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Follow on Google News | GenerationHub’s Wayne Barber Interviews ScottMadden on Middle-Age Myths for Gas PlantsAge is not destiny – a well-planned and executed maintenance strategy is key
By: ScottMadden, Inc. The following transcript has been edited for length. To access the full article, please visit here (http://generationhub.com/ “Combined- “As these assets begin to show their age and become more critical to fleet operations, we encourage generators to scrutinize their performance carefully, just as they have with coal-fired units for more than half a century,” said Mr. Williams in an April 2 statement. The firm examined a trio of issues concerning combined-cycle gas plants: · Do higher capacity factors really result in lower non-fuel costs? · Do older units that start more often have higher non-fuel costs? · Do merchant operators do a better job of cost containment compared to rate base operators? The answers were sometimes surprising. ScottMadden looked at non-fuel operation and maintenance costs for all gas-fired 2X1 combined-cycle plants commissioned between 2000 and 2007. “We divided the plants into two vintages, corresponding roughly to the initial and later build out cycles,” according to the report. “We expected the analysis to show older plants had higher costs. What we found was that older plants had a greater range of costs—higher and lower than new plants.” “The bottom line is that higher capacity factors are strongly correlated with lower costs,” ScottMadden said in the report. More high-side variability in costs appeared to occur when capacity factors dropped below 40% for both newer and older vintages. The number of starts per year is frequently cited as a root driver of higher costs, due to factors such as thermal cycling stress, and accelerated long-term service agreement (LTSA) costs. “The data, however, show otherwise,” ScottMadden said. “There does not appear to be a meaningful relationship between starts and costs. In fact, there is a surprising degree of variability in costs along all levels of starts,” the firm said. “Merchant plants show lower median costs than same vintage rate base plants, but merchants also show a greater range in costs compared to rate base plants,” ScottMadden said. “Age is not destiny. A well-planned and executed maintenance strategy likely sets the foundation for long-term low-cost operations,” In addition to Williams, other ScottMadden officials contributing to the report included Steve Sanders, director, and Quentin Watkins, energy benchmarking manager. About the Author Wayne Barber, Chief Analyst, Power Generation, has been covering energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career he has visited nuclear reactors and coal mines as well as coal and natural gas power plants. About ScottMadden, Inc. ScottMadden is a management consulting firm delivering customized, practical solutions for clients in energy, clean tech & sustainability, and corporate & shared services. Our collaborative, small-team approach, coupled with deep content knowledge, experience, and insight, delivers an exceptional consulting experience and superior results. To learn more, visit www.scottmadden.com | Twitter (https://twitter.com/#!/ Media contact: Mary Tew marytew@scottmadden.com 919-714-7628 End
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