Improving Heat Rate

Through Operations and

Maintenance Optimization


MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 1
Improving Heat Rate through Operations and
Maintenance Optimization

Copyright Meridium, Inc. 2000
All rights reserved. Printed in the U.S.A.

All rights including reproduction by photographic or electronic process and translation into other
languages of this material are fully reserved under copyright laws. Reproduction or use of this material in
whole or in part in any manner without written permission from Meridium, Inc. is strictly prohibited.

Meridium is a registered trademark of Meridium, Inc. All trade names referenced are the service mark,
trademark, or registered trademark of the respective manufacturer.

* Content originally developed by Robert Matusheski, Meridium, and Rich Colsher, CSI Services






















MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 2
Abstract

With todays emphasis on developing competition through deregulation, heat rate gains become more
significant. Cheaper fuels, better performance, and higher equipment reliability combine to become key
indicators for unit dispatch and the economic viability of generating units for future competitive markets.
Fuel performance and reliability are not independent, and gains made in one area are often offset by
losses in another. Less expensive fuels sometimes cause more wear and tear on equipment. Unit
performance can be impacted negatively by unreliability causing frequent, costly restarts, driving up fuel
costs. Swing load operation sometimes causes degradation in equipment reliability, leading to higher
maintenance costs.

Working against these trends are several new techniques for plants which, when taken together,
represent an optimization of operations and maintenance for these facilities. New technologies represent
an important part of the advances necessary for true optimization, but not the only part. New processes
must be put into place to take advantage of existing and new technologies in order to make positive gains
against the changes caused by deregulation. These new processes often need a paradigm shift in order
to be successful. This shift requires that both new and old processes be modified or abandoned. This
paradigm shift is quite often the largest barrier to the implementation of new technologies, rather than the
cost or functionality of the systems.

This paper examines new technologies used for implementation of an optimized operations and
maintenance program including advances in information technology usage, performance and reliability
improvements. The paper studies the impact of these techniques and the new information that these
systems provide. The paper also looks at how existing standard processes or procedures are overcome in
favor of the broad acceptance and use of the new information, emphasizing information over experience
for decision-making. Finally, the paper investigates how an analysis of global performance parameters
and benchmark data drives the need for the optimization of plant operations and maintenance.

MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 3
Introduction

Deregulation and competition are driving the need for improved business practices at all levels within
electric power utility organizations. Current and future goals for these organizations include the
development of a business model that will allow for generation facilities to be operated in a highly efficient
and effective manner. This is not to imply that the organizations were inefficient in the past, but rather,
the decision-making paradigms need to be shifted to take into account the new competitive nature of the
economic environment. One of the changes necessary for utility mangers to recognize is the need for
increased thermal efficiency at the generating facilities. Older plants that have considerably higher heat
rates will not be able to compete on the open market and will used for load regulation and peak operation
only. In some cases, the performance of these older units has been allowed to degrade, largely because
fuel expenses were always passed through to the customer.

Economic Drivers for Heat Rate Improvements

The overall corporate vision for many utilities includes the improvement of plant thermal efficiency as a
strategic initiative. In fact, many plant improvement capital programs center on thermal efficiency gains.
New technology solutions include the application of advanced computer systems for the identification of
performance problems.

Operations personnel play a key role in heat rate improvement at facilities where even small gains in
thermal efficiency provide big dividends in terms of improved financial performance. A major point for
plant management is to recognize the importance of heat rate awareness among operators and to make
this awareness part of all operators training. Including this awareness training in operator training is an
important part of any optimization effort.

In order to identify performance problems, the following are offered as inspection points that can have an
immediate impact on controllable heat losses:

Feed water heaters are the levels correct, how do we know? Since heater levels can be
disturbed in a dynamic situation such as load following, do the operators ensure that
appropriate levels are maintained in each heater in the train?
Condenser vacuum pressure is this at or near design, if not why not?
Make-up water usage are make-up flows consistent with normal design operation?
Do heat cycle pumps operate at or near their best efficiency point?
Is there any evidence of boiler drain valve or relief valve leakage?

MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 4

The role of maintenance in heat rate improvement is often less direct, but equally as important. The
pressures for unit availability often exceed considerations for the current material condition of troubled
components contained within the unit. Even of less concern is the thermal performance impact. In many
organizations, maintenance is a service organization to operations and as such, maintenance does not
prioritize critical work. The result of this relationship is that plant personnel often overlook the
thermal performance impact of the procedures on the equipment even though they understand the
adverse impact on heat rate.

Changing Plant Utilization & Long Term Maintenance

Some plant roles in the current dispatch scheme will changes with deregulation. Plants that have served
in a base loaded capacity may now see more swing load operation as competing units with lower dispatch
rates will now serve this role. Deregulation and competition indirectly causes some challenges for
maintenance:

Swing load operation causing increased wear and tear on equipment because of increased thermal
cycling.
Thermal stress that can induce cracking, which reduces life of pressure components and creates
potential safety hazards.
Companies that are achieving lower fuel cost through the blending of different types of coal are
experiencing abnormal wear on fuel handling components (pulverizers, crushers, conveyors.
Operation at loads higher than design maximum cause higher furnace gas velocities and increased
boiler tube erosion and ultimately premature boiler tube failures.
Longer run times reduce periodic inspection of air pre-heater seals
Condenser air in-leakage causes higher LP turbine back pressure that reduces efficiency and
increases LP turbine blade erosion.

Many companies have established longer time between major outages. These companies need to
establish new thermal performance objectives in new outage scheme.


MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 5
The Need for a Paradigm Shift

A paradigm is a set of business rules that help managers prioritize and organize work tasks, based on
high level corporate goals and initiatives. A key question to ask at your facility is: What decision-making
paradigm exists for power plant operations and maintenance regarding heat rate issues?

In some cases, emphasis on unit reliability (stay running at all costs, regardless of short-term fuel
expenditures, material and labor costs) has been the paradigm for many plants. This is not to imply that
management was wasteful, but simply that the priority was on reliable delivery of power to the customers,
regardless of cost. This approach is easily justifiable because the general public demands and expects
the uninterrupted supply of electrical power. This approach spread across all segments of utility business.
With deregulation, utility customers will still demand uninterrupted electrical service at the lowest cost.
These are the criteria that customers (both commercial and residential) will use to select their electric
power supplier. The choice will be based on a combination of cost and reliability.

Value-Based Asset Management

Under deregulation, the successful plant will produce electricity at a high level of reliability with extremely
low heat rates. Strategies that maximize on-line production time such as extending time between major
outages, shortening outage duration and avoiding periods of unexpected downtime are critical to
operating in a competitive utility environment.

To operate competitively, utilities need to move from a cost-based approach to asset management to a
value-based approach. The key difference between the two approaches is that the Value-based
approach involves strategic decision-making that takes the long term effect of repairs into account when
making replace, repair, overhaul, retrofit, refurbish decisions. The Cost-based approach relied on
available budget (can we afford it?) for maintenance decision-making that often ignores equipment
thermal performance considerations. Cost-based decisions are based on experience, not information.
While most repairs do not result in a loss of efficiency, performance issues are generally not addressed
when making Cost-based decisions.






MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 6
Figure 1 -
Value-based Asset
Management Strategy

In order to make these
decisions effectively,
managers and
engineers will require
access to more and
more data. Along with
this need for
information will come a
new emphasis on
reliability and heat
rate, driven by
competition for
production time. Equipment unreliability often causes unit load restrictions or frequent start-ups and
shutdowns. Improved reliability means less time in a transition or de-rated condition that can ultimately
affect unit heat rate. While these effects are not directly related, the secondary effects of disturbances in
operation cause a reduction in overall capacity. Conversely, by closely monitoring thermal performance
at the component level, O&M personnel can improve component reliability by spotting problems early.

Existing Operations and Maintenance Practices

Existing practices are often ineffective at identifying and correcting equipment problems that cause heat
rate deficiencies. The reason for this goes back to the lack of emphasis on performance. In order to
begin to take performance issues into account when making maintenance decisions, the daily workflow
needs to be redesigned. Operators, maintenance supervisors or engineers should consult performance
information before and after repairs are conducted.

An optimized approach for operations and maintenance includes the review of performance information
once repairs are complete. In most cases this is not done because of a lack of emphasis on heat rate
issues. Among the reasons for this are:

Lack of tools Thermal performance of components requires that certain measurements and
calculations be performed on a regular basis. If the necessary instrumentation is not
permanently installed or has suspect calibration, then the readings provided by the equipment

Plant Goals

Improve heat
rate
Improve
availability
Eliminate forced
downtime
Minimize O&M
expenses
Comply with all
safety and
environmental
regulations
Activities

Operate plant at
peak efficiency
Optimize
maintenance
decisions for
reliability and
performance
Integrate
information
systems
Track
performance
indicators and
continually adjust
Strategy for
Competition

Become least
cost provider
Achieve high
reliability
Maintain safe
and
environmentally
compliant
Value Based Asset Management

MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 7
will not be useful. Equipment that does not have permanently installed instrumentation will
need to have manual data collection. This presents a barrier to regular data collect because
dedicated resources are needed to install temporary instrumentation to collect the data.
Lack of procedures Cause and effect relationships are necessary for each known heat rate
problem. Reference 1 specifies that logic trees be developed for each heat rate problem.
Logic trees are useful tools establishing a uniform response to a particular set of
circumstances, independent of who is on shift.
Lack of communication In some cases, plant personnel make changes to equipment that
causes unit thermal performance degradation, often without documentation or turnover.

Understanding the link between O&M activities and thermal performance is critical for reaching the goal of
long term, competitive production in a Value-based economic environment. A component-based
information system is necessary to bring together maintenance, operations and performance information.

Performance Monitoring Assessment

One way to mitigate the effects of equipment degradations is to establish an improved thermal
performance-monitoring program. The first step is to assess current thermal analysis capability existing
within the organization. To make this assessment, two areas need to be investigated: the technical
aspects (what tools are available) and organizational aspects (who uses the tools). A key aspect of the
assessment is to understand the current goals for equipment performance monitoring at the company and
determine if these goals have changed under deregulation.

Management needs to set the vision for overall O&M improvements. The vision should include
benchmarking of competitive cost and production targets. The results of an assessment can give
guidance for the implementation of actual practical changes. Key performance indicators as shown in the
Table 1 need to be calculated and published in a conspicuous area to give O&M personnel feedback on
the success of the performance improvement program.



MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 8

Key Performance
Indicator
Description Benchmark Values
Heat rate by Unit Btu/kWh - Design vs. Actual Net heat rate within 500
Btu/kWh of design value
1

Efficiency by major
Equipment
Btu/kWh - Design vs. Actual Net heat rate within 500
Btu/kWh of design value
1

O&M Labor as a % of
total production cost
Percent 20%
Based upon 100 people per
500 MW with 80% capacity
factor
Total Production costs
by Unit per kWh
$/kWh (excludes capital) $0.011
Based on 9000 Btu/kWh net
and $1/Million Btu fuel cost
plus 20% O&M
Cumulative budget vs.
actual expenses
Trend for current calendar year within 10%
Unit capacity factors Percent 70%
2

Availability for Major
equipment
Percent Greater than 70%
2

O&M Labor hours per
kWh
Shown as hours/MWh 0.04


Table 1 - Typical Plant Performance Indicators

In general, what equipment is monitored and for what purpose need to be identified. The performance
gains that the company needs to make to become more competitive must be linked to the activities that
will achieve desired results. Table 2 shows how individual improvements on components can effect unit
heat rate and links activities to results, a necessary element of any performance improvement program.


MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 9

Equipment Procedures Potential Impact on
Unit Heat Rate
(average)
1

Responsible
Department
Testing
frequency
IP Turbine Testing Enthalpy 14.5 Btu/kWh/% Performance Monthly
HP Turbine Testing Enthalpy 18.8 Btu/kWh/% Performance Monthly
Feed water heaters Terminal
temperature
differences
2.1 Btu/kWh/degF Operators Monthly
Mill fineness Manual
sifting
29.4 Btu/kWh/% Maintenance Quarterly
Condenser Back
pressure
Air in-leakage 204 Btu/kWh/in HG Operators Monthly
Boiler - Main steam Steam side 1.4 Btu/kWh/degF Operators, DCS Daily (DCS)

Table 2 - Impact of Thermal Performance Improvement on Individual Components

The assessment should identify how the plant currently performs in these areas and what improvements
could be expected.

Thermal Performance as a Condition Indicator

Many industries, including the aircraft industry, use engine performance as a key condition indicator for
detecting problems between scheduled overhauls. Aircraft maintenance technicians conduct these tests
on the flight line prior to and shortly after flights. Failed flight line engine performance tests, in many
cases, are the first indication of problems and the most often cited reason for non scheduled overhauls.
Aircraft design lends itself to easy engine replacement. This allows aircraft mechanics to use engine
performance to drive maintenance activities. This practice leads to highly reliable and dependable
operation, critical for an aircraft.

In order to achieve a competitive edge in the electric generation business, high reliability plays a key role.
Performance testing of plant components can give clues to problems developing in a machine.
Performance Monitoring for pumps often requires ultrasonic flow testing for pumps that are not equipped
with flow transmitters. Typical automation tools, such as distributed control systems (DCS), are equipped
with on-line unit heat rate monitors that give calculated values thermal efficiency and incremental heat
rate for all components that are controlled and monitored by the DCS.

MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 10

Root Cause Analysis

In order to get the benefit from thermal performance testing, the organization needs to establish a link
between the causes and effects of thermal performance problems. Reference 1 calls these links heat rate
logic tree diagrams, and even provides suggestions to help reduce the effects of these losses. In a root
cause analysis, teams of employees work together to establish links between causes and effects within a
plant and connect these action or conditions to other causes and effects to try to understand the root
cause of each effect. Root cause analysis causes and effects are the same thing, depending on your
point of reference. A cause can be an action performed by person (or initiated automatically by a plant
system) or can be a condition that may have existed for some time, triggered by an action. Each action or
condition that contributed to a cause or effect needs to be supported by evidence in order to ensure that
solutions that arise as a result of the investigation are appropriate to the situation.

All root cause analyses should focus on solutions, not try to place blame. When implementing a
performance-monitoring program, we often focus on technical solutions to performance problems that
cause deficiencies, often ignoring problems caused by personnel actions. This is because actions are
often much more difficult to correct than conditions. Correcting actions usually requires a change of
procedures, which requires training and proficiency evaluations. Addressing the root cause of problems,
whether caused by technical or personnel issues, is at the heart of the value-based approach for
optimized operations and maintenance.

Applications and Technologies

Statistical Process Control (SPC)
SPC is a set of management tools that is used in the process industry for product quality tracking.
Reference 3 identifies the following management tools necessary for SPC:

Flow charts diagrams that maps out the process under study
Pareto Charts Bar chars of components versus total costs, number of repairs or occurrence of
problems. Used to identify bad actors.
Check sheets A data gathering tool used to categorize problems for investigation
Cause and effect diagrams Block diagrams that logically links causes and effects
Histograms Bar chart showing the distribution of process values, for a particular time period.
Control Charts A plot of individual measurements or moving average data. Usually, the chart
shows the mean, control limits and specification limits for a process. (See Figure 2)

MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 11
Scatter plots pairs of related measurements shown in an X-Y configuration. A common usage for
scatter plots would be to identify off-spec operation, for example heat rate versus main steam
temperature.

SPC allows for close tracking of small changes of process data. Many DCS and process data systems
contain SPC algorithms, allowing users to evaluate process data on a statistical basis. A Meridium
database, which also contains SPC capability, allows users to combine SPC results with other
maintenance management tools such as Pareto analysis, maintenance history reports and Weibull
analyses. Meridium also provides all the tools described above for analyzing SPC data.

Control charts can be used to track variations in thermal efficiency on an individual measurement or on an
entire process. SPC can help discriminate between instrument drift and process drift simply by applying
run rules to the results shown on the control charts. Run rules help to identify the non-random behavior of
a system or component. Non-random behavior implies that a systematic fault is occurring with the
process or system under study.




Figure 2 - Sample SPC Control Chart for thermal performance efficiency tracking.

There are several ways in which SPC can help a thermal performance-monitoring program. The first way
is to establish the normal random variation in the data. This variation helps to eliminate false alarms that
may come as a result of variations in test conditions. Another way that SPC can help a performance
program is by identifying periods of off target operation. With some SPC software packages, the data is

MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 12
automatically subjected to non-randomness run rules that automatically identify process drift.
Performance degradations that occur as a result of changing internal conditions in a machine are
manifested slowly over time. The performance data must be carefully analyzed to spot these small
variations. SPC is perfectly adapted to recognize even minor variations in data that would otherwise be
imperceptible. The run rules SPC can also be applied to diagnostic data such as vibration, which can
give notification of abnormal behavior and early warning of trouble. (See Reference 4)

Detecting Condenser Air In-Leakage
Several technologies exist for detecting condenser performance problems caused by air in-leakage. One
method uses a portable gas chromatography device. This device detects helium that is sprayed around
suspected leak areas. The gas chromatography detection system is attached to the suction side of the
condenser air removal system. This technology has been highly effective at identifying condenser
leakage.

Another device is used to detect air in-leakage that causes condenser performance problems measures
the total mass flow of the condenser air removal system. A specially designed sensor simultaneously
measures the water content of the total flow to the exhauster. The estimation of air in-leakage is found by
subtracting the calculated water vapor pressure from the total pressure. This system can also be used to
measure exhauster performance. (See reference 5)

On-line Boiler Optimization
The power plant furnace represents the area where large improvements in heat rate can be achieved.
Optimizing boiler operation is a particularly difficult challenge, but can pay big dividends in reducing
emissions while simultaneously improving heat rate. One such system takes process data from the
plants DCS system and provides an on-line operator advisory capability. The software takes advantage
of minor perturbations from standard settings in order to learn their effects on emissions. The software
measures each effect and suggests further adjustments to achieve optimum control combinations. The
control optimization is accomplished using Bayesian statistical models to estimate future behavior of
control adjustments. At one plant NO
X
emissions were reduced 20% while boiler efficiency was
simultaneous increased by 2%. (See Reference 6)


MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 13
Conclusions

When trying to establish or improve a performance-monitoring program, we need to develop a business
case showing the potential benefits of rate improvement and reliability optimization. Some utilities have
existing heat rate monitoring programs that are half-hearted and driven by public utility commission
requirements. Few plants use the data collected in the performance program to spot trouble and take
action before failure occurs. Competition and deregulation will force plants to optimize O&M practices to
implement a value-based approach.

In order to implement a value based asset management program, you will need to conduct an
assessment to understand existing efforts and application areas for new tools. Any new approach should
engage O&M personnel to buy-in to heat rate improvements through:

Performance awareness training and relationship to maintenance
The cost impact of thermal performance improvements
Decision-making based on information, not just experience
Integration of thermal performance information with maintenance data, organized at
the component level

Finally, the implementation of a value-based asset management program relies heavily on the use of new
technology solutions to old problems. Without investment in new technology, tools and training, O&M
personnel will not be able to recognize new opportunities for improvement and will continue to base future
decisions on past experience rather than new information, presented by the new technologies.


MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 14
References

1. A .E. Tome, Jr., D. E. Leaver, R. G. Brown, Heat Rate Improvement Guidelines for Existing Fossil
Plants, EPRI CS-4554, Delian Corporation, May 1996
2. Generating Availability Report 1987- 1991, North American Electric Reliability Council, July 1992
3. Smith, Gerald M. (1991), Statistical Process Control and Quality Improvement, Prentice-Hall, 1998
4. Matusheski, Robert, C-103 Reliability Seminar Training Guide, Meridium, 1998
5. J. W. Hempster, et al., Advancements in Air In-Leak Measurement, EPRI Plant Performance Seminar
Proceedings, 1994
Patterson, Peter, Kruger, Michael S., Optimization Saves Money, Reduces NO
X
, Power Engineering,
September, 1997





MERIDIUM | Improving Heat Rate Through Operations and Maintenance Optimization 15


Corporate Offices
10 South Jefferson Street
Roanoke, Virginia 24011
540.344.9205
540.345.7083 fax

Regional Offices
11200 Richmond Avenue
Suite 670
Houston, Texas 77082
281.920.9616
281.920.9190 fax

www.meridium.com
info@meridium.com