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Abstract
Due to the deregulation in energy markets there is an increased need for asset
management tools. The essence of asset management is having the decision-support
for finding an optimum between financial performance, operational performance, and
risk exposure. Decisions must be made about operating and maintaining infrastructure
assets. Hence, the primary goal of an asset management tool is informed decision-
making, rather than the pure focus on technical performance.
The Lifecycle Optimizer, presented in this paper, addresses the influence of a given
operating mode on the ageing process of the power plant and includes this in the
economic optimization. A Model Predictive Control (MPC) and Mixed Logical
Dynamic (MLD) approach are used to solve the posed optimization problem.
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1 Asset management for power plants
As a consequence of the deregulation in the power industry, utility business units have
been transformed from cost centers into profit centers. Whereas they previously had a
budget and carried out projects, they are now charged with contributing to growth in
corporate earnings. Whereas the justification of their budget was mainly based on
engineering criteria related to Operation and Maintenance (O&M), they have become
increasingly more focused on return-on-investment.
Today the utility business faces the challenge of aligning the management of their
assets with corporate objectives. This requires engineering and economic tools as well
as value-based decision-support. The strategic plan of a company defines the high-
level goals and based on this, the business units setup their operational plans to
achieve their targets. The asset manager sits between these functions and must
therefore have comprehensive tools for decision-making about assets.
The key component in asset management is lifecycle costing, which implies cost
minimization starting with the initial investment, continuing through O&M, and
ending with recycling or phase-out. This approach requires asset plans to be linked to
financial plans. In order to achieve this, the asset manager shall be able to carry out
the following tasks:
This is only possible through informed decision-making. The asset manager shall not
only receive data about specific assets, but shall also be able to translate that data into
knowledge.
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1.1 The stakeholders
For complex asset infrastructures such as power plants, the responsibilities can be
divided among the following two key persons:
The asset owner represents corporate strategy, defines the asset costs and risks the
company is willing to accept, and sets the level of expected performance. The asset
owner is also responsible for raising and managing capital.
The asset manager focuses on decision-making and optimizes asset values in line
with corporate objectives. His core competencies are performance analysis, financial
analysis, risk management and economic decisions. The asset manager sets the budget
and the targets for the trader and the O&M manager in the plant.
Today, the information retrieved through the automation system from the plant floor
is usually of technical nature. Knowledge of the influence of some technical facts on
the plant floor on the commercial success of the plant lies with the experienced plant
manager. If a plant is run on condition based maintenance, where outages are not
planned in regular intervals, but depending on the state of the plant, the success of this
strategy is highly dependent on the quality of the plant state assessment. But even
with a very precise plant state assessment there is room for optimization in this
approach. Information on how plant operation influences the plant state is needed.
Only with this information, the plant manager has the full picture of the results of his
decisions. If we provide a tool which not only analyses the current plant state, but also
informs the operator about the influence of his actions on the future plant state, a
business decision can be taken on whether to run the plant aggressively and to initiate
maintenance earlier, or to run the plant more smoothly and extend the maintenance
interval.
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Planning &
Scheduling
Business
Plant Systems
Engineering
Process
Engineerin
g Asset
Information Optimization
Design
Centric
Maintenance
Field
Operations Devices
The two central themes in IndustrialIT are information availability and information
integration. This means that information must be available at the right place at the
right time independent of where the information comes from. It must be possible to
seamlessly integrate the right information from any combination of sources.
Each of these real world objects can be described from several different perspectives.
Each perspective defines a piece of information, and a set of functions to create,
access, and manipulate this information. We call this an Aspect of the object.
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Aspects, which can be defined as all the real-time information connected to a
particular Object, including design drawings, control diagrams, maintenance
information, location, quality information and configuration information. In fact, an
Aspect can be composed of data and programs performing specific functions.
Together, these Aspects form a dynamic 'model object' containing links to all the
important information. In IndustrialIT terminology, this is called an Aspect ObjectTM.
Once the physical device (object) is put in place in the plant, the operator can simply
copy and paste the model Aspect Object into the overall system. No matter where
each real object is deployed, one 'click' on the model object provides a link to its
Aspect information.
Today’s plant manager assumes new responsibilities mostly focused towards the
management of more complex business situations. When talking about decisions for
plants with a complex configuration (multi-unit plants, multi-plants and multi-product
trading, i.e. fuel, power, heat, emissions), finding the operation schedule that provides
the optimal economical results cannot be solved without decision-support tools.
Decisions support systems for operation of power plants in an economic market are
typically based around the concepts of economic commitment and dispatch. The
objective of, what hereafter is referred to as operational optimization, is to schedule or
commit generating units over a certain horizon such that the difference between
operating cost and revenue is minimized. In addition to meeting the expected load, the
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operational optimization problem must take into account requirements such as
minimum uptime and downtime of generation units, startup and shutdown times,
spinning reserve, and other constraints such as emissions (e.g. CO2, NOx, SO2) and
minimum or maximum power output.
Two elements are at the core of any operational optimization problem. The first is a
model of the plant describing how the plant reacts to various control signals, i.e., an
input-output model. The second is an objective function that uses a combination of
external variables and variables from the plant model to compute a plant performance
measure, e.g., external variables could include the electricity market price and fuel
price, and model variables the plant output and fuel consumption. The objective
function has the generic form [1]:
t +T
J [u ] = ∫ f (e(τ , u(τ )), c(τ , u(τ )), q(τ , u(τ )), u(τ )) dτ
t
where:
T : time optimization horizon;
u: power plant control, for example, generated power and heat;
e: ageing rate of plant components, or more exactly, its dollar effect;
c: cost rates;
q: revenue rates.
There are various techniques for solving this class of optimization problem but one
widely adopted by industry to solve control problems of systems subject to input and
output constraints is Model Predictive Control (MPC) [2]. The following components
are thus required:
• Process models to describe how fuel is converted into electrical and thermal
energy. This gives the traditional plant operating costs. The models take static,
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dynamic and integral factors into account. These factors include, for example,
fuel heat consumption, auxiliary power consumption, minimum standstill period,
minimum operating time, load gradient limitation, hot start/cold start, limitations
on operating time, on production quantities, on startup frequency, and also on
emissions (e.g. CO2, NOx, SO2).
• Operation and constraint models for the plant, including the ageing models in this
plant. This is achieved in a hybrid systems modeling framework [3] known as
Mixed Logic and Dynamic models (MLD).
• An optimization routine that computes the optimal control sequence using the
MPC strategy.
3.2 Trading
Trading and asset management have much in common with traditional utility
management, such as demand forecasting, lifecycle costing, risk management,
performance monitoring, condition-based maintenance, and other aspects. The power
of the Lifecycle Optimizer is its ability to integrate these components and optimize
the trade-offs between financial performance, operational performance and risk
exposure. This can be achieved by:
• Trading of gas, oil, steam and electricity, including penalties for not matching
the objectives.
• Fuel trading: the trader is able to buy and resell fuel.
• Fuel balancing: when a gate-close event occurs and the trader still needs to
fulfill a diary or subdiary balance of fuel, this may be done through the storage
capacity of the fuel network.
• Power trading: the trader is able to stop power generation in case buying
power from other generators and reselling it to the grid is found more
profitable.
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• Emission trading: the trader is able to stop or reduce power generation in order
to comply to emission constraints, or to sell emission permits to others if this
is profitable.
• Choosing different types of contracts, e.g. bilateral, fortnight-, week- or day-
ahead, block-hour (4h or 6h), hour (1h), half-hour (0.5h) and quarter-hourly
(15m) contracts.
3.3 Ageing
The key stochastic variables for scheduled maintenance are expected life estimations
for repair and replacement of major parts. These are based on manufacturer data and
calculation methods which take into account equipment load factors such as, e.g.
equivalent operation hours, number of startups, etc.
For the purpose of lifecycle or ageing modeling two factors are critical. Firstly, the
models are required to provide a direct relationship between equipment load and
equipment ageing. Ageing in a gas turbine, for example, takes into account effects
like firing temperature, fuel type, fuel switch-over, use of power augmentation, trips,
startups, etc. Secondly, the models must capture the equipment’s operating history.
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Finally, for lifecycle optimization purposes, the ageing function is included in the
optimization routine.
In order to account for the risk of suffering an unplanned outage or the risk of not
being able to connect to the grid after a plant shutdown, risk estimation and evolution
of the failure probability distribution of individual components are addressed. These
risk considerations are condensed as additional terms in the cost objective function
and add a tuneable term to penalize events through the optimization. Those terms may
depend on factors such as the equipment life already consumed, the time since last
shutdown, the weather conditions, etc. The factors are tuneable by the user because
taking one or the other decision is affected by the market pressure and by the risk the
asset manager or trader is willing to take.
Take as an example the decision to shutdown a plant during the weekends. Even if it
is clear that shutting down is the best economical solution, the operator could choose
not to assume the risk of not being able to provide the committed power to the grid on
monday. This could ruin the earning of the week but can be included as a risk term in
the cost objective function. In this sense, risk considerations include subjective
evaluations by the user but are nevertheless analytically formulated.
3.5 Emissions
Emission trading is playing an increasingly important role in energy markets. If a
plant emits less than the level of its allocations, it can sell the additional permits to
others that may have emitted more. If it emits more, then it needs to purchase
additional permits or pay a penalty. To arrive at an optimal decision the asset manager
or trader needs to consider two important factors:
Decision tools which are based on historic data (looking at the past days, weeks or
months) will not be able to capture these factors and therefore disadvantage the
competitive position of the plant. This is true for combined cycle power plants, firing
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gas or oil as primary fuel, but is even more important for coal-fired plants because of
the problems of coal storage and the difficulties for the trader to unwind a coal
position. The Lifecycle Optimizer is able to take such effects into account by
including additional terms, related to emission credits and penalties, into the cost
objective function. An example of optimized load dispatch, e.g. shutting down the
plant for a period of time based on NOx emission trading, is shown in Fig. 3. The
influence on profits and losses can be huge, specially in case emission permits have to
be purchased and traded. The strength of this approach is the ability to take such a
variety of factors into the optimization and calculate the impact on profitability, an
impossible task for decision-makers without tool support.
Figure 3: Example of optimized load dispatch taking emission constraints into account.
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A frequent problem is the lack of equipment manufacturer data required for
parametrising the lifetime models. This is overcome by directly mapping the
monetary value of such components, based on O&M data such as replacement cost
and estimated lifecycle. The additional advantage of this method is the possibility for
the asset manager to use his/her preferred accounting method (replacement value,
value in the books, etc.).
The Lifecycle Optimizer has been installed and successfully tested at Enfield Energy
Center Ltd. (UK). The main purpose of this project was to verify the optimization
approach, the system design and configuration, as well as the software
implementation.
4 Examples
In this example we consider the following scenario: the plant outage for inspection
and preventive maintenance is scheduled to take place 100 days from now. The
inspection threshold is set at 1000 EOH (Equivalent Operating Hours) and the plant is
presently at zero EOH. There is a multitude of operating strategies which lead to 1000
EOH in 100 days, e.g. 10 EOH per day, 24 EOH per day for the next 41.6 days, etc. In
order to simplify this example, we allocate extremely high costs to overshooting of
EOH, i.e. this option will not be optimal. The task is to find an operation strategy
resulting in maximum profit over a defined time horizon, and respect the EOH
constraint. Note that profit depends on actual energy prices and that revenues are lost
in case the plant has not “consumed” the available EOH. The following cases are
considered:
• The flat solution running constant plant output to satisfy the EOH constraint.
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• The manual solution selecting an operating strategy to match the EOH
constraint, while simultaneously trying to maximize profit. The strategy is to
initially set all hours to minimum production and then increase peak price
hours to maximum production until the EOH constraint is met. Note that this
assumes lifetime models available, which is usually not the case if the
Lifecycle Optimizer is not installed.
The results (normalized) show the advantage of the optimizer approach in terms of
Net Present Value (NPV) and profit:
This example focuses on load scheduling but can also be used for post operation
analysis and monitoring. The task is to find the optimal load dispatch strategy of a
unit resulting in maximum profit over a defined time horizon, again taking lifecycle
costs into account. For the purposes of this analysis three possible operating strategies
are compared:
The results (normalized) indicate that, for this example, a peaking strategy increases
both income from sales and lifecycle costs, resulting in an increase in net revenues. A
load-following strategy reduces both income from sales and lifecycle costs also
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resulting in a higher net revenue. The calculated increases in net revenues reflect an
expected upper limit on benefits resulting from the Lifecycle Optimizer.
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5 Conclusions
The use of optimization techniques, risk assessment and information integration are
central components of asset management for today’s power plants. Decisions are
driven by the actual condition and performance of assets. Not meeting corporate
objectives such as operating requirements, financial targets and regulations are among
the risks which shall be addressed by the asset manager.
The first new element in this approach is the explicit handling of lifecycle models and
their inclusion in the optimization routine. The lifecycle models provide a direct
relationship between plant load and plant ageing, and capture the operating history of
the component.
The other new element is the representation of the lifecycle optimization in a hybrid
systems modeling framework known as Mixed Logic and Dynamic models (MLD).
This enables the economic problem to be solved using Model Predictive Control
(MPC) techniques.
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6 References
[3] A. Bemporad and M. Morari, "Control of systems integrating logic, dynamics, and
constraints", Automatica, Vol. 35, no. 3, pp 407-427, 1999.
Authors:
Marc Antoine was born in Belgium 1959, received his M.Sc. in mechanical engineering at
the University of Brussels 1982, research assistant in aerospace & ocean engineering at
Virginia Polytechnic Institute USA, joined Brown Boveri Company as development engineer
for process computer systems in Switzerland 1985. Senior engineer at ABB Power Generation
for plant management systems 1989, development manager for plant monitoring &
optimisation systems at ABB Power Automation 1999. Currently product manager for plant
automation systems at ABB Switzerland.
Luis Ruiz-Escribano was born in Madrid 1974, received his M.Sc. in power engineering at
the Polytechnic University of Madrid, research assistant at the Institute of Thermal Power
Systems, Technical University of Munich. Joined ABB Power Automation Switzerland in
2001. Currently, system engineer at ABB Switzerland for plant monitoring & optimisation
applications.
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