Bonneville Power Administration - Northwest Hydroelectric Association

Risky Business – Asset Management
for Aging Hydro Plants
Bonneville Power Administration
Northwest Hydroelectric Association
February 2016
The Federal Columbia River Power System
• 31 Powerplants (21 Corps, 10
Reclamation)
• 196 Generating Units
• 22,060 MW
• 60% of region’s hydroelectric
capacity
• 65 million+ MWh/year
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Asset Age
Over 30% of the assets in the FCRPS are at or exceeding their design life. Of those
assets, over 60% are related to unit reliability and have direct impacts on
generation.
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Assessing Asset Condition
The FCRPS uses the hydroAMP Condition Assessment framework to assess the
condition of over 5500 assets.
The hydroAMP guide contains specific instructions for the condition assessment
of:
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Turbines
Generators (Rotors and Stators)
Excitation Systems
Governors
Transformers
Circuit Breakers
Surge Arrestors
Cranes
Batteries
Compressed Air Systems
Emergency Closure Gates and Valves
Penstocks
Additionally, a more generic “Balance of Plant” guide can be used to assess the
condition of more than eighty additional components.
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Projecting Condition Degradation
The condition of each asset is projected over time using degradation curves derived
from FCRPS and available industry data. In the chart above, the average equipment
score of each plant for a given piece of equipment is plotted against the projected
degradation rate.
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Relating Condition to a Probability of Failure
Using a combination of industry failure data as well as expert opinion elicitation,
hydroAMP condition is mapped to a probability of failure for each equipment type.
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Calculating Risk
With an understanding of condition, how it changes without intervention and how it
relates to a probability of failure, risk can be forecast over time. Using Copperleaf’s
C55, the FCRPS forecasts the following risks and costs:
Lost Generation Risk:
Equipment failure may also result in longer outages and, thus, more lost generation than if replaced on a
planned basis. This cost risk increases as equipment condition degrades over time.
Direct Cost Risk:
If equipment fails during the deferral period, intervention costs may be incrementally higher for collateral
damage and planning, procurement, and scheduling inefficiencies (overtime, emergency hiring, contract
premiums, etc.). This cost risk also increases as equipment condition degrades over time.
Lost Efficiency Opportunity:
Some equipment replacements (turbine runners, transformers and generator windings) reduce efficiency
losses. Deferring replacement results in a lost opportunity to capture increased generation from higher
efficiency equipment.
Replacement Cost:
Typically, the longer the replacement can be deferred, the lower the present value of its cost.
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Optimizing Replacement Timing
The Total Cost is the present value sum of replacement costs, risk costs and LEO. The cost
minimum on this curve is the point at which financial risk is forecasted to begin growing faster
than the benefit of investment deferral and represents the optimum time to forecast replacement
to minimize lifecycle cost.
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Prioritizing Investment
$000s
Capital Program Forecast
For a given program level, the C55 Asset Analytics will fill in investment based on the cost
minimization algorithm. Assets with lower deferral costs are deferred in favor of assets with
higher deferral costs when a budget constraints are introduced. The chart above displays the
results at a $300 million budget level from BPA’s 2014 Capital Investment Review materials.
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The Cost of Deferral
High Deferral Cost
Low Deferral Cost
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Sensitivity Analysis
Sensitivity analyses can help zero in on the optimal program level by
analyzing both the qualitative and quantitative results. Running C55
Asset Analytics at different Capital Program levels can quickly show the
impacts on the Condition, Age and Risk of assets over time.
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Condition Forecast for a Given Capital Program
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Condition Forecast for a Higher Capital Program
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Lost Generation Risk Forecast
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Non-Routine Expense Forecast
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NPV of Different Capital Program Levels
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Gordon Ashby
[email protected]
503.230.3665