Square Ageing Effects and

Equipment Fleet
Requirements
Wiedmann ACTI Inc., 2nd Annual Conference,
November 10, 2003 - Miami Beach, FL

Darije C. Nikolic, EPRIsolutions; dnikolic@EPRIsolutions.com

Michael A. Lebow, Consultant; mike@mikelebow.com

Traditional Way

Dealing with the uncertainty passively

Saving time on analysis and planning
Assuming to get away without understanding
Prolonging status quo for as long as possible

Changing Power Delivery

P=R-C R=C+P

RTO
PX

Retail Co
Commercial

ITC
ISO

Wire Co

Energy
Service Co

Industrial

Traditionally Integrated Utility

Transmission
Retailing
Distribution
Consumption
Trading

Business Environment Dynamics

Merciless change of business environment
Wall street metrics
Common unpreparedness

And Response
Scanning the road ahead
Or keeping the eyes on the hood

No-way I've got mine on the trunk lid baby!

What do we mean by that?

Heard of using past years budgets
as a basis for the future needs?
Heard of cost cutting initiatives
that reduce those yesteryear budgets?
Heard of being 60% over the annual budget
in less than first 6 months?
Heard of the older transformers being up-rated
try repeating all after 2 year old and see for how long youll go!

Consequently
Heard of not having resources to analyze
not even to replace transformers that fail!

Meeting Requirements and Achieving

Operational Excellence Goals
Driving at 20 m/hr in a prairie, no
one needed dashboard
instruments and scanning the
road occasionally, was optional
Speeding at reduced margin in the
interdependencies rich
environment requires plan,
signals, and quantified data for
informed decisions
Era of Informed Business Decisions proactively driving
Operations is now!

Fork in The Road

Paralyzed by fear and lifes capriciousness?

but, Id rather know!

Making a Step Ahead

Good Old is not coming back do
we have a choice? Yes, its ahead!

Reason to shed the shades and look

ahead
Accessorize for fleet observability
Effect seeing things the way they are
not the way we are

Troubling News
North American Transformer Fleet - Average Age Gain:
0.5 - 0.7 years per calendar year
It was in its teens in 1970s
It is in its mid 30s in 2003

Age and Ageing

Life Limiting Factors
Component
Coating
Procelain flanges
Contacts
Large seals and flanges
Small seals and flanges
Contact
Moving Assemblies
Metal housing
0

10

20

30

40

50

Expected Life

60

70

Age and Ageing

End of Life and is it defined?

We mean BUSINESS thus

the End-of-Economic Life

Life Extension Guidelines Course Equipment Level Reference

IR Image - Overheating

Resistor Contacts from 550kV air-blast

Failure After Maintenance

Broken Linkage 220kV SF6 2-pres

November 18-20th, 2003 - Long Island, NY

Equipment Unit - Fleet Level

Equipment Unit Focused

Maintain / Repair / Replace

Fleet Focused Management

Strategy

Age, cumulative operating stress

Operability
Maintainability
Spare parts availability
Forward looking Risk and Economics
Repair / replacement needs
Technology obsolescence
Support for end-of-life framework
and project optimization

balance of replacement, life

extension, relocation,
diagnostics, monitoring and
maintenance alteration
Understanding population of the
replacement candidates
Simple replacement is not an
affordable option
Less of an option is accepting the cost
of failure consequences

Now More Important than Ever

100
80
60

40
20

2005

C-Util.
2000

1995

1990

1985

Yr.
1980

1960
1965
1970
1975

Av. Age

Average Stress

High

Square Ageing Effect

Low

Average Age

High

Contributing Factors
Reductions in system expansion raising the fleet average age
Added operating stresses from increased load and bulk power transactions
Budget cuts and cost control increased competition for available funds
Big ticket items with a long lead time

Budgeting decisions enabled on quantifiable and

defendable basis are a must for sustainability of
ageing transformers fleet subdued to modern
operating conditions

Proactive Fleet Management

Reactive fire fighting mode
Expensive and ineffective (overtime & band-aids / time-bombs in the
system)

Proactive equipment replacement

Timely just before it failed replacements
Like-for-a-like replacements

Proactive EOL and Fleet Management Strategy

Respective to modern performance requirements
Adjusting the node capacity concurrently
Considering all alternatives brought by technology and system
development

Proactive is Beneficial
But it Does Represent a New Culture
It takes resources to analyze
predict
justify
persuade
Requires commonly disparate capabilities
solid technical knowledge
subtle communication skills
operational excellence
and most overlooked discipline of

industrial engineering

Why New Culture

It requires hard work on a daily basis
Superb cross-functional relationships
and 3R to keep them
Affords others the time to question
and improve decision

It prevents wars and does not make any heroes

Obviously it is to be avoided at all costs
wherever possible

Lead Time vs. Horizon EOL Battle

Economic End of Life

Implement Recovery Plan

Risk of Failure

Recovery Plan - Choose and Fund

Develop Alternatives
Remaining Life Assessment
MM Prioritization
Add to Life Assessment Prog.
Altered Maintenance

Effective Age

What will you do with the time and

resources you save
Time & Money dimension
Early savings add opportunities
Funding business
integration and dynamic
optimization
Enabling high return
investments in fleet
observability
But, only timely savings will do.
Cost reduction ahead of
revenue pushdown = flexibility

The Taste of It
300MVA Transformer Failure
Transformer = $3M + 18months
Collateral damage = $2M
$ Bill in Assets Exposed to Fault Duty Stress
Alternative ?
How much monitoring does $5M buy

Analyze, Quantify and Project

For Improved Winning Chance
Challenge is to:
Understand your fleet
Its operating conditions
Its ageing pattern and effects
And to predict its requirements
Question:
How accurate are retirements prediction models

Big Picture
Asset Management Model

Processes That supports the Model

Tactical Tools for Process Enabling and Automation

Example-Transformer Fleet
Management

Problem

Manage an aging population of transformers while maintaining

reliability and minimizing costs
Predict Capital and O&M needs for the next 5-10 years

Growth

Replacement

Tradeoff between maintenance and capital

Identify and/or develop the necessary data collection, analysis and
decision support systems
Develop effective risk-based asset management strategy that will
meet corporate financial needs and regulatory review

Develop a High-level Transformer Fleet

Management Model
Pilot study of utility needs, data availability and quality
Demographics, long and short term ratings of equipment, loading, failure
data and worst case operational stresses
Statistical analysis and development of demographic and failure/end-of-life
projections for the pilot utilities fleet of transformers
Develop a more advanced version of the Maintain / Repair / Replace
model for individual units or groups of similar units
Data readily available in utilities
Life-cycle cost analysis
Forecasts for spare transformers and transformer replacement
Validate the tool on data from a number of project participating utilities with
a variety of requirements and available data

To Conclude

=DxVxE