The Coating Solution Forum presents:

The Importance of Corrosion Prevention —

REINFORCING OUR NATION’S INFRASTRUCTURE.

Presented by:

02

TOPLINE FACTS & FIGURES

How Stark is the Reality? 03

Stringent air quality legislation and new “effluent guidelines” may result in increased concentration of corrosive species in water treatment systems.1

Corrosion responsible for 50% of forced outages in steam generating plants.2

U.S. power grid outages have risen by 285% since 1984.3

Increasing demands on our national power grid, both due to population growth and tech demands, growing at a rapid pace: U.S. Population Growth = approximate 2.5 million per year.4

Electricity demand rose approximately 10% between 2006 and 2016.5

How Great is the Cost? 04

Estimated cost of corrosion in the electricity power industry

Over $23 billion per year6

$698 million fossil fuel8

Corrosion portion of annual O&M cost estimated

$17.27 billion per year9

Cost of corrosion to consumers of electricity

$1.214 billion7 Fossil fuel facility cost percentage as part of total utility depreciation

How Attainable is a Qualified Solution?

Practical economics alongside

intervention planning…

Qualified contractors and

certified workers.

The solution is within reach

through…

05

06

THE CORROSION PROBLEM

What is Corrosion?07

The physical properties of metal are constantly in flux. This “disintegration of metal” occurs through an electrochemical process that starts on the metal’s surface, as part of its natural behavior.

As such, corrosion of steel rebar used to reinforce concrete, causes cracking as the byproduct of corrosion.

8

Causes of CorrosionWater / moisture (humidity)

Acids

Bases

Salts

Oils

Within these power distribution facilities and systems, the metallic form will continually corrode due to a variety of factors:

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Assessment Selection and Engineering

While non-metallics and other composite materials may mitigate corrosion problems, costs can be prohibitive and many are untested for structural applications. If metals are selected they must be protected.

10

Corrosion Prevention

Some of the common coatings used are: Ultra-High Solids (Plural Component) Coatings, Poly Urea, High Performance Acrylics, High Performance Alkyds, Alkyd Esters and Acrylics, Epoxy Esters, Pre-Catalyzed Epoxies, Moisture Cured Urethanes, VOC Compliant Coatings, Powder Coatings, Metalizing, Vinyls, Radiation Cured Coatings, Sacrificial Coatings, and Vulcanized Rubbers.

Technological advancements in the formulation of coatings, the expertise necessary to choose the appropriate coating solution for each infrastructure asset, the proper inspection by certified coatings inspectors and the proper surface preparation and application by certified coatings applicators, has increased the professionalism of the industry and elongated expected performance life-cycles, all of which fosters asset protection.

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ECONOMIC REALITIES

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It is a paradoxical problem… the resources needed to provide service to the grid siphon away efforts to prolong the life of the system, which protects against costly outages.However, if we only focus on the short-term economics, we may lose sight of the ”long-view” savings.

The Cost of Service Outages

13

A Deeper Look at the Numbers

World – Total Energy and Real GDP14000

12000

10000

8000

6000

4000

01980 1986 1992 1996 2002 2006 2010

2000

60.0

50.0

40.0

40.0

30.0

20.0

0.0

10.0

Trillion US 2005 $

Mill

ion

Tonn

es o

f Oil

Equi

v.

Total EnergyReal GDP

Energy and economic output

have a symbiotic relationship…

energy drives business, which

drives progress.10

14

QUALIFICATIONS

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Stringent Industry Standardenacted in 2004.Standard shows proficiency in: Environmental Safety and Health; Process Control; Materials; Surface Preparation; and Coating Application.Certification Test: Is administered by a 3rd Party and tests knowledge, skill and overall proficiency.

What is the “NACE 13/SSPC ACS-1 Standard?”

16

Inspector and Specification Writer Programs

The Protective Coatings Specialist Program (PCS) – introduction to coatings and linings used to control corrosion… defines and examines common coatings, addressing when, how and why they should be used.

NACE Coating Inspector Program (CIP) – for over 30 years, the “gold standard” for inspections in the protective coatings industry.

The SSPC Protective Coatings Inspector Program (PCI) – training in proper methods of inspection for surface preparation and installation of industrial and marine protective coatings and lining systems.

17

Independent Cost-Benefit Analysis

Location

Contractor Certification

Contract AwardFinal Contract Cost

Material$/Sq Foot

NFESC Support TotalTime

Qualified Personnel

San Diego, CA

YES

$ 320 K$ 320 K$ 30 K$ 17.50$ 40 K$ 390 K

2 months

Non-qualified Personnel

Pensacola, FL

None

$ 320 K$ 600 K$ 30 K$ 31.50$ 240 K$ 870 K

5 months

US Navy’s Naval Facilities department (NAVFAC) did a cost-benefit analysis regarding the use of certified or non-certified contractors on coatings projects.

The results showed that utilizing certified contractors and trained personnel has proven an overwhelming “cost-benefit” success in particular as it pertains to time.

18

The NACE 13/SSPC ACS-1 Standard was firmly in place to execute the massive Capitol Dome Restoration Project.

Case Study

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LOCAL PLACEHOLDER FOR CASE STUDIES

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American workforce, well versed in the up-to-date techniques and equipment to truly make a difference in fighting corrosion.

The Coating Application Specialist

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TAKEAWAYS

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Preservation Through Mitigation

We can expand the useable life of these assets, allowing a long-term

cost benefit.

23

Responsible Economics

30%

Through proper mitigation, costs can be reduced by as much as.11

24

Harnessing the expertise of those trained to handle these types of projects brings about the culmination of The Coating Solution.

Certified Personnel

25

Proper Assessment & Selection

+ Qualified Applicators & Contractors

+ Certified Inspectors

The Coating Solution = Quality Job

The Coating Solution Forum presents:

The Importance of Corrosion Prevention —

Presented by:

REINFORCING OUR NATION’S INFRASTRUCTURE.

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THANK YOU

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APPENDIX

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1 Electric Power Research Institute

2 Corrosion Management Ltd.

3 U.S. Department of Energy

4 U.S. Census Bureau

5 Power-Technology.com

6 Polygon Group

7 Federal Energy Regulatory Commission

8 Federal Energy Regulatory Commission

9 Electric Power Research Institute

10 George C. Marshall Institute

11 NACE International

Appendix