ECRA Workshop: Development of KPIs for the Electricity Generation, Transmission & Distribution Activities of the Kingdom of Saudi

Arabia
Riyadh, 9-12 November 2008
Dr. Viren Ajodhia Mr. Daniel dHoop

Dr. Jan Lefers

Experience you can trust.

Confidential

FOR MORE INFORMATION PLEASE CONTACT: VIREN.AJODHIA@KEMA.COM

2. GENERATION
Data Information Decision

Generation Transmission

Price Controls

KPI System

Regulatory Process
Quality Controls

Distribution Supply

Regulation

2. Generation
2.1 Indicators and Definitions 2.2 Data and Measurements 2.3 Regulatory Standards & Experiences

Overview
Overview power generation in Kingdom of Saudi Arabia Overview of generation technologies and developments Security of supply Generation adequacy Reserve capacity

Capacicity KSA (37154 MW in 2007)

Producing entity No. of plants Capacity (MW)

SEC SWCC Saudi Aramco Tihamah Power Generation Co Marafiq (Yanbu) Jubail Power Co

49 12 5 4

30670 3426 834 1074

1 1

900 250

Technologies
Combined Cycle Gas Turbine (CCGT). This is the dominant technology
employed in the power production sector in Middle East. The exhaust gases

from the gas turbine are delivered to a heat recovery steam generator
(HRSG). The high pressure and high temperature steam generated in the in the HRSG is then delivered to steam turbine to generate more power. The

plant can be normally coupled to a thermal desalination plant such as multi

stage flash (MSF) device to produce water or can be used as cogeneration unit for steam supply to industries.

Simple cycle gas turbine or open cycle gas turbine (OCGT) is another type
adopted by the sector. The exhaust heat is not recovered and no desalination unit is coupled to the plant. The OCGT is acting as peak load units

Technologies
Thermal Plant. This relies on conventional boiler and steam turbine
technology. Steam can also extracted to be utilized in industries or in multi stage flash device to produce water.

Diesel Generators. This is a combination of diesel engine with an electric

generator to generate electricity. Diesel generators are used iin places without connection to the power grid (e.g. small coastal islands) or as emergency power-supply if the grid fails (hospitals, government buildings, palaces, etc.)

Desalination-Technologies
Multi Stage Flash (MSF) desalination. Flashing a portion of the sea water into
steam in multiple stages. Basically sea water is heated before it gets admitted
into a chamber or stage with pressure less than the heated sea water. The sudden introduction of this water into a lower pressure "stage" causes it to boil

so rapidly as to flash into steam. The remaining water will be sent through a
series of additional stages, each possessing a lower ambient pressure than the previous "stage". The steam is condensed into pure water.

Multi Effect Desalination (MED). Vapors from the first evaporator condense in
the second and their heat of condensation serve to boil the sea water in the second evaporator. In plainer terms, the second condenser acts as a condenser for the vapors of the first which in turn acts as a heater for the water in that evaporator.

Desalination-Technologies
Reverse Osmosis (RO) is a separation process that uses
pressure to force water (sea water) through a membrane that retains the sea salt on one side and allows the pure water to pass to the other side. This is interesting in to operate power plants separately from desalination units

Combined cycle
Flue gas NG HRSG

ST

Air

Condenser

Combined Cycle

Oil fired power plant with FGD

Convential power plant with sea water scrubbing (Alstom)

Typical triple pressure HRSG with reheat steam cycle

Typical triple pressure HRSG with reheat steam cycle

GE 9H Water-steam scheme

Efficiency of Combined Cycle

Process Net Efficiency (LHV) % Single pressure Dual pressure Triple pressure Triple pressure with reheat 50.5 52.5 54.3 54.7 Improvement of efficiency %-point 0.0 2.0 1.8 0.4

CCGT Developments
Main developments in gas turbine Higher turbine inlet temperatures (TIT) ( advanced
coatings and cooling of hot gas paths) will increase efficiency

Reduction of NOx emissions (dry low NOx emission

combustors)

Increase of maintenance intervals will reduce

maintenance costs (by approximately 20% over next 25
years) (EIA, 2007)

CCGT Developments

Source:Mitsubishi Heavy Industries, Ltd. Technical Review Vol. 45 No. 1 (March. 2008)

CCGT Developments
Operational flexibility and turn-down ratio of CCGT will not be
influenced much by the developments in higher turbine inlet temperature

Increased steam pressure and temperature in steam cycle will

increase efficiency (Higher TIT)
Sources: GE, Siemens, MHI, Alstom
Prof. Bohn, Aachen, M. Susta, Switzerland KEMA Gas turbine course

Source: Mr.Susta IMTE AG

Typical unit size of combined cycle

600 500

Typical unit size (MW)

400 300 200 100 0 1990 2003 2004 2010 2015 2020 2025 2030

Sources: GE,Siemens, MHI,Alstom Prof. Bohn, Aachen, M. Susta, Switzerland KEMA Gas turbine course

Efficiency (LHV) of power plant

80%

Efficiency (%)

70% 60% 50% 40% 30% 1990 1995 2000 2005 2010 2015 2020 2025 2030 Year CCGT Coal fired

Sources: GE, Siemens, MHI, Alstom Prof. Bohn, Aachen, M. Susta, Switzerland KEMA Gas turbine course

Relative importance of characteristics by application

Gas Turbine Characteristic Start-up Reliability Running Reliability Efficiency O&M Cost Peaking High Low Low High Gas Turbine Plant Application Cycling High Medium Medium Medium Base load Low Very High Very High Low

Rousch Pakistan-RFO

Rousch Pakistan
Heavy fuel oil used to be processed in the treatment plant and pre-heated to approximately 110C before it get burned in the gas turbines. Also an oil-soluble magnesium-base vanadium inhibitor used to be injected to prevent high temperature corrosion of the turbine blades. Reliability will be less than a natural gas fired system. O&M costs will be higher

Oil fired (convential)

Increase of steam temperatures and pressure Low NOx burners and SCR SO2 removal (lime(stone)-gypsum, sea water
scrubbers)

Low NOx burners

Alstom premix EV-burner

Selective Catalytic Reduction (SCR)

SCR Process

SCR -Catalyst

Coal fired unit (700C and 350 Bar)

Single buyer model

35

Single buyer- Model

PPA with the single buyer Regulation is needed on the entire chain of supply
(generation, bulk supply, and retail supply) (monopoly/monopoly

36

Responsibilties of Regulators
Technical codes electricity: network code, system code,
metering code

Consultations, changes, legal procedures

Market design electricity markets through technical codes Balancing market Transparency Quality and security of supply Capacity plans network companies electricity and water service quality, voltage quality, minimum standards for
interruptions (electricity only)

Responsibilties of Regulators
Regulate all network access conditions Financial conditions: transport-, system- and connection tariffs Set captive supply tariffs; monitor household prices

Generation companies Competitive framework

Network companies Transmission and distribution have

monopoly
Market prices All decisions (long and short term) are Regulated prices Actions according to EU and local

made according to business

considerations Regulator have small influence on

regulations. Some are driven by real

business ( tariff approval) High influence of regulator on future

future developments Low level of cooperation between

companies High economic risk

developments Traditional local and regional

cooperation Low economic risk

EURELECTRIC-Security of supply
Security of supply is the ability of the electrical power system
to provide electricity to end-users with a specified level of continuity and quality in a sustainable manner relating to existing standards and contractual agreements at the points of delivery

Comments on security of supply

Continous provision of electricity and 100 % reliability are
economically unfeasible Contracts between customer and supplier may specify either a reliability level or f.i. the maximum duration of an interruption Power quality is dealt in certain standards (EN 50160 etc.)

Security of electricity supply

Long term

Short term

Access to primary fuels

System adequacy

Market adequacy

Operational security

Generation

Network

Long-term security of supply

Long term security of electricity supply is the simultaneous
adequacy of access to primary fuels, generation, networks and market Long term security of supply consists of the following: - Access to primary fuels - Generation adequacy - Network adequacy - Market adequacy

Long term

(1/2)

Access to primary fuels (fuel diversity to minimise risks) System adequacy is the ability of the system to convert fuels
ito electricity and supply it to the end-users in a sustainable manner. Short term adequacy is secured by for instance dayahead schedules. Long term adequacy is more difficult to predict Generation adequacy is the availability of enough generating capcity to meet demand (means availability of both base-load and peak load) Peak load units provide the finetuning of supply security and may require specific monitoring to ensure sufficient capacity margins

Long term

(2/2)

Network adequacy ( transmission, distribution and

interconnection) is the availability of sufficient network to meet demand. Market adequacy means the ability of the market to establish and maintain an efficient link between producers and consumers. Electricity can not be stored. Electricity demand and supply must be balanced

Short term
Short term security of supply is
the operational reliability of the system as a whole and its assets including the ability to overcome short term failures Operational security Technical reserve capacity Balancing

Energy Balance
Load Losses
Power generated

Interchange

Hertz 50

Demand

49

51

Generation

Scheduling-Forecasting, Analyse, Advise

2. Generation
2.1 Indicators and Definitions 2.2 Data and Measurements 2.3 Regulatory Standards & Experiences

Overview of indicators
Performance Indicators Technical Indicators Cost indicators Risks (Health, Safety, Environment)

50

Key Performance Indicators

Maximum Optimum

PERFORM.

Availability Efficiency Reliability

Safety Health Environment Avoid Controlled

KS IS R

CO

ST S

Intuitive Substantiated

Maintenance Repairs Replacement Inspections

51

52

Factors that are influencing the cost of electricity (CoE)

Fuel costs Operation and maintenance Availability Depreciation Interest

53

Factors that are influencing CoE Fuel costs

Fuel costs Fuel type and price Fuel consumption Heat rate Amount of electricity produced

54

Heat rate
Age of unit (older plants have higher heat rates) Type of plant (oil/coal fired steam cycle, gas fired combined
cycle, single cycle, diesel plant) CCGT have lower heat rates than single cycle Climate Dispatch ( plants making a lot of start stops and operating in a load following mode will have a lower yearly average heat rate than plants operating in base load

55

Heat rate (Effect of ambient conditions)

Steam cycle 10 K increase in cooling +2% water temperature 10 K increase in ambient no impact temperature Gas turbine no impact +1.5 to +2% Combined Cycle +0.5% to +1% no impact

Heat rate is important for plant managers and less for regulators

56

Factors that are influencing CoE Depreciation and Cost of Capital

Depreciation is consumption of lifetime of plant Plant lifetime is 25 years and capital cost are 500 MUSD.
Yearly depreciation is 500/25=20 MUSD Cost of Capital Power plant projects need capital. Banks demand interest and investors demand a return on investments. Assume an interest rate of about 7.5%. Yearly payments are 7.5%/100 *500=37.5 MUSD Cost of capital is the result of decisions in the past and can not influenced anymore

 Operational costs Fuel costs Operating personnel Consumables (chemicals, catalyst) Waste handling Local taxes, insurance, plant management, cost control,
process support, IT, security

Factors that are influencing CoE Operation and Maintenance costs

Maintenance costs Maintenance personnel Materials Maintenance contracts

58

Additional indicators Emissions

Emissions (mg/MWh) NOx SO2 Particulates CO2 Waste water Rest products (ashes, flue gas desulfurization byproducts)
Plants must fulfil requirements regarding emissions (permits). Incidents must reported

Indicative list for physical data for generation

Year of Commissioning Technology (CCGT, steam cycle, single cycle) Type of unit (base load, peak load) Fuel Base Heat rate Installed Capacity Actual Capacity Capacity factor (= Yearly produced electricity (MWh)/ (installed capacity (MW)*8760)

Indicative list for physical data for generation

Forced Outage Scheduled Outage Availability

Indicative list of cost data for generation

OPEX (excluding depreciation) fuel cost and cost of consumables share of labour cost share of other OPEX (local taxes, insurance etc.) CAPEX depreciation return on equity return on debt regulatory return on assets (WACC times asset base)
Data will be difficult to collect

Additional performance indicators Health, Safety and Environment

Number of accidents per year per FTE Number of days absence because of illness per year per FTE Incident reporting

Labour productivity
FTE/MW FTE/MWh FTE/unit
or

Working hours/ MW Working hours/MWh Working hours/unit

What about overhead costs? What about FTEs for desalination? What about LTSA agreements and maintenance contractors? Labour productivity is difficult to compare and not a good indicator

Starting reliability-Start-up failure

Interesting for peak load and less for base load SR=(number of actual starts/ number of attempted
starts)/100

Key Performance Indicators

Ensure a high reliability and availability of power generators Power plants must operate in a safe and reliable way

Definitions of indicators must be uniform and clear

IEEE- 762
Standard definitions for use in reporting electric generating unit reliability, availability and productivity NERC- North American Electric Reliability Council Eurelectric-TherPerf data base: Evaluation of performance indicators 1990-2004 Differs from IEEE and NERC

NERC

68

Indicators needed on different level

Unit level Plant level Region Level Country level

Indicators for single and groups of units

Single generation units No difference between weighted and unweighted statistics Grouping a set of units of similar size No big differences Grouping units of different size (50 MW) statistics will be
different

Unit and Group of units-Example

Unit and Group of units-Example

Egypt Egypt Electric Utility and Consumer Protection Regulatory Agency

http://www.egyptera.com/en/Studies.htm Using the Performance Indicators for Electricity Generation
companies (NERC)

Jordan ( Regulator NERC definitions)

Availability (AVAIL)

Equivalent Availability Indicator (E_AVAIL)

Indicators (Jordan)
Unplanned Unavailability (U_UNAVAIL)

Forced Outage Factor (FOF)

Indicators (Jordan)
Equivalent Forced Outage Factor ( E_FOF)

Fail Start Up Performance Indicator (FAILST)

Fail Start Up Performance Indicator is the number of failed starts
divided by attempts to start

Data
Physical data of units Many data in PI system Process data and process conditions are available Outages and availabities have to be reported to the System Operator and are available Data on costs (O&M costs) are difficult to collect Auditing and monitoring is important Comparison with similar units (catogorizing of units Recommendations for improvements Reliable data are important for a good regulation. Benefit for all parties

Starting point-Existing data and indicators

Reviewing of existing data and existing key performance
indicators in Kingdom of Saudi Arabia

Possible use of historical figures Trend analysis For instance outages correlation between outages frequencies with similar type
of generators ( CCGT, steam cycles,diesels)

Practices undertaken by generators to improve reliability and security

Condition monitoring Regular site inspection/asset and system audits Scheduled maintenance Benchmarking to achieve world best class HAZOP- a process to identify operational hazards associated with generation plant e.g. rotating equipment, live parts, moving parts, high temperatures, explosive atmospheres

- Risk analysis - Training

79

Practices undertaken by generators to improve reliability and security

An OEM (Original Equipment Manufacturer) can provide long term service agreement for critical equipment such as gas turbine to maintain the availability on a acceptable level and to optimize the outages by: insurance coverage and supplier warranties parts and outage planning and preventive maintenance programs technology infusion

80

2. Generation
2.1 Indicators and Definitions 2.2 Data and Measurements 2.3 Regulatory Standards & Experiences

Overview- International Practices

Key performance indicators The Netherlands Malaysia Australia USA California Texas PJM ( Pennsylvania, New Jersey, Maryland)

82

Conclusions of of Key Indicators in The Netherlands

Heat rates is the lowest at CCGT and increases with
decreasing size and age Old CCGT have to highest outages Best practice values are 5% forced outage 5% scheduled outage O&M costs are the highest for smaller and older CCGT are the highest Best practice values will be 3-5 EUR/MWh

83

Energy Commission of Malaysia Suruhanjaya Tenaga-Single Buyer Model

Average thermal efficiency Thermal combustion/technology Operating conditions and site conditions Type of fuel and quality of fuel Degradation (condition, age)

84

Energy Commission of Malaysia

Suruhanjaya Tenaga-Single Buyer Model-Average Thermal efficiency

85

Energy Commission of Malaysia

Suruhanjaya Tenaga-Single Buyer Model-Equivalent unplanned outage factor

86

Energy Commission of Malaysia

Suruhanjaya Tenaga-Single Buyer Model-Equivalent availability factor

87

Energy Commission of Malaysia

Suruhanjaya Tenaga-Unplanned outage rate

88

Australia

89

Indicators (Australia)
Planned outages- generally involve overhaul work (unit or
components planned well in advance usually by more than one year Maintenance outages- require the removal of a unit or component from service which can be deferred beyond the next weekend but must be carried out before the next planned outage Forced outage removal of a unit or component from service for work that can not be deferred beyond the next weekend. Starting reliability-Starting reliability is the percentage of time the plant actually starts when called up. Only for power plants classed as peaking units
90

Indicators (Australia-Tasmanian Energy Suppy

Industry Performance Report 2003-2004)
Planned outage factor= MWh out of service due to planned outage x 100% Installed plant capacity (MW)x 8760 Hours Maintenace outage factor= MWh out of service due to maintenance outage x 100% Installed plant capacity (MW)x 8760 Hours Equivalent forced outage factor= MWh out of service due to forced outage x 100% Installed plant capacity (MW)x 8760 Hours

Indicators (Australia-Tasmanian Energy Suppy

Industry Performance Report 2003-2004)
Equivalent Availability factor =
Installed plant capacity (MW) x 8760- MWh losses due to outages x 100% Installed plant capacity (MW)x 8760 Hours

Indicators (Australia-Tasmanian Energy Suppy

Industry Performance Report 2003-2004)

System Adequacy
System load factor= System energy (MWh) Historical Peak Load (MW)X 8760 (hrs) Capacity factor= Total annual generation (MWh) Installed capacit X 8760 (hrs)

Availability factor (Australia-Tasmanian Energy

Suppy Industry Performance Report 2003-2004)

Planned outage (Australia-Tasmanian Energy Suppy Industry Performance Report 2003-2004)

Forced outage (Australia-Tasmanian Energy

Suppy Industry Performance Report 2003-2004

System Load Factor(Australia-Tasmanian

Energy Suppy Industry Performance Report 20032004)

Capacity factor (Australia-Tasmanian Energy

Suppy Industry Performance Report 2003-2004

HSE-Indicators (Australia)
Lost time injuries-number of injuries resulting in more than one working days Medical treatment injuries-number of injuries requiring medical treatment

Indicators (Australia)
- Annual reporting - Quaterly report (outages and reliability)

USA
California Texas Pennsylvania, New Jersey,
Maryland

101

Indicators in USA (California-CAISO-www.ferc.gov)

Monthly average planned and forced outage (2004-2007)

102

Indicators USA (California-CAISO-www.ferc.gov)

Annual forced outage rates

103

Indicators-Penalties (California-CAISOwww.ferc.gov)

104

Indicators (California effect of penalties to be paid to CAISO)

Non compliance with 30-minute outage reporting (California-CAISO-www.ferc.gov)

105

Indicators (California effect of penalties to be paid to CAISO)

Non compliance with two day outage explanation requirement

(California-CAISO-www.ferc.gov)

106

Indicators (TEXAS-ERCOT-www.ferc.gov)
Short and long term deratings of installed capacity (2006)

107

Indicators (ERCOT-NERC definitions)

Long term outages and deratings Short term planned outages Short term forced outages Other short term deratings Available and in service capacity

108

Indicators (Texas-ERCOT-www.ferc.gov)
Equivalent availability factor (EAF)= Proportion of
hours in a year that a unit is available to generate full capacity

Equivalent forced outage rate (EFORd)=Proportion of

hours that a unit is not available because of forced outage AND the unit would have operated had it been available

Equivalent forced outage factor(EFOF)=Proportion of

hours in a year that a unit is unavailable because of forced outage
109

Indicators (Texas-ERCOT)
Equivalent maintenance outage factor(EMOF)=
Proportion of hours in a year that an unit is unavailable because of maintenance outage

Equivalent planned outage= Proportion of hours in a

year that an unit is unavailable because of planned outage

110

Indicators (Texas-ERCOT-www.ferc.gov)
Short term outages and deratings

111

Indicators (PJM) equivalent outage and availability factors-www.ferc.gov)

112

Indicators (PJM-www.ferc.gov)
Trends in the demand forced outage -EFORd

113

Indicators (PJM-www.ferc.gov)
Contribution to EFORd for specific units (percentage point)

114

Power Purchase Agreements

Long term contracts > 15 years Energy base x/kWh Energy and capacity base y/kWh+z/kW Performance standards for generators Availability criteria Deficit capacity=dependable capacity- contract capacity Penalties/rewards Long term service agreements to ensure high availability

Power Purchase Agreement-Example

The Penalty Factors for de-rating: Penalty if Dependable capacity/Contractual Capacity < 98% Penalties are depending on the season: Summer Period-high Shoulder Period- medium Winter period-low

Power Purchase Agreement-Example

Penalty for forced outage for availability 3.2% forced outage accepted at start of a new
unit 4.0% forced outage at the end of its life time

Overview-KPI General
Key Performance Indicators Outage forced planned maintenance Availability Capacity factor Heat rate Reliability start HSE X X X X X X X X X X X X X X X X X X X X X X X X X X X Malaysia California Texas PJM Australia Jordan

Summary-Proposal to Generation Key Performance Indicators for RegulatorsAnnual figures last three years
Availability Heat rate Outages Forced outage Scheduled outage Start failures or start reliability HSE Number of incidents/accidents

Summary-Proposal to Generation Key Performance Indicators for Regulators

Plant data Year of commissioning Technology (CCGT, steam cycle, peak unit, cogeneration) Fuel base (gas, oil, coal) Installed capacity Actual capacity Electricity generation (gross) Total auxiliary consumption