Download - Underwriting & loss control
UNDERWRITING & LOSS CONTROLIN COMBINED CYCLE POWER PLANTS
PRESENTED BY Sudhindra B. KodagaliSenior UnderwriterProperty & Engineering
Objectives
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● Combined Cycle Power Plants
● Introduction – Trends, Advantages, Working cycles
● Underwriting considerations
● Loss Control
● Insurance covers
Increased Deployment of Gas Turbine Technology in Power Plants
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● More private operators due to liberalization● Increase in gas production world wide and development
of Gas Turbine technologies● Increasing need to find environmentally friendly
methods of power generation● IT development allowed better control and accounting
record of complicated power flows● Development of new techniques in transmission and
distribution of Electric power by creating national and International networks
● Drop in prices of GTs due to strong competition
Preference for Gas Turbine Power Plants
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● Low initial costs compared to other types of power plants● Less space requirements● Less time required for installation● Increased unit capacity due to technological
developments● Increased efficiency● Low maintenance costs, though operational costs are
higher● Higher reliability● Low NOx emissions● Increased fuel spectrum
Section of Gas Turbine
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Types of Gas Turbine Plants - Simple Cycle
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Types of Gas Turbine Plants - Combined Cycle
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Main Manufacturers ofLarge Combustion Turbines
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Europe : Siemens and Alstom
North America: GE and Siemens
Japan : Mitsubishi
Underwriting Considerations
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● Continuous Product Development: Lead to increased power plant risk exposures. Firing temp and compression ratios are being increased to achieve higher efficiency
● Firing temp levels directly affect operating metal temp. Latest models of ‘F’ and ‘G’ class turbines operate at 300 to 400 degrees firing temp more than previous ‘E’ class turbines,
● Prototype Models: Regular upgrade developments of Gas Turbines made it difficult to distinguish a prototype model from a proven model. A GT to be judged as prototype as long as the first model of the series has not reached 8000 hours of trouble free operation. Higher deductibles to be applied for covering manufacturer’s risk
Underwriting Considerations
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● Operating Conditions: To check whether GTs are operated under standard conditions like use of special fuels, new elements leading to increased efficiency
● Quality of fuel● CAT exposures● Operating Cycles: Base load and peak load. Peak load
station with frequent starts and stops is subject to extensive thermal fatigue
● Risk management practices: Fire fighting systems to be operational before commencement of testing
Underwriting Considerations
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● Completion Date Monitoring (ALOP): Periodical monitoring of work progress program and assessment of actual date of commissioning in case of ALOP cover
● Parts of Limited Life: Items like turbine vanes and blades to be subject to depreciation (Mre 333)
Loss Analysis and Control - Causes
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Losses are classified in to three categories of causes by International Machinery Association:
● Design faults: About 35% of all loss repair costs are in respect of Prototypes of new models or components. Design cover has to be selectively given. LEG 3 to be given for proven models.
● Human Errors: This depends on quality of staff, management and implementation of quality and process regulations. These failures are estimated to produce 50% of losses.
Loss Analysis and Control - Causes
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● Operational losses: Losses caused by faulty operation, natural disasters, fire, wear and tear. Approx 15% of losses are attributed to this category and this could be improved by good plant design, automatic diagnosis program routines and good fire fighting system installation before commencement of Testing phase.
Loss Analysis and Control - Prevention
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1. Use of risk based maintenance and inspection programs● Combustion inspection,● Hot gas path inspection,● Major overhaul,
2. Use of proactive maintenance schedules
3. Diagnostic monitoring● Vibration analysis,● Thermography,● Endoscopy
Conclusion
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● The demand for insurance protection would increase in the coming years
● The level of rating to be set at adequate levels to at least cover the burning costs, CAT loss reserve and admin costs
● Careful approach is required to cover manufacturer’s risk specifically for models not satisfactorily proven. For wider covers we adopt very high deductibles for testing and commissioning risks,
● Higher preventive maintenance standards to be applied.
