce
With the acceleration in growth of the generation sector there is an increase in
the manpower requirement every year. It was estimated that a total of 5,10,000
additional manpower would be required for Construction, Operation and Maintenance
of capacity being implemented in the 12th Plan.
Category Construction Operation & Maintenance (Including
7.5% recoupment)
Engineers 2500 45000
11 CEA annual report 2010-11, Load Generation Balance Report 2011-12 12 Load Generation Balance Report 2012-13
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Supervisors 3500 80000
Skilled Workers 7000 80000
Semi-skilled Workers 7000 60000
Unskilled Workers 12000 80000
Non-Tech 8000 125000
Total 40,000 4,70,000
Table Error! No text of specified style in document.-3: Manpower requirement during the 12th FYP13
To address the issue of Shortage of skilled and trained manpower, an Adopt an
ITI scheme was launched in July 2007 under which project developers and contractors
were asked to adopt it is in the vicinity of their project sites. Many PSUs and private
developers have since adopted it is.
As it can be observed from CEA/MoP estimates, the training & education
infrastructure of India is not likely to cope up to the requirement. To add to this, it is
also observed that the manpower available (both skilled & semiskilled) lacks the skills
& experience required14.
Overall, above two factors (a) Lack of availability of educated/trained
manpower and (b) shortage of skills & experience within available manpower has
lead to higher demand of skilled & experienced personnel. This also is evident from
the attrition rates observed in power sector entities in recent times15. It is also
observed that this organization in the power sector have not observed such high
attrition rates historically & hence not fully equipped to respond to such challenges.
This has also lead to increase in O & M cost for certain power plants – especially
small & medium size power plants. Typical response chosen by small organizations
has been to conduct anticipatory recruitment to match the attrition, leading to either
cost increases or deterioration of performance.
13 National Electricity Plan :(Generation) Volume 1, January,2012 14 Working group on power report, Tata Strategic Management Report
15 Indian Express article: Power sector faces higher attrition, Dated:12th June, 2012
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VI. Changes in technology and increasing foreign suppliers.
Though the fundamental principles of power generation have remained same,
technological advancements have lead to supercritical and ultra supercritical plants
with higher temperatures & pressures. Besides these, new technologies like fluidized
bed combustion (AFBC/CFBC/PFBC) are evolving & getting higher acceptance
across the globe. In India, we had our no plants with such technology till 10th FYP
and today, we are seeing that significant number of plants being built on such
advanced technologies. This also poses a challenge to present workforce to adapt to
these changes so quickly, increasing importance of mid-career trainings & skills up
gradation. .
Foreign suppliers mainly Chinese have also increased focus on the Indian
power market due to various factors. All These factors have increased the need of
more professional and skilled personnel. Deployment of skilled foreign personnel is
also important to ensure necessary skills transfer to local workforce.
We have seen six fundamental trends that are shaping the power generation
sector: a) Dominance of thermal in power generation capacity b) increasing private
sector participation c) Demand Supply Gaps d) Need for improvement in plant
utilization factors e) Increasing shortage of skilled workforce and f) Chancing
technology and increasing foreign suppliers. These trends are leading to certain
requirements for power generation which are outlined below.
2.3 Emerging Needs of Generation Sector:
All above six trends, collectively, indicate that it is imperative for India to focus on
improved asset utilization for existing and upcoming power generation assets. This would
require right O & M practices & expertise. It would be increasingly important for power
generators to
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i. Improve plant availability & utilization
ii. Improve efficiency of power generation
iii. Reduce Station Heat Rate
iv. Operation and Maintenance Practices
v. Bring down cost of power generation.
In today’s competitive markets prices are generally set by market condition. In this
context, power generators have to compete with each other in the market. Industry would
need to learn to cope with this competitive pressure. This implies need for focusing on
efficient operations as the key to profitability. Operation and Maintenance cost has a direct
reflection on the cost of generation and hence there is need to optimize the same.
2.4 Introduction to a Potential Solution:
The requirements of the sector outlined in chapter combined with the challenges
posed by trends analysed above, indicate that we need a solution which can enable a)
harnessing private sector efficiencies, b) maintenance and service delivery with focus on life
cycle costs, c) create opportunities to bring in innovation and technological improvements
and d) enable affordable and improved services to the users in a responsible and sustainable
manner.
All above points indicate to bringing in private sector participation & competition in
to the sector. Following chapter examines suitability of this idea in Indian power generation
sector, especially for the plants already commissioned under the state GENCOs in detail.
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Chapter-3
Efficiency Improvement
3.1 Introduction:
Tracking the losses can do energy conservation in a thermal Power Plant. The
tracking of losses can be done by regular energy audit of the TPP. Energy audit focuses on
gray areas. Losses may be controllable or uncontrollable. These losses need to be identified
and a time bound action plan needs to be drawn up for minimizing such losses. Energy
efficiency improvement exercise involving multi disciplinary activities in existing power
plants assume great importance.
Keeping in view of the high capital cost in newer capacity addition, Sethi(1986)
suggested improvement in energy efficiency during conversion from heat to electricity is one
of the potential areas for energy saving. Energy audit will thus go a long way in improving
energy efficiency of existing plants. This requires check on fuel consumption, auxiliary
power consumption, heat rate and heat balance of thermal systems. There is need of
introducing of practice of periodic in house performance testing of existing plants for
determining fuel consumption, boiler efficiency and turbine heat rate.
National Productivity Council (1994) suggested the following objectives in Operation
& Maintenance (O & M) which may result in achieving the desired improvements in energy
efficiency.
Monitoring Station Heat Rate
Monitoring fuels consumption
Monitoring auxiliary power consumption
Monitoring parameters with respect to design condition
Plugging leakage
Operating efficient units in merit order
Identifying negative impacts on energy efficiency
Preparing for crisis management
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3.2 Auxiliary Power Consumption (APC):
Auxiliary power consumption (APC) is an important factor to assess the efficiency of
the thermal power plant .Efficiency of TPS is a function of auxiliary power consumption.
Auxiliary power consumption in a thermal power plant is a major source of energy
consumption. During the financial year 2007-08, total generation by coal plants was
488157.46 Mus with a PLF of 78.75 %. Auxiliary power consumption was 8.17 %. If this
APC gets reduced only by 0.17 %, fresh capacity addition of about 120 MW can be achieved
without any investment. APC reduction initiatives not only reduces energy intensity but also
ensures more revenues because of increase in energy export
In this direction the Evaluation Division of CEA had devised a Performa to monitor
the various parameters of efficiency of thermal power plant. On monitoring the data of
auxiliary power consumption had been received. The data of the current APC so received has
been compiled, compare with the designed APC of the captive power plant. And a program
has been designed to improve it.
3.2.1 Auxiliary Power Consumption (APC) Indian Scenario:
Auxiliary Power Consumption capacity wise
Capacity group in MW Auxiliary power consumption in %
500 6.13
250 8.80
210 8.77
195-200 7.67
100-150 10.32
<100 10.31
Table 3.1: APC Bench Mark
National Level APC is 8.32%
Best achieved APC is of NTPC Sipat i.e. 5.04 %
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3.2.2 Auxiliary Power Consumption (APC) Elements:
Figure 3.1: APC Elements
3.2.3 Auxiliary Power Consumption (APC) Breakup:
Figure 3.2: APC Breakup
Auxiliary Power
Consumption
Draft System(ID,
FD, PA Fans) Feed Water System
(BFP,CEP)
Cooling Water System
(ACW,MCW,CT)
Grinding plant & CHP
Ash Handling System
Compressed Air System
Water Treatment
System
Lighting
Air Washer & plant AC
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Figure 3.3: APC Equipment wise consumption
3.2.4 Factors Affecting Auxiliary Power Consumption (APC):
Plant load Factor: Plant load factor must be high for low APC since there is
no direct method for calculating APC. It is simply the difference between the
power generated and power transmitted. Therefore the more is the power
generated the more is power transmitted which is only possible when the plant
is run in high PLF
Operational efficiency of equipment: The equipment must have high
efficiency in order to have low APC. Since APC is the cumulative power
Boiler feed pump39%
MILL motor15%
GEHO PUMP14%
ID FAN motor11%
PA FAN motor8%
FD FAN motor4%
Condensate Extraction Pump
3%
AIR COMPRRESSE
R2%
CRUSHER motor
1%vaccum pump
1%
Drip pump
1%
SLURRY PUMP
1%
APC Consumption
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consumption of the equipment hence the less they consume more is the
efficiency.
Start-up & shutdown: Thermal power plant generally takes few hours to get
stabilized after startup and during that time the energy consumption is high.
Once the plant gets stabilised the power consumption gets reduced. So in order
to have less APC the plant shut down and startup must be as low as possible.
Age of the plant: The energy consumption of the plant increases with the
increase in the working age of the equipment. Therefore timely replacement
of old machinery and equipment is desirable to have low APC.
Coal Quality: Coal mill is one of the major consumers of power in a power
plant. If the coal quality is not good the mill will overdraw energy to grind
same quantity of coal. Therefore it is desired to have good quality of coal to
have low APC.
It is to be noted that 0.2-0.3 % of APC can be saved using small retrofitting
and asset optimization techniques.
3.2.5 Auxiliary Power Consumption Reduction Measure:
BOILER FEED PUMP (BFP): Boiler Feed Pump is one of the largest
auxiliaries of the power plant in terms of energy consumption. It nearly
consumes 25 % of the APC itself alone. Any reduction in the energy
consumption using asset optimization will greatly increase the efficiency of
the plant. The various measures which can be taken to optimize the BFP are
described below.
o Energy consumption can be saved in boiler feed pump (BFP) and
condensate Extract Pump (CEP) by controlling the speed of the pump
by using modern electronic solution instead of valve control methods.
The use of variable speed drives to run BFP and CEP can help in
drastically cutting the energy consumption of the plant thus saving
energy and money. The use of variable speed hydraulic coupling is
also helpful in reducing APC. BFP operation can be optimized by
preventing recirculation of the feed ie by replacing faulty valve if any.
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BFP can further be optimized by replacing cartridge and even by
reducing a stage.
o By avoiding recirculation of feed there can be saving of as much as 15
% of the energy consumption of BFP
DRAFT SYSTEM: Draft system is the second major energy consumption
system after boiler feed water system. Draft system includes forced draft fan,
primary air fan and induced draft fan. It has been observed that excess air or
air ingress tends to increase the flow of ID fan. The condition of excess air in
draft air draft system and ingress is due to FD pan and PA fan respectively.
Since there is a increased air flow in the draft system the energy consumption
increases substantially resulting in higher APC consumption.
o Arresting air leaks in the draft system (by auto measurement) lead to
reduction in air ingress which helps in reducing auxiliary power
consumption. Since excess air in combustion increases the FD, PA and
ID fan power optimizing air flow leads to decrease in efficiency.
Similarly leakage in Air-pre heater and duct of Electro-static
precipitator also leads to increase in ID fan power consumption. This
increase in power consumption can be optimized by regular detection
and arresting air leaks thus substantial reducing APC of the plant.
o The performance of fans (ID, PA & FD fans) can be analyzed by
comparing the design with actual power consumption pattern. It has
been observed that a reduction of 10% air ingress between APH and ID
fan can result of 15% ID fan power consumption.
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Figure 3.4: Replacement Analysis Figure
Coal handling plant & Coal Milling: Coal Handling Plant & Coal Milling is
also a major consumption of energy in Thermal power plant. Coal pulverizes
use up to 5% of the energy of the plant. Reduction in even 5% of energy
consumption of the pulverizes would bring significant benefit to the plant. The
operations of coal mills can be optimized by maintaining proper air-fuel ratio,
periodic testing of coal particles and size and roller pressure with grind ability
of the coal. Mill performance can be analyzed with regression analysis of
previous and present consumption pattern. Break-even point for replaced must
be identified so as to avoid excess energy consumption in coal mill.
Cooling water system & Water treatment plant: Cooling water system &
Water treatment plant contribute significantly to the energy consumption of
the thermal power plant. Detail study of the entire system from intake to
make-up waters has potential in optimizing complete system. This
optimization includes intermitted operation of additional pumps avoiding re-
circulation, installation of Variable frequency drive (VFD). Estimate annual
saving of this measure is 1.38 million units.
o The optimization of water treatment can also be done:
By avoiding, over sizing and improper selection of pump using
start stop control to fill the tank.
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Impeller trimming to permanent reduces the capacity.
With proper maintenance of bulbs and checking cavitations and
leakage in plant ceiling.
Using multiple pumps in parallel as per flow requirement.
Power Distribution: The efficiency of power distribution system in plants can
be achieved by
o Using energy efficient motors.
o Optimizing voltage level of distribution transformer and shifting of
loads to under loaded transformers.
o Power factor improvement.
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Chapter-4
Asset Optimization
4.1 Introduction:
Asset Optimization is the process of improving the deployment of assets such
as boiler auxiliaries, turbine auxiliaries and other remote assets to achieve improved
performance, increased asset utilization and lower costs. Simply knowing the location of
assets can achieve efficiencies in resource allocation and routing and greatly increase the
security and recoverability of assets.
Adding intelligent sensors to determine asset conditions can further improve operating
efficiencies. Optimization uses intelligent analytics based on real-time monitoring inputs and
collected data on location and status of transportation assets and their content to alter business
processes for performance improvement.
It includes maintaining a desired level of service for what we want our assets to
provide at the lowest lifecycle cost. Life cycle cost refers to the best appropriate cost for
rehabilitating repairing or replacing an asset.
4.2 What is Asset Optimization?:
Asset Optimization is the process of improving the deployment of assets to achieve
improve performance and lower costs of operations with a system based approach.
4.3 Needs of Asset Optimization:
Asset Optimization makes our boilers, compressors, turbines, furnaces, heat
exchanger, pumps, instruments, valves and other process equipments as perfect, effective, of
functional as possible.
Today in Power Sector Company generally bid for supplying power based on
competitive tariff which reflect their overall cost of generation. In order to remain
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competitive or to have larger market share the cost of generation should be as lower as
possible. Minimum cost of generation can be achieved by utilizing our fixed asset to the
maximum and reduce wastage to minimum level.
Approaches followed in asset optimization are-
Maximize Equipment Availability & reliability
Maximize turbine efficiency
Reduce Auxiliary power consumption
Optimize specific coal consumption
Reduce Specific Oil consumption
For employee engagement and involvement for proactive initiatives
4.4 Asset Optimization Framework:
A holistic asset optimization framework would cover the entire life cycle of assets and
would be supported with the right enablers.
Fig. 4.1: Asset Optimization Framework
Vedanta Aluminium Limited has designed and implementing asset optimization
porgramme under the banner of AROHAN-PASSION in all its power generating units.
Results
Enablers
Process Management
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4.4.1 DMAIC Project Manager:
The company used a project manager which helps to implementing the project
in a proper manner. The name of the project manager is DMAIC. Which provide all
the information regarding project charter, project roadmap, templates and tools. The
outline of the project manager contains five steps. This steps as shown in the
figure 4-2.
Figure 4-2: DMAIC Steps
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4.4.2 Key Performance Index of Asset Optimization:
The company set their target which will be achieved through the asset
optimization programme. These targets are called result of asset optimization. Final
goal of the company is increasing cash flow. To achieve goal, company fixed some
business parameters. This will be achieved through this programme. The company set
business parameters or Key Performance Indexes (KPI) are,
Plant Load Factor (PLF)
Specific Coal Consumption
Specific Oil Consumption
Auxiliary Power Consumption (APC)
Plant Availability
Plant Load Factor (PLF): Plant load factor is a measure of average capacity
utilization. Plant load factor is a measure of the output of a power plant compared
to the maximum output it could produce. Plant load factor is often defined as the
ratio of average load to capacity or the ratio of average load to peak load in a
period of time.
𝑃𝑙𝑎𝑛𝑡 𝐿𝑜𝑎𝑑 𝐹𝑎𝑐𝑡𝑜𝑟 =𝑀𝑊𝐺𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑
𝑀𝑊𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑒𝑑
A higher load factor is advantageous because a power plant may be less
efficient at low load factors, a high load factor means fixed costs are spread over
more kWh of output (resulting in a lower price per unit of electricity), and a
higher load factor means greater total output. If the power load factor is affected
by non-availability of fuel, maintenance shut-down, unplanned break down, or
reduced demand (as consumption pattern fluctuate throughout the day), the
generation has to be adjusted, since grid energy storage is often prohibitively
expensive
Therefore a higher load factor usually means more output and a lower cost
per unit, which means an electricity generator can sell more electricity at a higher
spark spread.
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The plant load factor trends of unit 1,2&3 are shown in the figure 4-3.
This figure contains five months trends of all the units. The plant load factor goes
high in the month of March’13 and worst plant load factor in the month of
January’13 and April’13.
Figure 4-3: Plant Load Factor Trends
The company is implementing DMAIC project manager for improving the
plant load factor and also set the base line. The baseline of plant load factor is 79
and 86 is the target. The status of the DMAIC project manager is shown below
figure 4-4.
Figure 4-4: DMAIC Status Report
The company is implementing DMAIC project manager for improving the
plant load factor
50
57
67
51
62
0
10
20
30
40
50
60
70
80
Jan'13 Feb'13 Mar'13 Apr'13 May'13
PLF Trend (%) considering Unit1,2&3
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Specific Oil Consumption (SOC): The Specific Secondary Fuel Oil
Consumption for the purpose of start up-shut down and flame stabilization. The
Central Electricity Regulatory Committee set the parameter for using the specific
oil consumption. According to the CERC norms SOC for all types of coals,
petroleum coke and vacuum residue is 1.0ml/gross kWh. The secondary oil is
used only for the lighting up of the plant.
The specific coal consumption trends from January to May for three
units are shown Figure 4-5. The trend shows that the specific oil consumption of
the month of February is very less and below the target. In the month of January
SOC is very high. It means the plant was shut down many times.
Figure 4-5: Specific Oil Consumption
The company set their target to reduce the SOC at 0.1ml/kWh. That
reduction target is gives the benefit for less generation cost. The base line of SOC
is 0.87 which is quite higher than the target value. The figure 4-6 shows the
DMAIC status report of May.
0.64
0.070.13
0.26
0.37
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
Jan'13 Feb'13 Mar'13 Apr'13 May'13
SOC Trend
SOC
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Figure 4-6: DMAIC Status of Specific Oil Consumption
Specific Coal Consumption (SCC): The effect of various coal properties like ash
content, moisture content, fixed carbon and calorific value on specific coal
consumption in a typical thermal power station in India is analysed. It is observed that
the specific coal consumption is a strong function of moisture content, ash content and
fixed carbon. For the Thermal Power Station (the one considered in the present
analysis), it is observed that, for an increase in moisture content by 2%, the specific
coal consumption increases by about 8%. If, however, the ash content is increased by
2%, the specific coal consumption increases by about 5%. It is also observed that, for
a 4% increase in fixed carbon, the specific coal consumption decreases by about 25%.
It also can be reduce by station heat rate reduction methodology. Which is already
discussed detailed in previous chapter. So the specific coal consumption can be shown
in terms of SHR. The figure 4-7 showed five months SHR trends.
Figure 4-7: Trends of Station Heat Rate.
2454
2495
2448
2347
2369
2424
23872374
2506
2430
2409
2527
2415
2522
2423
2,250
2,300
2,350
2,400
2,450
2,500
2,550
Jan'13 Feb'13 Mar'13 Apr'13 May'13
SHR Trends for Unit 1,2 &3 in (Kcal/KWh)
Unit1 unit2 unit3
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The design value of unit heat rate is 2257kcal/kWh. But if we are compare
with the graph value of heat rate which is quite high. High station heat rate is one of
the reasons for losses of the plant. Implementing the DMAIC project manager for
reduce the losses. Status report of the DMAIC is shown in the figure 4-8.
Figure 4-8: DMAIC Status of Station Heat Rate
Auxiliary Power Consumption (APC): Power plant produces electrical energy and
also consumes a substantial amount of energy in the form of auxiliary consumption
required for various plant equipment and services. The auxiliary power consumption
varies from 6 – 14 %depending on the plant size and age of the plant.
The auxiliary power consumption plays a major role in enriching the energy
efficiency of the thermal power plant. As per the norms APC should well within the
10%. Since Thermal power plant is also falls under energy intensive consumer
category like railways, metal industries, port trust etc. Electricity Act features it is
paramount importance to analyze the consumption pattern of the plant and work on
various areas so as to boost up the efficiency of cycles and sub-cycle.
Capacity Group in MW Auxiliary Power Consumption (%)
500 MW 6.63
250 MW 8.80
210 MW 8.77
195-200 MW 7.67
100-200 MW 10.32
Less than 100 MW 10.31
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Table 4-1: Auxiliary Power Consumption1316
Factors affecting the APC:
Plant load factor = high
Operational efficiency of the equipment = Moderate
Startup and shutdown = low
Age of the plant = high
Coal quality = Moderate to high
The figure 4-9 shows auxiliary power consumption trend for all units.
Figure 4-9: Trends of APC.
The company wants to reduce the auxiliary power consumption and increase
the plant efficiency. In present scenario auxiliary power consumption of all the units
are higher according to the CEA guide line. Now the company set the target to reduce
the APC at 8.0% where base line is 9.87% of total generation. The APC reduction
program status is shown figure 4-10.
16 CEA Auxiliary Power Consumption Regulation
9.67
8.36 8.078.59
7.68.17 8.01 8.11 8.19 8.468.19
8.577.91 8.07 8.28
0
2
4
6
8
10
12
Jan'13 Feb'13 Mar'13 Apr'13 May'13
APC trend (%) for unit1,2&3
Unit1 unit2 unit3
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Figure 4-11: DMAIC Status of Auxiliary Power Consumption
Plant Availability Factor (PAF): Energy efficiency is the least expensive way for
power and process industries to meet a growing demand for cleaner energy, and this
applies to the power generating industry as well. In most fossil-fuel steam power
plants, between 7 to 15 percent of the generated power never makes it past the plant
gate, as it is diverted back to the facility’s own pumps, fans and other auxiliary
systems. This auxiliary equipment has a critical role in the safe operation of the plant
and can be found in all plant systems. Perhaps the diversity of applications is one
reason why a comprehensive approach to auxiliaries is needed to reduce their
proportion of gross power and to decrease plant heat rate.
The plant availability are divided into two availability factor. These are,
i. Critical Equipment Availability
ii. Station Availability
Critical Equipment availability is directly affecting the plant availability
factor. Whether all the equipment of the plant are available any time. Plant can
be stop due to this reason. So this availability is most important. Present trends
of critical equipment availability are show in figure 4-12.
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Figure 4-12: Trends of Critical Equipment Availability.
The critical equipment availability should be increase for better plant
availability. The company follows the nine steps for maintenance the plant
equipment. The status of the nine steps is shows figure 4-13.
Figure 4-13: Status Report for Critical Equipment Availability.
Station availability is depends upon various factor. Station availability is the main
reason for 100% PLF. The trends of station availability shows figure 4-14.
92.83
97.07
93.45
91.98
93.87
89
90
91
92
93
94
95
96
97
98
Jan'13 Feb'13 Mar'13 Apr'13 May'13
Critical equipment availability (%)
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Figure 4-14: Trends of Station Availability
54
73 73
8085
-
10
20
30
40
50
60
70
80
90
Jan'13 Feb'13 Mar'13 Apr'13 May'13
Station Availability
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4.4.3 Process Management:
The result section described above is the outcome of the process carried out in
the plant. So in order to bring about any change in the result there must be procedural
or process changes implemented. The approach taken for bringing the desired result
or fulfilling the business plan for the above mentioned five parameters are categorized
below.
Figure 4-15: Spider Diagram of Process Management
Basic Equipment Condition:
Basic equipment includes all those equipment which are mostly
required to run a power plant effectively. These include various pumps,
transformers, HV & LT drives and monitoring equipment.
There must be a maintenance schedule for various equipment and job
responsibilities should be fixed for the maintenance of the equipments. The
log book of the equipment must be maintained mentioning the date of
maintenance, spares changed, man hours employed etc. Regular analysis of
equipment must be done giving due weightage to corrective action and
preventive action. Planned maintenance schedule must be formulated and
strictly adhered.
Basic EquipmentCondition
PM/CBM compliance
Spare PartsManagement…
MaintenanceFacilities
SOP compliance
ContractorManagement
Budget and CostControl
Safety & RegulatoryCompliance
Process Management
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Performance Management & Condition Based Monitoring:
Employee must be aware of the SMP and review of PM schedule
adherence. If there is any slippage in adherence proper curative action must be
implemented. The work order logged for the job must be according to the
standard prescribed and if possible in SI system. There must be guidelines for
tracking the adherence to CAPA (corrective action and preventive action).
Moreover the higher authority or management must be made aware of the
equipment availability through regular MTTR and MTBF. So that proper
planning for future course is done in advance.
Contractor Performance:
The contractor must be made aware of the key Performance Indicators
for the respective department in line the business plan. Proper list of tools
must be maintained with proper calibration plan and its implementation
adherence. There must be proper framework for capacity building of the
employee and emphasis must be on skill mapping.
Spare Parts Management:
The management must be aware of the critical spares for respective
equipment. A critical equipment list must be made for the reference of the
employee. Proper Procedure must be laid down to preserve critical spares
along with optimum level of stock of the critical equipment so as to ensure
smooth uninterrupted running of plant.
Budget Cost Control:
There must be a budget allocated for every work area and the
employees must be aware of the budget allocated to their work area. A system
for tracking cost centre wise and actual SAP must be established. In addition
to that there must be mechanism to control cost of various centers.
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Maintenance Facility:
Employees must be aware of the area of their work. 5S (Annexure I)
practices must be adhered to. Unwanted items must be removed and there
must be designated Red Tag area identification. Defining area must be
allocated for tools, spares and visual controls. A system of self assessment
with action plan for improvement must be laid down.
Safety and Regulation:
There must be awareness among the employees about the safe working
practices and periodic training must be provided to inculcate the habit of
safety. Safety workshop must be arranged for the employees and due
importance must be given to safety rules and regulation. Employees must be
aware of the operation on the Interlock & Protection testing .There must be a
standard operation procedure of operating various equipment.
4.4.4 Enablers:
Enablers are like catalyst they helping, fastening or speeding up the process.
This enabler is supports to deliver desired results. Enablers promote an organization
from present scenario to targeted status.
Figure 4-15: Spider Diagram of Process Management
GoalDeployment
SkillsDevelopment
ContinuousImprovement
Reward &Recognition…
Organisation &Performance…
Results
Enablers and Results
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Goal Development:
There must be awareness about the business plan at the plant level and
department level. Proper drill must be followed adhering the KPI’s to achieve
the primary goal of the plant. There must be proper understanding about the
need and requirement of each department by means of voice of customers.
Awareness must be spread about the various service level agreements between
different departments where each of them are internal customer of each other.
Continuous Improvement:
There must be arrangement for regular and effective tracking of all the
improvement projects with specific framework.
Building capability by means of training on various tools and
methodology to the members involved in the project also includes in the
program.
Reward Recognition & Skill Development:
A comprehensive Reward and Recognition system must be developed
for the employees. There must be awareness among the employees about this
system. The system must be able to evaluate the performance of the
employees and also the shortcomings. Based on these shortcomings there must
be training of the employees focusing on the KSA elements. Training calendar
based on the shortcoming must be based on each employee’s shortcomings.
The training adherence must be monitored and its effectiveness must be
traceable.
Organization performance management:
This includes the establishment of Asset Optimization war room in
each and every department and coordinating with War rooms of various
departments. This also includes the analysis of kPI of various departments and
determines the effectiveness of the asset optimization program by comparing
the past and present performance of the organization as a whole.
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The effect of implementation of asset optimization can be seen from the
performance diagram below figure 4-16.
Figure 4-16: Performance Diagram of Process Management
Figure 4-17: Enablers and Results of Process Management
67%
65%
25%
90%
100%
78%
80%
80%
Basic EquipmentCondition
PM/CBMcompliance
Spare PartsManagement
Practices
MaintenanceFacilities
SOP compliance
ContractorManagement
Budget and CostControl
Safety &RegulatoryCompliance
Process Management
May April
83%
17%
17%
100%
90%
40%
GoalDeployment
SkillsDevelopment
ContinuousImprovement
Reward &Recognition
practices
Organisation &Performancemanagement
Results
Enablers and Results
May
April
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Chapter-5
Strengthening Operation and Maintenance Practices in Coal Fired
Power Generation Plant in India
5.1 Introduction:
The Plant Load Factor (PLF) of private-sector thermal power plants in India in April,
2012 was on an average 82.13 percent compared with 82.21 percent for central-sector NTPC
power plants and 71.67 percent for state-sector power plants. Among the private-sector power
plants also, there is a wide performance range with more than 90 percent PLF for some power
plants. It is seen that most of the high performing power plants have adopted modern
Operations and Maintenance (O&M) practices and systems. There is a significant scope for
improving the performance of the underperforming private-sector power plants just by
focusing on the O&M practices / systems.
Improving performance of private-sector power plants through interventions aimed at
strengthening O&M practices, coupled with required rehabilitation and life extension
interventions is perhaps the quickest and least cost alternative for augmenting availability of
power in the Indian context. If all the available generation units can be utilized at an average
PLF similar to central sector units through rehabilitation combined with better O&M
practices. Although such high levels of performance may be difficult to achieve across all
private-sector power plants, the potential benefits of focusing on improved power plant
performance are clearly immense. Improved O&M practices are also necessary to sustain the
performance of rehabilitated power plants as well as new power plants. Government of India
initiatives in this regard (Partnership in Excellence – PIE Program) also amply demonstrated
the potential benefits.
For enhancing the O&M practices, multiple interventions are required across the
various aspects including people, technology, process and facilities/infrastructure.
Operational practices improvement will require setting up an Operations and Efficiency
(O&E) cell at the plant which needs to complement the current corporate performance
oversight process. It would also require setting up a Trip Committee at the plant to analyze
the root causes of unforeseen outages. There is also a need for designing a framework for
assessment of losses on commercial basis.
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Maintenance practices enhancement shall require short-term interventions in the form
of establishing and strengthening the maintenance planning function through establishment of
a Maintenance Planning Cell along with preparation of a Plant Asset Database and a
Condition Monitoring Plan. Longer term interventions could be towards investing in a
Computerized Maintenance Management System (CMMS) and developing a decision support
system linking maintenance costs to reliability levels of station.
Generation budgeting process would need to be strengthened through establishment of
an in-house Budget Committee and the preparation of a comprehensive Budget Manual along
with conducting training for the utility personnel to operate in a performance based budget
regime. In the area of Generation Planning, there is a need to slowly move from the 'Bottom
Up' approach (based on what is readily achievable) of generation target setting to the 'Top
Down' approach (based on the desired level of performance). Enablers for achieving these
targets should be identified and all out efforts be made to achieve them.
There is a need to establish a Quality Assurance function along with introduction of
Quality Assurance Plan in tenders and developing strong vendors through long-term contracts
for spares and services. The existing inventory levels could be rationalized through
classification on Vital-Essential-Desirable (VED) basis for the ease of setting differential
procurement strategies for the same. Also spares banks could be established to benefit from
reduced inventory holding by pooling spares across plants at close distances.
A deeper appreciation of cost related aspects needs to be inculcated at the utility
through development of a costing framework and establishment of cost codes and
operationalising the same with requisite training to the finance personnel. Over a long term
based on the benefit assessment, the utility may migrate to an Activity Based Costing (ABC)
System.
Human resource related aspects are a key concern with most utilities. In particular,
there is a need to have robust job descriptions with clearly identified accountabilities to
establish Key Responsibility Areas (KRAs) and Key Performance Indicators (KPIs). The
established KRAs and KPIs should feed into an improved Performance Management process.
A structured approach towards training has to be developed both for the plant and corporate
level staff. Given the increasing complexities of operating the assets in a competitive regime,
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it is essential that a rigorous skill gap analysis is conducted and suitable measures taken
towards training and recruitment of staff.
Background:
1. Sector Background: The Indian power sector suffers from considerable electricity
supply shortages (peak deficit of 9.0 percent and energy deficit of 8.7 percent in 2012-13).
The Government of India (GoI) is addressing this problem both through a major green field
capacity augmentation program and through rehabilitation of existing coal fired generation
capacity. Around thirty percent of India’s power is owned by private utilities, and a
significant part of this is reported to be in a poor condition, with plant load factors of about
82.13 percent (with some plants having lower than 55 percent) and station heat rates of about
3,000 kcal/kWh (in some cases up to 3,500 kcal/kWh).
2. The Plant Load Factor (PLF): The PLF of private-sector thermal power plants in
India in 2012-13 was on an average 82.13 percent compared with 82.21 percent for NTPC
power plants in the state sector and 71.67 percent for private-sector power plants – clearly
indicating the significant scope for improving performance of state-sector power plants.
However, there is a wide performance range among the state-sector power plants themselves,
with PLF of more than 90 percent for some power plants. It is also seen that almost all power
plants which exhibit high PLF also have better energy efficiency performance as well –
typically less than 10% deviation from the design heat rate, compared to up to 50% deviation
in some cases.
0
10
20
30
40
50
0-5% 5-20% Above 20%
SHR Deviation in Private sector Power Plant (2010-11)
Pe
rcen
tage
of
Po
wer
Pla
nt
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Improving performance of state-sector power plants through interventions aimed at
strengthening operations and maintenance practices is essential to ensure optimum
performance of the power plant both from the Availability as well as Efficiency aspects.
5.2 Key Technical Problem area of O&M Practices in India:
The key technical problem areas typically identified under the Performance
Improvement Program were as follows:
Poor condition of boiler pressure parts with high erosion, overheating, external
corrosion, oxide deposits, weak headers and pressurized furnace etc.
Poor water chemistry has affected the condition of boiler and turbine in many cases.
The water treatment plant is often in a dilapidated condition.
Poor performance of air pre-heaters due to blocked elements and high seal leakage
Poor performance of the milling system resulting in high un-burnt carbon. This was
often a result of lack of preventive or scheduled maintenance.
Poor condition of Electrostatic Precipitators (ESPs) resulting in high emissions.
Problems of high axial shift, vibrations and differential expansion in Turbine
Low vacuum in condenser due to dirty / plugged tubes, air ingress and tube leakages
High vibrations in Boiler Feed Pumps and Condensate Pumps and passing of
recirculation valves, resulting in low discharge
High pressure heater not in service in most of the units, directly impacting the energy
efficiency performance
Deficiencies in electrical systems including High HT and LT motor failures, poor
condition of DC system, non-availability of Unit Auxiliary Transformer etc
Poor condition of Balance of Plant (BoP) resulting in under-utilization of capacities
5.3 Developing and Implementing a Performance Improvement Programme:
Achieving significant improvements in plant performance over a short period requires
a “Performance Improvement Program” (PIP) which would identify the key aspects that hold
maximum potential for yielding performance improvements, develop steps towards
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addressing those aspects and systematically implement the same. The PIP process should
start with an assessment of the current operational practices both managerial and technical,
including inter-alia an assessment of various technical subsystems of the plant to bring out
the minimum technical interventions needed to sustain regular functioning of the plant. Such
an assessment could also tie-in with a Residual Life Assessment of the plant which would
indicate the need for rehabilitation (R&M) interventions, including need for upgrading
Control and Instrumentation systems. In Parallel, the PIP process requires steps to be initiated
for strengthening the managerial and organizational systems as described in the later sections
of this note.
The PIP serves as the overall change management theme, covering several individual
activities which are outlined in the subsequent sections of this note. The overall phases of a
PIP are:
Awareness Phase, including unit benchmarking and forecasting worth of unit
improvement.
Identification Phase, including equipment /
component benchmarking, High Impact-Low
Probability benchmarking, trend analysis and
creating a wide range of solution options using
input from many sources.
Evaluation Phase, including using advanced
methods to justify, select optimal timing and
prioritizing among many competing projects as
well as day-to-day O&M decisions, both
reactive and increasingly proactive decision-
making.
Implementation Phase, including using the results of the evaluations to select that
group of projects offering the best use of the limited resources, goal-setting based on
the projects actually chosen for implementation,
It is also essential to track the actual results of implemented projects and
compare these results to the expectations used in the evaluations and finally
incorporating feedback of these results into the first three phases of the process. The
Fig. 5.2: Perf Improvement Program
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various aspects of change necessary for performance improvement are brought out in
the subsequent sections, starting with industry best practices on operations.
5.3 Enhancement of Operational Practices:
Existing Operational Practices in State Sector Coal Fired Power Plants Operational
practices among state-sector power generation utilities in India display a wide spectrum, with
some of the better managed utilities exhibiting superior systems and procedures, while most
of the remaining have critical gaps in several key operational areas, leading to reduced plant
performance in terms of availability, generation and energy efficiency.
Owing to a legacy of focus on plant load factor, most utilities still do not pay
adequate attention to energy efficiency aspects. Regular energy audits (including efficiency
tests for boiler, turbine and other sub-systems) are not carried out in most cases. Heat rate and
specific oil consumption targets are fixed and monitored for the station as whole and as a
result unit-level energy efficiency related issues do not get identified and addressed.
Auxiliary power consumption is often not measured systematically and is generally computed
by deducting sent out energy from the total energy generated. In the absence of any trend
analysis and benchmarking, opportunities for improvement do not get identified.
Coal accountability issues both external and internal to the plant, including
availability and accurate measurement of quantity as well as quality (calorific value) have a
direct bearing on technical and commercial performance of the plant, but continue to receive
less than required attention.
Poor Water Chemistry Water quality and make-up quantity are often not monitored
systematically, leading to operational problems in boiler (for example more frequent tube
failures) and turbine (for example deposits on blades).
In many utilities, well documented operating procedures are not available to the
relevant staff who execute their functions based on personal experience. As a result, staff
response to various situations becomes subjective and may lead to sub-optimal approaches in
addressing operational issues. Such responses may sometimes cause avoidable tripping and
forced outages, and in some cases even reduce equipment availability, reliability and life. The
observations from independent consultants on one such poorly operated power plant are
provided in Text Box-1.
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Operational data is often relegated to records and not systematically utilized to
generate information on operational and maintenance requirements through trending and
other analysis.
Housekeeping in general is poor in several power plants with heaps of scrap
(including discarded components), coal dust and ash scattered all over the plant, which is not
only reflective of the poor O&M culture, but is also a significant deterrent to conducting
prudent O&M practices. Similarly, safety aspects are also usually neglected.
Operating Procedures, Manuals and Instructions Proper documentation of various
operating procedures and making such documentation readily available is critical to enhanced
operating practices in power plants. Such documentation would typically include:
Operations and Maintenance Manuals supplied by the Original Equipment
Manufacturer (OEM). The O&M manuals and the operating procedures based on
them should be made available with the shift-charge engineer at the plant and the
respective maintenance heads.
Technical Handbook for the plant indicating the various equipment
specifications, process parameter limits and critical alarm values. The handbook
should be made available to all operations and maintenance personnel.
“Text Box-1”: Consultant's Observations on Use of Procedures, Manuals and Instructions at
a Select Power Plant:
Independent Consultants have reported that the various operating procedures are not available with
the plant shift personnel or shift-in-charge in well-documented form. The original OEM manuals
are available in limited quantity for reference on a requirement basis. There is no library or
Centralized documentation centre. The originals are therefore difficult to be located at one place.
Signature check-lists for equipment lining up and various systems start-up and shut down were also
not available which is utilized by most utilities for standardizing such operational processes.
Equipment changeover guidelines along with key process diagrams for critical equipments along
with checking procedures at local for critical and non-frequented equipment were also observed to
be absent at the Power Plant. During the field visit, the consultants noted that the Key process
diagrams, Heat balance diagrams and Technical parameters handbook indicating ideal measurement
at various plant load factors are not available with Operation Personnel. Also the consultants
observed that operation personnel did not have at shifts the Key logic diagrams indicating
interlocks, protections and associated C&I details.
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Key Process Diagrams, Key Logic Diagrams and Heat Balance Diagrams which
would assist in better operational decision-making, trouble shooting and enable
enhanced operational efficiency.
Signature Check List for start-up, shut-down and all emergency handling
procedures should be available with the Unit in-charges and shift-charge engineer.
In addition, Walk-down Checks should be carried out in each shift by the
respective operational staff responsible for boiler, turbine, balance of plant etc. to
report any abnormalities and take corrective actions. Checklists should be
deployed to ensure that all necessary aspects are verified during the walk-down
checks.
Equipment Changeover Guidelines and Schedule to ensure reliability of stand-
by equipment and balanced utilization. These should also be made available to the
Unit in-charges and shift-charge engineer
Training on Procedures, Manuals and Instructions Further, in all well-run
generation utilities, operating staff are provided exhaustive training to familiarize them with
the above procedures, manuals and instructions. Such trainings include trainings on ‘Power
Plant Simulator’. Refresher courses are also conducted for experienced staff to reinforce
awareness of these procedures and reduce complacency in adherence.
A Central Technical Library needs to be setup preferably under the Head of O&M at
the plant. The library should have an archive of all procedures, manuals and instructions, as
well as latest technical journals in hard and soft copy so that the same can be accessed on-line
by operations and maintenance personnel.
Monitoring of Energy Efficiency Performance In several state owned coal fired
generation plants in India, lack of focus on energy efficiency is reflected by the absence of
adequate mechanisms for monitoring energy efficiency performance. The industry best
practice in this regard is to have Computer-based systems for On-line Monitoring of Energy
Efficiency Performance. Such systems are deployed to monitor, for each unit in real time, the
overall unit heat rate (overall unit efficiency), boiler efficiency, turbine efficiency,
controllable and non-controllable losses, performance of condensers, regenerative cycle etc.
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Such a system allows Heat rate to be monitored on a unit-wise basis (rather than for the
whole plant) in real-time through on-line measurement of coal consumption and electricity
generation. The calorific value of coal however has to be measured off-line and fed manually
to the system.
Coal Measurement Systems In order to bring greater accountability and focus on
energy efficiency, it is necessary to have a reliable coal flow measurement device – separate
for each generation unit. This needs to be coupled with adequate systems for reliable
measurement of coal quality in order to determine the amount of heat being put into the
generation unit vis-à-vis the electricity generated.
Auxiliary Consumption Monitoring System is deployed to monitor the energy
consumption and operating parameters of key systems / auxiliaries such as Boiler Feed Pump
(current drawn), Ash Handling System (ash to water ratio), Coal Handling System (idle
running of conveyors) etc.
Steam and Water parameters (conductivity, pH values, PO4) are measured online in
real-time through the Steam and Water Analysis System (SWAS). Similarly, on-line
condensate conductivity measurement system is deployed to determine condenser tube
leakages. Even simple historical trends of such parameters can reveal malfunctions and areas
of potential improvement in plant efficiency.
Specialized and Focused Cells / Committees For effective O&M of power plants, it
is necessary to have specialized and focused cells at each power plant as well as centralized
cells at the headquarters catering to multiple plants. The division of functions across these
plant-level and centralized cells could vary across utilities – some may have a largely plant
based approach (with only critical management inputs going to centralized cells) while others
may have more centralized approach (with data inputs from plants being provided to
specialist experts located at the headquarters), or a blend of these two. The information
technology solutions now available facilitate adoption of more centralized systems which
better utilize precious technical expertise and enable closer management oversight. However,
a minimum level of expertise at the plant is necessary in any case to cater to day-to-day
O&M requirements at the plant and take necessary actions in real time, while also feeding
information to the centralized cells. The following specialized/focused cells may be
recommended:
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Operations and Efficiency (O&E) Cell at the Plant The O&E cell measures
and analyses energy efficiency performance of the plant on a regular basis and
is responsible for strict monitoring of the unit heat rate and its deviations. It
ensures the operation of the plant and auxiliaries at optimum efficiency by
identifying and rectifying gaps in efficiency compared to the design
parameters. This is achieved by ensuring the operation of the unit at rated
parameters and minimizing the consumption of coal, secondary oil, auxiliary
power and make-up water. Another aspect specifically monitored by the O&E
cell is achievement of optimum water chemistry parameters. Some of the tests
routinely carried out by the O&E cell in association with O&M divisions are
(i) Boiler Efficiency, (ii) Air Pre-Heater X- Ratio, (iii) Condenser Efficiency,
(iv) Turbine Cylinder Efficiency, (v) Dirty Pitot Tube Test for Mills, (vi)
Cooling Towers Efficiency, and (vii) Efficiency Tests for Heaters and De-
aerators.
Trip Committee at the Plant Typically, well-run plants have a trip committee
which is entrusted with the task of root cause analysis of trips and suggesting
corrective actions to prevent recurrence of trips. The suggested corrective
actions are typically formulated as an action plan with clearly ear-marked
responsibility center and schedule. Compliance with such recommendations is
monitored at plant as well as corporate levels and an institutional framework
for achieving this is also put in place. Recommendations of the trip committee
also feed into the maintenance plan. In some cases, specialized committees are
also in place for analyzing boiler tube leakages – one of the most frequent
reasons for forced outages. Other causes of forced outage are also analyzed in
detail by what are called as ‘Forced Outage Committees’.
Energy Audit Committee at the Plant The Energy Audit Committee is
mandated with preparing the Energy Audit Plan for the plant, conducting in-
house energy audits and coordinating third party external audits at the plant. In
the Indian context, the Energy Conservation Act, 2001 mandates periodic
energy audits for all energy intensive industries (including thermal power
plants). It has been observed that Energy Audits lead to significant
inexpensive performance improvements by enabling capture of low hanging
fruits (energy losses). An efficiency audit should be carried out based on
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which the Energy Efficiency indicators should be defined for major energy
consumption/loss centres. However it is also essential to set up mechanisms
and institutional processes for ensuring that the recommendations of the
Energy Audit Committee are evaluated through a cost-benefit assessment and
implemented in a time bound manner.
Pool of Technical Experts across the Organization In order to build-upon the
shared expertise across various power plants, a Pool of Technical Experts is
developed across the organization, deriving expertise in different areas (such
as turbine, boilers, C&I etc) from different locations. From this pool,
Knowledge Teams are derived, which bring knowledge and experience in
different areas from different power plants and provide in-house consultancy
to technical problems at any location.
Daily Operational Review of Plant Performance Structured Daily Plant Meetings
chaired by the head of plant O&M should be held each morning to analyze the previous day’s
performance and plan the generation target as well as the maintenance activities for the
current day. Relevant inputs from the specialized cells/committees mentioned above are also
discussed in these meetings. Apart from the daily meetings, a monthly operational review
meeting chaired by the head of the plant should be held to follow-up on O&M aspects as well
as other plant issues.
Knowledge Management In any power station a huge amount of operational data is
generated on an ongoing basis which needs to be stored properly for future reference,
analysis and feedback. Moreover, significant data is also regularly churned out by supporting
departments like stores, procurement, finance, environment and human resources etc. A
proper knowledge management framework needs to be developed in the power plant for its
smooth and efficient functioning. Such a framework would enable the utility to capture,
analyze and refer experiences from different situations including unit tripping, specific
problems of various plant systems, experience pertaining to plant overhauls etc. Utilities
having a portfolio of plants of varying vintage can be expected to have a rich experience
across the years of operation that needs to be captured through a knowledge management
initiative.
The process of developing a robust knowledge management framework can be
initiated through implementation of department-level Information Systems (possibly through
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modular Enterprise Resource Planning – ERP interventions) which will share all relevant data
for multiple uses and subsequently these systems can be interlinked to develop a proper
knowledge sharing platform.
The knowledge platform also provides various standardized reports for management
decision making and serves as the Management Information System (MIS) backbone at the
plant and corporate levels. Figure-1 provides an indicative content framework for a typical
power plant knowledge management platform. A separate discussion on MIS is provided in
Annexure-I of this note.
Enhancement of Plant Maintenance Practices:
Existing Maintenance Practices in State Sector Coal Fired Power Plants Based on
the review of select power plants by independent consultants it is seen that there is wide
variation in existing maintenance practices in state sector power generation plants, although
Fig. 5.3: Content Framework of a typical power plant knowledge management platform
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even the relatively better utilities do not exhibit practices comparable with the industry best
practices. It is seen that often documented maintenance procedures have not been developed
and deployed even for critical equipment, especially in case of weaker utilities.
Maintenance Related Operational History Comprehensive database of performance
trends and failure history is often not available even for critical assets such as mills, pumps
and balance of plant. Also, where available data is recorded in hard copy maintenance
registers and is not used for failure history analysis or for monitoring Mean Time Between
Failures (MTBF). Failure Modes and Effect Analysis is usually absent as an institutional
practice.
Maintenance Planning Based on the review of select power plants by the
consultants, it is seen that typically there is no dedicated maintenance planning department –
and even when there, it is not effectively contributing to systematic maintenance planning.
Mostly, maintenance planning is being carried out by individual maintenance groups (boiler /
turbine / electrical etc). Long term planning for overhaul is done 2-3 years in advance, though
inadequate planning and preparation often leads to extension of shutdown-schedule. Spares-
planning is carried out on the basis of past experience rather than a systematic analysis of
spares requirement, leading to imbalance in availability of spares. Spares for planned-
maintenance are planned 6-8 months in advance by the individual maintenance groups.
There is a limited appreciation of the commercial linkages of plant level availability
and the reliability of individual equipments. Often the commercial implications of
productivity loss (impact on fixed cost recovery) and reduced heat rate due to poor equipment
performance (for example underperforming mills) is not objectively assessed in the
maintenance decision-making process., Prioritization of maintenance areas based on a pareto
analysis of failures is not undertaken.
Condition Monitoring Since most of these plants are relatively old, there is
inadequacy of modern measuring equipments and where available, such equipment is often
not used on a regular basis. Absence of adequate condition monitoring systems leads to
reactive maintenance practices rather than pro-active maintenance practices.
Pro-Active Maintenance One of the hallmarks of top performing generating
companies worldwide is their successful efforts to establish a Pro-active O&M program, one
that uses their equipment reliability, cost and efficiency data to supplement the
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recommendations of the equipment manufacturers and the utility’s first hand experience. The
key elements of proactive maintenance in power plants are illustrated through Figure-5.4.
Steps for Strengthening Maintenance Practices and Establishing Pro-Active
Maintenance
Establish a Strong Maintenance Planning Department (MPD) at the Plant
The Maintenance Planning function at the Plant should be strengthened in
terms of placing it as the nodal point in both target review and daily decision
making process for day-ahead maintenance plan, in association with
Operations and Efficiency (O&E) Cell. The MPD would be responsible for the
overall planning of the maintenance activities both short-term and long-term.
This includes developing preventive maintenance schedules and ensuring
compliance, formulation of overhauling strategy (for example preparation of
six year maintenance rolling plans), spare parts planning, condition monitoring
and maintenance of equipment history.
Establish a Condition Monitoring (CM) Cell under the MPD Setting up of a
condition monitoring cell at the plant with priority basis will facilitate the
induction of proactive maintenance at the plant. The staffing requirements and
role definitions for the CM cell would need to be defined and adequate
Fig. 5.4: Proactive Maintenance Management System
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infrastructure in respect of instrumentation shall need to be made available to
make it fully functional.
CM cell should develop a Condition Monitoring Plan which would include
check-lists and frequency for equipment monitoring. Equipment monitoring
would require a wide array of techniques including among others Vibration
analysis, Shock-pulse analysis, Lubricant oil analysis and Thermo-vision etc.
MPD should carry out Maintenance Process Enhancement Steps in
coordination with respective maintenance departments. (See Figure-3)
i. Creation of a comprehensive asset database at individual departments and
MPD.
ii. Identification of critical equipments in the process train based on past
operating history of the assets.
iii. Failure Modes and Effects Analysis (FMEA), Root Cause Analysis and
Pareto Analysis for the critical equipment.
iv. Updating of Condition Monitoring Plan (including standardized
procedures for condition monitoring of critical equipment) and Operating
Norms / Signature Checks in light of the above.
v. Identification of Key Performance Indicators (KPIs) for maintenance.
Fig. 5.5: Maintenance Process Enhancement Steps
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Establish a Decision Support System to Facilitate Pro-Active Maintenance
Such a system should be aimed at optimization of power plant reliability
based on the following approach:
i. Allocation of the risks of production discontinuity to individual assets
and failure modes. This is done through a bottom to top linkage – i.e.
probability weighted impact of equipment/part’s failure on plant
operation and therefore profitability.
ii. Estimation of returns on reliability enhancement investment for each
asset/part.
iii. Prediction of profit impact of selective maintenance relaxation for
each asset/part.
iv. Comparison of investment costs with risk-reduction returns on both
annualized and plant lifetime basis.
Establish a Technical Database to establish relationship between equipment
aging rate and equipment reliability, equipment reliability and generation
reliability, and optimal power generation and penalty consequences of failure
to generate.
Establishment of a Computerized Maintenance Management System having
modules like-Plant Performance module, Human resource module, Works
Planning module, Materials Management Module, Budget and Cash flow
module, Work Permit module, Costing System module, Financial accounting
system module, Coal Management module, etc. This system will generate
various reports on daily, monthly and annual basis which will be used to
review and take corrective measures for various facets of plant performance.
Similar to the plant level and centralized approaches discussed for operational aspects
in paragraph 28, the maintenance activities could also be organized across plant level and
centralized level. In case of utilities favoring a more centralized approach, the above
suggestions would need to be implemented at the centralized cells through suitable
information technology interventions.
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5.4 Generation Planning and Plant Level Budgeting:
By virtue of operating in a regulated environment with the regulator setting the
performance norms for operational aspects. Under the prevailing regulatory regime, tariff
levels are typically set for individual generating stations based on normative performance
parameters under an annual tariff approval process (though some states have introduced
multi-year tariffs recently). The normative performance parameters are determined based on
performance during the previous periods and a comparison with similar plants elsewhere in
the country. The annual tariff process requires the utility to submit the expectations on both
fixed and variable costs to the SERC under the tariff filing process. The fixed costs comprise
of O&M costs besides other standard elements like depreciation, interest charges, return on
working capital (normative basis), return on equity and taxes. With the exception of O&M,
the majority of the other fixed cost elements are maintained by the corporate office and hence
the budgeting/planning at the plant level is primarily limited to O&M budgeting.
Existing practices in Generation Planning and Plant Level Budgeting
Weak Framework for Generation Planning It is seen that generation
planning process in state power generation utilities in India is often based on a
qualitative input from various operations and maintenance departments. Even
in the relatively better utilities, where all key plant personnel (including shift
in-charges, maintenance in-charges and plant head) are involved in the
generation target setting process, the system is currently more reliant on their
experience and judgment than on hard data analysis. Further, in the select
power plants reviewed by the consultants, there is limited participation from
the maintenance planning cell, where such a cell exists. Also, the generation
planning process does not incorporate any significant inputs from the energy
audits.
Trend Based Generation Planning The generation planning process at state
power generation utilities is typically focused on maintaining status quo of
plant performance and maintaining historical performance levels. As a result,
generation parameters are projected conservatively based on trends from past
years.
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Partial Loss Occurrences from Previous Year not Analyzed for setting in
place plans for improved generation levels for the year ahead. Further, limited
focus on commercial analysis of generation loss or operational constraints
during the year results in reduced generation than potentially achievable
output.
Inadequate Focus on Monitoring Tariff Parameters during Operation The
consultants have reported that there is inadequate appreciation at plant and
enterprise level of the commercial implications of the Tariff plan including
Performance targets given by the state electricity regulatory commission. The
monthly / daily target is often not revised to reflect shortfall in generation (if
any) or other plant parameters on a cumulative basis against the regulator
approved benchmarks.
Limited Focus on Other Aspects during Management Review Although
regulatory targets are included during the periodic management reviews of
achievement against generation targets, several other aspects of plant
operation such as commercial performance (cost of generation on fixed /
variable basis), implications of Availability Tariff, status of maintenance
works, inventory position, safety and environmental performance etc. do not
find adequate focus.
Departmental Budgets are prepared mostly on Historical Basis It is seen from
the consultant’s reports that the departmental budgets are prepared mostly on
historical basis using previous experience and are subject to some discretion
of senior departmental personnel. It is also seen that the explanation of
variance of actual expenditure versus budgetary projections is often
inadequate / lacking.
Inadequate Design of Accounting Codes The Budget compilation exercise
typically takes around a month. Part of this can be attributed to the current
design of accounting codes where there are single codes for repairs and
maintenance items encompassing both supply and labour. This results in the
departments furnishing the information under a single accounting code that
later requires segregation of the supply and labour components. Additionally
often due to non-standardization of reporting template, cost codes are not
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represented on the utilizing department budget forwarded to Finance and
Accounts department.
Budgeting for O&M is typically restricted to Regulatory norms The approved
level of O&M expenses in the Annual Tariff Order by the Regulatory
commission is usually set as the Station O&M budget level as a gross whole.
The Tariff order levels thus constitute the sole basis of O&M budgets for cost
control in the station on an aggregate basis.
Generation Planning and Transition Steps
Focus on exceeding regulatory targets on a sustained basis The minimum
plant performance for ensuring commercial operations is defined by the
targets specified by the regulator in the tariff order. Therefore, the utility has
to identify the steps required to achieve / surpass the same on a sustained
basis. The steps identified have to be reflected suitably across generation
planning as well as plant level budgeting.
Scenario Based Approach to Generation Planning The regulatory
framework provides for incentives linked to higher availability of the unit. In
addition, higher generation beyond the Declared Capacity (DC) (within limits
set by the regulator to prevent gaming) can potentially yield higher revenues
through Unscheduled Interchange (U.I.) charges in the prevailing supply
shortage conditions. Therefore, better performing utilities strive to exceed
regulatory targets with respect to availability, while also attempting to
generate beyond the declared capacity. Such utilities plan scenarios for
maximizing generation and while providing resources for concomitant capital
expenditure over a medium term time horizon, especially where regulator has
provided multi-year tariffs.
Operation efficiency needs to be attributed greater focus at both the
corporate and plant level. It is essential that elements of detailed shortfall
analysis, partial loss analysis and inputs from the energy audit reports be
utilized for the preparation of year-ahead plans. However prior to initiating
the same, the utility may also require formalizing an energy audit and
performance review plan for the asset portfolio.
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Day-ahead forecasting may be important in states where generation utilities
stand to be affected by Availability Based Tariff. Establishment of an ABT
Cell comprising of personnel skilled in analyzing the impact of ABT would
be important in such cases. Utilities could also develop internal guidelines on
day-ahead generation planning to optimize on commercial implications of
ABT regime.
Adopt an availability based approach to generation planning
i. The plant should target to progressively move towards Zero Forced
Outages. With this aim, the benchmark targets should be set for forced
outages as well as planned maintenance. This should be utilized to
project Availability and derive the PLF projection based on the same.
ii. Assess individual equipment level reliability and performance levels
so that the expected station overall availability can be projected and
steps taken to improve the same, with the aim of meeting the targets
set in the tariff regulations.
Strengthen the generation target review process through
i. Utilization of a commercial basis for evaluation of plant constraints to
prioritize maintenance interventions
ii. Analysis of shortfall at plant on daily basis to develop and implement
recovery plans for shortfalls (if any).
iii. Expansion of topical coverage to address other non technical issues
like stores, finance, human resources in the generation target review
meetings
iv. Strengthening of channels of communication for the review meeting
outcomes via circulation of formalized Minutes and making the same
accessible to plant executive staff at all levels.
5.4.1 Plant Level Budgeting and Transition Steps
Develop a Suitable Budget Manual which will act as a guideline for all
involved in the budget preparation process in the organization. The budget
manual should typically cover the overall framework of the Budgeting
System, detailed budgeting process, budgeting responsibility, time schedule
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for budget preparation, and the system for monitoring adherence to budgetary
targets. It also provides the relevant formats for all the above aspects.
Establish Plant Level Budget Committee comprising of Plant Head, O&M
in-charges and various departmental heads. The committee should review the
overall physical targets, examine the budget proposals of the individual cost
centres and prioritize the allocation of resources to them.
Technical Vetting of the Budget is carried out by Operation and Efficiency
(O&E) Cell as well as the Maintenance Planning Department (MPD) at the
plant for operating parameters and maintenance requirements necessary to
meet the proposed budgetary targets. The technically vetted budgetary inputs
from the plant level budget committee are subsequently finalized during the
review by corporate level budget committee.
Budget System should be aligned with Finance and Accounts (F&A) for
account codes and Costing System for cost codes to ensure that variance
against the budgetary targets during the previous years and cost estimates for
planned activities can be fed into the budgeting process.
Periodic Review of Budgetary Performance at Plant and Corporate Levels
Typically performance against budgetary targets should be reviewed at the
plant on a monthly basis and at the corporate level on a quarterly basis, with
the aim of formulating recovery plans, if needed. Review of actual
expenditure against budgetary targets and actual plant performance against
physical targets should typically feed into a periodic review of the impact on
overall profitability.
5.5 Management Information Systems:
Existing practices in Management Information Systems Some of the leading state
owned power generation utilities have traditionally had reasonably strong (though manual or
part computerized) MIS systems and are now in the process of adopting state-of-the-art
Enterprise Resource Planning (ERP) systems which would also cater to their MIS
requirements. Some utilities (such as MSPGCL) have even initiated steps towards remote
monitoring of plant performance in real-time at a centralized facility called the Generation
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Control Room (GCR) at the corporate office through a SCADA system. However,
Information Technology (IT) infrastructure at power plants owned by many other state-sector
utilities has significant deficiencies – in some cases virtual absence of any IT infrastructure at
the plant is observed. The key aspects of existing MIS systems at some of the lagging utilities
are as follows:
IT Infrastructural Constraints Typically, in poorly performing power plants
with weak IT infrastructure, MIS data is collected manually by the relevant
plant staff. There is absence of Local Area Network (LAN) connectivity and
only limited availability of computers. As a result access to internet and email
is also limited. Officials are not habitual to using computers and are dependent
on specialized computer operators even for basic applications.
MIS design and Process Shortcomings Typically MIS formats being used by
generation utilities report on basic operational data (mainly physical
parameters), and are not amenable to detailed analysis of key plant issues on
commercial terms. This is illustrated in the MIS formats collected by the
consultants from one of the power stations (see Annexure-II). Reports
typically do not adequately cover other power plant aspects such as
maintenance activities, stores, commercial performance, environmental
performance and training of personnel etc. Further, it seen that MIS reports
generated by various departments at the plants often contain duplicate data.
5.5.1 Transition Steps for a Strengthening MIS Framework
Integrated MIS policy for the Organization should be formulated for
implementation across the headquarters and the various plants, covering all
aspects of functioning of the plants – viz. operations, maintenance, stores,
purchase, human resource, safety, environment etc.
Appropriate IT Organizational Structure should be developed Separate MIS
and IT cells would be required at each location. MIS Cell should look after
data collection, compilation, and report preparation while the IT cell will be
responsible for taking care of the technology / hardware related issues. There
has to be a single departmental interface for reporting and information
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archival- MIS department preferably in the Technical Secretariat of the Plant
In-charge.
Plant-wide and Company-wide IT infrastructure development All the
executives at the plant should be provided with IT infrastructure with Local
Area Network (LAN) connectivity in the plant and Wide Area Network
(WAN) connectivity across all plants and headquarters.
Development of IT modules to cater to various functional requirements, such
as Computerized Maintenance Management System (CMMS), Materials and
Stores Management System (MSMS), Operation Plant Performance
Management System (OPPMS), Business Planning Module, Finance and
Accounting (F&A) and Human Resource Development modules etc.
Alternatively, generation companies can install Enterprise Resource Planning
(ERP) packages customized for power plant / generation company
requirements encompassing all the above mentioned modules.
MIS interface with Digital Control System (DCS) of the power plant for
automatic generation of management reports. The DCS captures data in real
time without much human interference directly from the various instruments
installed in the plant. This information can be fed into the ERP / MIS system
directly.
5.6 Purchase & Stores:
Existing practices in Purchase and Stores Management The existing practices in
purchase and stores management differ significantly across different utilities, with some of
the better utilities have adopted some of the industry best practices such as rationalized list of
inventory items, e-procurement, computerized inventory management systems and evolved
vendor management systems.
On the other hand, the relatively lagging utilities have under-evolved practices on
several fronts. Indents for purchase have to be raised manually by the utilizing department
(with no system of automatic flagging of requirement). The delegation of powers is not
adequate considering the current price levels, often implying that all purchases have to be
approved by the corporate authorities which may require considerable time causing delays.
Absence of suitable quality assurance system and vendor performance management system
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imply that related issues are not identified systematically and remain unaddressed. In most
cases material is inspected only after receipt at the plant.
Plants of some of the lagging utilities have a much higher number of inventory items
than comparable plants of relatively better utilities due to inadequate item codification and
poor inventory management practices. For example, one such lagging plant has about 46,000
inventory items compared with about 3500 items for a similar plant of a better managed
utility. In the absence of suitable and effective categorization of store items (with respect to
cost, criticality, procurement lead time and fast moving/slow moving), it is difficult to
manage stocks availability while strategically keeping the costs low and reducing the
procurement effort. It is often difficult to undertake annual physical verification of stocks of
all the items in the stores, especially where inventory management processes are manual.
Transition Steps for a Strengthening Purchase and Stores
Establish a Quality Assurance (QA) System The better performing generation
utilities typically have a stringent quality assurance system which caters to the
requirements of regular maintenance, annual overhauls, major rehabilitation
works as well as new builds (expansion or green-field projects). Such QA
systems extend to both plant level (Field Quality Assurance Cell) and
corporate level (Corporate Quality Assurance Department). They typically
have Quality Assurance Manuals with detailed process documentation. A
Quality Assurance Plan (QAP) is prepared for all major items detailing out the
Checks/Tests to be carried out, Customer Hold Points (CHP) and Acceptance
Criteria. The QAP also details out the stage, location and agency responsible
for testing.
Establish a Vendor Management System Establishing a strong vendor
management system based on enlistment of vendors after due assessment of
vendor’s manufacturing capabilities (including quality control aspects) and
subsequent monitoring of vendor’s performance through a Vendor
Performance Appraisal System is critical for ensuring smooth availability of
quality components. Further, utilities could also undertake vendor
development activities aimed at developing more vendors and strengthening
manufacturing practices of existing vendors. Strategic interventions like
pooling of spares requirements across the organization to achieve economies
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of scale as well as to elicit greater interest from larger (and more capable)
vendors could also be undertaken.
Tendering Related Aspects Since delays in procurement can imperil smooth
functioning of the plant and timely completion of overhauls, standardization of
tender procedures should be done along with clearly defined delegation of
powers (DoP), responsibility and timelines. Bid documents should be
strengthened to include appropriate provisions for liquidity damages, price
variations (especially for long lead time items) and Quality Assurance Plans.
Utilities could progressively move towards e-tendering which would allow
faster and more efficient procurement while ensuring adherence to required
procedures. The utility should develop strong procurement skills at both the
plant and corporate levels and should conduct suitable trainings in this
direction. Having a materials management manual which also covers
procurement and stores (inventory management) can be useful.
Proper Identification and Codification of Stores Items to achieve
rationalization of inventory levels by bringing out duplication or redundancy
of items. Also, the stores should generate monthly report of inventory
positions with respect to all materials, and an annual report which should be
linked to the physical verification of assets.
An ABC analysis or a Vital-Essential-Desirable (VED) analysis is carried
out for all stores items. This helps in classification of spares in accordance
with an appropriate inventory management and procurement strategy based on
the criticality, cost and lead time of the items. For example, an Automatic
Procurement Process is devised for all fast moving items and consumables by
fixing minimum and maximum reorder levels which are monitored and
procured by the stores personnel themselves. Similarly, an organization-wide
pooling of common high value spares could be organized and systems devised
to share this information across plants.
A suitable Computerized Inventory Management Package linked to the main
Enterprise Resource Management (ERP) System is implemented to cater to all
requirements of stores management.
Finally, a Materials Preservation Manual should be developed which will act
as a reference for the store employees to ensure proper storage of equipment.
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5.7 Indicative Action Plan for Strengthening O&M Practices:
The O&M strengthening Plan at the utilities will need to be based on ensuring not
only business process turnaround but also instilling in place an improved organizational
culture and climate. The Strengthening plan aimed at transforming the existing plant practices
and creating an agile generation utility shall need to be overseen and supported by the Utility
Management as a Change management exercise. The improvement activities shall need to be
kick-started with a Performance Improvement Program aimed at disseminating the program
benefits and ensuring readiness within the organization to adapt to the necessary changes that
shall be set out in the individual modules.
A modular approach could be adopted for the entire change management exercise.
Each module shall a number of tasks both technical and management related with a specific
time line as tabulated below:
Module Task
Operation Practices
Enhancement
Redesign of existing O&M Manuals post review of existing
ones along with development of equipment procedures and
conducting training for O&M personnel
Establishing efficiency management as a thrust area through
setting up the Efficiency Monitoring Cell and
institutionalizing procedures for performance testing,
auxiliary energy management, root cause analysis of trips.
The efficiency management is expected to be
complemented by a commercial loss evaluation and
efficiency benchmarking tool which will facilitate analysis
and identification of controllable losses and identify assets
for refurbishment / replacement.
Initiation of Knowledge Management through establishing a
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Central Technical library at the Plants and subsequently
creating of a web based system for capturing plant
information, best practices, technical, operational details for
dissemination across the entire utility.
Proactive Maintenance Creating an asset database to be populated with failure
history, performance characteristics, design data which shall
enable analysis of failure mode and effects. This will lead to
development of a proactive maintenance plan along with the
condition monitoring schedules and reliability assessment
matrix.
Designing and setting up a Decision support system linking
the costs to reliability along with equipment level operating
limits and checklists which shall enable the utility to pre-
empt failures and also utilize cost / reliability information to
substantiate refurbishment / replacement decisions.
Setting up a Computerized Maintenance Management
System (CMMS) at the Plant.
Cost Information System The costing system shall entail setting up a costing
framework at the plant along with relevant cost codes and
centers. The implementation arrangement shall consist of
creating a cost database, populating it with one time cost
data and conducting training for utility personnel on the
same. Depending upon the current maturity level of the
utility, this can be extended towards designing an Activity
Based Costing system at the Plants.
Generation Planning &
Budgeting
Realignment of existing practices with the future market
scenario.
Establishing a Techno-commercial cell at the plant along
with integration with CMMS based planning.
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Setting up of procedures for Equivalent Availability Factor,
Year ahead planning integrated with Energy Audit and
Partial Loss analysis
Developing a Budget Manual along with introduction of a
Performance Based Budget System at the utilities.
Management Information
System
The MIS system at the utilities shall require varying levels
of intervention based on the existing systems with the utility
and shall range from improving existing system through
additional functionalities to developing an IT policy,
establishing a full fledged IT and MIS system along with
procuring an MIS system via bid route.
Purchasing & Store Review and Redesign of existing procurement procedures
Institutionalizing Quality Assurance (QA) systems in the
Procurement cycle by setting up QA cell at the Plants,
developing a QAP and setting up checks and controls
within the Procurement Contracts. This will also require
training for Plant Personnel in QA related aspects
Optimization of Inventory levels releasing idle working
capital through review of inventory holding, reorder levels,
creation of a high value spares bank by inventory pooling,
standardization of stores items, automatic procurement
protocols on reorder level basis for fast moving
consumption items.
Organizational Culture &
Climate
Performance Management System by designing the job
description for all positions along with formulating Key
Performance Indicators and Key Result Areas for the
positions. This shall need to be complemented through a
KPI monitoring mechanism through a base line study and
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establishing targets and review principles. Improving the
existing system of Training & Development through
conducting a Training Needs Analysis exercise ,
formulating the training scope and strategy along with
developing training course materials and conducting
Training for the Plant Personnel.
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Chapter-6
Conclusion & Recommendation
It’s important to have competition in Indian Power Generation. The private sector will
bring investment and technology with them that will help in bridging the gap of the demand
and the supply at a faster rate they will in the improvement in the performance of the existing
power plants and thus help in the improvement of the asset optimization framework and also
help in sharing the risk of the owners.
We have enough evidence from both public and private sector which indicates
movement in similar direction. Various other sectors in order to improve the performance and
to speed up the growth have moved to similar line. The telecom sector the distribution sector
the software industries are some example.
As in the case of Sterlite Energy Limited it is observed that asset optimization
programme has positive impact on overall operation of the organization with significant
financial benefits as well. It led to increase return from existing facilities.
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Annexure-I
‘5-S’ Work Place Management
What are 5-S?
Five 'S' is an integrated concept for Work Place management.
1-S: SEIRI:
Organization or re-organization is to sort out unnecessary items in the work
place and apply stratification management to discard them e.g. Things not
belonging to that area to be removed from there. If repairing is required,
separate them and get them repaired. If it has to be discarded, decide first
whether it has some scrap value, then sell them at the right time. If the item is
all right but not useful to you, and you can’t sell them, but can be utilized by
someone else, who needs it send it to them. Items which need to be discarded
must be discarded in such a way that what is discarded will not harm society,
environment and even animals.
2-S: SEITON:
Neatness: Put the things in a proper neat way. Everything should have a
place and everything should be in its place. Decide the place, mark the
place, put label on items. Arrange the items in such a way so that they can be
picked up easily for use. During storage, keep in mind the height, weight, size,
shape, safety etc. of the item. Functional storage of items will help in our day
to-day use and functioning.
3-S: SEISO:
Cleaning: Here cleaning is in the form of cleaning inspection. When we are
doing cleaning, we are also inspecting simultaneously, if something is
unnecessary we are discarding those things under 1S and if during cleaning we
have seen that any item is not kept in its proper place and we put them in its
place, then we are doing under 2S. Hence whenever we are doing ‘3S’, it
means that we are doing ‘1-S’ and ‘2-S’ simultaneously. In addition, we also
check for the health of the machine, the lubrication, electrical connections etc.
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Clean your work place completely so that there should not be any dust on the
floor, walls, windows, desk, table, machinery etc. Cleaning should be done at
Macro level first and then individual item wise and finally at micro level.
4-S: SEIKETSU:
Standardization: When we are doing 1-S, 2-S and 3-S, we may be facing
number of problems. In ‘1-S’ it is very easy to discard items, but think why
this has become unnecessary, in ‘2-S’ if things are not in proper place we
simply put them back in their proper place. Here, we have to think why this
has happened. In 3-S, area is dirty we clean it. Here, again we have to think as
to why this had become dirty. What is the system of cleaning, can we change
the equipment/way of cleaning, can we arrest the source by which the area has
become dirty. All these thinking will give some solution through Brain
Storming. Try to find out good solutions and standardise them as a part of the
system.
5-S: SHITSUKE:
Discipline: This means whatever system we are having or developed under ‘4-
S’ they have to be followed in such a way that, standard practices become a
part of our lives. This will help to maintain high levels of work place
organization at all the time.
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