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Medium-Sized Combined-Cycle Power Plant Achieves >15M USD in Sustainable Annual Cost Reductions
Solomon employs its CPA methodology to optimize performance improvement across the plant.
A power producer in a competitive electric wholesale market wanted to be more competitive and improve profitability.
The utility participated in Solomon’s Power Study and relied on our proprietary analytical tools to identify areas in which its plant could improve performance.
The company achieved >15M USD in reduced annual fuel and maintenance expenses.
IDENTIFYING PERFORMANCE GOALS
A medium-sized power generation company was faced with operating in an increasingly competitive wholesale electricity-generating market. To boost its place in that market, the company decided to transform its 2nd-/3rd-quartile (Q2/Q3) performance (Figure 1 and Figure 2) to 1st-quartile (Q1) performance, producing power reliably and safely at the lowest possible cost.
Figure 1. Total Cash Less Fuel and Emissions
Figure 2. Combined Cycle - Electric Only Peers
UNDERSTANDING COST AND RISK
The utility engaged Solomon to utilize its Power Study to identify performance improvement goals that would take the company to the next level among its peers. Solomon’s patented Equivalent Generation Complexity (EGC®), along with its Maintenance Index (Figure 3) and Maintenance Risk (Figure 4) performance measures, resulted in specific insights that enabled the company to optimize performance by deploying the right resources to the right process areas.
Figure 3. Maintenance Index Performance Measure
Figure 4. Maintenance Risk Performance Trend
BUILDING A SUSTAINABLE PROCESS
With an understanding of the need to achieve reliability first, the utility prioritized achieving a repeatable operating performance that could then be optimized. In the area of overall plant efficiency, the company achieved reductions in fuel cost through improved plant operations. Following these reliability and efficiency improvements, the company also achieved reductions in maintenance costs.
Solomon’s patented “Total Cash less Fuel and Emissions per kEGC™” curve (see Figure 5) was used to set the utility’s spending targets, reducing costs in some areas without negatively affecting performance. Solomon knows from extensive study that if too much planned maintenance work is deferred or eliminated, plant reliability suffers and costs eventually skyrocket.
Using Solomon’s tools and analysis, the company achieved 15M USD in sustainable cost reductions while maintaining reliability.
Figure 5. EGC Curve
Contributing to this success was the client’s renegotiation, based on Solomon data, of its original equipment manufacturer long-term service agreement (OEM LTSA) as well as its awareness of its position on the risk curve. By optimizing spending and operating processes, the plant has seen substantial cost savings and is poised for continued excellent performance.
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