High Voltage Electrical Power Equipment Assets Condition-based Maintenance in Asset Management
Repair or replace? The stakes are extremely high when utilities pose the question about highly engineered products and expensive machinery that generate, transmit and distribute power to thousands, or even millions of people and businesses. As the industry continues to mature, how each utility approaches the “repair or replace question” is becoming a more crucial business practice specifically because it directly impacts the value of its assets and overall profitability of the utility in the short term – as well as into the future. Fortunately, there are effective business processes and tools to walk utilities through the question and reach that critical answer. This paper explores those business processes and tools along with the numerous factors utilities need to consider when answering the repair or replace question.
An age-old (and young) question
The repair or replace question, and how to best answer it, is coming to the forefront for utilities as their assets and employees age. “In many cases, you’re dealing with aging infrastructure, and you have the tribal knowledge walking out the door as well as new personnel coming in who don’t know the equipment,” said Mark McCloy, Senior Associate at Legacy Power Solutions LLC, Cincinnati, Ohio.
As more utility assets reach the end of their projected lifecycles, utilities will increasingly need to address the repair or replace question. The substantial post-World War II industrial boom meant significant growth in base infrastructure, especially electric utilities. Most of this equipment is now in the aging part of its lifecycle. “The average age of the equipment that utilities have out on the grid is about 40 years old,” said Chris Brown, Group Leader of Substation Asset Management, Transmission Substations for LGE-KU a PPL Company. “A lot of assets out there are 50, 60 years old.”
For example, according to the U.S. Commerce Department, the utility industry reached a peak in new U.S. transformer installations around 1973. At that time, the United States added about 185 GVA of power transformers. Today, that equipment is about 37 years old. With lower capital spending on new or replacement transformers, the average age of the U.S. transformer fleet continues to increase. (As does the load as new is deferred)
So the repair or replace question is coming up more often with aging assets, but answering that question is becoming increasingly complex with an aging workforce and the struggle to attract younger employees to the utility industry. You’ve likely heard it before, but the United States is home to an aging population and the utility industry is no exception. In fact, according to the U.S Bureau of Labor Statistics, the 2009 median age of utility industry employees is 45 years old, or about 7.5 percent higher than the median age for all employed people in the United States. The utility industry is facing the loss of some it’s most experienced and knowledgeable employees.
At the same time, on top of utility struggles to attract younger workers, these younger workers just don’t have the same level of knowledge about utility assets as their more experienced counterparts. “Sometimes they see the risks of exposure to equipment, so they don’t get near it. They may say, ‘I’m not working on that stuff,’” said McCloy. With experienced personnel leaving the industry and fewer young employees coming onboard, utilities must have effective methods in place to address the repair or replace question with a smaller, less experienced workforce.
On top of age issues, other complexities push utilities to look at the repair or replace question more closely. These complexities include:
- Cost of failures: With an increasingly digital and subsequently electricity dependent economy, the economic costs associated with outages are important. For example, Lawrence Berkeley National Laboratory estimates that electric power outages and blackouts cost the United States about $80 billion annually. How much downtime can utilities and the economy afford?
- Ability to build new infrastructure: With the greenhouse gas (GHG) pressures impacting new generation and the increasing difficulty of siting new transmission infrastructure, utilities are facing challenges with building new assets. This means that utilities will have to use existing infrastructure to its fullest.
- Changing customer needs and demands: Despite the current economy, demand for electricity will continue to increase in the coming years. Customer expectations and needs for energy are changing, which could significantly impact today’s infrastructure. For example, what will happen when millions of electric vehicles hit the road? Will today’s infrastructure be able to handle those changes in demand?
Key factors in the repair or replace decision
When faced with these many factors, utilities must develop more sophisticated business processes and tools to better maintain existing assets and prioritize new asset investments. The traditional “rip and replace” approach will no longer work for most assets, whether transformers, medium voltage switchgear, high voltage breakers, or a host of newer technologies coming on line. Before discussing these more sophisticated approaches, it is important to examine some of the factors to consider when answering the repair or replace question.
Risk, reliability and cost
No matter what the asset, its assessment should account for the fundamentals of risk, reliability and cost. The first two factors, risk and reliability, go hand-in-hand according to Brown. “What is the risk if you don’t maintain it properly? You’ll eventually have a failure and you’ll have a problem,” he said. “It could cost much more than a planned replacement, especially if it is a catastrophic failure. It may also mean that customers are going to have an outage,” which ultimately impacts the reliability of a utility’s network. Then there is cost. Key cost considerations, according to Brown, include:
- Deferred maintenance. “Let’s say you’re supposed to do maintenance every five years, but decide to implement a Condition based Maintenance Program,” Brown said. “A company will now apply their Maintenance dollars, and in fact stretch it, by applying intelligent operating and maintenance data and formulating it into Operating and Performance intelligence; minimizing risk and investing into critical equipment application and performance.”
- Capital or operations and maintenance expense. “Typically if utilities get a new piece of equipment they would capitalize it, and then it only ends up costing them a certain percentage of that per year over whatever period of time they capitalize it,” he said. “They would like to capitalize that cost if they can, because it spreads it out over a longer period of time. If it’s expense money, the wiser we invest it, the better. So you spend within budget and enhance the shareholders equity. There are new modern options to live within budget and still maintain a sound system for customers.”
- Replace or maintain. “The other approach from a cost standpoint is to say, ‘this piece of equipment is getting pretty old, do I replace it? Do I continue to maintain it or, could I in fact upgrade it to something that is even better in terms of ratings than what we have?’” said Brown. “A lot of the equipment that might be 20, 30, 40 years old is fundamentally very sound, and it could be rebuilt at a lower cost than replacing it, and essentially have a new life in front of it. So utilities have that option to rebuild breakers or rewind a transformer with new insulation that could last another 30 years or so, just like a new unit should.”
On top of these fundamental factors, there are numerous other factors to consider when looking at whether you should repair or replace an asset. Such factors include:
- What is the criticality of this circuit and associated assets?
- What System Ratings and Performance need to be considered?
- What is the length of time that the asset will be out of service?
- What is the availability of replacement parts?
- What safety issues are involved?
With the length of time out of service, it is important to consider how much time it would take to replace an asset versus upgrading or repairing it. “If you take an asset that is 40 to 50 years old and replace it, how many days can you afford to take it offline?” said McCloy in reference to switchgear. “It could take weeks or even months, which means lost revenue streams. Upgrading an asset could take it down for just hours.” On the transformer side, Kenneth Hill, Senior Engineer, Distribution Substation at KU, a PPL company; pointed out that “with a failure, the lead time can be 15 to 18 months for a new transformer, whereas a remanufacture could run just 12 – 16 weeks.”
At the same time, a repair may be faster than a replacement, but what if the asset is so old that parts are obsolete and that performance has become an issue? “Sometimes the repair of older breakers is not a viable option,” said McCloy. “It’s not so much the parts availability, but the “system” needs and requirements in the form of higher interrupting ratings or faster clearing times; the change-out/replacing of older Oil Circuit Breakers with new SF6 Puffer Breakers are being performed on wholesale levels amongst utilities nationwide at this time.”
On top of reliability and replacement equipment concerns, safety upgrades also need to be considered. “You may not be able to replace switchgear, but you can upgrade the safety of it,” McCloy said. “You can’t completely eliminate safety risks, but you can take action to upgrade the safety of that equipment, such as Arc Resistant designs with Remote Racking operations”.
How do you make these decisions?
So far, we’ve discussed numerous factors to consider with the repair or replace question, but what other factors do you need to consider? In what order should you consider these factors? And which factors should you consider for each type of asset? We’ve discussed the “what” of the repair and replace question, so now let’s look at the “how” of addressing the question and the factors that feed into it. The how requires more sophisticated business processes and tools that utilities can use to help them effectively answer the repair or replace question. These business processes and tools first look broadly at a utility’s asset fleet to prioritize asset investment and maintenance needs, and then focus in on prescriptive approaches for specific assets.
A holistic approach: Fleet assessment
Determining whether to repair or replace an asset starts with looking beyond the individual asset. With only so much funding to go around for maintenance and investment, utilities must first step back to prioritize where funding will provide the most value. For example, according to Brown, if utilities spend the same maintenance dollars for each transformer, “when 90 percent of the transformers are fine, they may be overspending on healthy assets. With the 10 percent that actually have problems, they are neglecting those transformers. Companies should be putting more dollars into that 10 percent and getting a better return; thus the development and implementation of a holistic, Condition/Performance-based maintenance Program versus the old, time-based approach.
Maintaining assets at regular intervals, regardless of their condition has become an unattainable and untenable approach. Traditional time-based maintenance techniques rely on the failure occurring in a statistically predictable fashion, but predicting failure is difficult. A multi-year study of various complex machines completed by the airline industry showed that only 11 percent of failures fell within a definite “wear out” period and 89 percent of failures occurred randomly. Ultimately, since most failures of complex machines occur in a random manner, companies cannot accurately predict them using statistical failure data alone. Therefore, whether in the airline or utility industry, companies must understand the actual condition of each asset; applying, implementing and incorporating significant data into useful operational and performance INFORMATION to guide critical maintenance guidelines, scopes and timeframes PLUS critical Capital Asset replacement and upgrade purchases.
Identical assets can vary health-wise based upon their maintenance, operation and environment. “We manage the life of a transformer dependent on how hard we run them and how well we maintain them,” said Hill at KU. “Think about the analogy of an old lady who just drives her car to church. Her car may be 40 years old, but it looks brand new.” Environment can also play a significant role. Assets facing harsher environments whether more heat, salt or storms, for example typically fare worse than the same asset in a less harsh environment.
On top of asset operation and maintenance, design can impact an asset’s longevity. As Brown noted, “design and age of the design has some influence on how long an asset will last. Like humans with good DNA and bad DNA, you can have really good designs and not so good designs.”
Another factor that can vary between assets is their criticality. For example, in the case of high voltage breakers, McCloy recommends that utilities “look at where their critical points are on the system. In many cases, we’re talking about breakers in key transmission substations that feed critical loads or breakers outside of power plants.”
Given the varying conditions and criticalities of assets, a fleet assessment is a process and tool that can determine the health and longevity of individual assets, and then use that information to prioritize investments across a group of assets. According to Brown, this involves inspecting “all or a percentage of equipment a utility has, if they are concerned that some equipment is at risk. A fleet assessment can determine what needs to be done and how quickly. It helps companies prioritize how to spend money and ensures people focus spending where it needs to be focused.”
Getting specific: Condition-based maintenance
Once utilities undertake a fleet assessment, they can then drill down and focus on individual assets and their needs. Brown likened this approach to a doctor’s assessment and treatment plan. “It is like a company that is concerned about their key management,” he said. “The company may offer annual assessments for these employees, where a doctor does a complete workup, looking at things like blood samples and EKGs. One person may have a heart problem and would be put on a specific prescription or health regimen, but that plan won’t apply to all managers.”
As mentioned earlier, time-based maintenance approach has proven inadequate for determining cost- effective maintenance for individual assets. Monitoring an asset through condition-based maintenance processes will enable companies to assess each asset’s individual health and develop appropriate diagnosis and treatment plans. This approach will also assist utilities with reaching critical maintenance, repair and replace decisions. To better illustrate how the condition-based approach and decision-making process can help companies answer the repair or replace question, the following table points out key considerations for three assets: high voltage breakers, low voltage and medium voltage switchgear, and transformers.
The first two considerations in this table can help utilities understand and state the problem impacting an asset:
- Key data points. Different assets have different health indicators. In the case of transformers it may be oil temperature, but for breakers it may be number of operations and faults. For each data point, there may be multiple values to track. For example, companies should pay attention to both high and low operation numbers with breakers. If a high voltage breaker doesn’t operate that much and sits in a static state, its seals will be exposed to more pressure on one side versus the other, which can lead to uneven wear and potential problems. Bearing lubrication is not dispersed and operating linkages will tend to freeze up causing a slow or inoperable breaker.
- Determine the optimum repair/replace window. This is certainly not an exact science, but it comes back to understanding the key data points and what data values indicate a potential problem. By under- standing these values for each asset, it can help a utility identify which assets are at a greater risk of failure and enable the utility to take action.
Once a problem has been identified, the next considerations help utilities take the proper steps toward finding a solution for the identified problem.
Table: Key considerations for utility assets
Repair vs. replace: As the table demonstrates, the cost and complexity of addressing the repair or replace question depends upon an asset’s size, type, age and application. However, when looking at the repair or replace decision for a variety of assets, Brown, Hill and McCloy agreed that companies should consider today’s advanced, condition-based maintenance practices and programs. An intelligent, pro-active maintenance program can defer the more costly repair or replace question for many years.
Long-term maintenance needs: Whether utilities decide, to maintain, repair or replace, they can expect some variation with ongoing maintenance. A key factor here is design differences between new and old equipment. Newer or upgraded equipment may be designed with fewer moving parts and lower maintenance technologies, so they may not require as much ongoing care as equipment made with older technologies.
- Every company and every asset is different and there are many different factors influencing how best to approach the repair or replace question. As noted, questions could include:
- What “System” design or demand changes have been implemented and what affect has there been on your current Equipment Performance and Ratings requirements?
- Will today’s infrastructure be able to handle projected or anticipated future changes in system demand or performance?
- What is the length of time that the asset will be out of service?
- What safety issues are involved?
- A repair may be faster than a replacement, but what if the asset is so old that parts aren’t readily available?
- Is your Company truly “vested” in an intelligent, condition-based, asset management Program and are the results truly being captured and acted upon?
- Capital versus Operations & Maintenance budget considerations?
When facing such questions, utilities should seek out tools and business processes that first look broadly at a utility’s asset fleet to prioritize asset investment and maintenance needs, and then focus in on prescriptive approaches for specific assets. These tools and business processes will ultimately enable utilities to prioritize asset maintenance and investment needs, identify asset problems, determine the appropriate action to address those problems, and successfully address the repair or replace question.
Mark S. McCloy
Legacy Power Solutions 2017
LGE-KU, a PPL Company