Brains and Brawn

Integrating Digital and Human Asset Intelligence into Comprehensive Power Plant Knowledge Management

A Foundational Strategy Advocated and Prepared by: Paul Kurchina, President, KurMeta Inc Jason Makansi, President, Pearl Street Inc | August 2008
2008 KurMeta, Inc. and Pearl Street, Inc.

Brains and Braun: A Foundational Strategy | August 2008

Brains and Brawn:

Integrating Digital and Human Asset Intelligence into Comprehensive Power Plant Knowledge Management

Preface
This document represents a collaboration of two recognized leaders in asset and enterprise software and digital applications with corresponding deep domain expertise in power generation. It offers a vision and a strategy for achieving the highest level of performance from a power production facility through integrated application of todays powerful performance software and communication tools. Fundamentally, all the digital elements of a power station must be conceived, designed, and managed in an integrated fashion just like the physical equipment on the ground. This document explains how knowledge management, with the twin engines of the human element and digital intelligence, drives an asset-based business. Against the onslaught of exorbitantly high global fuel and commodity costs, opposition towards building new capacity, carbon constraints, and other severe pressures, the industry has little choice but to extract as much value from existing assets. Thats what integrated digital asset intelligence is all about. A follow-up effort by the authors will provide recommended solution sets for achieving the vision and gaining competitive advantage in the marketplace. KurMeta and Pearl Street also plan to build as well as participate in on-line communities (website, blogs) and face-to-face events around these concepts, to foster acceptance among the many stakeholders and application by the owner/operators of power generating assets. Feel free to contact either of the authors for comment, discussion, and opinion, and to request information about the follow-up efforts.

Author Contact Details: Paul Kurchina

403.374.1580 Paul@Kurchina.com

Jason Makansi
314.495.4545 jmakansi@pearlstreetinc.com

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Executive Summary: Meet the Chief Asset Intelligence Guy (Gal)

Managing a power plant asset over its multi-decade lifetimea continuum that begins with project conception and ends with the dismantling and decommissioning of the facilityrequires a comprehensive, integrated, and flexible knowledge management (KM) strategy with two principal elements: The digital element--asset intelligence (DAI) embodied by myriad automation and software performance solutions The human element (HE), the people who are assigned responsibility, wholly or in part, for the power plant asset, the processes through which they work, and the cultural aspects of the organization

In this report, we advance a vision based upon the analogy that the KM system is the plants brain, constantly assimilating information, and requires a design and development strategy distinct from, but closely aligned with, the physical assets, or the brawn. We also demonstrate that executing such a vision, though conducted in stages, provides a distinct competitive advantage unmatched in terms of early payback on investment. Why? Because it has become so difficult to expand electricity infrastructurefor example, to obtain permits to build new power plants and transmission lines or to justify capital costs for new plant assets which have more than doubled in five years. Every kilowatt-hour that comes from an existing asset grows more valuable by the day. In addition, the imposition of climate change policy onto power generators means that the primary emission from a plant, carbon dioxide, has a financial value, determined either through a tax, cap and trade, or other policy mechanism. This fundamentally changes not only the financial management of the plant but also leads to a rethinking about the Environmental, Health, and Safety (EHS) systems for the asset. Fundamentally, superior KM allows the asset owner to extract more value and productivitythat is, more revenue under a declining cost curvefrom the asset in the face of new, more complex constraints, such as carbon management, a changing workforce, reliability standards imposed by the North American Electric Reliability Council (NERC), European Union, International Union of Producers and Distributors of Electricity (Unipede, now called EurElectric), various Asia-Pacific partnerships, and others. The successful KM strategy is equal parts digital asset intelligence and human elements. The latter work together to define an organizations culture. One aspect cannot be divorced from the other. The KM strategy we describe and advocate here acknowledges that information about an asset is becoming more valuable than the asset itself, or at least equally important. To reflect this, every asset-based organization [see illustration next page] should have the equivalent of a Chief Asset Intelligence Officer in the executive boardroom who works closely with the CIO (Chief Information Officer) or head IT person and the head human resources person. Every project design team should have a Lead Asset Intelligence Architect working in conjunction with the architect-engineer (A/E) or the engineer-procure-construct (EPC) contractor, equipment and automation system suppliers, and so forth. Perhaps most importantly, every power plant should cultivate and deploy throughout the enterprise asset intelligence specialists who can cross boundaries among equipment and IT/software; among maintenance, operations, and finance; and among mechanical, electrical, I&C, and chemical disciplines. However, these specialists should ultimately be responsible to, and report through, the operations executives.

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Knowledge management, with the twin engines of human element (HE) and digital asset intelligence (DAI), should drive the business. In the past, the industry has talked at length about the trends in cross-training and multi-skilled workers. Today, leadership organizations must actively cultivate hybrid specialists who interpret the digital asset intelligence, make the linkages and connections that uncover value, prove that value to the plant operators and managers, and articulate that value to management. The knowledge so gained should then be spread and leveraged over other assets in the portfolio. Importantly, the knowledge base about the asset must transcend individual human elements so that changes to the workforce, to the people who interact with the knowledge, can be accommodated with the least amount of disruption to the enterprise.

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Introduction & Overview: The Vision of the Chief Asset Intelligence Officer
Although there are many reasons why a KM strategy is necessary, the most compelling is that the performance constraint envelope within which a power plant must operate today is simply too dynamic and variable to be optimized by the human element alone. In addition, the human element has also changed irrevocably. With todays wired and wireless communications technologies, data and information about the asset can be propagated to whoever, wherever, whenever, literally at the speed of light. Having stated this, the human element is an essential component of the KM strategy. The IT (information technology) or digital component of the strategy must be designed for optimum interaction with, and flexibility around, human element resources [see text box below].

Battlefield intelligence proves the point.

One of our white paper reviewers made an interesting observation. US Army units, usually at the battalion level, begin to build a knowledge base of battlefield intelligence soon after they enter a new area of operations (AO). There is a standard template for building this base of knowledge. Officers and others add data about key terrain, enemy habits, enemy personalities, areas needing special attention, friends, and so forth. All of the intelligence that can be gathered is input. When a new unit is rotated in, the knowledge base is passed on, for continuity of operations, safety, and effectiveness. All officers and NCOs are graded on their contributions to the knowledge base, and these grades are then tied to their annual review, pay, promotion, and awards. Medical and health professionals are also beginning to share patient data among geographically dispersed locations, or treat patients remotely from a central facility. There are reports that at least one defense contractor is preparing to bring its command and control military platform to the power industry. Each power plant asset represents, at a minimum, several thousand process and sensor data pointsa fleet of generating units for a mid-sized utility represents, according to one utilitys count, 300,000 process data points, or tags. Now consider the millions of interactions and relationships among all of these tags, at least with respect to extracting actionable intelligence from them, as well as the multiple locations at which this data and information can be beneficially usedtrading and markets, purchasing and stores, management oversight and tracking, supplier contracts, regulatory compliance, and on and onand it becomes obvious why a digital KM platform is essential. To make it seemingly even more complicated, overlay the data from external sources that can help the plant run its businessfuel market prices, real-time electricity prices, emissions allowances, emissions data to compliance authorities, and so on. All of this must be carefully considered and crafted as an overall knowledge management strategy that drives the business. The essential challenges to this vision are three-fold: 1. 2. The digital elements of this brain, from a commercial viewpoint, are fragmented among multiple, disparate software and automation suppliers The traditional functions within the asset owner/operator organization often are not reconfigured to best interact with the asset brain

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3.

The sensors and final control devices at the plant are not advancing commensurate with the software and presiding KM, or digital, elements

Our objectives in preparing this document are: To encourage suppliers to cooperate and collaborate to overcome the first challenge To convince owner/operators that both top-down and bottom up strategies are necessary to overcome the second challenge To make a compelling argument that designers and project developers should think harder and deeper about the third challenge

In understanding the depth of these challenges, consider this: When you buy a power plant, you typically purchase a boiler island, a gas turbine island, and/or a steam turbine island. One supplier assumes responsibility for the island even though all of the components could come from many different shops. An architect engineer (A/E) or EPC contractor is responsible for fitting the islands together, along with the balance of plant. The control and automation supplier contracted by the developer, owner/operator, or A/E firm, designs a system which includes the sensors and final control elements that meet the control strategy, not necessarily the KM strategy. [See illustration below.]

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There is nothing like this island supply concept for the KM system. In principle, the automation or DCS supplier could be the supplier of the brain island; in practice, the KM system is actually built up outside of the DCS, often on an ad hoc basis. However, as a caveat, the digital movement and management capabilities of the Internet, intranets, and associated storage and applications software is becoming an enabling platform for an integrated KM system distinct from the DCS. An analogy to the personal computer (PC) is appropriate. Originally, you bought a PC and then had to install myriad software applications to make it do anything. Today, you buy a PC that is pre-loaded with all kinds of softwareword processing, spreadsheets, printer drivers, database managers, photo-file handlers, Internet access, modems and wireless drivers, storage devices and ports, and so on. Most of this stuff actually works together pretty well in an integrated fashion. However, these software shells then evolve to reflect how an individual user, family, business,and the like, manages things. A simple example might be using an official power point template required by your company. Few people actually think very hard about a knowledge management strategy, and then go purchase a system that executes that strategy! However, this is the critical missing element with knowledge management around an asset or portfolio of assets, taking into account that the system must be flexible and be capable of handling the dynamic nature of information flow. The strategy that we advocate, and present in this document, is that the knowledge management strategy must be the foundational framework for the entire asset design, build, and operating enterprise. This is the best and most intelligent way to continually extract more value from the asset. The name of the game is faster, better, cheaper, or doing something better tomorrow than you did today, while at the same time improving the quality of the product or service. We also want to caution against the danger of pursuing the more glamorous aspects of KM and sacrificing the small things that nevertheless have great payback. For example, plant personnel in several owneroperator organizations report that their firms are spending millions for new control and information systems but neglect the basics, like replacing worn bearings on burner tilts. Apparently, it hasnt dawned on some management that the most sophisticated control system in the world wont move a burner with a frozen bearing, and therefore heat rate and emissions performance could suffer. No one should read this thinking that proper investment in the brawn should ever be sacrificed for more sophisticated investment in a KM platform. There is, however, a need for balance and to avoid turf wars among those responsible for the physical equipment and those responsible for the bits and bytes.

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Forces Demanding Continuous Performance Improvement

Global power generation has transformed from a parochial regulated electric-utility operation to a sophisticated regional, national, and even global business, especially from the perspective of asset management. As one measure, 40% of the power generation capacity in the U.S. is now categorized as non-utility, meaning that it functions as an independent generator (long-term contract for output), merchant generator (sales based on market conditions), or has been divested from a utility as a result of prior deregulation and competitive electricity supply programs. Another measure is the growing influence of regional electricity markets like PJM, NY-ISO, New England ISO, CAISO (California), ERCOT (Texas), and MISO (many Midwest and western states), and their attendant reporting and compliance requirements. A third measure is that power stations are largely either part of either regional or national portfolios of assets owned by a Canadian, U.S. or foreign-owned generating company or are owned by energy companies that have multi-state or regional portfolios participating in different markets. In a sense, power plants have become factories or refineries, and electricity is almost a byproduct, or at least one of many products. Several of the products are not products in the conventional sense of the word. They are products that represent compliance with environmental restrictions for air, water, and solid waste discharges. However, at coal-fired plants, processes to remove emissions often result in saleable products, such as fly ash, gypsum, slag, and so forth. Even the primary output, electricity, is sold as differentiated products in the marketplace, such as capacity, energy, reserve capacity, reactive power for voltage support, spinning reserve, and so on. The primary product, electricity, is sold where it commands the best price, and may be sold as energy, capacity, black start capability, regulation, and other needs of the market or grid. The fuel, raw materials, other inputs, and labor are sourced on commodity and labor markets. The emissions from the plant also have financial value through the emissions trading mechanisms, including potentially the biggest emissions market of all, carbon dioxide, or are cost items (compliance penalties) if emissions limits are exceeded. Even the discharges from the plant, like fly ash, slag, bottom ash, and flue gas desulfurization (FGD) product gypsum, can be sold for beneficial use. All of the input costs, revenue generating outputs, and emissions/ discharges vary to some degree. Most coal is purchased through long-term contracts, but more and more smart operators buy some coal on the spot, or short-term, market. Natural gas is also supplied under some combination of long-term and short-term contract, and many gas-fired plants arbitrage their gas instead of generating power. And electricity is now subject to real-time market pricing. Even labor may be more variable and transient with the shortage of skilled engineers and workers and the prospect of foreign labor filling in gaps. In addition to the financial and technical constraints, there are new requirements for reliability and cyber-security. In North America, new requirements are being issued by the Federal Energy Regulatory Commissionthrough its official electricity reliability organization, the North American Electric Reliability Corporationand the old requirements to meet federal OSHA standards, safety standards, insurance requirements, local and state environmental laws, emergency preparedness, national security, and so forth, have not gone away. Global climate change and carbon management will add another dense layer onto the already complex emissions profile management of an asset.

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Optimizing the technical and financial performance of an asset within this massive constraint envelope is beyond the capabilities of the unaided human element. The optimization routines necessary to dynamically balance the above constraints in real time are too complicated. The need to parse and distribute plant information about process, equipment, emissions, safety, reliability, output, spares and inventory within the plant (operations, maintenance, engineering, EHS), outside the plant to the owner/operator organization (asset manager, electricity marketers, outsourced services partners), and to regulatory and community organizations (NERC, FERC, EPA, OSHA, NRC, etc) is too vast to be handled by armies of paper-handlers. On top of all this, the skills and talent pools in the industry are being depleted. Although this isnt necessarily a permanent, chronic problemall resource constraints tend to be a temporary dislocation between supply and demandit is an acute problem today and is expected to be so for at least several years, and perhaps a decade or more. The result may not be a systemic lack of people to do the jobs, but extraordinarily high labor and salary rates needed to attract and retain them. The value of a streamlined KM capability shows up in less than obvious places as well. For example, insurance companies are considering lowering their rates to power plant customers which have remote monitoring capability, at least for certain machine configurations. Some owner/operators are able to run machines with some issues by closely monitoring them, rather than assuming they have to be taken out of service at the wrong times, such as when electricity prices are best in the markets. Scheduled major outages for the main steam turbine/generator have now been extended from one year to three to five years at many power stations, primarily as a result of having more knowledge about the condition of the machine. There is incremental and continuous value to be extracted by having as much intelligence as possible about a plant and its components. Despite all of the apparent sophistication of automation, software, and telecom tools, and the complexities of the optimization routines, the power industry is no closer to some of the most important ways to manage financial performance than it was twenty years ago. For example, there is still no real ability to correlate coal characteristics to downstream performance in process control, or to match coal prices and quality with electricity prices. The so-called dark spread, reducing coal costs when electricity prices are highest in the market, is probably the fastest way to make money at a coal-fired plant. The need for new sensing and initial and final control devices is addressed in a later section. And, regarding participation in electricity markets, most plants acknowledge that the heat rates being used for scheduling units in and out of the queue do not reflect reality, but are either design basis numbers or the result of a rarely conducted American Society of Mechanical Engineers (ASME) performance test. Real-time, or at least updated heat rate calculations, are going to be necessary to properly account for carbon allowances, and this also means that instrumentation must be properly maintained.

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The Brain: Mastering the Digital Elements and Integrating Islands of Automation
So, what constitutes this power plant KM system, or brain? Management consultants, automation system suppliers, software companies, and IT gurus in owner/operator organizations have all kinds of pretty PowerPoint slides to depict an advanced strategy or vision. But what are we really talking about? It begins with a monitored parameter which could come from a temperature sensor, pressure transmitter, motor controller, valve positioner, or damper motor, for example. This represents one of thousands of pieces of data available at any given time that describes the state of the plant. This data may be a critical part of the plants automation and control system, or it may be informational only. It is then transmitted and used in the control room to monitor and control the unit, but it is also transmitted to various software programs that can convert the data into information for equipment diagnostics, maintenance and outage planning, compliance reporting, capital projects budgeting, etc.

Information is created when data points or tags are aggregated and analyzed for trends, when multiple data points are used in a calculation, or when data points are correlated, analyzed, and compared to earlier data to detect patterns, identify anomalies, and so on. Information is then acted upon (actionable information), either in the form of the control and automation system making a change to the state of the unit (by moving a valve, a damper, a burner, or a pump), an operator making a decision to do something or not, or an engineer determining the condition of a piece of equipment, for example. At the plant itself, the brain interfaces with a final control device to implement a decision or action automaticallyclosed loopor with an operator (human element) who adjusts something manuallyopen loop.

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In practice, many power plants are moving towards an integrated, comprehensive KM system, or brain. In particular, theres been important progress in moving from a plant-by-plant concept to a fleet concept, where expertise and management resources are shared by multiple plants. As just one of many examples, a vibration analysis expert can now monitor data remotely and serve multiple plant locations, rather than having dedicated specialists at each plant. This trend, by the way, could be considered a modern manifestation of an earlier trend to move from control systems for individual units at multi-unit power stations to one control room for the entire plant. However, the transition from plant to fleet has had unintended consequences: Some utilities have established centralized performance monitoring facilities, in which information from multiple plants is collected, analyzed, and acted upon in a war room or dispatch-center style. However, these facilities typically are constructed using a software stack, different software packages that are layered (as opposed to integrated) within the monitoring computer screens. The KM system is usually separate from the DCS system, even though virtually every DCS vendor claims to provide all of the capability that individual software suppliers provideincluding data historian or repository, neural network or process optimization, condition monitoring and analytics, emissions monitoring and reporting, computerized maintenance management system, executive and management dashboards for key performance indicators (KPI), project and scheduling management, outage management, inventory and procurement interfaces, simulators for training, engineering and process models of the plant, and so on. Some of the software digital elements are selected by function and department of the owner/operator organization, rather than being streamlined for the organization as a whole. For example, an asset management software package may be tailored to the needs of the VP of asset management but duplicates many of the functions found in the DCS or in other software packages used by the plant or other staff. Some companies issue edicts to standardize on a software platform, even though that software may be better for one type of plant and not another, or the Internet may in fact be the platform. Many KM systems for older plants are the equivalent of baling wire and spit. They are built out by functional silos within the owner/operator organization for specific narrow purposes, to solve emergent, pressing problems, or to deal with obsolescence. These are often also referred to islands of automation, perhaps more aptly referred to as digital islands. Often, these systems are abandoned or turned off when staffing changes or because the capability to use the software was never properly transferred to the plant staff.

In fact, if you look closely at a power plant or portfolio asset level KM system today, you find three essential elements: 1. 2. 3. The DCS or automation system The data historian (usually a PI system) that pulls the data from the DCS and converts it into opensystem data that can be handled and transferred to any and all PCs and consoles The many independent software packages that take the historian data and convert it into information, trends, analytics, actionable information, etc.

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In practice, theres no reason why many, most, or even all of these software functions could not be embedded into the DCS controllers, although there are reasons to limit the integration of some pieces of the KM puzzle with the DCS. In addition, the DCS data-gathering operations are intended primarily to support the closed-loop control needs of the automation system. From the corporate side, an enterprise-wide information network now interfaces with the plant and asset-level KM system.

Within each software package, you also often find that its full capabilities are not being used, or being abused. Many neural network process optimization packages can, in theory, optimize the whole boiler, even the whole plant, but usually are bought and employed for minimizing NOx emissions. While the intent is to minimize sacrifice in heat rate, often plant equipment deteriorates even faster because one goal, NOx reduction, becomes paramount. Condition-based predictive analytics packages may be used for a few of the highest value components, such as the main turbine and boiler feed pumps, even though the capability can apply to virtually any component where two or more monitored parameters can be correlated in real time. Emissions monitors are used strictly for compliance, even though the information could be very useful for feedback process control for open or closed loop.

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Today, data and information is often propagated far and wide without adding much value at all for the enterprise.
Sometimes, centralized performance monitoring is in place mostly as an oversight function on the plant management. In this regard, information is simply shifted from one place to another, without adding much value. The real objective should be to gain additional insight into the operation of the asset and gain value from having actionable intelligence. In fact, a close under the hood examination of an organizations information systems usually reveals that there has to be a more expedient way to integrate and share the various data platforms. It is non-optimum to hammer away at the legacy plant control and information systems for existing assets and get them to fit with a sophisticated enterprise information system. It is unrealistic to expect half a dozen small suppliers of critical performance and asset management software to collaborate and integrate their offerings for the benefit of a customer. Moreover, it takes timetime that an enterprise doesnt have in the brutally competitive world electricity marketsto get older employees to conform to new KM systems. Once again, coming back to the brawn, a new vendors DCS may be interacting with the last DCS vendors hardware in the plant. Cooperation and sharing between the two competitors is necessary to expedite the project and make it a success. In fact, the owner/operator may have to invest in upgrading the legacy equipment, such as an analog field controller, to take advantage of the digital capability. At the same time, the information about both the DCS and the plant-installed hardware must be sent to the enterprise-wide software system as well as other plant or fleet-centered software systems. Often, the monitoring of major equipment is now the responsibility of the supplier, whose interestsselling services and replacements and sparesare not necessarily aligned with the plantsavoiding unnecessary costs. The transition from plant/asset and fleet to enterprise poses another set of issues. In this realm, you can think of it like this: Trying to marry up the corporate information systems to the asset information systems, both of which are likely a combination of legacy and customized systems and softwaresuch as for accounting, human resources, finance, for exampleand implementation of an enterprise-wide software system. In a sense, the corporate IT department is responsible for one side of the house, and the technical managers, engineers, and specialists are responsible for the other. Thus, the need for the Chief Asset Intelligence Officer and the asset intelligence architects we identified earlier to pull these often competing and disparate requirements into a seamless whole becomes clear.

Characterizing Todays Brain

Original research conducted by Pearl Street last year reveals that power plant digital and software applications have moved closer together but each piece in the stack continues to work independently. An integrated platform is still elusive. In addition, there is much disparity of opinion regarding the value of specific software applications. Most every plant or diagnostic & monitoring center has, or is interfaced to, several of the following digital elements: Plant data repository and data historian that captures data from the DCS and non-DCS control and monitoring systems Enterprise resource planning (ERP) systems A management level dashboard and/or portal, or data/information window onto the asset(s) generally accessible by many others beyond the plant staff

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Maintenance systems, computerized maintenance management system (CMMS), or task management of some form, usually interfaced with the enterprise asset management (EAM) software Process and equipment diagnostic and asset analytics package Intelligent soot-blower software (coal plants only) Thermal performance monitoring (heat rate) Combustion, boiler, or process optimization neural network, or equivalent Outage and project management and scheduling software for capital budget projects and outages Environmental health and safety (EHS) monitoring, documentation, and reporting Corporate governance risk and compliance (GRC), a la Sarbanes Oxley Emissions compliance reporting and monitoring Cycling and dispatch cost estimation software Fuel cost and characteristics tracking Electricity trading and marketing software tracking output, availability history, and other key performance indicators important to the market interface Electronic notification and alerts distributed to PCs and personal digital assistantscell phones, blackberries, and so on

Most of these applications reside outside of the plant DCS system. Even more interesting, all of these software applications together, even with an apportioned cost for the usually expensive enterprise software, may cost a fraction of what is invested in the DCS at the plant. If anything, the PI system that pulls the data out of the DCS and makes it available to the other software packages could be considered the true KM hub. In addition to these systems, which can be said to be associated with the continuous processes at the plant, there are the controls, monitoring, and software associated with the batch (or discontinuous) processes, such as coal yard operations, water treatment, and so forth. These systems can also provide valuable information that can be propagated and shared among the enterprise, but often are constrained by manual control systems and even local control, where a plant staff person must physically go to the area and push buttons. Local, disconnected control continues to plague power stations.

Propagating Informationthe Meta-Organization

Earlier, we mentioned that information from the plant can be propagated to whoever, wherever, whenever. Because of this, the expertise best capable of analyzing the information available from the data can be located remotely from the plant. This is why owner/operators have gone to centralized monitoring and diagnostic centers, and many equipment suppliers, especially those associated with todays combined cycle plants and wind energy facilities, provide outsourced maintenance and even operations services based on this data and information. Today, fleet owner/operators interact with local plant personnel and asset managers, transmit revenue requirements, share information that helps them understand operating costs before committing assets in open markets, analyze plant performance trends, and compare unit performance at the portfolio level.

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In other words, the actual financial management of the plant is taking place elsewhere, while the plant staff essentially follows instructions for how to bid into the market and cycle the unit up and down in load. The responsibilities of the plant staff become more focused on day-to-day tasks, such as maintaining equipment, buying consumables, overseeing the controls, rebuilding circuits, locating hard to obtain spares, tending to labor and workforce problems, and so forth. For critical components, such as the gas turbine/generator or steam turbine/generator, the full expertise of the vendors organization or performance engineering firm can be brought to bear through remote machine monitoring, diagnostics, and analytics. Thus, for todays plant, the plant staff isnt constrained to the people assigned to the plant location. The staff includes those individuals, of course, but also the equivalent of people from the water treatment vendor, chemical analysis laboratory, one gas turbine specialist located at the vendors headquarters, some fraction of a team of asset analytics experts residing at the software vendors location, the equivalent of three engineers from corporate headquarters, some fraction of the asset portfolios vibration expert, who serves multiple plants, and so on. The important rule of thumb is this: The information and data must be made available to those with the expertise to best make use of it.

Information and data must migrate to where the expertise can best make use of it.
Although this is not yet prevalent at power stations, information from the KM system can be propagated out another level into the meta-organization: The wider supply chain that serves the enterprise. Automated searches could be conducted for suppliers of components, consumables, and services ahead of scheduled equipment overhauls. Plant KM systems can be wired into stores and inventory databases and to automatically order replacements when necessary. Plants of identical or similar design can share databases for critical spares, or hard to obtain parts for legacy equipment. This would help companies reduce carrying expenses by sharing inventory. Eventually, the system could even be smart enough to identify heat rate lossesimpacting the carbon footprintand make recommendations on what components to consider during the next outage! Of course, one has to ensure that the base information driving the supply chain is correct and adequately updated. Often, in most facilities, it is neither.

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Configuring the Human Element: Avoiding Islands of Communication

In some ways, optimizing the human element to the digital elements is no different than, twenty years ago, optimizing an organizational chart. Every military and organizational leader knows that power resides in knowledge, and there is always resistance to sharing powerand knowledgeand therefore there is a tendency to hoard knowledge. In this regard, the digital part of the KM strategy is at the mercy of the business objectives and the human element. Another thing to keep in mind when configuring the human element is that the digital elements are most logical for repetitive tasks, for identifying and mapping important patterns within and among individual data streams. Overall, the industry must concede that the impact of the digital elements on the human element is two-fold: on one hand, fewer people are needed to perform those repetitive tasks or search for those patterns and correlations; on the other, some of the labor is simply displaced to others in the organization, or the metaorganization. Ten years ago, it appeared that the IT and computer/automation revolution was going to empower plants and allow them to run autonomously as profit centers. Plant management would simply interact with the owners as necessary and send the money to headquarters. It would be the corporate owners who would be hollowed out because the IT systems would allow the plant to manage their own affairs. In truth the opposite happened. The higher value functions of engineering, management, and financial operations were displaced elsewhere. Maintenance specialists are no longer dedicated to a single asset. On-site management of the asset is being dis-intermediated, meaning that the value of the function has been stripped away so that it is no longer necessary. There are still plant people with these titles, but when you remember the rule about knowledge and power, well, the power is located elsewhere because the information is available elsewhere. Optimizing the human element around the digital elements requires an understanding of the continuum of knowledge provided from the digital side, that is, data, trended data, correlations and analytics based on the trended data, advisories provided to those who can do something with the knowledge, and immediate, short-term, and long-term decisions and actions based on the knowledge. Certain functions required on a continuous or frequent basis will always remain at the plant site. Some actions and activities will be handled by teams assembled and sent to the plant site. Many functions can be located virtually anywhere in the worldmonitoring, trending, analysis of long-term impacts, and others. What is important is not so much that the IT systems shatter the traditional boundaries drawn in organizations, that a reduced staff does more with less by sharing the knowledge contained in the enterprise information system, or that costly preventive maintenance work is avoided or postponed because predictive techniques now prevail because of sophisticated analytics. All of these outcomes are a given. What is important is that the human elements are properly configured around the digital elements, and vice versa. Its not about one or the other; its about a KM system where the digital elements are an extension of the brains of the human elements.

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Brains and Braun: A Foundational Strategy | August 2008

Enduring Challenges and Risks: What Stands in the Way

Achieving the vision of an integrated, comprehensive KM platform poses challenges beyond the general inertia prevalent in large organizations, the characteristics of the IT and software business, and the duplication of functions between the software stack and the DCS. Topping the list is cyber-security, the unwanted, unintended consequence of the move to the open PC-based computing environment. Related to this, something that plant managers complain bitterly about, is version proliferationnew software versions with re-adjusted security management that requires everyone to be retrained. Also high on the list is user-friendliness. Pearl Streets research also suggested that most software, even products that have a high perceived value, does not pass the means test for the user interface. So-called data fog threatens the utility of the KM program. Workers simply go numb from having too much information and not knowing what to do with it. Plus, they are worried about the energy and time it takes to share their knowledge, or maintain the asset intelligence base. A less obvious challenge is that the ability to pass information around the meta-organization also makes it easier for people to pass the buck. An analogy can be made here to email trafficking: 1. 2. People spend a great deal of time today managing email rather than managing their job or business People often forward emails irresponsibility, in the hopes that someone else will handle an unwanted task

There are computer hardware issues as well. One of these, also uncovered in the Pearl Street research, is the inability of the PC environment to handle the real-time data environment at the plant. The shear volume of data and/or the processing times required are reported to overwhelm PC capability. Often, problems shift or move, rather than go away. For example, the immature KM platform, in its unintegrated state, has spawned a crisis of sorts in alarm management. Plant managers note that from 25-50% of the alarms handled at the plant are system alarms, or alarms pertaining to the DCS or control system itself, not the actual equipment being controlled. There are vastly more alarms and they are functionally different. It should also be acknowledged that one reason the cost for the software stack mentioned earlier is so low relative to, for example, the DCS, is that the initial cost of digital element software is much smaller than the final cost of software. Usually software implementations require continuing consulting and services. In fact, the research referenced earlier showed that the initial vs. final cost could be anywhere from 1:2 to 1:20 depending on what was included and paid for initially, the capability of the owner/operator staff managing the software, and so forth. While these issues are relevant and important, we believe that most of them can be managed precisely by the strategy advocated here. For example, a common user interface for multiple software applications would go a long way towards alleviating the issue of user-friendliness. Having a KM island supplied by one vendor at least means that there would be one source of responsibility that the owner/operator would have to communicate with. As a minimum, perhaps, the number of vendors could be limited and the strategy could be to at least work towards one common graphical user interface (GUI).

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Brains and Braun: A Foundational Strategy | August 2008

Perhaps the one KM issue that cannot be managed by the strategy advocated here is the need for better and more accurate original data inputs from the plant. The old saw, garbage in garbage out, is a real threat to KM effectiveness. It is important to think through the wide range of data needs for the life of the plant during the design stage and make a larger effort to justify the expenditures for better sensors and final control devices, and new real-time monitors and measuring devices. Many times, software suppliers advocate using their analytical capability to determine where bad sensors are, rather than using good data from the sensor to gain more insight into operations. And, optimization software may simply camouflage the lack of attention to the brawn with respect to plant performance.

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Brains and Braun: A Foundational Strategy | August 2008

The Next Ten Years: Transforming Digital Asset Intelligence into Knowledge Management
Today, it is true that KM strategies are being adapted to the assets at hand. Existing assets, with old hardware and control/automation systems, are like having a modern airplane cockpit run a 58 Chevy. The controls are far more sensitive than the ability to actually move a final control element (motor, damper, or valve, for example). In thinking ahead to the next ten years, it is likely that the asset will have to adapt to the enterprise KM strategy. For example, how well and how quickly an assets KM can be adapted to the enterprise KM platform could well be one of the highest priority considerations for an acquisition. In addition, Pearl Street and KurMeta anticipate the KM strategy expanding to include a real-time assessment of an enterprises carbon footprint. Forward-thinking energy companies now accept that carbon management will be requiredits just a matter of when. The first step will be a comprehensive evaluation to develop the baseline case. Cap & trade legislation and/or carbon taxes will be instituted. Regulators and even lenders/investors will require detailed information about global warming and carbon risks to the business. Carbon management has already become an issue in financing coal plants, much less permitting them. Reducing the carbon footprint will become a part of doing business. The immense tracking, monitoring, reporting, and analytical requirements associated with this ramp up the necessity of an overall KM strategy. There is likely to be more outsourcing than less. The upcoming crop of young engineers is different from current engineers. Reports are that they are resistant to working in the remote environments where many plants are locatedand new ones will be as well. Many plant engineers, especially in nuclear plants, were members of the nuclear navy, who were happy to simply work in one place, rather than travel underwater their entire career. The next crop of engineers isnt like them. The KM system can be best thought of not only as a brain, but one that matures and grows as the asset proceeds from project conception through design, engineering, construction, commissioning, startup, and life-cycle operation. Lets face it, the best training simulator for a plant should be a somewhat simplified version of the actual plant thats being built, with the ability to adapt as the plant ages and the design characteristics change [see diagram next page].

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Brains and Braun: A Foundational Strategy | August 2008

Experience tells us that power plants either do not proceed through the early startup phase without difficulties (nuclear plants), or end up operating in modes not envisioned in original designfor example, coal plants built for base-load in the late 1970s ended up being heavily cycled because the base-loaded nukes came on line, and the combined cycles of the last ten years mostly run in peaking mode because the market for mid-merit electricity collapsed. The KM system has much more flexibility to adapt to such disruptions and can therefore minimize the cost impact when they occur. However, this will require that project developers, and those who finance projects, understand that new instrumentation and devices are necessary to measure the right parameters and input the data into the KM system. Some of the devices designers must consider seriously include: On-line fuel analysis: Evaluations conducted by Pearl Street, Inc. and others clearly show that advanced plant instruments that monitor in real time the important constituents in coalash elements that lead to slagging, water, sulfur, and so on

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Brains and Braun: A Foundational Strategy | August 2008

lead to improved process control of the entire combustion process. Advanced gas turbines are extremely sensitive to impurities in fuel gas feed and therefore benefit from on-line analysis. Corrosion monitors: Weaknesses in metal often lead to catastrophic failure or unplanned downtime. Devices available today can monitor corrosion and erosionfor example, metal lossdirectly and report the data through the KM system. Cycling and dispatch impacts: Every plant needs more instrumentation and control flexibility to minimize the significant cost impacts of cycling and start-stop operations. Gas-fired combined cycles, in particular, are suffering from the effects of cycling, because they were designed for base load or mid-merit operation. Tube failures: 50% of all forced outages at coal-fired plants, and a substantial source of problems at combined cycle plants, are boileror HRSGtube failures. The industry is no closer to a solution to this problem today than it was twenty five years ago. This is an area screaming for better sensor and detection technology, or asset analytics that identify problems in other ways. Emissions monitors, carbon in fly ash monitors,and so on.

Thus, the evolution of the design of the KM system, or brain, has multiple objectives. One is to ensure an integrated software stack that is designed and built in conjunction with the physical assets, and makes best use of software and tools applied during the design and construction phases of the project. Another is the opportunity to improve on the raw data that is the source for all the enterprise asset knowledge. Importantly, it is essential to remember that many key components at the power plant are not well-instrumented in the first place, especially in older plants. In some cases, it will be necessary to add basic sensing capability, not even advanced sensors. In other cases, so-called soft sensor technology can be employed to provide monitoring of poorly instrumented equipment. At the other end of the spectrum, the technologies for collecting and propagating information continue to advance and are making their way into the plant environment, where, just a few years ago, they were considered inappropriate (for example, wireless) or ineffective. Some of these communications technologies include radio-frequency identity (RFID) tags, wide area networks (WiFi) with multiple communication channels, mesh networks, digital bus (sensors embedded in equipment with diagnostic capability), and smart digital meters. Ultimately, the model that were aiming for isnt another continuous process industry, perhaps, but a discrete manufacturing one like the automobile industry. For example, sensors in todays automobiles know second by second the critical performance parameterswhere it is going, how fast, traction at the tires, whether it is raining, darkness levels, and so on. Braking systems and safety systems are well automated today, as are the combustion and engine timing systemseven a sound system can automatically adjust for higher levels of background noise in the interior! More than 20% of the value of an automobile today, according to reports, is embodied by the electronics, sensors, and software. And, they can send alerts and maintenance notifications back to the dealership so they can badger you about bringing the car in for scheduled maintenance!

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Brains and Braun: A Foundational Strategy | August 2008

Conclusion: The Payoff from an Integrated Knowledge Management Platform

Re-orienting the asset-based organization towards asset intelligence is the first strategic step in leveraging the benefits of todays performance software, digital technologies, and advanced communication practices. Once a cadre of asset intelligence specialists and architects are in place, cultivated by the Chief Asset Intelligence Officer and his/her department, they will readjust and execute on the vision of a streamlined asset software stack and work with the appropriate vendors to customize the system and make it happen for the organization. The payoff has been shown to be enormous, even if implementing the early stages of the vision advocated here.

Islands of automation often spawn islands of communication!

The fact is, software and digital technologies are very low cost compared to equipment brawn and workforce labor, and the real value for your money only comes when all the software elements are configured as a streamlined whole and the knowledge propagated across the enterprise to those who can best make use of the information. Unfortunately, digital software and communication solutions are usually implemented as silos within departments, or end up creating a new function or layer on top of old ones. Islands of automation spawn islands of communication! However, by thinking in terms of our analogy of brains and brawn, the asset-based organization can visualize the importance of taking the long view, of ensuring that the digital and human elements of the asset brain are conceptualized, designed, built, modified, and retrofitted to reflect the needs of the physical assets and the long-term strategy of the organization. Only when the digital asset intelligence is truly propagated and shared across the human element can an asset-based business claim to be a knowledge management enterprise.

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Brains and Braun: A Foundational Strategy | August 2008

Paul Kurchina
Paul Kurchina is an Information Technology visionary and a leader in leveraging applications and technology including Plant, Enterprise Asset Management, and Mobile Solutions. Over his career, Paul has worked for government, crown corporations, public corporations, and consulting organizations. Much of Pauls career has been spent working in the utility industry, including a variety of leadership roles at Ontario Hydro, TransAlta and PriceWaterhouseCoopers. Over the years, he has developed and launched numerous IT initiatives, including ERP implementations and Plant focused solutions. Paul now runs KurMeta, an IT ecosystem development practice. Paul has also been involved in working with a number of utility industry companies and technology partners around the world on plant and fleet focused solutions with a strong focus on customer value. He has been a technology advisor to a number of leading utilities and non-utility organizations. Paul served as Strategic Technology Advisor to the Executive Vice President of a power generation company, leading the transformation of the power generation business through integrated software and plant performance applications. These efforts culminated in the awarding of Power magazines Power Plant of the Year Award in 2005 to the company. Paul has been the chair of a number of user groups focused on various subjects areas including utilities, power generation, plant maintenance, enterprise portals, and service orientated architecture. He is currently a chair of an Enterprise Architecture Special Interest Group. Paul has been the co-author of a number of books including: Mashup Corporations: The End of Business as Usual, and most recently In Pursuit of the Perfect Plant: A Business and Technical Guide. Paul is a frequent speaker at utility and non-utility events around the world.

Jason Makansi
Jason Makansi is a recognized thought leader in the electricity industry and has worked with leading clients and businesses involved with power plant management, performance, and operations. Knowledge management and asset intelligence is a key Pearl Street practice area. He is the author of three books, most recently the highly acclaimed Lights Out: The Electricity Crisis, the Global Economy, and What It Means To You (John Wiley & Sons, June 2007). Earlier books include An Investors Guide to the Electricity Economy, (John Wiley, April 2002), and Managing Steam: A Guide to Industrial, Commercial, and Utility Systems. Current and recent work with plant knowledge management tools include predictive analytics, neural network process optimization, on-line fuel analysis, cost of power plant dispatch and cycling, equipment damage estimation, simulators, distributed control systems, and others. In 2000, Jason lead the power industry business segment for Myplant.com, an innovative on-line community for information and Internetenabled services and software applications. Also at that time, Jason published the seminal executive report, Information Technology for Power Plant Management, distributed through The McIlvaine Company. Prior to that effort, Jason was the Editor in Chief of Power magazine, the industrys leading trade publication, from 1994-2000 and was with the publication since 1981. In 1989, Jason became Editor in Chief of a companion magazine, Electric Power International, and began covering the worldwide electric power industry. In the early 1990s, he launched a series of events, The Power Plant Managers Workshop and the Power Plant

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Brains and Braun: A Foundational Strategy | August 2008

Information Technology Symposia; special reports and articles, focused on integrating controls and performance software. Jason has been an active member of numerous engineering and technical societies, and currently is on the Executive Committee of the ISA/EPRI Power Industry Symposium and the Program Planning Committee of the Electric Power series of Conferences and Expositions. He earned a BS in Chemical Engineering from Columbia University. Feel free to contact us for comment, discussion, and opinion or for further information on our continuing work on integrating digital and human asset intelligence into comprehensive power plant knowledge management systems.

Paul Kurchina
403.374.1580 Paul@Kurchina.com

Jason Makansi
314.495.4545 jmakansi@pearlstreetinc.com

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