efficiency improvement by asset optimization program … no 77/project... · the simpler solution...

Summer Internship Report

on

Efficiency Improvement by Asset Optimization Program and

Strengthening Operation and Maintenance Practices of Captive

Power Plant

Under the Guidance of

Ms. Rachna Vats,

Senior Fellow, NPTI, Faridabad

&

Mr. Bimalendu Mohapatra

AGM, Asset Optimization

Sterlite Energy Limited, Jharsugda

At

Sterlite Energy Limited, Jharsugda

Submitted by

Sanjeev Kumar Mahato

ROLL NO: 77

MBA (Power Management)

Sector-33, Faridabad, Haryana-121003 (Under the Ministry of Power, Govt. of India)

Affiliated to

Maharshi Dayananda University, Rohatak

Acknowledgement

I would like to extend warm thanks to all the people who had been associated with me in

some way or the other and helped me avail this opportunity for my summer Internship on the topic

“Efficiency Improvement by Asset Optimization Program and Strengthening Operation

and Maintenance Practices of Captive Power Plant”.

I acknowledge with gratitude and humanity my indebtness to my Summer Internship Project

guide Mr. Bimalendu Mohapatra, AGM- Asset Optimization, Ms. Arpita Roy, Assistant Manager and the

Technical Team for providing me excellent guidance, material and motivation under whom I completed

my summer internship at Sterlite Energy Limited.

I would like to thank Mrs. Manju Mam, Deputy Director, NPTI Faridabad for her support

and guidance throughout the project duration.

I would like to thank Mr. S.K. Choudhary, Principal Director (CAMPS) and my project guide

Ms. Rachna Vats, Senior Fellow, NPTI Faridabad who always assisted me in every possible manner.

Sanjeev Kumar Mahato

Summer Interns

NPTI, Faridabad


2

Declaration

I Sanjeev Kumar Mahato, Roll No. 77, student of 3rd semester MBA (Power

Management) of the National Power Training Institute, Faridabad, hereby declare that the

Summer Internship Report entitled “Efficiency Improvement by Asset Optimization

Program and Strengthening Operation and Maintenance Practices of Captive Power

Plant” is an original work and the same has not been submitted to any other institute for the

award of any other degree.

A seminar presentation of the training report was made on 4nd September, 2013 and

the suggestions approved by the faculty were duly incorporated.

Presentation In-charge

(Faculty)

Signature of the Candidate

Counter Signed

Director/ Principal of the Institute


3

Executive Summery

This report is result of efforts to understand key performance indices in Thermal

Power Plant & an attempt to improve them as a student of NPTI during a summer internship

project. Following paragraphs outline summary of background, analysis & recommendations

of the study.

Considering the demand for power in India, commissioning new plants at

approximately Rs. four billion per MW could prove a costly proposition, at this juncture as

the simpler solution of making considerable amount of power available through energy

efficiency improvement, could be an attractive option. In fact, one percent efficiency

improvement would render a reduction of about 3% coal consumption and a consequent

emission reduction as well. India has an installed capacity of 211 766MW (as on January 31,

2013) of which the Thermal share is 141714MW (66%). It is worth considering that even a

1% reduction in auxiliary power consumption from the existing levels would yield 9900MU

of energy annually, worth Rs. 29700 Crs (@ Rs.3 / KWh).

Coal-based thermal power stations are the leaders in electricity generation in India.

This study basically deals with analyzing two of many vital parameters of thermal power

plant – Station heat rate & auxiliary power consumption. These parameters vary widely

across plants and regions, but remain within a wide range, indicating a substantial scope for

increasing thermal power generation in the country, with improved application of existing

technology and without employment of additional resources. The western region is

technically more efficient than other regions and young plants are more efficient than their

old counterparts. We hope that the findings will prove useful to management in devising

appropriate strategies to improve station heat rate and auxiliary power consumption and

altogether generation as a whole.

In this context it becomes imperative to assess the performance and efficiency of coal

based thermal power plant in India. The power plant is considered inefficient if the plants

existing resources or inputs are utilize sub optimally as a consequence of which plants power

generation is less than its potential or maximum possible generation.


4

This report analyze as the key performance index (KPI) of Independent Power Plant

(IPP) of Sterlite Energy Limited (SEL) specially concentrating on station heat rate (SHR).

The report also takes stock of in house asset optimization program of SEL named ‘Arohan’.

This asset optimization program aims to achieve not only synergies of energy efficiency but

overall optimization of organizations tangible as well as intangible assets. Optimizing assets

of the organization not only supports exponential business growth but also provides congenial

work atmosphere. It also helps and designing frame work for various regulatory and safety

compliance and engaging employs for proactive initiative.

It is observed that improving performance of power plants through interventions

aimed at strengthening O&M practices, coupled with required rehabilitation and life

extension interventions is perhaps the quickest and least cost alternative for augmenting

availability of power in the Indian context. It is estimated that the availability of power in the

country can be enhanced by more than 17 percent (as against peak energy deficit of 9

percent) if all the available generation units can be utilized at an average PLF similar to

NTPC units through rehabilitation combined with better O&M practices. Although such high

levels of performance may be difficult to achieve throughout the country. The potential

benefits of focusing on improved power plant performance are clearly immense. Improved

O&M practices are also necessary to sustain the performance of rehabilitated power plants as

well as new power plants. Government of India initiatives in this regard (Perform Archive

and Trade (PAT) Program) also amply demonstrates the potential operational as well as

financial benefits.


5

List of Figures

Figure 2-1: Power Generation Mix……………………………………………………………… 10

Figure 2-1: Private participation in Power Generation and its increasing trend………………… 11

Figure 2-3: Plant Load Factor Trends…………………………………………………………….11

Figure 2-4: PLF comparison of different sectors…………………………………………………12

Figure 3.1: APC Elements…………………………………………………………………………19

Figure 3.2: APC Breakup………………………………………………………………………….19

Figure 3.3: APC Equipment Consumption..……………………………………………………….20

Figure 3-4: Replacement Analysis………………………………………………………………...23

Figure 4.1: Asset Optimization Framework………………………………………………………26

Figure 4-2: DMAIC Steps…………………………………………………………………………27

Figure 4-3: Plant Load Factor Trends…………………………………………………………….29

Figure 4-4: DMAIC Status Report ……………………………………………………………….29

Figure 4-5: Specific Oil Consumption…………………………………………………………….30

Figure 4-6: DMAIC Status of Specific Oil Consumption………………………………………..31

Figure 4-7: Trends of Station Heat Rate.…………………………………………………………31

Figure 4-8: DMAIC Status of Station Heat Rate………………………………………………….32

Figure 4-9: Trends of APC………………………………………………………………………..33

Figure 4-11: DMAIC Status of Auxiliary Power Consumption………………………………….34

Figure 4-12: Trends of Critical Equipment Availability.…………………………………………35

Figure 4-13: Status Report for Critical Equipment Availability………………………………….35

Figure 4-14: Trends of Station Availability………………………………………………………36

Figure 4-15: Spider Diagram of Process Management……………………………………………37

Figure 4-15: Spider Diagram of Process Management……………………………………………39

Figure 4-16: Performance Diagram of Process Management…………………………………….41

Figure 4-17: Enablers and Results of Process Management……………………………………...41


6

Figure 5-1: SHR Deviation in Private Sector Power Plant……………………………………….44

Figure 5.2: Performance Improvement Program…………………………………………………46

Figure 5.3: Content Framework of a typical power plant knowledge management platform……53

Figure 5.4: Proactive Maintenance Management System ………………………………………..55

Figure 5.5: Maintenance Process Enhancement Steps……………………………………………56

Figure AIII-1: PAT mechanism and structure……………………………………………………77

Figure AIII-2: Setting up the Target Heat Rate ………………………………………………….78

Figure AIII-3: Methodology for target setting……………………………………………………79

Figure AIII-4: Decision making process under PAT…………………………………………….80

Figure AIII-5: Decision making process-II………………………………………………………81

Figure AIII-6: Decision making process- III …………………………………………………….81


7

List of Tables

Table 2-1: The Growth of power generation in various FYP…………………………………….. 9

Table 2-4: Manpower requirement during the 12th FYP………………………………………... 14

Table 2-2: The energy demand and gap in the year 2012-13…………………………………..... 13

Table 3-1: APC Bench Mark………………………………………......………………………….18

Table 4-1: Auxiliary Power Consumption....…..............................................................................32


8

Contents

Acknowledgement .................................................................................................................................. i

Declaration............................................................................................................................................. ii

Executive summery .............................................................................................................................. iii

List of Figures ........................................................................................................................................ v

List of Tables ........................................................................................................................................ vi

Abbreviation ......................................................................................................................................... ix

1 Introduction ........................................................................................................................................ 1

1.1 Problem Statement ........................................................................................................................ 2

1.2 Objective ....................................................................................................................................... 3

1.3 Scope ............................................................................................................................................. 3

1.4 Company Profile ........................................................................................................................... 4

1.4.1 Business of the organization .................................................................................................. 5

1.4.2 Global and Domestic Market ................................................................................................. 5

1.4.3 Orissa Opportunity ................................................................................................................. 6

1.4.4 VAL Uniquely Positioned to Deliver .................................................................................... 6

1.4.5 Project and Products .............................................................................................................. 7

2 Review of Indian Power Generation Sector..................................................................................... 8

2.1 Indian Economy & Power Requirement ....................................................................................... 8

2.2 Power Generation in India ............................................................................................................ 9

2.3 Growth in Capacity Addition since 6th FYP ................................................................................. 9

2.3.1 Trend in Typical Installed Capacity Dominance of Thermal ................................................. 9

2.3.2 Public Vs Private Sector Increasing Role of Private Sector ................................................ 10

2.3.3 Performance Trends: PAF/PLF/Efficiency .......................................................................... 11

2.3.4 Trends in Demand Supply Gap ............................................................................................ 13

2.3.5 Increasing shortage of skilled workforce ............................................................................. 13

2.3.6 Changes in technology and increasing foreign suppliers ..................................................... 15

2.4 Emerging Needs of Generation Sector ........................................................................................ 15

2.5 Introduction to a potential solution ............................................................................................. 16

3 Efficiency Improvement .................................................................................................................. 17

3.1 Introduction ................................................................................................................................. 17

3.2 Auxiliary Power Consumption (APC) ........................................................................................ 18

3.2.1 APC Indian Scenario............................................................................................................ 18

3.2.2 APC Elements ...................................................................................................................... 19

3.2.3 APC Breakup ....................................................................................................................... 19

3.2.4 Factors Affecting APC ......................................................................................................... 20

3.2.5 APC Consumption Reduction Measures ............................................................................. 21

4 Asset Optimization ........................................................................................................................... 25


9

4.1 Introduction ................................................................................................................................. 25

4.2 What is asset optimization? ......................................................................................................... 25

4.3 Needs of Asset Optimization ...................................................................................................... 25

4.4 Asset Optimization Framework .................................................................................................. 26

4.4.1 DMAIC Project Manager ..................................................................................................... 27

4.4.2 Key Performance Index of Asset Optimization ................................................................... 28

4.4.3 Process Management ........................................................................................................... 37

4.4.4 Enablers ............................................................................................................................... 39

5 Strengthening Operation & Maintenance Practices in Coal Fired Power Plant in India ......... 42

5.1 Introduction ................................................................................................................................. 42

5.2 Background ................................................................................................................................. 45

5.3 Key Technical Problem Area of O&M Practices in India .......................................................... 47

5.4 Developing and Implementing a Performance Improvement Programme .................................. 58

5.5 Enhancement of Operational Practices ....................................................................................... 62

5.6 Enhancement of Plant Maintenance Practices ............................................................................ 64

5.7 Generation Planning and Plant Level Budgeting ........................................................................ 67

6 Conclusion & Recommendation ..................................................................................................... 71

Annexure-I ........................................................................................................................................... 72

Annexure-II ......................................................................................................................................... 74

Bibliography ........................................................................................................................................ 82


10

Chapter-1

Introduction

This report aims to give an overview of status of efficiency improvement initiatives

undertaken in Vedanta Aluminium Ltd.

The Indian economy has experienced unprecedented economic growth over the last

decade. Today, India is the fourth largest economy in the world, driven by a real GDP growth

of above 6% in the last 5 years (7.5% over the last 10 years). In 2011 itself, the real GDP

growth of India was 5th highest in the world, next only to Qatar, Paraguay, Singapore and

Taiwan.

Sustained growth in economy comes with growth from all sectors, among which

growth in infrastructure sector is a key requirement for growth in sectors with in

manufacturing and services. Within infrastructure, growth in power sector is one of the most

important requirements for sustained growth of a developing economy like India.

Government utility companies, with only three major private sector generation and

distribution companies, traditionally ran the Indian electric power sector until the mid1990s.

Since then the Indian government has pursued a policy of deregulation by opening it to

private sector investment and separating generation from transmission and distribution of

electricity. While there were many goals, a primary objective of this policy was to ensure a

reliable supply of electricity to consumers at affordable prices.

Deregulation was intended to reduce or eliminate the electricity deficit, improve the

financial performance of the State Electricity Boards (SEBs), and reduce the government’s

outlay for construction of new electricity supply and subsidies. After almost two decades of

reforms, however, the supply and demand gap of electricity widened over the years. In 1990-

91, the electrical energy deficit was around 7.7%, and by 2008-09 it grew to 11.1%. The peak

power deficit, however, reportedly declined from around 18% in 1990-91 to 11.9% by 2008-

09 (CEA, 2009).

India faces formidable challenges in meeting its energy needs and providing adequate

energy of desired quality in various forms to users in a sustainable manner and at reasonable

costs. India needs to sustain 8% to 10% economic growth to eradicate poverty and meet its


11

economic & human development goals. Such economic growth would call for increased

demand for energy and ensuring access to clean, convenient and reliable energy for all to

address human development. To deliver a sustained growth of 8% through 2031, India would,

in the very least, need to grow its primary energy supply by 3 to 4times and electricity supply

by 5 to 7 times of today’s consumption.

By 2031-32 power generation capacity would have to increase to 778095MW and

annual coal requirement would be 2040mt, if we don’t take any measures to reduce

requirement. Along with quantity the quality of energy supply has to also improve. The

energy challenge is of fundamental importance to India’s economic growth imperatives.

Energy Efficiency could provide the quickest, cheapest and most direct way to turn

these challenges into real opportunities. Rapid growth of any economy requires huge

quantum of energy resources.

India has an installed capacity of 211 766MW (as on January 31, 2013) of which the

Thermal share is 1,41,714MW (66%). It is worth considering that even a 1% reduction in

auxiliary power consumption from the existing levels would yield 9900MU of energy

annually, worth Rs. 29700 Crs (@ Rs.3 / KWh).

Improving energy efficiency can have many benefits; some of them are as follows:

A. Meeting global emission reduction targets

B. Meeting global energy saving commitments

C. Ensuring sustainable economic growth

1.1 Problem Statement:

Unprecedented fuel hike and importance of equipment’s life assessment and subsequent

extension have become extremely important concerns for thermal power stations. Present

work is aimed at energy conservation in thermal power plants and also focusing on increasing

the life of boiler components by conducting heat transfer analysis. Energy conservation in

thermal power plant can be done by:

Decreasing energy input i.e. coal input by better combustion efficiency.

Efficient heat utilization


12

For this purpose, heat transfer analysis of a thermal power station was quite necessary and

this is done by taking a reference unit and doing studies along with the energy audit team.

Most of the Indian thermal power stations are producing power at very high heat rate at one

hand and falling in preventing the life deteriorating conditions on the other hand. Exhaustive

studies of different parameters of a thermal power plant will be done for efficiency

improvement resulting in energy conservation. This may result in costly fuel saving and

better capacity utilisation of a reference unit.

1.2 Objective:

Efficiency Improvement of a coal based thermal power plant using Asset

Optimization and Strengthening Operation and Maintenance Practices in Coal Fired Thermal

Power Generating Station in India.

1.3 Scope:

Efficiency Improvement of a coal based thermal power plant can be achieved through,

Station Heat Rate Reduction

Auxiliary Power Consumption Reduction

Implementing Asset Management frame work

Basic Equipment Care

Process Management (PM) and Condition Based Monitoring (CBM)

Contractor Performance

Spare Parts Management

Budget Cost Control

Standard of Performance (SOP) Compliance

Maintenance Facility

Safety & Regulation

Goal Deployment

Continuous Improvement

Reward and Recognition

Organization Performance Management

Skill Development

Operation and Maintenance Practices


13

1.4 Company Profile:

Vedanta Aluminium Ltd is an associate company of the

London Stock Exchange listed, FTSE 100 diversified resources

group Vedanta Resources Plc. Originally incorporated in 2001,

VAL is a leading producer of metallurgical grade alumina and other aluminium products,

which cater to a wide spectrum of industries.

VAL has carved out a niche for itself in the aluminium industry with its superior

product quality based on state-of-the-art technology. The firm operates a 1 mtpa greenfield

alumina refinery and an associated 75 MW captive power plant at Lanjigarh in the state of

Orissa. Plans are afoot to increase the capacity of the Lanjigarh refinery significantly to 5

mtpa. This is in line with VAL’s strategy to promote Lanjigarh as a self sustained

manufacturing unit in terms of cost advantage and resource availability.

VAL has invested in a 0.5 mtpa aluminum smelter and 1215 MW captive power plant

supported by highly modern infrastructure at Jharsuguda, Orissa. In addition to this,

construction of 1.1 mtpa aluminium smelter expansion project at Jharsuguda is under process.

The company intends to expand the fully integrated aluminium smelting capacity to around

2.6 mtpa in near future.

Jharsuguda is also the site of the 2400 MW Independent Power Plant being set up by

group company Sterlite Energy Ltd to meet the growing demand for power from both urban

and rural consumers.

The idea of sustainable development is deeply ensconced in VAL’s business ethos.

VAL is committed to the socio-economic transformation of local communities residing

around the plant sites and undertakes several initiatives to promote sustainable development.

The firm has focused on developing modern health amenities, educational facilities for

children and skill development programmes for adults. Several other programmes have been

undertaken to enhance health and sanitation, promote livelihood generation and improve

infrastructure in the villages surrounding Jharsuguda and Lanjigarh. The firm believes that its

development initiatives will encourage a dedicated team of self motivated individuals to

participate and drive the company’s growth in the future.


14

1.4.1 Business of the Organisation:

Vedanta Aluminium Ltd., an associate company of diversified resources group

Vedanta Resources Plc, leverages its strategic location and cutting edge technology to

deliver world class products. Operative in Orissa, which has huge bauxite and coal

reserves, VAL leverages its accessibility to cheap, skilled labour and vast captive

mineral resources to work out a favourably low production cost structure. This is in

line with Vedanta Resources’ objective of claiming a position in the top decile of

global low cost aluminium producers. VAL’s diversified and de-risked project

development strategy and its fully integrated operational structure, which includes

mining to smelting/refining and power generation, equips it to meet the growing

global and domestic demand for aluminium.

1.4.2 Global and Domestic Markets:

VAL is positioned to make a significant contribution to global aluminium

demand, which is expected to increase substantially over the next few years. The

rapid growth of the emerging nations led by China and India and the concomitant

growth in aluminium demand in these countries is expected to benefit VAL.

Vedanta

Resources

Konkola

Copper

Mines

Vedanta

Aluminium

Sterlite

Industries

Madras

Aluminium

Sesa

Goa

Cairn

India

Limited

Bharat

Aluminium

Zinc –

India

(HZL)

Skorpion

&

Lisheen

Black

Mountain

Sterlite

Energy

Australian

Copper

Mines

Liberia

Iron Ore

Assets

79.4% 70.5% 54.6% 94.8% 55.1% 40.1%

51.0% 64.9% 100% 74% 100% 100%

51%

29.5% 3.6% 18.7%


15

Aluminium consumption in BRIC nations alone is expected to increase at a CAGR of

9% over the period 2007-2020 while global aluminium consumption is anticipated to

more than double from 38 mt to 78.5 mt over the same period. India’s demand for

aluminium is expected to touch 2.5 mt by 2015.

India is positioned to become one of the world’s largest producers of

aluminium, with the 5th largest reserves of bauxite globally of 2.3 billion tonnes and

the 4th largest reserves of coal worldwide of over 250 billion tonnes. The domestic

market is currently growing at a robust pace, which augurs well for VAL. The firm

would benefit from the continued market expansion, which would help it tap a wide

range of new business segments. Increasing investments in the Indian power sector

coupled with rising consumerism have driven growth in industries such as packaging

and consumer durables. VAL, with its superior product portfolio, is competitively

positioned to take a lead in catering to these industries.

1.4.3 The Orissa Opportunity:

VAL is located in the heart of Orissa, which has abundant mineral reserves

including bauxite and coal. The state has as much as 1.7 billion tonnes of the

country’s total 3.3 billion tonnes of bauxite reserves. The optimal location of VAL

affords an easy reach to recoverable bauxite deposits of over 900 mt within 60 km

radius of Lanjigarh, the location of its greenfield alumina refinery. The bauxite variety

here boasts of low reactive silica content, adaptability to low temperature and low

pressure digestion, which entail low cost and high quality alumina production. VAL is

further aided by availability of ample reserves of coal (62 billion tonnes) and low cost

of power generation.

1.4.4 VAL-Uniquely Positioned to Deliver:

With a highly qualified and technologically advanced research and development

wing, VAL has acquired comprehensive expertise at producing high quality products.

Supported by state of art facilities, competitive intelligence and resource utilisation,

VAL takes pride in an unparalleled track record of project delivery and

implementation. The firm benefits from teams with proven project handling expertise

which hugely reduces risk of execution. This ensures strict adherence to international


16

time and cost benchmarks, which raises VAL above competitors. The experienced in-

house project management teams have implemented the 1.0 mtpa alumina refineries

and the associated 75 MW captive power plant at Lanjigarh and 0.5 mtpa Greenfield

Aluminium Smelter with a 1215 MW captive power plant at Jharsuguda.

1.4.5 Projects and Products:

VAL is making huge investments to expand capacities of existing plants in order to

address growing industry demand. Expansion of the Jharsuguda aluminium smelter

plays a pivotal role in VAL’s growth strategy. The firm has started construction of a

new 1.1 mtpa aluminium smelter at Jharsuguda which would expand smelting

capacity from 0.5 mtpa to 1.6 mtpa in near future. For this, VAL has channelized

funds towards the commissioning of additional units of power. At Lanjigarh, plans

have been made to enhance capacity of the alumina refinery from 1 mtpa to 5 mtpa. In

addition to this, total captive power generation capacity is also expected to be

increased to 300 MW in near future. Responding to the global demand pattern for

aluminium, VAL has recently diversified its product portfolio to cater to a wide range

of industrial sectors. VAL specialized in manufacturing aluminium ingots until 2008-

09. The firm has now extended its production proficiency in the field of billets and

wire rods though ingots remain the chief product offering.


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Chapter-2

Review of Indian Power Generation Sector

2.1 Indian Economy & Power Requirement:

India experienced unprecedented economic growth of 8%1 for the last several years.

Even after factoring recent developments in global economy & local scenario, India is likely

to maintain 9%2 economic growth over 12th FYP. These growth rates are fairly higher than

the economic growths observed in developed world and they are likely to increase our energy

requirement at even higher rate.

India is currently facing energy shortage of 8.5% and peak shortage of 10.3%3. As per

the 12th FYP, India’s energy demand will grow 6% per annum and we would require installed

power generation capacity of about 100 Gigawatts (GW). The power requirement, besides

economic growth, is also driven by Government’s aim to provide “power for all”.

Given the above scenario, it is becoming increasingly important for India to operate

existing generation assets at peak of their capacity besides new capacity additions. A number

of plants today are running at sub-optimal plant load factor (PLF) levels due to various issues

like fuel shortages, unplanned shut-down due to poor maintenance and time taken to rectify

the problems. While, we have observed improvements in Plant Load Factor (PLF) of

generating plants (from 57.1% in year 1992-93 to 75.1% in year 2010-114), still there is

significant improvement possible.

1 Report of the working group on power for 12th plan 2 Report of the working group on power for 12th plan 3 National Electricity Plan (volume 1) Generation Report, January 2012 4 CEA: Operation performance of generating stations in the country during the year 2010-11.


18

2.2 Power Generation in India:

The capacity addition during the 11th five year plan FYP has been the highest till date

in any FYP. As on 31st March 2012 the total generation stood at 199877.03 MW5 as per the

CEA report. The details of this generation capacity based on type of generation capacity and

ownership of generation capacity is outlined in the following diagram.

Power Generation in India:

Plan/Year Thermal

Nuclear Hydro RES Total Coal Gas Diesel Total

End of 6th FYP 26311 542 177 27030 1095 14460 0 42585

End of 7th FYP 41237 2343 165 43745 1565 18308 18 63636

End of 8th FYP 54154 6562 294 61010 2225 21658 902 85795

End of 9th FYP 62131 11163 1135 74429 2720 26269 1628 105046

End of 10th FYP 71121 13699 2102 86915 3900 34654 7761 132330

End of 11th FYP 112022 18381 1200 131603 4780 38990 24503 199877

Table 2-1 The Growth of power generation in various FYP

Further analysis of Indian power generation sector over a period of time

reveals following fundamental trends:

I. Trend in Type Installed Capacity: Dominance of Thermal

Thermal power plants comprised nearly 66.9 % of its generation capacity as on 31st

January 20136. In the 11th FYP also the thermal capacity addition (coal + gas + diesel) was the

highest of around 141713.68 MW. This indicates that thermal power generation has been a

dominant source of electricity.

In the near future, about 100 GW of generation capacity is expected to be

added in 12th FYP and out of this 63781 MW is thermal generation capacity. This

dominance of the thermal power plants will continue in the electrical power sector.

5 CEA: Growth of installed capacity since 6th FYP. 6 CEA: Annual Report 2011-12, Growth of installed capacity since 6th FYP.


19

Fig. 2-1: Power Generation Mix

II. Public Vs Private Sector: Increasing Role of Private Sector

Indian economy in general and power sector in particular has seen

liberalization and implementation of enabling framework to allow private sector

participation. The key developments which encouraged private sector participation in

power generation are a) de-licensing of power generation in Electricity Act 2003, b)

competitive bidding framework for power procurement c) Open access & framework

for power trading/power exchanges d) escrow mechanism for addressing of credit

risks in power generation etc. All these factors have lead to significant interest of

private sector in power generation.

20%

2%

12%

66%

Generation MW

Hydro Nuclear RES Thermal


20

Following chart depicts growth of private sector in power generation space7.

The private sector accounted for only 14 % of the total installed capacity as of March 2008.

Presently, the private partnership in generation has increased to 29.49% (January 2013)8. The

private sector accounts for 62,459.24 MW of generation capacity out of 211766.22 MW.

III. Performance Trends: PAF/PLF/Efficiency

Historically, performance of the power plants in India has been poor in terms

of plant availability (PAF), generation (PLF) and efficiency terms. Recent trends

indicate improvement in performance with average PLF of 70.76% in FY12-13 from

57.1% in FY 91-929.

Figure 2-3: Average Plant Load Factor

7 MoP: Report of The Working Group on Power for Twelfth Plan (2012-17).

8 CEA: January,2013 report of Installed capacity of all utilities across the country. 9 CEA: Operation performance of generating stations in the country during the year 2010-11.

1934.8

16227

42131

10th FYP 11th FYP 12th FYPproposed

Generation addition in Private Sector

31%

40%

29%

Installed Capacity (January 2013)

Center State Private

65.00%

70.00%

75.00%

80.00%

Average PLF

Average PLF

Figure 2-1: Private participation in Power Generation and its increasing trend.


21

Though the performance appears to be improving, a detailed analysis reveals

that improvement is mainly driven by increasing private sector participation and

improved performance of the central sector plants. However, the power plants under

the state sector lag behind these two significantly. The sector wise PLF data10 (as on

April, 2012) from CEA indicates following:

Figure Error! No text of specified style in document.-2: PLF comparison of different sectors

As indicated in the above chart, the state sector plants are operating at very

low load factors. The state sector currently accounts for 43 % of the total installed

capacity. This indicates that even a 5% improvement in state sector plant utilization

would add generation equivalent to 4300 MW of capacity. The plant utilization can be

improved through improved availability of plants. This would require proactive

maintenance practices to bring down unscheduled breakdown of the equipments,

thereby increasing the plant availability. Thus increasing the plant availability will

help in increasing the plant utilization and so its generation.

10 CEA report : All India plant load factor ( % ) during apr.12

76.68

69.31

81.47

72.53

82.21

71.67

82.13

75.21

Centre State Private All india

Plant Load Factor (PLF) april 2012

Projected Achieved


22

IV. Trends in Demand Supply Gap

As per CEA report the energy availability in the country has increased by

5.6% in 2010-11, while the peak demand met has increased by 6% during the same

period. Despite the increase in availability, India faced an energy deficit of 8.5% and

a peak deficit of 10.3% in 2010-11. In 2009-10 energy deficit was 11% and peak

demand deficit was 11.9%. It is expected that the energy deficit and peak deficit will

rise to 10% and 13% respectively in 2011-1211.

The assessment of the anticipated power supply position in the Country during

the year 2011-12 has been made taking into consideration the power availability from

various stations in operation and fuel availability.

Forecast of power requirement and deficit for year 2012-1312:

Energy Demand Peak Demand

Requirement Availability Deficit Demand Met Deficit

MU MU % MW MW %

Total 998114 911209 8.7 135453 123294 9.0

Table 2-2: The energy demand and gap in the year 2012-13

The above data indicates that we will continue to face energy shortages for

foreseeable future.

V. Increasing shortage of skilled workforce

With the acceleration in growth of the generation sector there is an increase in

the manpower requirement every year. It was estimated that a total of 5,10,000

additional manpower would be required for Construction, Operation and Maintenance

of capacity being implemented in the 12th Plan.

Category Construction Operation & Maintenance (Including

7.5% recoupment)

Engineers 2500 45000

11 CEA annual report 2010-11, Load Generation Balance Report 2011-12 12 Load Generation Balance Report 2012-13


23

Supervisors 3500 80000

Skilled Workers 7000 80000

Semi-skilled Workers 7000 60000

Unskilled Workers 12000 80000

Non-Tech 8000 125000

Total 40,000 4,70,000

Table Error! No text of specified style in document.-3: Manpower requirement during the 12th FYP13

To address the issue of Shortage of skilled and trained manpower, an Adopt an

ITI scheme was launched in July 2007 under which project developers and contractors

were asked to adopt it is in the vicinity of their project sites. Many PSUs and private

developers have since adopted it is.

As it can be observed from CEA/MoP estimates, the training & education

infrastructure of India is not likely to cope up to the requirement. To add to this, it is

also observed that the manpower available (both skilled & semiskilled) lacks the skills

& experience required14.

Overall, above two factors (a) Lack of availability of educated/trained

manpower and (b) shortage of skills & experience within available manpower has

lead to higher demand of skilled & experienced personnel. This also is evident from

the attrition rates observed in power sector entities in recent times15. It is also

observed that this organization in the power sector have not observed such high

attrition rates historically & hence not fully equipped to respond to such challenges.

This has also lead to increase in O & M cost for certain power plants – especially

small & medium size power plants. Typical response chosen by small organizations

has been to conduct anticipatory recruitment to match the attrition, leading to either

cost increases or deterioration of performance.

13 National Electricity Plan :(Generation) Volume 1, January,2012 14 Working group on power report, Tata Strategic Management Report

15 Indian Express article: Power sector faces higher attrition, Dated:12th June, 2012


24

VI. Changes in technology and increasing foreign suppliers.

Though the fundamental principles of power generation have remained same,

technological advancements have lead to supercritical and ultra supercritical plants

with higher temperatures & pressures. Besides these, new technologies like fluidized

bed combustion (AFBC/CFBC/PFBC) are evolving & getting higher acceptance

across the globe. In India, we had our no plants with such technology till 10th FYP

and today, we are seeing that significant number of plants being built on such

advanced technologies. This also poses a challenge to present workforce to adapt to

these changes so quickly, increasing importance of mid-career trainings & skills up

gradation. .

Foreign suppliers mainly Chinese have also increased focus on the Indian

power market due to various factors. All These factors have increased the need of

more professional and skilled personnel. Deployment of skilled foreign personnel is

also important to ensure necessary skills transfer to local workforce.

We have seen six fundamental trends that are shaping the power generation

sector: a) Dominance of thermal in power generation capacity b) increasing private

sector participation c) Demand Supply Gaps d) Need for improvement in plant

utilization factors e) Increasing shortage of skilled workforce and f) Chancing

technology and increasing foreign suppliers. These trends are leading to certain

requirements for power generation which are outlined below.

2.3 Emerging Needs of Generation Sector:

All above six trends, collectively, indicate that it is imperative for India to focus on

improved asset utilization for existing and upcoming power generation assets. This would

require right O & M practices & expertise. It would be increasingly important for power

generators to


25

i. Improve plant availability & utilization

ii. Improve efficiency of power generation

iii. Reduce Station Heat Rate

iv. Operation and Maintenance Practices

v. Bring down cost of power generation.

In today’s competitive markets prices are generally set by market condition. In this

context, power generators have to compete with each other in the market. Industry would

need to learn to cope with this competitive pressure. This implies need for focusing on

efficient operations as the key to profitability. Operation and Maintenance cost has a direct

reflection on the cost of generation and hence there is need to optimize the same.

2.4 Introduction to a Potential Solution:

The requirements of the sector outlined in chapter combined with the challenges

posed by trends analysed above, indicate that we need a solution which can enable a)

harnessing private sector efficiencies, b) maintenance and service delivery with focus on life

cycle costs, c) create opportunities to bring in innovation and technological improvements

and d) enable affordable and improved services to the users in a responsible and sustainable

manner.

All above points indicate to bringing in private sector participation & competition in

to the sector. Following chapter examines suitability of this idea in Indian power generation

sector, especially for the plants already commissioned under the state GENCOs in detail.


26

Chapter-3

Efficiency Improvement

3.1 Introduction:

Tracking the losses can do energy conservation in a thermal Power Plant. The

tracking of losses can be done by regular energy audit of the TPP. Energy audit focuses on

gray areas. Losses may be controllable or uncontrollable. These losses need to be identified

and a time bound action plan needs to be drawn up for minimizing such losses. Energy

efficiency improvement exercise involving multi disciplinary activities in existing power

plants assume great importance.

Keeping in view of the high capital cost in newer capacity addition, Sethi(1986)

suggested improvement in energy efficiency during conversion from heat to electricity is one

of the potential areas for energy saving. Energy audit will thus go a long way in improving

energy efficiency of existing plants. This requires check on fuel consumption, auxiliary

power consumption, heat rate and heat balance of thermal systems. There is need of

introducing of practice of periodic in house performance testing of existing plants for

determining fuel consumption, boiler efficiency and turbine heat rate.

National Productivity Council (1994) suggested the following objectives in Operation

& Maintenance (O & M) which may result in achieving the desired improvements in energy

efficiency.

Monitoring Station Heat Rate

Monitoring fuels consumption

Monitoring auxiliary power consumption

Monitoring parameters with respect to design condition

Plugging leakage

Operating efficient units in merit order

Identifying negative impacts on energy efficiency

Preparing for crisis management


27

3.2 Auxiliary Power Consumption (APC):

Auxiliary power consumption (APC) is an important factor to assess the efficiency of

the thermal power plant .Efficiency of TPS is a function of auxiliary power consumption.

Auxiliary power consumption in a thermal power plant is a major source of energy

consumption. During the financial year 2007-08, total generation by coal plants was

488157.46 Mus with a PLF of 78.75 %. Auxiliary power consumption was 8.17 %. If this

APC gets reduced only by 0.17 %, fresh capacity addition of about 120 MW can be achieved

without any investment. APC reduction initiatives not only reduces energy intensity but also

ensures more revenues because of increase in energy export

In this direction the Evaluation Division of CEA had devised a Performa to monitor

the various parameters of efficiency of thermal power plant. On monitoring the data of

auxiliary power consumption had been received. The data of the current APC so received has

been compiled, compare with the designed APC of the captive power plant. And a program

has been designed to improve it.

3.2.1 Auxiliary Power Consumption (APC) Indian Scenario:

Auxiliary Power Consumption capacity wise

Capacity group in MW Auxiliary power consumption in %

500 6.13

250 8.80

210 8.77

195-200 7.67

100-150 10.32

<100 10.31

Table 3.1: APC Bench Mark

National Level APC is 8.32%

Best achieved APC is of NTPC Sipat i.e. 5.04 %


28

3.2.2 Auxiliary Power Consumption (APC) Elements:

Figure 3.1: APC Elements

3.2.3 Auxiliary Power Consumption (APC) Breakup:

Figure 3.2: APC Breakup

Auxiliary Power

Consumption

Draft System(ID,

FD, PA Fans) Feed Water System

(BFP,CEP)

Cooling Water System

(ACW,MCW,CT)

Grinding plant & CHP

Ash Handling System

Compressed Air System

Water Treatment

System

Lighting

Air Washer & plant AC


29

Figure 3.3: APC Equipment wise consumption

3.2.4 Factors Affecting Auxiliary Power Consumption (APC):

Plant load Factor: Plant load factor must be high for low APC since there is

no direct method for calculating APC. It is simply the difference between the

power generated and power transmitted. Therefore the more is the power

generated the more is power transmitted which is only possible when the plant

is run in high PLF

Operational efficiency of equipment: The equipment must have high

efficiency in order to have low APC. Since APC is the cumulative power

Boiler feed pump39%

MILL motor15%

GEHO PUMP14%

ID FAN motor11%

PA FAN motor8%

FD FAN motor4%

Condensate Extraction Pump

3%

AIR COMPRRESSE

R2%

CRUSHER motor

1%vaccum pump

1%

Drip pump

1%

SLURRY PUMP

1%

APC Consumption


30

consumption of the equipment hence the less they consume more is the

efficiency.

Start-up & shutdown: Thermal power plant generally takes few hours to get

stabilized after startup and during that time the energy consumption is high.

Once the plant gets stabilised the power consumption gets reduced. So in order

to have less APC the plant shut down and startup must be as low as possible.

Age of the plant: The energy consumption of the plant increases with the

increase in the working age of the equipment. Therefore timely replacement

of old machinery and equipment is desirable to have low APC.

Coal Quality: Coal mill is one of the major consumers of power in a power

plant. If the coal quality is not good the mill will overdraw energy to grind

same quantity of coal. Therefore it is desired to have good quality of coal to

have low APC.

It is to be noted that 0.2-0.3 % of APC can be saved using small retrofitting

and asset optimization techniques.

3.2.5 Auxiliary Power Consumption Reduction Measure:

BOILER FEED PUMP (BFP): Boiler Feed Pump is one of the largest

auxiliaries of the power plant in terms of energy consumption. It nearly

consumes 25 % of the APC itself alone. Any reduction in the energy

consumption using asset optimization will greatly increase the efficiency of

the plant. The various measures which can be taken to optimize the BFP are

described below.

o Energy consumption can be saved in boiler feed pump (BFP) and

condensate Extract Pump (CEP) by controlling the speed of the pump

by using modern electronic solution instead of valve control methods.

The use of variable speed drives to run BFP and CEP can help in

drastically cutting the energy consumption of the plant thus saving

energy and money. The use of variable speed hydraulic coupling is

also helpful in reducing APC. BFP operation can be optimized by

preventing recirculation of the feed ie by replacing faulty valve if any.


31

BFP can further be optimized by replacing cartridge and even by

reducing a stage.

o By avoiding recirculation of feed there can be saving of as much as 15

% of the energy consumption of BFP

DRAFT SYSTEM: Draft system is the second major energy consumption

system after boiler feed water system. Draft system includes forced draft fan,

primary air fan and induced draft fan. It has been observed that excess air or

air ingress tends to increase the flow of ID fan. The condition of excess air in

draft air draft system and ingress is due to FD pan and PA fan respectively.

Since there is a increased air flow in the draft system the energy consumption

increases substantially resulting in higher APC consumption.

o Arresting air leaks in the draft system (by auto measurement) lead to

reduction in air ingress which helps in reducing auxiliary power

consumption. Since excess air in combustion increases the FD, PA and

ID fan power optimizing air flow leads to decrease in efficiency.

Similarly leakage in Air-pre heater and duct of Electro-static

precipitator also leads to increase in ID fan power consumption. This

increase in power consumption can be optimized by regular detection

and arresting air leaks thus substantial reducing APC of the plant.

o The performance of fans (ID, PA & FD fans) can be analyzed by

comparing the design with actual power consumption pattern. It has

been observed that a reduction of 10% air ingress between APH and ID

fan can result of 15% ID fan power consumption.


32

Figure 3.4: Replacement Analysis Figure

Coal handling plant & Coal Milling: Coal Handling Plant & Coal Milling is

also a major consumption of energy in Thermal power plant. Coal pulverizes

use up to 5% of the energy of the plant. Reduction in even 5% of energy

consumption of the pulverizes would bring significant benefit to the plant. The

operations of coal mills can be optimized by maintaining proper air-fuel ratio,

periodic testing of coal particles and size and roller pressure with grind ability

of the coal. Mill performance can be analyzed with regression analysis of

previous and present consumption pattern. Break-even point for replaced must

be identified so as to avoid excess energy consumption in coal mill.

Cooling water system & Water treatment plant: Cooling water system &

Water treatment plant contribute significantly to the energy consumption of

the thermal power plant. Detail study of the entire system from intake to

make-up waters has potential in optimizing complete system. This

optimization includes intermitted operation of additional pumps avoiding re-

circulation, installation of Variable frequency drive (VFD). Estimate annual

saving of this measure is 1.38 million units.

o The optimization of water treatment can also be done:

By avoiding, over sizing and improper selection of pump using

start stop control to fill the tank.


33

Impeller trimming to permanent reduces the capacity.

With proper maintenance of bulbs and checking cavitations and

leakage in plant ceiling.

Using multiple pumps in parallel as per flow requirement.

Power Distribution: The efficiency of power distribution system in plants can

be achieved by

o Using energy efficient motors.

o Optimizing voltage level of distribution transformer and shifting of

loads to under loaded transformers.

o Power factor improvement.


34

Chapter-4

Asset Optimization

4.1 Introduction:

Asset Optimization is the process of improving the deployment of assets such

as boiler auxiliaries, turbine auxiliaries and other remote assets to achieve improved

performance, increased asset utilization and lower costs. Simply knowing the location of

assets can achieve efficiencies in resource allocation and routing and greatly increase the

security and recoverability of assets.

Adding intelligent sensors to determine asset conditions can further improve operating

efficiencies. Optimization uses intelligent analytics based on real-time monitoring inputs and

collected data on location and status of transportation assets and their content to alter business

processes for performance improvement.

It includes maintaining a desired level of service for what we want our assets to

provide at the lowest lifecycle cost. Life cycle cost refers to the best appropriate cost for

rehabilitating repairing or replacing an asset.

4.2 What is Asset Optimization?:

Asset Optimization is the process of improving the deployment of assets to achieve

improve performance and lower costs of operations with a system based approach.

4.3 Needs of Asset Optimization:

Asset Optimization makes our boilers, compressors, turbines, furnaces, heat

exchanger, pumps, instruments, valves and other process equipments as perfect, effective, of

functional as possible.

Today in Power Sector Company generally bid for supplying power based on

competitive tariff which reflect their overall cost of generation. In order to remain


35

competitive or to have larger market share the cost of generation should be as lower as

possible. Minimum cost of generation can be achieved by utilizing our fixed asset to the

maximum and reduce wastage to minimum level.

Approaches followed in asset optimization are-

Maximize Equipment Availability & reliability

Maximize turbine efficiency

Reduce Auxiliary power consumption

Optimize specific coal consumption

Reduce Specific Oil consumption

For employee engagement and involvement for proactive initiatives

4.4 Asset Optimization Framework:

A holistic asset optimization framework would cover the entire life cycle of assets and

would be supported with the right enablers.

Fig. 4.1: Asset Optimization Framework

Vedanta Aluminium Limited has designed and implementing asset optimization

porgramme under the banner of AROHAN-PASSION in all its power generating units.

Results

Enablers

Process Management


36

4.4.1 DMAIC Project Manager:

The company used a project manager which helps to implementing the project

in a proper manner. The name of the project manager is DMAIC. Which provide all

the information regarding project charter, project roadmap, templates and tools. The

outline of the project manager contains five steps. This steps as shown in the

figure 4-2.

Figure 4-2: DMAIC Steps


37

4.4.2 Key Performance Index of Asset Optimization:

The company set their target which will be achieved through the asset

optimization programme. These targets are called result of asset optimization. Final

goal of the company is increasing cash flow. To achieve goal, company fixed some

business parameters. This will be achieved through this programme. The company set

business parameters or Key Performance Indexes (KPI) are,

Plant Load Factor (PLF)

Specific Coal Consumption

Specific Oil Consumption

Auxiliary Power Consumption (APC)

Plant Availability

Plant Load Factor (PLF): Plant load factor is a measure of average capacity

utilization. Plant load factor is a measure of the output of a power plant compared

to the maximum output it could produce. Plant load factor is often defined as the

ratio of average load to capacity or the ratio of average load to peak load in a

period of time.

𝑃𝑙𝑎𝑛𝑡 𝐿𝑜𝑎𝑑 𝐹𝑎𝑐𝑡𝑜𝑟 =𝑀𝑊𝐺𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑

𝑀𝑊𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑒𝑑

A higher load factor is advantageous because a power plant may be less

efficient at low load factors, a high load factor means fixed costs are spread over

more kWh of output (resulting in a lower price per unit of electricity), and a

higher load factor means greater total output. If the power load factor is affected

by non-availability of fuel, maintenance shut-down, unplanned break down, or

reduced demand (as consumption pattern fluctuate throughout the day), the

generation has to be adjusted, since grid energy storage is often prohibitively

expensive

Therefore a higher load factor usually means more output and a lower cost

per unit, which means an electricity generator can sell more electricity at a higher

spark spread.

http://en.wikipedia.org/wiki/Grid_energy_storage

http://en.wikipedia.org/wiki/Grid_energy_storage


38

The plant load factor trends of unit 1,2&3 are shown in the figure 4-3.

This figure contains five months trends of all the units. The plant load factor goes

high in the month of March’13 and worst plant load factor in the month of

January’13 and April’13.

Figure 4-3: Plant Load Factor Trends

The company is implementing DMAIC project manager for improving the

plant load factor and also set the base line. The baseline of plant load factor is 79

and 86 is the target. The status of the DMAIC project manager is shown below

figure 4-4.

Figure 4-4: DMAIC Status Report

The company is implementing DMAIC project manager for improving the

plant load factor

50

57

67

51

62

0

10

20

30

40

50

60

70

80

Jan'13 Feb'13 Mar'13 Apr'13 May'13

PLF Trend (%) considering Unit1,2&3


39

Specific Oil Consumption (SOC): The Specific Secondary Fuel Oil

Consumption for the purpose of start up-shut down and flame stabilization. The

Central Electricity Regulatory Committee set the parameter for using the specific

oil consumption. According to the CERC norms SOC for all types of coals,

petroleum coke and vacuum residue is 1.0ml/gross kWh. The secondary oil is

used only for the lighting up of the plant.

The specific coal consumption trends from January to May for three

units are shown Figure 4-5. The trend shows that the specific oil consumption of

the month of February is very less and below the target. In the month of January

SOC is very high. It means the plant was shut down many times.

Figure 4-5: Specific Oil Consumption

The company set their target to reduce the SOC at 0.1ml/kWh. That

reduction target is gives the benefit for less generation cost. The base line of SOC

is 0.87 which is quite higher than the target value. The figure 4-6 shows the

DMAIC status report of May.

0.64

0.070.13

0.26

0.37

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70


SOC Trend

SOC


40

Figure 4-6: DMAIC Status of Specific Oil Consumption

Specific Coal Consumption (SCC): The effect of various coal properties like ash

content, moisture content, fixed carbon and calorific value on specific coal

consumption in a typical thermal power station in India is analysed. It is observed that

the specific coal consumption is a strong function of moisture content, ash content and

fixed carbon. For the Thermal Power Station (the one considered in the present

analysis), it is observed that, for an increase in moisture content by 2%, the specific

coal consumption increases by about 8%. If, however, the ash content is increased by

2%, the specific coal consumption increases by about 5%. It is also observed that, for

a 4% increase in fixed carbon, the specific coal consumption decreases by about 25%.

It also can be reduce by station heat rate reduction methodology. Which is already

discussed detailed in previous chapter. So the specific coal consumption can be shown

in terms of SHR. The figure 4-7 showed five months SHR trends.

Figure 4-7: Trends of Station Heat Rate.

2454

2495

2448

2347

2369

2424

23872374

2506

2430

2409

2527

2415

2522

2423

2,250

2,300

2,350

2,400

2,450

2,500

2,550


SHR Trends for Unit 1,2 &3 in (Kcal/KWh)

Unit1 unit2 unit3


41

The design value of unit heat rate is 2257kcal/kWh. But if we are compare

with the graph value of heat rate which is quite high. High station heat rate is one of

the reasons for losses of the plant. Implementing the DMAIC project manager for

reduce the losses. Status report of the DMAIC is shown in the figure 4-8.

Figure 4-8: DMAIC Status of Station Heat Rate

Auxiliary Power Consumption (APC): Power plant produces electrical energy and

also consumes a substantial amount of energy in the form of auxiliary consumption

required for various plant equipment and services. The auxiliary power consumption

varies from 6 – 14 %depending on the plant size and age of the plant.

The auxiliary power consumption plays a major role in enriching the energy

efficiency of the thermal power plant. As per the norms APC should well within the

10%. Since Thermal power plant is also falls under energy intensive consumer

category like railways, metal industries, port trust etc. Electricity Act features it is

paramount importance to analyze the consumption pattern of the plant and work on

various areas so as to boost up the efficiency of cycles and sub-cycle.

Capacity Group in MW Auxiliary Power Consumption (%)

500 MW 6.63

250 MW 8.80

210 MW 8.77

195-200 MW 7.67

100-200 MW 10.32

Less than 100 MW 10.31


42

Table 4-1: Auxiliary Power Consumption1316

Factors affecting the APC:

Plant load factor = high

Operational efficiency of the equipment = Moderate

Startup and shutdown = low

Age of the plant = high

Coal quality = Moderate to high

The figure 4-9 shows auxiliary power consumption trend for all units.

Figure 4-9: Trends of APC.

The company wants to reduce the auxiliary power consumption and increase

the plant efficiency. In present scenario auxiliary power consumption of all the units

are higher according to the CEA guide line. Now the company set the target to reduce

the APC at 8.0% where base line is 9.87% of total generation. The APC reduction

program status is shown figure 4-10.

16 CEA Auxiliary Power Consumption Regulation

9.67

8.36 8.078.59

7.68.17 8.01 8.11 8.19 8.468.19

8.577.91 8.07 8.28

0

2

4

6

8

10

12


APC trend (%) for unit1,2&3

Unit1 unit2 unit3


43

Figure 4-11: DMAIC Status of Auxiliary Power Consumption

Plant Availability Factor (PAF): Energy efficiency is the least expensive way for

power and process industries to meet a growing demand for cleaner energy, and this

applies to the power generating industry as well. In most fossil-fuel steam power

plants, between 7 to 15 percent of the generated power never makes it past the plant

gate, as it is diverted back to the facility’s own pumps, fans and other auxiliary

systems. This auxiliary equipment has a critical role in the safe operation of the plant

and can be found in all plant systems. Perhaps the diversity of applications is one

reason why a comprehensive approach to auxiliaries is needed to reduce their

proportion of gross power and to decrease plant heat rate.

The plant availability are divided into two availability factor. These are,

i. Critical Equipment Availability

ii. Station Availability

Critical Equipment availability is directly affecting the plant availability

factor. Whether all the equipment of the plant are available any time. Plant can

be stop due to this reason. So this availability is most important. Present trends

of critical equipment availability are show in figure 4-12.


44

Figure 4-12: Trends of Critical Equipment Availability.

The critical equipment availability should be increase for better plant

availability. The company follows the nine steps for maintenance the plant

equipment. The status of the nine steps is shows figure 4-13.

Figure 4-13: Status Report for Critical Equipment Availability.

Station availability is depends upon various factor. Station availability is the main

reason for 100% PLF. The trends of station availability shows figure 4-14.

92.83

97.07

93.45

91.98

93.87

89

90

91

92

93

94

95

96

97

98


Critical equipment availability (%)


45

Figure 4-14: Trends of Station Availability

54

73 73

8085

-

10

20

30

40

50

60

70

80

90


Station Availability


46

4.4.3 Process Management:

The result section described above is the outcome of the process carried out in

the plant. So in order to bring about any change in the result there must be procedural

or process changes implemented. The approach taken for bringing the desired result

or fulfilling the business plan for the above mentioned five parameters are categorized

below.

Figure 4-15: Spider Diagram of Process Management

Basic Equipment Condition:

Basic equipment includes all those equipment which are mostly

required to run a power plant effectively. These include various pumps,

transformers, HV & LT drives and monitoring equipment.

There must be a maintenance schedule for various equipment and job

responsibilities should be fixed for the maintenance of the equipments. The

log book of the equipment must be maintained mentioning the date of

maintenance, spares changed, man hours employed etc. Regular analysis of

equipment must be done giving due weightage to corrective action and

preventive action. Planned maintenance schedule must be formulated and

strictly adhered.

Basic EquipmentCondition

PM/CBM compliance

Spare PartsManagement…

MaintenanceFacilities

SOP compliance

ContractorManagement

Budget and CostControl

Safety & RegulatoryCompliance

Process Management


47

Performance Management & Condition Based Monitoring:

Employee must be aware of the SMP and review of PM schedule

adherence. If there is any slippage in adherence proper curative action must be

implemented. The work order logged for the job must be according to the

standard prescribed and if possible in SI system. There must be guidelines for

tracking the adherence to CAPA (corrective action and preventive action).

Moreover the higher authority or management must be made aware of the

equipment availability through regular MTTR and MTBF. So that proper

planning for future course is done in advance.

Contractor Performance:

The contractor must be made aware of the key Performance Indicators

for the respective department in line the business plan. Proper list of tools

must be maintained with proper calibration plan and its implementation

adherence. There must be proper framework for capacity building of the

employee and emphasis must be on skill mapping.

Spare Parts Management:

The management must be aware of the critical spares for respective

equipment. A critical equipment list must be made for the reference of the

employee. Proper Procedure must be laid down to preserve critical spares

along with optimum level of stock of the critical equipment so as to ensure

smooth uninterrupted running of plant.

Budget Cost Control:

There must be a budget allocated for every work area and the

employees must be aware of the budget allocated to their work area. A system

for tracking cost centre wise and actual SAP must be established. In addition

to that there must be mechanism to control cost of various centers.


48

Maintenance Facility:

Employees must be aware of the area of their work. 5S (Annexure I)

practices must be adhered to. Unwanted items must be removed and there

must be designated Red Tag area identification. Defining area must be

allocated for tools, spares and visual controls. A system of self assessment

with action plan for improvement must be laid down.

Safety and Regulation:

There must be awareness among the employees about the safe working

practices and periodic training must be provided to inculcate the habit of

safety. Safety workshop must be arranged for the employees and due

importance must be given to safety rules and regulation. Employees must be

aware of the operation on the Interlock & Protection testing .There must be a

standard operation procedure of operating various equipment.

4.4.4 Enablers:

Enablers are like catalyst they helping, fastening or speeding up the process.

This enabler is supports to deliver desired results. Enablers promote an organization

from present scenario to targeted status.

Figure 4-15: Spider Diagram of Process Management

GoalDeployment

SkillsDevelopment

ContinuousImprovement

Reward &Recognition…

Organisation &Performance…

Results

Enablers and Results


49

Goal Development:

There must be awareness about the business plan at the plant level and

department level. Proper drill must be followed adhering the KPI’s to achieve

the primary goal of the plant. There must be proper understanding about the

need and requirement of each department by means of voice of customers.

Awareness must be spread about the various service level agreements between

different departments where each of them are internal customer of each other.

Continuous Improvement:

There must be arrangement for regular and effective tracking of all the

improvement projects with specific framework.

Building capability by means of training on various tools and

methodology to the members involved in the project also includes in the

program.

Reward Recognition & Skill Development:

A comprehensive Reward and Recognition system must be developed

for the employees. There must be awareness among the employees about this

system. The system must be able to evaluate the performance of the

employees and also the shortcomings. Based on these shortcomings there must

be training of the employees focusing on the KSA elements. Training calendar

based on the shortcoming must be based on each employee’s shortcomings.

The training adherence must be monitored and its effectiveness must be

traceable.

Organization performance management:

This includes the establishment of Asset Optimization war room in

each and every department and coordinating with War rooms of various

departments. This also includes the analysis of kPI of various departments and

determines the effectiveness of the asset optimization program by comparing

the past and present performance of the organization as a whole.


50

The effect of implementation of asset optimization can be seen from the

performance diagram below figure 4-16.

Figure 4-16: Performance Diagram of Process Management

Figure 4-17: Enablers and Results of Process Management

67%

65%

25%

90%

100%

78%

80%

80%

Basic EquipmentCondition

PM/CBMcompliance

Spare PartsManagement

Practices

MaintenanceFacilities

SOP compliance

ContractorManagement

Budget and CostControl

Safety &RegulatoryCompliance

Process Management

May April

83%

17%

17%

100%

90%

40%

GoalDeployment

SkillsDevelopment

ContinuousImprovement

Reward &Recognition

practices

Organisation &Performancemanagement

Results

Enablers and Results

May

April


51

Chapter-5

Strengthening Operation and Maintenance Practices in Coal Fired

Power Generation Plant in India

5.1 Introduction:

The Plant Load Factor (PLF) of private-sector thermal power plants in India in April,

2012 was on an average 82.13 percent compared with 82.21 percent for central-sector NTPC

power plants and 71.67 percent for state-sector power plants. Among the private-sector power

plants also, there is a wide performance range with more than 90 percent PLF for some power

plants. It is seen that most of the high performing power plants have adopted modern

Operations and Maintenance (O&M) practices and systems. There is a significant scope for

improving the performance of the underperforming private-sector power plants just by

focusing on the O&M practices / systems.

Improving performance of private-sector power plants through interventions aimed at

strengthening O&M practices, coupled with required rehabilitation and life extension

interventions is perhaps the quickest and least cost alternative for augmenting availability of

power in the Indian context. If all the available generation units can be utilized at an average

PLF similar to central sector units through rehabilitation combined with better O&M

practices. Although such high levels of performance may be difficult to achieve across all

private-sector power plants, the potential benefits of focusing on improved power plant

performance are clearly immense. Improved O&M practices are also necessary to sustain the

performance of rehabilitated power plants as well as new power plants. Government of India

initiatives in this regard (Partnership in Excellence – PIE Program) also amply demonstrated

the potential benefits.

For enhancing the O&M practices, multiple interventions are required across the

various aspects including people, technology, process and facilities/infrastructure.

Operational practices improvement will require setting up an Operations and Efficiency

(O&E) cell at the plant which needs to complement the current corporate performance

oversight process. It would also require setting up a Trip Committee at the plant to analyze

the root causes of unforeseen outages. There is also a need for designing a framework for

assessment of losses on commercial basis.


52

Maintenance practices enhancement shall require short-term interventions in the form

of establishing and strengthening the maintenance planning function through establishment of

a Maintenance Planning Cell along with preparation of a Plant Asset Database and a

Condition Monitoring Plan. Longer term interventions could be towards investing in a

Computerized Maintenance Management System (CMMS) and developing a decision support

system linking maintenance costs to reliability levels of station.

Generation budgeting process would need to be strengthened through establishment of

an in-house Budget Committee and the preparation of a comprehensive Budget Manual along

with conducting training for the utility personnel to operate in a performance based budget

regime. In the area of Generation Planning, there is a need to slowly move from the 'Bottom

Up' approach (based on what is readily achievable) of generation target setting to the 'Top

Down' approach (based on the desired level of performance). Enablers for achieving these

targets should be identified and all out efforts be made to achieve them.

There is a need to establish a Quality Assurance function along with introduction of

Quality Assurance Plan in tenders and developing strong vendors through long-term contracts

for spares and services. The existing inventory levels could be rationalized through

classification on Vital-Essential-Desirable (VED) basis for the ease of setting differential

procurement strategies for the same. Also spares banks could be established to benefit from

reduced inventory holding by pooling spares across plants at close distances.

A deeper appreciation of cost related aspects needs to be inculcated at the utility

through development of a costing framework and establishment of cost codes and

operationalising the same with requisite training to the finance personnel. Over a long term

based on the benefit assessment, the utility may migrate to an Activity Based Costing (ABC)

System.

Human resource related aspects are a key concern with most utilities. In particular,

there is a need to have robust job descriptions with clearly identified accountabilities to

establish Key Responsibility Areas (KRAs) and Key Performance Indicators (KPIs). The

established KRAs and KPIs should feed into an improved Performance Management process.

A structured approach towards training has to be developed both for the plant and corporate

level staff. Given the increasing complexities of operating the assets in a competitive regime,


53

it is essential that a rigorous skill gap analysis is conducted and suitable measures taken

towards training and recruitment of staff.

Background:

1. Sector Background: The Indian power sector suffers from considerable electricity

supply shortages (peak deficit of 9.0 percent and energy deficit of 8.7 percent in 2012-13).

The Government of India (GoI) is addressing this problem both through a major green field

capacity augmentation program and through rehabilitation of existing coal fired generation

capacity. Around thirty percent of India’s power is owned by private utilities, and a

significant part of this is reported to be in a poor condition, with plant load factors of about

82.13 percent (with some plants having lower than 55 percent) and station heat rates of about

3,000 kcal/kWh (in some cases up to 3,500 kcal/kWh).

2. The Plant Load Factor (PLF): The PLF of private-sector thermal power plants in

India in 2012-13 was on an average 82.13 percent compared with 82.21 percent for NTPC

power plants in the state sector and 71.67 percent for private-sector power plants – clearly

indicating the significant scope for improving performance of state-sector power plants.

However, there is a wide performance range among the state-sector power plants themselves,

with PLF of more than 90 percent for some power plants. It is also seen that almost all power

plants which exhibit high PLF also have better energy efficiency performance as well –

typically less than 10% deviation from the design heat rate, compared to up to 50% deviation

in some cases.

0

10

20

30

40

50

0-5% 5-20% Above 20%

SHR Deviation in Private sector Power Plant (2010-11)

Pe

rcen

tage

of

Po

wer

Pla

nt


54

Improving performance of state-sector power plants through interventions aimed at

strengthening operations and maintenance practices is essential to ensure optimum

performance of the power plant both from the Availability as well as Efficiency aspects.

5.2 Key Technical Problem area of O&M Practices in India:

The key technical problem areas typically identified under the Performance

Improvement Program were as follows:

Poor condition of boiler pressure parts with high erosion, overheating, external

corrosion, oxide deposits, weak headers and pressurized furnace etc.

Poor water chemistry has affected the condition of boiler and turbine in many cases.

The water treatment plant is often in a dilapidated condition.

Poor performance of air pre-heaters due to blocked elements and high seal leakage

Poor performance of the milling system resulting in high un-burnt carbon. This was

often a result of lack of preventive or scheduled maintenance.

Poor condition of Electrostatic Precipitators (ESPs) resulting in high emissions.

Problems of high axial shift, vibrations and differential expansion in Turbine

Low vacuum in condenser due to dirty / plugged tubes, air ingress and tube leakages

High vibrations in Boiler Feed Pumps and Condensate Pumps and passing of

recirculation valves, resulting in low discharge

High pressure heater not in service in most of the units, directly impacting the energy

efficiency performance

Deficiencies in electrical systems including High HT and LT motor failures, poor

condition of DC system, non-availability of Unit Auxiliary Transformer etc

Poor condition of Balance of Plant (BoP) resulting in under-utilization of capacities

5.3 Developing and Implementing a Performance Improvement Programme:

Achieving significant improvements in plant performance over a short period requires

a “Performance Improvement Program” (PIP) which would identify the key aspects that hold

maximum potential for yielding performance improvements, develop steps towards


55

addressing those aspects and systematically implement the same. The PIP process should

start with an assessment of the current operational practices both managerial and technical,

including inter-alia an assessment of various technical subsystems of the plant to bring out

the minimum technical interventions needed to sustain regular functioning of the plant. Such

an assessment could also tie-in with a Residual Life Assessment of the plant which would

indicate the need for rehabilitation (R&M) interventions, including need for upgrading

Control and Instrumentation systems. In Parallel, the PIP process requires steps to be initiated

for strengthening the managerial and organizational systems as described in the later sections

of this note.

The PIP serves as the overall change management theme, covering several individual

activities which are outlined in the subsequent sections of this note. The overall phases of a

PIP are:

Awareness Phase, including unit benchmarking and forecasting worth of unit

improvement.

Identification Phase, including equipment /

component benchmarking, High Impact-Low

Probability benchmarking, trend analysis and

creating a wide range of solution options using

input from many sources.

Evaluation Phase, including using advanced

methods to justify, select optimal timing and

prioritizing among many competing projects as

well as day-to-day O&M decisions, both

reactive and increasingly proactive decision-

making.

Implementation Phase, including using the results of the evaluations to select that

group of projects offering the best use of the limited resources, goal-setting based on

the projects actually chosen for implementation,

It is also essential to track the actual results of implemented projects and

compare these results to the expectations used in the evaluations and finally

incorporating feedback of these results into the first three phases of the process. The

Fig. 5.2: Perf Improvement Program


56

various aspects of change necessary for performance improvement are brought out in

the subsequent sections, starting with industry best practices on operations.

5.3 Enhancement of Operational Practices:

Existing Operational Practices in State Sector Coal Fired Power Plants Operational

practices among state-sector power generation utilities in India display a wide spectrum, with

some of the better managed utilities exhibiting superior systems and procedures, while most

of the remaining have critical gaps in several key operational areas, leading to reduced plant

performance in terms of availability, generation and energy efficiency.

Owing to a legacy of focus on plant load factor, most utilities still do not pay

adequate attention to energy efficiency aspects. Regular energy audits (including efficiency

tests for boiler, turbine and other sub-systems) are not carried out in most cases. Heat rate and

specific oil consumption targets are fixed and monitored for the station as whole and as a

result unit-level energy efficiency related issues do not get identified and addressed.

Auxiliary power consumption is often not measured systematically and is generally computed

by deducting sent out energy from the total energy generated. In the absence of any trend

analysis and benchmarking, opportunities for improvement do not get identified.

Coal accountability issues both external and internal to the plant, including

availability and accurate measurement of quantity as well as quality (calorific value) have a

direct bearing on technical and commercial performance of the plant, but continue to receive

less than required attention.

Poor Water Chemistry Water quality and make-up quantity are often not monitored

systematically, leading to operational problems in boiler (for example more frequent tube

failures) and turbine (for example deposits on blades).

In many utilities, well documented operating procedures are not available to the

relevant staff who execute their functions based on personal experience. As a result, staff

response to various situations becomes subjective and may lead to sub-optimal approaches in

addressing operational issues. Such responses may sometimes cause avoidable tripping and

forced outages, and in some cases even reduce equipment availability, reliability and life. The

observations from independent consultants on one such poorly operated power plant are

provided in Text Box-1.


57

Operational data is often relegated to records and not systematically utilized to

generate information on operational and maintenance requirements through trending and

other analysis.

Housekeeping in general is poor in several power plants with heaps of scrap

(including discarded components), coal dust and ash scattered all over the plant, which is not

only reflective of the poor O&M culture, but is also a significant deterrent to conducting

prudent O&M practices. Similarly, safety aspects are also usually neglected.

Operating Procedures, Manuals and Instructions Proper documentation of various

operating procedures and making such documentation readily available is critical to enhanced

operating practices in power plants. Such documentation would typically include:

Operations and Maintenance Manuals supplied by the Original Equipment

Manufacturer (OEM). The O&M manuals and the operating procedures based on

them should be made available with the shift-charge engineer at the plant and the

respective maintenance heads.

Technical Handbook for the plant indicating the various equipment

specifications, process parameter limits and critical alarm values. The handbook

should be made available to all operations and maintenance personnel.

“Text Box-1”: Consultant's Observations on Use of Procedures, Manuals and Instructions at

a Select Power Plant:

Independent Consultants have reported that the various operating procedures are not available with

the plant shift personnel or shift-in-charge in well-documented form. The original OEM manuals

are available in limited quantity for reference on a requirement basis. There is no library or

Centralized documentation centre. The originals are therefore difficult to be located at one place.

Signature check-lists for equipment lining up and various systems start-up and shut down were also

not available which is utilized by most utilities for standardizing such operational processes.

Equipment changeover guidelines along with key process diagrams for critical equipments along

with checking procedures at local for critical and non-frequented equipment were also observed to

be absent at the Power Plant. During the field visit, the consultants noted that the Key process

diagrams, Heat balance diagrams and Technical parameters handbook indicating ideal measurement

at various plant load factors are not available with Operation Personnel. Also the consultants

observed that operation personnel did not have at shifts the Key logic diagrams indicating

interlocks, protections and associated C&I details.


58

Key Process Diagrams, Key Logic Diagrams and Heat Balance Diagrams which

would assist in better operational decision-making, trouble shooting and enable

enhanced operational efficiency.

Signature Check List for start-up, shut-down and all emergency handling

procedures should be available with the Unit in-charges and shift-charge engineer.

In addition, Walk-down Checks should be carried out in each shift by the

respective operational staff responsible for boiler, turbine, balance of plant etc. to

report any abnormalities and take corrective actions. Checklists should be

deployed to ensure that all necessary aspects are verified during the walk-down

checks.

Equipment Changeover Guidelines and Schedule to ensure reliability of stand-

by equipment and balanced utilization. These should also be made available to the

Unit in-charges and shift-charge engineer

Training on Procedures, Manuals and Instructions Further, in all well-run

generation utilities, operating staff are provided exhaustive training to familiarize them with

the above procedures, manuals and instructions. Such trainings include trainings on ‘Power

Plant Simulator’. Refresher courses are also conducted for experienced staff to reinforce

awareness of these procedures and reduce complacency in adherence.

A Central Technical Library needs to be setup preferably under the Head of O&M at

the plant. The library should have an archive of all procedures, manuals and instructions, as

well as latest technical journals in hard and soft copy so that the same can be accessed on-line

by operations and maintenance personnel.

Monitoring of Energy Efficiency Performance In several state owned coal fired

generation plants in India, lack of focus on energy efficiency is reflected by the absence of

adequate mechanisms for monitoring energy efficiency performance. The industry best

practice in this regard is to have Computer-based systems for On-line Monitoring of Energy

Efficiency Performance. Such systems are deployed to monitor, for each unit in real time, the

overall unit heat rate (overall unit efficiency), boiler efficiency, turbine efficiency,

controllable and non-controllable losses, performance of condensers, regenerative cycle etc.


59

Such a system allows Heat rate to be monitored on a unit-wise basis (rather than for the

whole plant) in real-time through on-line measurement of coal consumption and electricity

generation. The calorific value of coal however has to be measured off-line and fed manually

to the system.

Coal Measurement Systems In order to bring greater accountability and focus on

energy efficiency, it is necessary to have a reliable coal flow measurement device – separate

for each generation unit. This needs to be coupled with adequate systems for reliable

measurement of coal quality in order to determine the amount of heat being put into the

generation unit vis-à-vis the electricity generated.

Auxiliary Consumption Monitoring System is deployed to monitor the energy

consumption and operating parameters of key systems / auxiliaries such as Boiler Feed Pump

(current drawn), Ash Handling System (ash to water ratio), Coal Handling System (idle

running of conveyors) etc.

Steam and Water parameters (conductivity, pH values, PO4) are measured online in

real-time through the Steam and Water Analysis System (SWAS). Similarly, on-line

condensate conductivity measurement system is deployed to determine condenser tube

leakages. Even simple historical trends of such parameters can reveal malfunctions and areas

of potential improvement in plant efficiency.

Specialized and Focused Cells / Committees For effective O&M of power plants, it

is necessary to have specialized and focused cells at each power plant as well as centralized

cells at the headquarters catering to multiple plants. The division of functions across these

plant-level and centralized cells could vary across utilities – some may have a largely plant

based approach (with only critical management inputs going to centralized cells) while others

may have more centralized approach (with data inputs from plants being provided to

specialist experts located at the headquarters), or a blend of these two. The information

technology solutions now available facilitate adoption of more centralized systems which

better utilize precious technical expertise and enable closer management oversight. However,

a minimum level of expertise at the plant is necessary in any case to cater to day-to-day

O&M requirements at the plant and take necessary actions in real time, while also feeding

information to the centralized cells. The following specialized/focused cells may be

recommended:


60

Operations and Efficiency (O&E) Cell at the Plant The O&E cell measures

and analyses energy efficiency performance of the plant on a regular basis and

is responsible for strict monitoring of the unit heat rate and its deviations. It

ensures the operation of the plant and auxiliaries at optimum efficiency by

identifying and rectifying gaps in efficiency compared to the design

parameters. This is achieved by ensuring the operation of the unit at rated

parameters and minimizing the consumption of coal, secondary oil, auxiliary

power and make-up water. Another aspect specifically monitored by the O&E

cell is achievement of optimum water chemistry parameters. Some of the tests

routinely carried out by the O&E cell in association with O&M divisions are

(i) Boiler Efficiency, (ii) Air Pre-Heater X- Ratio, (iii) Condenser Efficiency,

(iv) Turbine Cylinder Efficiency, (v) Dirty Pitot Tube Test for Mills, (vi)

Cooling Towers Efficiency, and (vii) Efficiency Tests for Heaters and De-

aerators.

Trip Committee at the Plant Typically, well-run plants have a trip committee

which is entrusted with the task of root cause analysis of trips and suggesting

corrective actions to prevent recurrence of trips. The suggested corrective

actions are typically formulated as an action plan with clearly ear-marked

responsibility center and schedule. Compliance with such recommendations is

monitored at plant as well as corporate levels and an institutional framework

for achieving this is also put in place. Recommendations of the trip committee

also feed into the maintenance plan. In some cases, specialized committees are

also in place for analyzing boiler tube leakages – one of the most frequent

reasons for forced outages. Other causes of forced outage are also analyzed in

detail by what are called as ‘Forced Outage Committees’.

Energy Audit Committee at the Plant The Energy Audit Committee is

mandated with preparing the Energy Audit Plan for the plant, conducting in-

house energy audits and coordinating third party external audits at the plant. In

the Indian context, the Energy Conservation Act, 2001 mandates periodic

energy audits for all energy intensive industries (including thermal power

plants). It has been observed that Energy Audits lead to significant

inexpensive performance improvements by enabling capture of low hanging

fruits (energy losses). An efficiency audit should be carried out based on


61

which the Energy Efficiency indicators should be defined for major energy

consumption/loss centres. However it is also essential to set up mechanisms

and institutional processes for ensuring that the recommendations of the

Energy Audit Committee are evaluated through a cost-benefit assessment and

implemented in a time bound manner.

Pool of Technical Experts across the Organization In order to build-upon the

shared expertise across various power plants, a Pool of Technical Experts is

developed across the organization, deriving expertise in different areas (such

as turbine, boilers, C&I etc) from different locations. From this pool,

Knowledge Teams are derived, which bring knowledge and experience in

different areas from different power plants and provide in-house consultancy

to technical problems at any location.

Daily Operational Review of Plant Performance Structured Daily Plant Meetings

chaired by the head of plant O&M should be held each morning to analyze the previous day’s

performance and plan the generation target as well as the maintenance activities for the

current day. Relevant inputs from the specialized cells/committees mentioned above are also

discussed in these meetings. Apart from the daily meetings, a monthly operational review

meeting chaired by the head of the plant should be held to follow-up on O&M aspects as well

as other plant issues.

Knowledge Management In any power station a huge amount of operational data is

generated on an ongoing basis which needs to be stored properly for future reference,

analysis and feedback. Moreover, significant data is also regularly churned out by supporting

departments like stores, procurement, finance, environment and human resources etc. A

proper knowledge management framework needs to be developed in the power plant for its

smooth and efficient functioning. Such a framework would enable the utility to capture,

analyze and refer experiences from different situations including unit tripping, specific

problems of various plant systems, experience pertaining to plant overhauls etc. Utilities

having a portfolio of plants of varying vintage can be expected to have a rich experience

across the years of operation that needs to be captured through a knowledge management

initiative.

The process of developing a robust knowledge management framework can be

initiated through implementation of department-level Information Systems (possibly through


62

modular Enterprise Resource Planning – ERP interventions) which will share all relevant data

for multiple uses and subsequently these systems can be interlinked to develop a proper

knowledge sharing platform.

The knowledge platform also provides various standardized reports for management

decision making and serves as the Management Information System (MIS) backbone at the

plant and corporate levels. Figure-1 provides an indicative content framework for a typical

power plant knowledge management platform. A separate discussion on MIS is provided in

Annexure-I of this note.

Enhancement of Plant Maintenance Practices:

Existing Maintenance Practices in State Sector Coal Fired Power Plants Based on

the review of select power plants by independent consultants it is seen that there is wide

variation in existing maintenance practices in state sector power generation plants, although

Fig. 5.3: Content Framework of a typical power plant knowledge management platform


63

even the relatively better utilities do not exhibit practices comparable with the industry best

practices. It is seen that often documented maintenance procedures have not been developed

and deployed even for critical equipment, especially in case of weaker utilities.

Maintenance Related Operational History Comprehensive database of performance

trends and failure history is often not available even for critical assets such as mills, pumps

and balance of plant. Also, where available data is recorded in hard copy maintenance

registers and is not used for failure history analysis or for monitoring Mean Time Between

Failures (MTBF). Failure Modes and Effect Analysis is usually absent as an institutional

practice.

Maintenance Planning Based on the review of select power plants by the

consultants, it is seen that typically there is no dedicated maintenance planning department –

and even when there, it is not effectively contributing to systematic maintenance planning.

Mostly, maintenance planning is being carried out by individual maintenance groups (boiler /

turbine / electrical etc). Long term planning for overhaul is done 2-3 years in advance, though

inadequate planning and preparation often leads to extension of shutdown-schedule. Spares-

planning is carried out on the basis of past experience rather than a systematic analysis of

spares requirement, leading to imbalance in availability of spares. Spares for planned-

maintenance are planned 6-8 months in advance by the individual maintenance groups.

There is a limited appreciation of the commercial linkages of plant level availability

and the reliability of individual equipments. Often the commercial implications of

productivity loss (impact on fixed cost recovery) and reduced heat rate due to poor equipment

performance (for example underperforming mills) is not objectively assessed in the

maintenance decision-making process., Prioritization of maintenance areas based on a pareto

analysis of failures is not undertaken.

Condition Monitoring Since most of these plants are relatively old, there is

inadequacy of modern measuring equipments and where available, such equipment is often

not used on a regular basis. Absence of adequate condition monitoring systems leads to

reactive maintenance practices rather than pro-active maintenance practices.

Pro-Active Maintenance One of the hallmarks of top performing generating

companies worldwide is their successful efforts to establish a Pro-active O&M program, one

that uses their equipment reliability, cost and efficiency data to supplement the


64

recommendations of the equipment manufacturers and the utility’s first hand experience. The

key elements of proactive maintenance in power plants are illustrated through Figure-5.4.

Steps for Strengthening Maintenance Practices and Establishing Pro-Active

Maintenance

Establish a Strong Maintenance Planning Department (MPD) at the Plant

The Maintenance Planning function at the Plant should be strengthened in

terms of placing it as the nodal point in both target review and daily decision

making process for day-ahead maintenance plan, in association with

Operations and Efficiency (O&E) Cell. The MPD would be responsible for the

overall planning of the maintenance activities both short-term and long-term.

This includes developing preventive maintenance schedules and ensuring

compliance, formulation of overhauling strategy (for example preparation of

six year maintenance rolling plans), spare parts planning, condition monitoring

and maintenance of equipment history.

Establish a Condition Monitoring (CM) Cell under the MPD Setting up of a

condition monitoring cell at the plant with priority basis will facilitate the

induction of proactive maintenance at the plant. The staffing requirements and

role definitions for the CM cell would need to be defined and adequate

Fig. 5.4: Proactive Maintenance Management System


65

infrastructure in respect of instrumentation shall need to be made available to

make it fully functional.

CM cell should develop a Condition Monitoring Plan which would include

check-lists and frequency for equipment monitoring. Equipment monitoring

would require a wide array of techniques including among others Vibration

analysis, Shock-pulse analysis, Lubricant oil analysis and Thermo-vision etc.

MPD should carry out Maintenance Process Enhancement Steps in

coordination with respective maintenance departments. (See Figure-3)

i. Creation of a comprehensive asset database at individual departments and

MPD.

ii. Identification of critical equipments in the process train based on past

operating history of the assets.

iii. Failure Modes and Effects Analysis (FMEA), Root Cause Analysis and

Pareto Analysis for the critical equipment.

iv. Updating of Condition Monitoring Plan (including standardized

procedures for condition monitoring of critical equipment) and Operating

Norms / Signature Checks in light of the above.

v. Identification of Key Performance Indicators (KPIs) for maintenance.

Fig. 5.5: Maintenance Process Enhancement Steps


66

Establish a Decision Support System to Facilitate Pro-Active Maintenance

Such a system should be aimed at optimization of power plant reliability

based on the following approach:

i. Allocation of the risks of production discontinuity to individual assets

and failure modes. This is done through a bottom to top linkage – i.e.

probability weighted impact of equipment/part’s failure on plant

operation and therefore profitability.

ii. Estimation of returns on reliability enhancement investment for each

asset/part.

iii. Prediction of profit impact of selective maintenance relaxation for

each asset/part.

iv. Comparison of investment costs with risk-reduction returns on both

annualized and plant lifetime basis.

Establish a Technical Database to establish relationship between equipment

aging rate and equipment reliability, equipment reliability and generation

reliability, and optimal power generation and penalty consequences of failure

to generate.

Establishment of a Computerized Maintenance Management System having

modules like-Plant Performance module, Human resource module, Works

Planning module, Materials Management Module, Budget and Cash flow

module, Work Permit module, Costing System module, Financial accounting

system module, Coal Management module, etc. This system will generate

various reports on daily, monthly and annual basis which will be used to

review and take corrective measures for various facets of plant performance.

Similar to the plant level and centralized approaches discussed for operational aspects

in paragraph 28, the maintenance activities could also be organized across plant level and

centralized level. In case of utilities favoring a more centralized approach, the above

suggestions would need to be implemented at the centralized cells through suitable

information technology interventions.


67

5.4 Generation Planning and Plant Level Budgeting:

By virtue of operating in a regulated environment with the regulator setting the

performance norms for operational aspects. Under the prevailing regulatory regime, tariff

levels are typically set for individual generating stations based on normative performance

parameters under an annual tariff approval process (though some states have introduced

multi-year tariffs recently). The normative performance parameters are determined based on

performance during the previous periods and a comparison with similar plants elsewhere in

the country. The annual tariff process requires the utility to submit the expectations on both

fixed and variable costs to the SERC under the tariff filing process. The fixed costs comprise

of O&M costs besides other standard elements like depreciation, interest charges, return on

working capital (normative basis), return on equity and taxes. With the exception of O&M,

the majority of the other fixed cost elements are maintained by the corporate office and hence

the budgeting/planning at the plant level is primarily limited to O&M budgeting.

Existing practices in Generation Planning and Plant Level Budgeting

Weak Framework for Generation Planning It is seen that generation

planning process in state power generation utilities in India is often based on a

qualitative input from various operations and maintenance departments. Even

in the relatively better utilities, where all key plant personnel (including shift

in-charges, maintenance in-charges and plant head) are involved in the

generation target setting process, the system is currently more reliant on their

experience and judgment than on hard data analysis. Further, in the select

power plants reviewed by the consultants, there is limited participation from

the maintenance planning cell, where such a cell exists. Also, the generation

planning process does not incorporate any significant inputs from the energy

audits.

Trend Based Generation Planning The generation planning process at state

power generation utilities is typically focused on maintaining status quo of

plant performance and maintaining historical performance levels. As a result,

generation parameters are projected conservatively based on trends from past

years.


68

Partial Loss Occurrences from Previous Year not Analyzed for setting in

place plans for improved generation levels for the year ahead. Further, limited

focus on commercial analysis of generation loss or operational constraints

during the year results in reduced generation than potentially achievable

output.

Inadequate Focus on Monitoring Tariff Parameters during Operation The

consultants have reported that there is inadequate appreciation at plant and

enterprise level of the commercial implications of the Tariff plan including

Performance targets given by the state electricity regulatory commission. The

monthly / daily target is often not revised to reflect shortfall in generation (if

any) or other plant parameters on a cumulative basis against the regulator

approved benchmarks.

Limited Focus on Other Aspects during Management Review Although

regulatory targets are included during the periodic management reviews of

achievement against generation targets, several other aspects of plant

operation such as commercial performance (cost of generation on fixed /

variable basis), implications of Availability Tariff, status of maintenance

works, inventory position, safety and environmental performance etc. do not

find adequate focus.

Departmental Budgets are prepared mostly on Historical Basis It is seen from

the consultant’s reports that the departmental budgets are prepared mostly on

historical basis using previous experience and are subject to some discretion

of senior departmental personnel. It is also seen that the explanation of

variance of actual expenditure versus budgetary projections is often

inadequate / lacking.

Inadequate Design of Accounting Codes The Budget compilation exercise

typically takes around a month. Part of this can be attributed to the current

design of accounting codes where there are single codes for repairs and

maintenance items encompassing both supply and labour. This results in the

departments furnishing the information under a single accounting code that

later requires segregation of the supply and labour components. Additionally

often due to non-standardization of reporting template, cost codes are not


69

represented on the utilizing department budget forwarded to Finance and

Accounts department.

Budgeting for O&M is typically restricted to Regulatory norms The approved

level of O&M expenses in the Annual Tariff Order by the Regulatory

commission is usually set as the Station O&M budget level as a gross whole.

The Tariff order levels thus constitute the sole basis of O&M budgets for cost

control in the station on an aggregate basis.

Generation Planning and Transition Steps

Focus on exceeding regulatory targets on a sustained basis The minimum

plant performance for ensuring commercial operations is defined by the

targets specified by the regulator in the tariff order. Therefore, the utility has

to identify the steps required to achieve / surpass the same on a sustained

basis. The steps identified have to be reflected suitably across generation

planning as well as plant level budgeting.

Scenario Based Approach to Generation Planning The regulatory

framework provides for incentives linked to higher availability of the unit. In

addition, higher generation beyond the Declared Capacity (DC) (within limits

set by the regulator to prevent gaming) can potentially yield higher revenues

through Unscheduled Interchange (U.I.) charges in the prevailing supply

shortage conditions. Therefore, better performing utilities strive to exceed

regulatory targets with respect to availability, while also attempting to

generate beyond the declared capacity. Such utilities plan scenarios for

maximizing generation and while providing resources for concomitant capital

expenditure over a medium term time horizon, especially where regulator has

provided multi-year tariffs.

Operation efficiency needs to be attributed greater focus at both the

corporate and plant level. It is essential that elements of detailed shortfall

analysis, partial loss analysis and inputs from the energy audit reports be

utilized for the preparation of year-ahead plans. However prior to initiating

the same, the utility may also require formalizing an energy audit and

performance review plan for the asset portfolio.


70

Day-ahead forecasting may be important in states where generation utilities

stand to be affected by Availability Based Tariff. Establishment of an ABT

Cell comprising of personnel skilled in analyzing the impact of ABT would

be important in such cases. Utilities could also develop internal guidelines on

day-ahead generation planning to optimize on commercial implications of

ABT regime.

Adopt an availability based approach to generation planning

i. The plant should target to progressively move towards Zero Forced

Outages. With this aim, the benchmark targets should be set for forced

outages as well as planned maintenance. This should be utilized to

project Availability and derive the PLF projection based on the same.

ii. Assess individual equipment level reliability and performance levels

so that the expected station overall availability can be projected and

steps taken to improve the same, with the aim of meeting the targets

set in the tariff regulations.

Strengthen the generation target review process through

i. Utilization of a commercial basis for evaluation of plant constraints to

prioritize maintenance interventions

ii. Analysis of shortfall at plant on daily basis to develop and implement

recovery plans for shortfalls (if any).

iii. Expansion of topical coverage to address other non technical issues

like stores, finance, human resources in the generation target review

meetings

iv. Strengthening of channels of communication for the review meeting

outcomes via circulation of formalized Minutes and making the same

accessible to plant executive staff at all levels.

5.4.1 Plant Level Budgeting and Transition Steps

Develop a Suitable Budget Manual which will act as a guideline for all

involved in the budget preparation process in the organization. The budget

manual should typically cover the overall framework of the Budgeting

System, detailed budgeting process, budgeting responsibility, time schedule


71

for budget preparation, and the system for monitoring adherence to budgetary

targets. It also provides the relevant formats for all the above aspects.

Establish Plant Level Budget Committee comprising of Plant Head, O&M

in-charges and various departmental heads. The committee should review the

overall physical targets, examine the budget proposals of the individual cost

centres and prioritize the allocation of resources to them.

Technical Vetting of the Budget is carried out by Operation and Efficiency

(O&E) Cell as well as the Maintenance Planning Department (MPD) at the

plant for operating parameters and maintenance requirements necessary to

meet the proposed budgetary targets. The technically vetted budgetary inputs

from the plant level budget committee are subsequently finalized during the

review by corporate level budget committee.

Budget System should be aligned with Finance and Accounts (F&A) for

account codes and Costing System for cost codes to ensure that variance

against the budgetary targets during the previous years and cost estimates for

planned activities can be fed into the budgeting process.

Periodic Review of Budgetary Performance at Plant and Corporate Levels

Typically performance against budgetary targets should be reviewed at the

plant on a monthly basis and at the corporate level on a quarterly basis, with

the aim of formulating recovery plans, if needed. Review of actual

expenditure against budgetary targets and actual plant performance against

physical targets should typically feed into a periodic review of the impact on

overall profitability.

5.5 Management Information Systems:

Existing practices in Management Information Systems Some of the leading state

owned power generation utilities have traditionally had reasonably strong (though manual or

part computerized) MIS systems and are now in the process of adopting state-of-the-art

Enterprise Resource Planning (ERP) systems which would also cater to their MIS

requirements. Some utilities (such as MSPGCL) have even initiated steps towards remote

monitoring of plant performance in real-time at a centralized facility called the Generation


72

Control Room (GCR) at the corporate office through a SCADA system. However,

Information Technology (IT) infrastructure at power plants owned by many other state-sector

utilities has significant deficiencies – in some cases virtual absence of any IT infrastructure at

the plant is observed. The key aspects of existing MIS systems at some of the lagging utilities

are as follows:

IT Infrastructural Constraints Typically, in poorly performing power plants

with weak IT infrastructure, MIS data is collected manually by the relevant

plant staff. There is absence of Local Area Network (LAN) connectivity and

only limited availability of computers. As a result access to internet and email

is also limited. Officials are not habitual to using computers and are dependent

on specialized computer operators even for basic applications.

MIS design and Process Shortcomings Typically MIS formats being used by

generation utilities report on basic operational data (mainly physical

parameters), and are not amenable to detailed analysis of key plant issues on

commercial terms. This is illustrated in the MIS formats collected by the

consultants from one of the power stations (see Annexure-II). Reports

typically do not adequately cover other power plant aspects such as

maintenance activities, stores, commercial performance, environmental

performance and training of personnel etc. Further, it seen that MIS reports

generated by various departments at the plants often contain duplicate data.

5.5.1 Transition Steps for a Strengthening MIS Framework

Integrated MIS policy for the Organization should be formulated for

implementation across the headquarters and the various plants, covering all

aspects of functioning of the plants – viz. operations, maintenance, stores,

purchase, human resource, safety, environment etc.

Appropriate IT Organizational Structure should be developed Separate MIS

and IT cells would be required at each location. MIS Cell should look after

data collection, compilation, and report preparation while the IT cell will be

responsible for taking care of the technology / hardware related issues. There

has to be a single departmental interface for reporting and information


73

archival- MIS department preferably in the Technical Secretariat of the Plant

In-charge.

Plant-wide and Company-wide IT infrastructure development All the

executives at the plant should be provided with IT infrastructure with Local

Area Network (LAN) connectivity in the plant and Wide Area Network

(WAN) connectivity across all plants and headquarters.

Development of IT modules to cater to various functional requirements, such

as Computerized Maintenance Management System (CMMS), Materials and

Stores Management System (MSMS), Operation Plant Performance

Management System (OPPMS), Business Planning Module, Finance and

Accounting (F&A) and Human Resource Development modules etc.

Alternatively, generation companies can install Enterprise Resource Planning

(ERP) packages customized for power plant / generation company

requirements encompassing all the above mentioned modules.

MIS interface with Digital Control System (DCS) of the power plant for

automatic generation of management reports. The DCS captures data in real

time without much human interference directly from the various instruments

installed in the plant. This information can be fed into the ERP / MIS system

directly.

5.6 Purchase & Stores:

Existing practices in Purchase and Stores Management The existing practices in

purchase and stores management differ significantly across different utilities, with some of

the better utilities have adopted some of the industry best practices such as rationalized list of

inventory items, e-procurement, computerized inventory management systems and evolved

vendor management systems.

On the other hand, the relatively lagging utilities have under-evolved practices on

several fronts. Indents for purchase have to be raised manually by the utilizing department

(with no system of automatic flagging of requirement). The delegation of powers is not

adequate considering the current price levels, often implying that all purchases have to be

approved by the corporate authorities which may require considerable time causing delays.

Absence of suitable quality assurance system and vendor performance management system


74

imply that related issues are not identified systematically and remain unaddressed. In most

cases material is inspected only after receipt at the plant.

Plants of some of the lagging utilities have a much higher number of inventory items

than comparable plants of relatively better utilities due to inadequate item codification and

poor inventory management practices. For example, one such lagging plant has about 46,000

inventory items compared with about 3500 items for a similar plant of a better managed

utility. In the absence of suitable and effective categorization of store items (with respect to

cost, criticality, procurement lead time and fast moving/slow moving), it is difficult to

manage stocks availability while strategically keeping the costs low and reducing the

procurement effort. It is often difficult to undertake annual physical verification of stocks of

all the items in the stores, especially where inventory management processes are manual.

Transition Steps for a Strengthening Purchase and Stores

Establish a Quality Assurance (QA) System The better performing generation

utilities typically have a stringent quality assurance system which caters to the

requirements of regular maintenance, annual overhauls, major rehabilitation

works as well as new builds (expansion or green-field projects). Such QA

systems extend to both plant level (Field Quality Assurance Cell) and

corporate level (Corporate Quality Assurance Department). They typically

have Quality Assurance Manuals with detailed process documentation. A

Quality Assurance Plan (QAP) is prepared for all major items detailing out the

Checks/Tests to be carried out, Customer Hold Points (CHP) and Acceptance

Criteria. The QAP also details out the stage, location and agency responsible

for testing.

Establish a Vendor Management System Establishing a strong vendor

management system based on enlistment of vendors after due assessment of

vendor’s manufacturing capabilities (including quality control aspects) and

subsequent monitoring of vendor’s performance through a Vendor

Performance Appraisal System is critical for ensuring smooth availability of

quality components. Further, utilities could also undertake vendor

development activities aimed at developing more vendors and strengthening

manufacturing practices of existing vendors. Strategic interventions like

pooling of spares requirements across the organization to achieve economies


75

of scale as well as to elicit greater interest from larger (and more capable)

vendors could also be undertaken.

Tendering Related Aspects Since delays in procurement can imperil smooth

functioning of the plant and timely completion of overhauls, standardization of

tender procedures should be done along with clearly defined delegation of

powers (DoP), responsibility and timelines. Bid documents should be

strengthened to include appropriate provisions for liquidity damages, price

variations (especially for long lead time items) and Quality Assurance Plans.

Utilities could progressively move towards e-tendering which would allow

faster and more efficient procurement while ensuring adherence to required

procedures. The utility should develop strong procurement skills at both the

plant and corporate levels and should conduct suitable trainings in this

direction. Having a materials management manual which also covers

procurement and stores (inventory management) can be useful.

Proper Identification and Codification of Stores Items to achieve

rationalization of inventory levels by bringing out duplication or redundancy

of items. Also, the stores should generate monthly report of inventory

positions with respect to all materials, and an annual report which should be

linked to the physical verification of assets.

An ABC analysis or a Vital-Essential-Desirable (VED) analysis is carried

out for all stores items. This helps in classification of spares in accordance

with an appropriate inventory management and procurement strategy based on

the criticality, cost and lead time of the items. For example, an Automatic

Procurement Process is devised for all fast moving items and consumables by

fixing minimum and maximum reorder levels which are monitored and

procured by the stores personnel themselves. Similarly, an organization-wide

pooling of common high value spares could be organized and systems devised

to share this information across plants.

A suitable Computerized Inventory Management Package linked to the main

Enterprise Resource Management (ERP) System is implemented to cater to all

requirements of stores management.

Finally, a Materials Preservation Manual should be developed which will act

as a reference for the store employees to ensure proper storage of equipment.


76

5.7 Indicative Action Plan for Strengthening O&M Practices:

The O&M strengthening Plan at the utilities will need to be based on ensuring not

only business process turnaround but also instilling in place an improved organizational

culture and climate. The Strengthening plan aimed at transforming the existing plant practices

and creating an agile generation utility shall need to be overseen and supported by the Utility

Management as a Change management exercise. The improvement activities shall need to be

kick-started with a Performance Improvement Program aimed at disseminating the program

benefits and ensuring readiness within the organization to adapt to the necessary changes that

shall be set out in the individual modules.

A modular approach could be adopted for the entire change management exercise.

Each module shall a number of tasks both technical and management related with a specific

time line as tabulated below:

Module Task

Operation Practices

Enhancement

Redesign of existing O&M Manuals post review of existing

ones along with development of equipment procedures and

conducting training for O&M personnel

Establishing efficiency management as a thrust area through

setting up the Efficiency Monitoring Cell and

institutionalizing procedures for performance testing,

auxiliary energy management, root cause analysis of trips.

The efficiency management is expected to be

complemented by a commercial loss evaluation and

efficiency benchmarking tool which will facilitate analysis

and identification of controllable losses and identify assets

for refurbishment / replacement.

Initiation of Knowledge Management through establishing a


77

Central Technical library at the Plants and subsequently

creating of a web based system for capturing plant

information, best practices, technical, operational details for

dissemination across the entire utility.

Proactive Maintenance Creating an asset database to be populated with failure

history, performance characteristics, design data which shall

enable analysis of failure mode and effects. This will lead to

development of a proactive maintenance plan along with the

condition monitoring schedules and reliability assessment

matrix.

Designing and setting up a Decision support system linking

the costs to reliability along with equipment level operating

limits and checklists which shall enable the utility to pre-

empt failures and also utilize cost / reliability information to

substantiate refurbishment / replacement decisions.

Setting up a Computerized Maintenance Management

System (CMMS) at the Plant.

Cost Information System The costing system shall entail setting up a costing

framework at the plant along with relevant cost codes and

centers. The implementation arrangement shall consist of

creating a cost database, populating it with one time cost

data and conducting training for utility personnel on the

same. Depending upon the current maturity level of the

utility, this can be extended towards designing an Activity

Based Costing system at the Plants.

Generation Planning &

Budgeting

Realignment of existing practices with the future market

scenario.

Establishing a Techno-commercial cell at the plant along

with integration with CMMS based planning.


78

Setting up of procedures for Equivalent Availability Factor,

Year ahead planning integrated with Energy Audit and

Partial Loss analysis

Developing a Budget Manual along with introduction of a

Performance Based Budget System at the utilities.

Management Information

System

The MIS system at the utilities shall require varying levels

of intervention based on the existing systems with the utility

and shall range from improving existing system through

additional functionalities to developing an IT policy,

establishing a full fledged IT and MIS system along with

procuring an MIS system via bid route.

Purchasing & Store Review and Redesign of existing procurement procedures

Institutionalizing Quality Assurance (QA) systems in the

Procurement cycle by setting up QA cell at the Plants,

developing a QAP and setting up checks and controls

within the Procurement Contracts. This will also require

training for Plant Personnel in QA related aspects

Optimization of Inventory levels releasing idle working

capital through review of inventory holding, reorder levels,

creation of a high value spares bank by inventory pooling,

standardization of stores items, automatic procurement

protocols on reorder level basis for fast moving

consumption items.

Organizational Culture &

Climate

Performance Management System by designing the job

description for all positions along with formulating Key

Performance Indicators and Key Result Areas for the

positions. This shall need to be complemented through a

KPI monitoring mechanism through a base line study and


79

establishing targets and review principles. Improving the

existing system of Training & Development through

conducting a Training Needs Analysis exercise ,

formulating the training scope and strategy along with

developing training course materials and conducting

Training for the Plant Personnel.


80

Chapter-6

Conclusion & Recommendation

It’s important to have competition in Indian Power Generation. The private sector will

bring investment and technology with them that will help in bridging the gap of the demand

and the supply at a faster rate they will in the improvement in the performance of the existing

power plants and thus help in the improvement of the asset optimization framework and also

help in sharing the risk of the owners.

We have enough evidence from both public and private sector which indicates

movement in similar direction. Various other sectors in order to improve the performance and

to speed up the growth have moved to similar line. The telecom sector the distribution sector

the software industries are some example.

As in the case of Sterlite Energy Limited it is observed that asset optimization

programme has positive impact on overall operation of the organization with significant

financial benefits as well. It led to increase return from existing facilities.


81

Annexure-I

‘5-S’ Work Place Management

What are 5-S?

Five 'S' is an integrated concept for Work Place management.

1-S: SEIRI:

Organization or re-organization is to sort out unnecessary items in the work

place and apply stratification management to discard them e.g. Things not

belonging to that area to be removed from there. If repairing is required,

separate them and get them repaired. If it has to be discarded, decide first

whether it has some scrap value, then sell them at the right time. If the item is

all right but not useful to you, and you can’t sell them, but can be utilized by

someone else, who needs it send it to them. Items which need to be discarded

must be discarded in such a way that what is discarded will not harm society,

environment and even animals.

2-S: SEITON:

Neatness: Put the things in a proper neat way. Everything should have a

place and everything should be in its place. Decide the place, mark the

place, put label on items. Arrange the items in such a way so that they can be

picked up easily for use. During storage, keep in mind the height, weight, size,

shape, safety etc. of the item. Functional storage of items will help in our day

to-day use and functioning.

3-S: SEISO:

Cleaning: Here cleaning is in the form of cleaning inspection. When we are

doing cleaning, we are also inspecting simultaneously, if something is

unnecessary we are discarding those things under 1S and if during cleaning we

have seen that any item is not kept in its proper place and we put them in its

place, then we are doing under 2S. Hence whenever we are doing ‘3S’, it

means that we are doing ‘1-S’ and ‘2-S’ simultaneously. In addition, we also

check for the health of the machine, the lubrication, electrical connections etc.


82

Clean your work place completely so that there should not be any dust on the

floor, walls, windows, desk, table, machinery etc. Cleaning should be done at

Macro level first and then individual item wise and finally at micro level.

4-S: SEIKETSU:

Standardization: When we are doing 1-S, 2-S and 3-S, we may be facing

number of problems. In ‘1-S’ it is very easy to discard items, but think why

this has become unnecessary, in ‘2-S’ if things are not in proper place we

simply put them back in their proper place. Here, we have to think why this

has happened. In 3-S, area is dirty we clean it. Here, again we have to think as

to why this had become dirty. What is the system of cleaning, can we change

the equipment/way of cleaning, can we arrest the source by which the area has

become dirty. All these thinking will give some solution through Brain

Storming. Try to find out good solutions and standardise them as a part of the

system.

5-S: SHITSUKE:

Discipline: This means whatever system we are having or developed under ‘4-

S’ they have to be followed in such a way that, standard practices become a

part of our lives. This will help to maintain high levels of work place

organization at all the time.


83

Annexure-II

Management Information System


84

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