EFFICIENCY IMPROVEMENT BY ASSET … No 99/Amit... · the topic “Efficiency Improvement by Asset...

Summer Internship Report

on

EFFICIENCY IMPROVEMENT BY ASSET OPTIMIZATION

PROGRAM AND STRENGTHENING OPERATION AND

MAINTENANCE PRACTICES OF COAL BASED THERMAL

POWER PLANT

Under the Guidance of

Dr. Manisha Rani

Senior Fellow, NPTI, Faridabad

&

Mr. Bimalendu Mohapatra

AGM, Asset Optimization

Sterlite Energy Limited (IPP), Jharsugda

At

STERLITE ENERGY LIMITED, Jharsugda

Submitted by : Amit Pramanik

MBA (Power Management)

Roll No. : 1031220

Sector-33, Faridabad, Haryana-121003 (Under the Ministry of Power, Govt. of India)

Affiliated to

Maharshi Dayananda University, Rohatak, Haryana

AUGUST 2013

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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 Coal Based Thermal Power Plant”.

I acknowledge with gratitude and humanity my indebtness to my Summer Internship

Project guide Mr. Bimalendu Mohapatra, AGM (IPP)- Asset Optimization, Mr. Pinaki

Dalal, Associate Manager(IPP) 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 Dr. Manisha Rani, Senior Fellow, NPTI Faridabad who always assisted me in

every possible manner.

Amit Pramanik

Summer Intern

NPTI, Faridabad

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DECLARATION

I, Amit Pramanik, Roll No. 99, 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 Coal Based Thermal 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 2nd

September, 2013 and

the suggestions approved by the faculty were duly incorporated.

Presentation In-charge

(Faculty)

Signature of the Candidate

(AMIT PRAMANIK)

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 FIGURE

Figure 1: Organization Structure .................................................................................................... 5

Figure 2: Independent Power Plant Project ..................................................................................... 7

Figure 3: The Growth of power generation in various FYP ............................................................ 9

Figure 4: Power Generation Mix .................................................................................................. 10

Figure 5: Private participation in Power Generation and its increasing trend ................................. 11

Figure 6: Plant Load Factor Trends .............................................................................................. 11

Figure 7: PLF comparison of different sectors .............................................................................. 12

Figure 8: Research Methodology ................................................................................................. 20

Figure 9: Monthly Trends of SHR................................................................................................ 21

Figure 10: Fishbone Diagram of Station Heat Rate....................................................................... 22

Figure 11: Fishbone Diagram of Dry Flue Gas Loss ..................................................................... 23

Figure 12: Fishbone Diagram of Vaccum Pressure ....................................................................... 23

Figure 13: Uncontrollable Parameter............................................................................................ 25

Figure 14: Controllable Parameter ............................................................................................... 26

Figure 15: Super Heater Spray Boxplot ........................................................................................ 27

Figure 16: Reheater Heater Spray Boxplot ................................................................................... 28

Figure 17: Makeup Flow Boxplot ................................................................................................ 29

Figure 18: Asset Optimization Framework ................................................................................... 31

Figure 19: Logo of Arohan-Passion ............................................................................................. 32

Figure 20: DMAIC Steps ............................................................................................................. 32

Figure 22: DMAIC Status Report on PLF .................................................................................... 34

Figure 21: Plant Load Factor Trends ............................................................................................ 34

Figure 23: Specific Oil Consumption ........................................................................................... 35

Figure 24: DMAIC Status of Specific Oil Consumption ............................................................... 36

Figure 25: Trends of Station Heat Rate ........................................................................................ 37

Figure 26: DMAIC Status of Station Heat Rate ............................................................................ 37

Figure 27: Trends of APC ............................................................................................................ 38

Figure 28: DMAIC Status of Auxiliary Power Consumption ........................................................ 39

Figure 29: Trends of Critical Equipment Availability ................................................................... 40

Figure 30: Status Report for Critical Equipment Availability ....................................................... 40

Figure 31: Trends of Station Availability ..................................................................................... 41

Figure 32: Spider Diagram of Process Management ..................................................................... 41

Figure 33: Diagram of Process Management ................................................................................ 44

Figure 34: Performance Diagram of Process Management ........................................................... 45

Figure 35: Enablers and Results of Process Management ............................................................. 46

Figure 36: SHR Deviation in Private Sector Power Plant ............................................................. 50

Figure 37: Perf Improvement Program ......................................................................................... 52

Figure 38: Content Framework of a typical power plant knowledge management platform ........... 59

Figure 39: Proactive Maintenance Management System ............................................................... 61

Figure 40: Maintenance Process Enhancement Steps.................................................................... 62

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LIST OF TABLES

Table 1: The energy demand and gap in the year 2012-13 ............................................................ 13

Table 2: Manpower requirement during the 12th FYP .................................................................. 14

Table 3: SHR Affecting Parameter ............................................................................................... 24

Table 4: Controllable and Uncontrollable Parameter .................................................................... 25

Table 5: Auxiliary Power Consumption13 ................................................................................... 38

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ABBREVIATION

AO Asset Optimization

CAMPS Centre for Advance Management and Power Studies

CEA Central Electricity Authority

CPP Captive Power Plant

CERC Central Electricity Regulatory Commission

DMAIC Define Measure Analysis Improve & Control

IPP Independent Power Producers

KPI Key Performance Index

MW Mega Watt

PM Performance Management

NPTI National Power Training Institute

NTPC National Thermal Power Corporation

PAF Plant Availability Factor

CBM Computer Based Monitoring

PLF Plant Load Factor

CAPA Corrective Action & Preventive Maintenance

PSP Private Sector Participating

RES Renewable Energy Resource

O&M Operation & Maintenance

GDP Gross Domestic Product

CMMS Computerized Material Management System

VED Vital essential and desirable

VFD Variable frequency device

BFP Boiler feed pump

ABC Activity based costing

KRA Key result area

GOI Government of India

SHR Station heat rate

BOP Balance of plant

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PIP Performance

R&M Renovation & modernization

SWAS Steam and water analysis system

C&I Control and Instrumentation

MIS Management Information system

MPD Maintenance Planning Department

FMEA Failure Mode & Affect Analysis

UI Unscheduled Interchange

ABT Availability Based Tariff

ERP Enterprise Resource planning

DCS Digital Control System

QA Quality Assurance

FD Forced Drought

PA Primary Air

CEP Condensate Extract Pump

ACW Auxiliary Cooling Water

MCW Make Up Cooling Water

CT Cooling Tower

CHP Coal Handling Plant

AC Air Consumption

APC Auxiliary Power Consumption

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CONTENTS

1. ORGANIZATION PROFILE ............................................................................................... 1

1.1 Introduction ................................................................................................................... 1

1.2 Problem Statement......................................................................................................... 2

1.3 Objective ....................................................................................................................... 3

1.4 Scope ............................................................................................................................ 3

1.5 Company Profile............................................................................................................ 4

1.5.1 About Sterlite Energy Limited (SEL) ................................................................ 5

1.5.2 Jharsugda Power Project .................................................................................... 6

2. REVIEW OF INDIAN POWER GENERATION SECTOR................................................ 8

2.1 Indian Economy & Power Requirement ......................................................................... 8

2.2 Power Generation in India ............................................................................................. 8

2.3 Growth In Capacity Addition Since 6th FYP ................................................................... 9

2.3.1 Trend in Type 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......................................................................... 12

2.3.5 Increasing Shortage of Skilled Workforce ........................................................ 13

2.3.6 Changes in Technology And Increasing Foreign Suppliers ............................... 14

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 Station Heat Rate (SHR) .............................................................................................. 18

3.2.1 The New Scenario ............................................................................................ 18

3.2.2 Cost of Generation ........................................................................................... 18

3.2.3 Heat Rate ......................................................................................................... 19

3.2.4 Research Methodology..................................................................................... 20

3.2.5 Present Trends of Station Heat Rate (SHR) ...................................................... 21

3.2.6 Cause And Effect Analysis............................................................................... 21

3.2.7 SHR Affecting Parameter ................................................................................. 24

3.2.8 Uncontrollable Parameter ................................................................................. 25

3.2.9 Controllable Parameter..................................................................................... 26

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4. ASSET OPTIMIZATION ................................................................................................... 30

4.1 Introduction ................................................................................................................. 30

4.2 What is Asset Optimization? ........................................................................................ 30

4.3 Needs of Asset Optimization ....................................................................................... 30

4.4 Asset Optimization Framework.................................................................................... 31

4.4.1 DMAIC Project Manager ................................................................................. 32

4.4.2 Key Performance Index of Asset Optimization ................................................. 33

4.4.3 Process Management ....................................................................................... 41

4.4.4 Enablers ........................................................................................................... 43

5. STRENGTHENING O & M PRACTICES IN COAL FIRED POWER GENERATION

PLANT IN INDIA ............................................................................................................... 47

5.1 Introduction ................................................................................................................. 47

5.2 Background ................................................................................................................. 49

5.2.1 Sector Background ........................................................................................... 49

5.2.2 The Plant Load Factor (PLF) ............................................................................ 49

5.3 Key Technical Problem area of O&M Practices in India .............................................. 50

5.4 Developing and Implementing a Performance Improvement Programme ...................... 51

5.5 Enhancement of Operational Practices ......................................................................... 52

5.6 Enhancement of Plant Maintenance Practices............................................................... 59

5.7 Generation Planning and Plant Level Budgeting .......................................................... 63

5.7.1 Existing practices in Generation Planning and Plant Level Budgeting ............... 64

5.7.2 Generation Planning and Transition Steps ........................................................ 66

5.7.3 Plant Level Budgeting and Transition Steps ..................................................... 67

5.8 Management Information Systems ............................................................................... 68

5.8.1 Transition Steps for a Strengthening MIS Framework ...................................... 69

5.9 Purchase & Stores ....................................................................................................... 70

5.9.1 Transition Steps for a Strengthening Purchase and Stores ................................. 71

5.10 Indicative Action Plan for Strengthening O&M Practices ............................................. 72

6. CONCLUSION & RECOMMENDATION ........................................................................ 76

ANNEXURE-I ........................................................................................................................... 77

„5-S‟ Work Place Management ............................................................................................. 77

ANNEXURE-II .......................................................................................................................... 79

BIBLIOGRAPHY ...................................................................................................................... 80

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1. ORGANIZATION PROFILE

1.1 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).

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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 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

1.2 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

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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

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.

1.3 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.

1.4 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

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Continuous Improvement

Reward and Recognition

Organization Performance Management

Skill Development

Operation and Maintenance Practices

1.5 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

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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.

Figure 1: Organization Structure

1.5.1 ABOUT STERLITE ENERGY LIMITED (SEL)

Sterlite Energy Limited

(SEL) is a part of Vedanta

Resources plc , a London listed

FTSE 100 diversified metals and

mining major with Aluminium, Copper, Zinc and Iron ore operations in

India, Australia and Zambia, and a subsidiary of Vedanta group flagship

company, Sterlite Industries (India) Limited. SEL was established to

develop, construct and operate power plants and seeks to become one of

India‟s leading commercial power generation companies.

SEL is well positioned to capitalize on India‟s economic growth,

power deficit and large coal reserves to develop a commercial power

generation business. It shall benefit from Vedanta group‟s experienced and

focused management with strong project execution skills, experience in

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building and operating captive power plants, substantial experience in

mining activities and the capacity to finance world-class projects.

1.5.2 JHARSUGDA POWER PROJECT

Sterlite Energy Ltd has taken a major initiative towards the

advancement of the power infrastructure in Orissa through its 4 x 600 MW

coal-based independent power plant (IPP) in Jharsuguda district. The IPP

project envisages a total capital outlay of Rs. 8,200 crores. The two units

have commenced commercial operation since November 2010 and April

2011 respectively. The project is expected to be fully commissioned in the

third quarter of Fiscal 2012.

The power plant entails a number of pioneering achievements in

the Indian power sector. Each of its four units has a capacity of 600 MW,

which makes the units the largest commissioned in India till date. One of

the largest coal handling plants to handle 44,000 MT of coal per day,

which is equivalent to 14 rakes of coal a day and a power generation

capacity to produce 57million units/day. In addition to this, a Hybrid ESP

with fabric filter is being deployed for the first time in an Indian power

plant. The plant also has a dual LP-flow steam turbine and four 160 meters

high natural draft cooling towers. Other important features of the plant

include two 275 meters high multi-flue stacks and a high concentration

slurry disposal (HCSD) system for dry ash and highly concentrated slurry.

The company has made extensive arrangements to source raw

materials for the power plant. The Hirakud Reservoir is being used as a

water source and coal- the chief raw material, is being derived from the IB

Valley coalfield. Power would be supplied to consumers through the high-

voltage power lines.

As a prime advocate of sustainable development, Sterlite Energy

Ltd. puts a premium on environmentally friendly construction technology.

The plant employs hybrid ESP and fabric filter which maintains stack

emission < 50 mg/m3 and HCSD system for ash disposal, which results in

very low consumption of water compared to wet slurry system. The

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Jharsuguda IPP would therefore be a zero effluent discharge plant with

stack emission

For actualization of Vision for Global Benchmark Performance, the

Company has tied up for Operation & Maintenance of the station with

Evonik Energy Services (India) Pvt. Ltd., a wholly owned subsidiary of

Evonik Energy Services GmbH, Germany having 70 years of experience

in O&M of Coal fired thermal Power Plants of big size.

Independent Power Plant Jharsugda, Odissa

Proposed Installed Capacity 2,4000 MW (600 X 4 MW)

Technology Thermal Sub-Critical

EPC Contractor SEPCO III, Chaina

O&M Contractor Evonik Energy Services (India) Pvt. Ltd.

Estimated Coal Requirement Approximately 12.49 MTPA

Coal Supply Status

112.22 million tons coal block allocated(2);

provisional coal linkage of 2.57 mtpa received,

which will be sufficient for the generation of a

substantial portion of the power in the first 600

MW unit, and coal linkage with respect to 1,800

MW of capacity applied for.

Off-take Status

Long-term PPA signed with GRIDCO

providing right to purchase approximately up to

718 MW, intend to supply power to Vedanta

Aluminium for its proposed 1.25 mtpa

aluminium smelter expansion project at adjacent

site and One unit power(600MW) being sold on

merchandise basis through national grid.

Commissioning of the Units First - August 2010

Second - January 2011

Estimated Project Cost 82,000 Million

Figure 2: Independent Power Plant Project

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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 12

th 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.

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.

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. 5 CEA: Growth of installed capacity since 6th FYP.

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2.3 Growth in Capacity Addition Since 6th

FYP

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

Figure 3: The Growth of power generation in various FYP

Further analysis of Indian power generation sector over a period of time

reveals following fundamental trends:

2.3.1 Trend in Type Installed Capacity Dominance of Thermal

Thermal power plants comprised nearly 66.9 % of its generation

capacity as on 31st January 2013

6. In the 11

th 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 63781MW is thermal generation capacity.

This dominance of the thermal power plants will continue in the electrical

power sector.

6 CEA: Annual Report 2011-12, Growth of installed capacity since 6th FYP.

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Figure 4: Power Generation Mix

2.3.2 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.

Following chart depicts growth of private sector in power generation space7.

7 MoP: Report of The Working Group on Power for Twelfth Plan (2012-17).

20%

2%

12%

66%

Generation MW

Hydro Nuclear RES Thermal

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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.

2.3.3 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.

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.

Figure 5: Private participation in Power Generation and its increasing trend

1934.8

16227

42131

10th FYP 11th FYP 12th FYP proposed

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 6: Plant Load Factor Trends

Page | 12

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:

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.

2.3.4 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

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

Figure 7: PLF comparison of different sectors

Page | 13

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:

Table 1: The energy demand and gap in the year 2012-13

Energy Demand Peak Demand

Requirement Availability Deficit Demand Met Deficit

MU MU % MW MW %

Total 998114 911209 8.7 135453 123294 9.0

The above data indicates that we will continue to face energy shortages

for foreseeable future.

2.3.5 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

Supervisors 3500 80000

Skilled Workers 7000 80000

Semi-skilled Workers 7000 60000

Unskilled Workers 12000 80000

11 CEA annual report 2010-11, Load Generation Balance Report 2011-12 12 Load Generation Balance Report 2012-13

Page | 14

Non-Tech 8000 125000

Total 40,000 4,70,000

Table 2: Manpower requirement during the 12th FYP

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 required13.

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

times14. 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.

2.3.6 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

13 Working group on power report, Tata Strategic Management Report 14 Indian Express article: Power sector faces higher attrition, Dated:12th June, 2012

Page | 15

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.

2.4 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

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

Page | 16

cost has a direct reflection on the cost of generation and hence there is need to

optimize the same.

2.5 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.

Page | 17

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

Page | 18

3.2 Station Heat Rate (SHR)

Station Heat Rate (SHR) is an important factor to assess the efficiency of a

thermal power station. Efficiency of TPS is a function of station heat rate and it is

inversely proportional to SHR. If SHR reduces, efficiency increases, resulting in fuel

saving. Station heat rate improvement also helps in reducing pollution from TPS. In

this direction, Performance Evaluation Division of CEA had devised a Performa to

monitor the various parameters of efficiency of thermal power stations. On

monitoring, the data of station heat rate parameters had been received. The data of

operating station heat rate parameters so received have been compiled & analysed for

instituting an incentive scheme on Improved Station Heat Rate (SHR) and have been

compared with design SHR of the IPP. The analysis of Station Heat Rate parameters

as given below has been carried out broadly in two categories of the stations with

SHR variation between (a) Controllable Parameter (b) Uncontrollable Parameter

categories have been considered as efficient. All the unit analysed have used coal as

primary fuel to generate power and oil as secondary fuel for starting purposes. The

analysis has been carried out on the unit basis.

3.2.1 The New Scenario

After the Indian Electricity Act 2003 introduce the competition in

power sector. This new competitive scenario, power station must faces,

To reduce the generating cost

To maintain high availability, efficiency and operational flexibility

To meet strict environmental condition

To manage and extend the equipment life including system

modernization

3.2.2 Cost of Generation

The cost of electricity generation is depends upon two types of cost,

one is the fixed cost another is the variable cost. The company wants to

increase their net profit. The company main aim should be reduce the

generation cost. Most of the generation cost is the variable cost. So the

company concentrated on the reduction of variable cost. The overall variable

Page | 19

cost components are the plant availability factor, station heat rate, specific fuel

oil consumption, auxiliary power consumption. The variable cost decides the

competitiveness of the electric units in a generating pool. The unit fuel cost is

the approximately 70% of the total unit variable cost. The main fuel cost

component is the station heat rate (kcal/kWh). To reduce the variable cost

through the heat rate improvement of a coal based electricity generating unit.

3.2.3 Heat Rate

"Heat Rate" is a broad measure of thermal efficiency of a power plant

in the conversion of fuel into electricity. It measures the amount of heat input

in kilo-calories per hour for each kilowatt-hour of electricity produced.

“Unit Heat Rate” is a measurement of electricity generating unit heat

rate factor. This is also effective for the efficiency improvement of a power

plant. The formulae of measuring unit heat rate is,

𝑈𝑛𝑖𝑡 𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒 𝑈𝐻𝑅 =𝑇𝑢𝑟𝑏𝑖𝑛𝑒 𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒 (

𝑘𝑐𝑎𝑙𝑘𝑊𝑕

)

𝐵𝑜𝑖𝑙𝑒𝑟 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦

“Station Heat Rate” is directly measurement input and output factor of

a power plant. It measure by the following formulae.

𝑆𝑡𝑎𝑡𝑖𝑜𝑛 𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒 𝑆𝐻𝑅

= [𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝑐𝑜𝑎𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 (𝑘𝑔

𝑘𝑊𝑕)

× 𝐺.𝐶.𝑉.𝑜𝑓 𝐶𝑜𝑎𝑙 (𝑘𝑐𝑎𝑙

𝑘𝑔)]

+ [𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝑂𝑖𝑙 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛(𝑚𝑙

𝑘𝑊𝑕)

× 𝐺.𝐶.𝑉.𝑜𝑓 𝑂𝑖𝑙(𝑘𝑐𝑎𝑙

𝑙𝑖𝑡)]

Where,

𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝐶𝑜𝑎𝑙 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 =𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑎𝑙 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑖𝑛 𝑎 𝑚𝑜𝑛𝑡𝑕 (𝑘𝑔)

𝐺𝑟𝑜𝑠𝑠 𝐺𝑒𝑛𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑖𝑛 𝑎 𝑚𝑜𝑛𝑡𝑕 (𝑘𝑊𝑕)

Page | 20

Heat rate deviation also measure by the following formulae.

𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒 𝐷𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 % =(𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒 − 𝐷𝑒𝑠𝑖𝑔𝑛 𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒)

𝐷𝑒𝑠𝑖𝑔𝑛 𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒× 100

The objective of the plant regarding SHR improvement is that to find out the

parameters which are directly effect on station heat rate. Collect the data of this

parameter and analyzing it to find out the problem area for the deviation of shr.

3.2.4 Research Methodology

Station heat rate improving research process done by the following steps.

Collect the

relevance and

available data from

the plant authority

Study about the

station heat rate and

plant efficiency

Sorting the 5

months data

according to the load

factor

Find out the

parameter according

to the deviation

Sorting the

parameter according

to the controllable

and uncontrollable

Compare each

parameter with their

design value

Find out the

problem parameter

Suggestion to the

operation team for

reducing SHR

Figure 8: Research Methodology

Page | 21

3.2.5 Present Trends of Station Heat Rate (SHR)

All the units of the plant are the design same station heat rate. The

design heat rate is 2257kcal/kWh for the entire unit of the plant. But all the

units can‟t maintain the design value. The last five months trends of station

heat rate are shown below figure 3-2. The trend shows that all the units SHR

are very high than the design value. So the company tries to reduce the SHR of

the plant.

3.2.6 Cause and Effect Analysis

When a typical problem, it's important to explore all of the things that

could cause it, before start to think about a solution. That way it can solve the

problem completely, first time round, rather than just addressing part of it and

having the problem run on and on.

Cause and Effect Analysis gives a useful way of doing this. This

diagram-based technique, which combines Brainstorming with a type of Mind

Map, pushes to consider all possible causes of a problem, rather than just the

ones that are most obvious.

2454

2495

2448

23472369

2424

23872374

2506

24302409

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

Figure 9: Monthly Trends of SHR

Page | 22

Cause and Effect Analysis was originally developed as a quality

control tool, but we can use the technique just as well in other ways. For

instance, we can use it to:

Discover the root cause of a problem.

Uncover bottlenecks in your processes.

Identify where and why a process isn't working.

The fishbone diagram of the station heat rate is shown below figure 3-3,

The station heat rate also depends upon the dry flue gas and condenser vaccum

pressure. The fishbone diagram of dry flue gas is shown figure 3-4 and condenser

vaccum pressure shown figure 3-5.

Figure 10: Fishbone Diagram of Station Heat Rate

Page | 23

Figure 11: Fishbone Diagram of Dry Flue Gas Loss

Figure 12: Fishbone Diagram of Vaccum Pressure

Page | 24

3.2.7 SHR Affecting Parameter

The company SEL outsources their operation and maintenance part of

the plant to the STEAG Energy Service India Pvt. Ltd. Collect the monthly

efficiency report from the plant authority. I got five months efficiency report

of unit 1, 2 and 3. Sort the station heat rate related parameter for analyzing.

These parameters with their design value are listed below.

The five months data of this parameter are collected and grouping

according to the load curve. The load ranges are grouping into four categories

these are, (a) below 300MW (b) 300-400MW (c) 400-500MW (d) 500-

600MW. After the grouping and analyzing this parameter it is easily seen that

some of these parameter are controllable and some parameter are

uncontrollable.

Those parameter are depending upon the load factor or plant load

factor, these are called uncontrollable parameter. Because the measure value

of those parameter are not directly matched with the design value. When the

Serial

No.

Description Units Design

Value

1. Total Coal Flow TPH 410

2. Condensate Flow TPH 1424

3. Feed Water Flow TPH 1863.75

4. Main Steam Flow TPH 1863.75

5. Main Steam Pressure Mpa 16.67

6. 1st Stage Pressure Mpa 12.34

7. Main Steam Temperature oC 538

8. Hot Reheat (HRH) Steam Temp oC 538

9. Super Heater (SH) Spray TPH 0

10. Re Heater (RH) Spray TPH 0

11. Feed Water Temperature at Economizer Inlet oC 276.7

12. Condenser Vaccum Pressure Kpa 10.2

13. Flue Gas (FG) Temperature at Air Pre Heater

(APH) Outlet

oC 136

14. % of O2 at Air Pre Heater Inlet % 3.6

15. % of O2 at Air Pre Heater outlet % 4.67

16. Makeup Flow TPH 0

Table 3: SHR Affecting Parameter

Page | 25

plant load factor is around the 100% then it approximately matched with the

design value.

Those parameter are not depending upon the load factor these are

called controllable parameter. These parameter measured value should be

always approximately same as design parameter value.

The controllable and uncontrollable parameters are shown below table.

Uncontrollable Parameter

Total Coal Flow

Total Air Flow

Condensate Flow

Feed Water Flow

Main Steam Flow

Main Steam Pressure

1st Stage Pressure

% of O2 at Air Pre Heater Inlet

% of O2 at Air Pre Heater outlet

Controllable Parameter

Condenser Vaccum Pressure

Feed Water Temperature at Economizer

Inlet

Main Steam Temperature

Hot Reheat (HRH) Steam Temp

Super Heater (SH) Spray

Re Heater (RH) Spray

Flue Gas (FG) Temperature at Air Pre

Heater (APH) Outlet

Makeup Flow

Table 4: Controllable and Uncontrollable Parameter

3.2.8 Uncontrollable Parameter

According to the plant data below table shows that the uncontrollable

parameters are fully dependent upon the plant load factor of the plant. The

Figure 13: Uncontrollable Parameter

Page | 26

below figure shows that when plant load factor is above 80% then the

uncontrollable parameter also varies in between 80% to 100% of its design

value. Two parameters are more deviation of its design value. So the problem

parameters are,

i) % O2 at Air Pre Heater Inlet

ii) % O2 at Air Pre Heater Outlet

3.2.9 Controllable Parameter

Controllable Parameters are not dependent upon the plant load factor.

So the controllable parameters always meet the design value of the parameter.

If it doesn‟t meet the design value then we can say that the parameters are

problematic. The analyzing values of the five parameters are shown below

Figure 3-4.

The main steam temperature is the very important parameter. From the

analysis table main steam temperature shown that it changes very little of its

design value throughout the entire unit and all the load range. Hot Reheat

Temperature and feed water temperature at economizer inlet also very closer

with its design value. Condenser vaccum pressure parameter performance is

poor in less than 300MW and 300-400MW load range. But it improves in 400-

500MW and 500-600MW load range. Flue gas temperature at air pre heater is

good condition throughout all the units and load range.

The main three controllable parameters are more deviation of its design

value. These parameters are,

i) Super Heater Spray

Figure 14: Controllable Parameter

Page | 27

ii) Re-heater Spray

iii) Makeup Flow

3.2.9.1 Super Heater Spray

The deviations of these three units are analyzed with the box plot

diagram with average load range. The Figure 3-3 shows the boxplot diagram

of unit-1, unit-2 and unit-3 measuring data deviation. The design value of SH

Spray is 0 TPH. But boxplot shows the mean value of the unit-1 is 150 and

50% of collected data lies in between the range approximately 135TPH to

165TPH. The unit-2 mean value is 153TPH and the 50% of the collected data

is higher than the unit-1. Lowest 25% data is more fluctuating tan uni-1. But

unit-3 major 50% data is approximately same as unit-1 but the 25% of upper

data and lower data are highly fluctuating. In compare with its design value

of SH Spray and the actual value is too difference. So high SH Spray is one

of the reason for high station heat rate.

Figure 15: Super Heater Spray Boxplot

Page | 28

3.2.9.2 Re-heater Spray

The re-heater spray is basically used to reduce the re-heater plate

melting temperature. The design value of the RH Spray for this plant is

0TPH. The Figure 3-4 shows that deviation of the RH Spray real time data.

The measured value of RH Spray for unit-1 and unit-3 is higher than the unit-

2 value. The mean value of unit-1 is 23TPH and unit-3 mean value is 24TPH.

Lower and upper 25% of value is highly fluctuated both units. The mean

value of the unit-2 is 15TPH which is less than the other two units. But in

compare to the design value RH Spray is also high. This parameter is also the

reason for high SHR of the plant.

Figure 16: Reheater Heater Spray Boxplot

Page | 29

3.2.9.3 Makeup Flow

Makeup flow is required for a plant to full fill the shortage water. In a

closed cycle steam cycle water should not be shortage. But in real case it never

happen because in steam line huge tapping and measurement instrument are

installed. For the tapping and measurement purpose some amount of steam are

losses. Those losses affect the overall station heat rate.

Makeup flow is required to full fill the shortage of water. Analysis the

measured data of the makeup flow through boxplot. The boxplot diagram

shows the variation of data of five months. The mean value of unit-1 is

13TPH, unit-2 15TPH and unit-3 12TPH. The upper 25% of data are more

fluctuate for all the units of the plat. This parameter is also the reason for high

SHR.

Figure 17: Makeup Flow Boxplot

Page | 30

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

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,

Page | 31

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.

Vedanta Aluminium Limited has designed and implementing asset

optimization programme under the banner of AROHAN-PASSION in all its power

generating units.

Results

Enablers

Process Managemen

t

Figure 18: Asset Optimization Framework

Page | 32

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 20.

Figure 19: Logo of Arohan-Passion

Figure 20: DMAIC Steps

Page | 33

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

4.4.2.1 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

http://en.wikipedia.org/wiki/Grid_energy_storage

http://en.wikipedia.org/wiki/Grid_energy_storage

Page | 34

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.

The plant load factor trends of unit 1,2&3 are shown in the figure-

21. 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.

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 22.

Figure 22: DMAIC Status Report on PLF

50

57

67

51

62

0

10

20

30

40

50

60

70

80


PLF Trend (%) considering Unit1,2&3

Figure 21: Plant Load Factor Trends

Page | 35

The company is implementing DMAIC project manager for

improving the plant load factor

4.4.2.2 Specific Oil Consumption (SOC)

The Specific Secondary Fuel Oil Consumption for the purpose of

startup-shutdown 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 23. 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.

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

24 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


SOC Trend

SOC

Figure 23: Specific Oil Consumption

Page | 36

Figure 24: DMAIC Status of Specific Oil Consumption

4.4.2.3 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 25 showed

five months SHR trends.

Page | 37

Figure 25: Trends of Station Heat Rate

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 26.

Figure 26: DMAIC Status of Station Heat Rate

4.4.2.4 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.

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


SHR Trends for Unit 1,2 &3 in (Kcal/KWh)

Unit1 unit2 unit3

Page | 38

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

100-200 MW 10.32

Less than 100 MW 10.31

Table 5: Auxiliary Power Consumption1315

Factors affecting the APC:

Plant load factor = high

Operational efficiency of the equipment = Moderate

Start-up and shutdown = low

Age of the plant = high

Coal quality = Moderate to high

The figure 27 shows auxiliary power consumption trend for all units.

Figure 27: Trends of APC

15 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


APC trend (%) for unit1,2&3

Unit1 unit2 unit3

Page | 39

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 28.

Figure 28: DMAIC Status of Auxiliary Power Consumption

4.4.2.5 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 is 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

Page | 40

important. Present trends of critical equipment availability are show in

figure 29.

Figure 29: 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 30.

Figure 30: 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 31.

92.83

97.07

93.45

91.98

93.87

89

90

91

92

93

94

95

96

97

98


Critical equipment availability (%)

Page | 41

Figure 31: Trends of Station Availability

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 32: Spider Diagram of Process Management

54

73 73

8085

-

10

20

30

40

50

60

70

80

90


Station Availability

Basic Equipment Condition

PM/CBM compliance

Spare Parts Management …

Maintenance Facilities

SOP compliance

Contractor Management

Budget and Cost Control

Safety & Regulatory Compliance

Process Management

Page | 42

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.

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

Page | 43

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.

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.

Page | 44

Figure 33: Diagram of Process Management

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

Goal Deployment

Skills Development


Reward & Recognition …

Organisation & Performance …

Results

Enablers and Results

Page | 45

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.

The effect of implementation of asset optimization can be seen from

the performance diagram below figure 34 and 35.

Figure 34: Performance Diagram of Process Management

67%

65%

25%

90%

100%

78%

80%

80%

Basic Equipment Condition

PM/CBM compliance

Spare Parts Management

Practices

Maintenance Facilities

SOP compliance

Contractor Management

Budget and Cost Control

Safety & Regulatory Compliance

Process Management

May April

Page | 46

Figure 35: Enablers and Results of Process Management

83%

17%

17%

100%

90%

40%

Goal Deployment

Skills Development


Reward & Recognition

practices

Organisation & Performance management

Results

Enablers and Results

May

April

Page | 47

5. STRENGTHENING O & M 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.

Page | 48

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

Page | 49

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, it is essential that a

rigorous skill gap analysis is conducted and suitable measures taken towards training

and recruitment of staff.

5.2 Background

5.2.1 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).

5.2.2 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.

Page | 50

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.

5.3 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

0

10

20

30

40

50

0-5% 5-20% Above 20%

SHR Deviation in Private sector Power Plant (2010-11)

Per

cen

tage

of

Po

wer

Pla

nt

Figure 36: SHR Deviation in Private Sector Power Plant

Page | 51

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

5.4 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 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.

Page | 52

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

various aspects of change necessary for performance improvement are brought out in

the subsequent sections, starting with industry best practices on operations.

5.5 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

Figure 37: Perf Improvement Program

Page | 53

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 executes 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.

“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.

Page | 54

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.

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.

Page | 55

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. 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.

Page | 56

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:

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

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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

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,

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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 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.

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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-38 provides an indicative

content framework for a typical power plant knowledge management platform. A

separate discussion on MIS is provided in Annexure-II of this note.

5.6 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 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.

Figure 38: Content Framework of a typical power plant knowledge management platform

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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 recommendations of the equipment manufacturers and the utility‟s

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firsthand experience. The key elements of proactive maintenance in power plants are

illustrated through Figure-39.

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

infrastructure in respect of instrumentation shall need to be made available to

make it fully functional.

Figure 39: Proactive Maintenance Management System

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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-40)

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.

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:

Figure 40: Maintenance Process Enhancement Steps

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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.

5.7 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

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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.

5.7.1 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.

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.

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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

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

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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.

5.7.2 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.

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.

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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.

5.7.3 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

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.

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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.

5.8 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 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

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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.

5.8.1 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

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

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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.

5.9 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 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

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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.

5.9.1 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

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

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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.

5.10 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

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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

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.

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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.

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,

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establishing a fully 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

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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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.

The benefits would be better realised if asset optimization programme is

carried forward along with Perform Achieve & Trade (Annexture III) scheme.

Participating in PAT will enhance the monetary benefit of AO and support the

organization‟s drive towards minimizing environmental impact.

Page | 77

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.

Page | 78

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.

Page | 79

ANNEXURE-II

Management Information System

Page | 80

Bibliography

The Electricity Journal, May”, 1995 issue.

Building energy efficiency and the remuneration of operation and maintenance

personnel, Francis W.H. Yik, W.L. Lee, C.K. Ng, (2002)

"Entrepreneurial Orientation and the Franchise System: Organizational Antecedents

and Performance Outcomes", Olufunmilola (Lola) Dada, Anna Watson, (2013).

Report of the Working Group on Power for Eleventh Plan (2007-12)

o Volume – II Main Report, Government of India, Ministry of Power, New

Delhi, February 2007.

Indian energy book-2012, World Energy Council

Operation Performance of Generating Stations in the Country during the Year „10-11

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