Manitoba Hydro

Asset Investment Planning
Managing Assets for the Long Term
Nick Read & Phil Jones
Manitoba Hydro & CopperLeaf Technologies
Supported by:
Produced by:
Key Topics
Introduction to Manitoba Hydro
Asset Challenges at Utilities
Asset Investment Planning & Management
SAP Integration
Results & Take Home
Questions
Manitoba Hydro
• Electric &
•
•
•
•
•
•
Natural Gas Utility
Crown Corporation
Monopoly in MB
Revenues $2.2B
6000 employees
5500 MW
installed capacity
14 Hydraulic stations
– 102 units
Churchill
Nelson
Drainage
Basin
Winnipeg
USA
CANADA
Major Transmission
Churchill River
Nelson
Limestone
River
Long Spruce
Kettle
Kelsey
Laurie
Jenpeg
HVDC Transmission
Grand Rapids
Winnipeg River
Generating Stations
Selkirk
450 MW 500 MW
Interconnections
Brandon
300 MW 300 MW
1050 MW
2250 MW
The Aging Asset Dilemma
Slide 6
An Aging Fleet of Stators – About $15 M Each!
95
Asphalt Mica - 1
90
85
80
75
70
65
60
55
50
1st Std Dev
AVG Life
Asphalt Fleet
45
AVG Existing & Retired
Asphalt Fleet
40
Asphalt Mica - 1
AVG - Retired
Asphalt-Mica
35
30
25
20
15
10
5
0
U2
U4
Great Falls
Slide 7
U6
U7
Kelsey
U1
U2
U3
U4
U5
McArthur Falls
U6
U7
U8
U1
U2
U3
Pine Falls
U4
U6
Seven
Sisters
U5
U6
U7
Slave Falls
U8
Power Supply Aging Asset Capital Plan
A Broken Capital Planning Process
180
160
140
Plnned Capital, millions
120
100
80
60
40
20
0
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Years
Slide 8
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
“Known Unknowns”
"We know there are known knowns: there are things we know
we know. We also know there are known unknowns: that is to
say we know there are things we know we don't know. But
there are also unknown unknowns — the ones we don't know
we don't know.“ — Defense Secretary Donald Rumsfeld,
Defense Department briefing, Feb 12, 2002
Slide 9
“Known Unknowns”
Two types of projects potentially make up the bulk of a
20 Year (+) Capital Plan
• “Known Projects”…the ones we know about today
• “Knowable Projects”…projects that we could predict in the
future if we had enough time and data
Drive Train Approach
To Templated Condition Assessment
Slide 11
Our “Typical” Low Head Plant
Slide 12
HydroAMP Health Index Data Mining
Slide 13
The Search for a Solution
• “Solution” is a combination of Process and Technology
o
o
Processes cannot be supported in spreadsheets, so software is required
Software does nothing without processes
• Started in 2006
o
o
o
Adopted a software solution
Didn’t fully understand our requirements and future state processes
Believed what we saw from vendor PPT presentations
• Learned, clarified our requirements, 2nd kick at the can in
2010
Slide 14
High Level Objectives
• Develop and Maintain a 30 year (+) capital plan
• Facilitate capital planning collaboration between 5 Power
Supply Divisions
• Identify future potential capital projects based on equipment
health and performance
• Provide Condition and Risk Assessment Reports on assets
and sub categories of assets and the effect of spend on asset
condition and risk
High Level Objectives …
• Create a prioritized portfolio of projects based on managing
risk while respecting constraints
• Implement a workflow approval system complete with
reduced document and process requirements for projects in
the longer term
• Identify and implement an enterprise capital planning tool for
Manitoba Hydro capable of providing all of the above while
accommodating MH processes and integration with SAP
Asset Investment Planning Maturity Pyramid
Slide 17
CopperLeaf Technologies
• Founded as a consultancy in 1993
•
Software solution development and delivery since 2004
• CopperLeaf has two main software products:
•
•
ESP, for Demand Side Management (Conservation) Planning
C55, for Asset Investment Planning and Management
• Customers
Slide 18
Aligning with Best Practices
• PAS 55 framework
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•
•
•
•
Slide 19
Line of sight
Risk-informed
Across all time horizons
Data-driven
Closed loop
Asset Decisions are Complex
MAINTENANCE
REQUIREMENTS
Slide 20
The Perfect Decision
Oversophisticated
Analytics
Decision Model
Sophistication
Get Perfect
Data First
Data Quality
Slide 21
Risk Informed Decisions
Slide 22
Understanding Risk, Money and Time
Slide 23
Understanding Risk, Money and Time
Slide 24
Understanding Risk, Money and Time
Slide 25
Understanding Risk, Money and Time
Slide 26
Understanding Risk, Money and Time
Slide 27
The Cost of Not Doing
INVESTMENT REDUCTION VS. RISK INCREASE (6% DISC. RATE)
$1,400
$1,200
(PV) millions
$1,000
$800
$1,044
$600
$699
$400
$422
$200
$196
Reduction in Program Level Investment
Increase in Total Risk (LGR + DCR)
$0
(Baseline) 0%
10%
20%
% Decrease in Capital Investment
Slide 28
30%
40%
The Four Quadrants
Slide 29
Strategic Framework
• Where corporate objectives, KPI’s, policies and constraints are defined
•
•
and maintained
All investments are evaluated in the this context
Bridges engineering and financial worlds
Slide 30
Asset Planning
• Where candidate asset investments (projects) are derived by modeling
•
•
future asset needs based on asset risks and costs over time, and
growth projections
Based on economic end of life
Factors in the corporate constraints & tolerances
Slide 31
Optimal Economic End of Life
90
80
70
60
PV Cost $
Optimal
Replacement
Date
50
Replacement Cost
O&M Costs
40
Lost Prod'n Risk
Total Cost
30
20
10
0
2010
2015
2020
Time
Slide 32
2025
Investment Planning
• Optimizes the project portfolio for the current and upcoming budget
•
periods
Candidate projects are converted into “real” funded investments
Slide 33
Performance Management
• Tracks all projects and re-forecasts asset investments based on actual
•
execution performance and KPI’s
Closes the loop
Slide 34
Enterprise Environment
Asset Investment
Planning &
Management
Slide 35
SAP Integration
• Version of SAP
o
ECC 6.0, Enhancement Pack 5, NetWeaver BI 7.01
• Integration Method
o
The integration between SAP and C55 is done via a synchronous Web Service
• Interfaces are run:
o
o
On an as-needed basis. These interfaces are invoked by the user by initiating
specific workflows
On a nightly basis
Slide 36
SAP Integration
Project Hierarchy
Capital Projects Ready for Approval
Updated Capital Project Forecasts & In-Service Dates
Special Maintenance Projects Ready for Approval
Actuals from all Projects
Slide 37
IM
PS
CO
Purchase Orders (Commitments) for all Projects
MM
Users, Organization Information
HR
Asset Hierarchy & Details (planned)
EAM
Results
• System went Live end of December and the Working Team is
very satisfied…so far
• Many End Users are still dealing with change issues; why do
we need to do 20 year planning?
• Still some bugs in the system but less than we would normally
expect for complex software integrating with our existing
systems
• Reports from the system are already turning data silos from
various groups into shared information that we are beginning to
use to make capital investment decisions
Slide 38
What did we do Right? / Take Home
1. Telling other groups which of their people we wanted
2.
3.
4.
5.
so that we got the best people
We were careful when picking an AIP tool and
approving the supplier’s blueprint team
Getting processes and data ready ahead of time
Built support for the project at the bottom and at the
top of our organization. Planted seed and kept
watering
Formed a Capital Planning Committee
Slide 39
Slide 40
Nick Read
Manager, Generation Maintenance Engineering, Manitoba Hydro
[email protected]
Phil Jones
VP Sales, CopperLeaf Technologies
[email protected]
Supported by:
Produced by: