No.18 March 1999 Tailor-Made off the Shelf Reducing the Cost and Construction Time of Thermal Power Plants Ingo Paul, Robert Taud, and Donal O'Leary Over the last ten years, the average cost and con- struction time of "greenfield" fossil fuel-fired power Figure 1. Driving Forces in Power Plant Construction plants has been reduced by approximately 50%, even as their performance has improved. This is the result 100% Total Construction of technological changes and increased competitive Time 30% pressures arising from the deregulation of power mar- Contract kets. This paper provides an overview of steps that Value have been taken by the power industry to respond to imeT 20% this challenge by designing and building standardized 50% power plants based on sound technical solutions and Construction optimized economics, with short preparation and and 10% construction times and a high degree of operational Guarantee* reliability. The paper deals with the key factors which alueV Supplier Guarantee have contributed to these changes: standardization of * Technical warranties, delivery Contract Supplier power plant designs; modularization; automation of 0% 0% power plant design; technological improvements; and 1991-92 1995-96 2000-01 the impact of these changes on design and manufac- turing of power plants in developing countries. The paper discusses the advantages of the approach for are experienced by both the customer and supplier. In the client and supplier. the case of the power industry, "tailor" is the engi- neering designer and supplier of fossil-fired power Modularization Significantly Reduces the Costs of Thermal Power Plants. Compared with the customized plants. For many years, the market was one in which approach for project design and construction, modu- practically every power plant was designed and cus- larization can significantly reduce project-financing tomized for the clients' special requirements. Market costs (by up to 10%) in three categories: detailed engi- price levels and project time schedules permitted this neering and supervision, price contingencies and "tailor-made" concept. interest during construction. Since the late eighties the market for power plants has Striving for "Tailor-Made off the Shelf" changed dramatically. Market growth in plant addi- The analogy of choosing between a tailor-made suit tions has shifted from the industrialized countries in and a ready-made one illustrates the dilemma. Europe, North America and Japan to the emerging Advantages and disadvantages of one over the other countries in Asia and South America (notwithstanding The World Bank Group · Energy, Mining & Telecommunications · Finance, Private Sector and Infrastructure Network Ingo Paul is Head of Product Management for fossil-fueled steam power plants at Siemens Power Generation (KWU). Robert Taud is Head of Product Marketing in the Product Center of the Gas Turbine/Combined Cycle Power Plant division, Siemens KWU. Donal O'Leary, Senior Power Engineer, World Bank, is on assignment with Siemens KWU under the Siemens/World Bank Staff Exchange Program. This paper has been prepared under the aegis of a Siemens/World Bank partnership program (c.f. note on page 8). The paper was reviewed and edited by Masaki Takahashi, Stratos Tavoulareas and Kyran O'Sullivan of the Energy, Mining and Telecommunications Department of the World Bank. 2 Tailor-Made off the Shelf Developments Affecting the Costs Figure 2. Market for Gas Turbines (1995 - 2005) and Commissioning of Fossil >300 MW Combined-cycle Dominate in Both the 50 and 60 Hz Markets Fuel-Fired Plants The Viability of Standard Power Plant Concepts 50Hz 26% 60Hz Africa With only a few hundred power plants being ordered North & South America every year worldwide, global suppliers (less than a 20% Asia/Pacific Eastern Europe dozen), must generate and work from standard power class 16% 15% Western Europe plant concepts, which nevertheless have to meet a wide variety of operational conditions and require- output 12% thisin ments. The problem is complex since each client, even 6% when refraining from substantial requests for individ- share 4% ual design features, has nevertheless to specify its 1% Market requirements in terms of characteristics of intended 50--100 100-300 300-600 >600 50--100 100-300 300-600 >600 fuels, plant capacity, local ambient conditions of tem- Output classes (MW) Output classes (MW) perature and humidity as well as local emission stan- dards. The client must then evaluate each supplier's offer according to criteria of capital costs, efficiency, recent tightening of investment flows). In these coun- service, maintenance, etc. In some countries addition- tries, utilities are typically faced with limited resources al criteria such as cogeneration in combined heat and of capital that hamper their ability to deploy new tech- power plants (CHP) or district heating, as well as strin- nologies and to meet the power capacity addition gent conditions (e.g. available space, emissions, noise requirements that can enable their countries' econom- level, architecture, environmental permits) associated ic development. with the use of existing sites and their infrastructure must also be considered. For the supplier of power plants, the key demands to be faced are project cost, construction time and risk To determine the viability of using standard concepts guarantees (Figure 1). Project cost and construction for fossil-fired plants, a project database (developed by time of coal and gas fired units have halved since the Siemens KWU) was used to analyze all combined, 80s. In relation to the construction and operation of open cycle and steam power plants worldwide in terms these units, the supplier bears increased exposure to of capacity (MW), fuel requirements, power system warranties and liquidated damages. To retain compet- frequency and regional location. The database captures itiveness, suppliers of fossil-fired plants have begun to projected orders through 2005. The results of the develop and build standardized power plants based on analysis are described below. sound technical solutions, optimized economics and repeated applications. Short preparation and construc- Gas Turbine-based Systems 300-600 MW combined tion times as well as a high degree of reliability during cycle plants seem to be the favored plant size in both operation characterize these plants. 50 and 60 Hz markets (Figure 2). This is because uti- lization of more than one block improves economic viability, yet 300-600 MW fits well with the needs of most power systems and is relatively easy to finance. Energy Issues 3 Power systems in countries with relatively small installed generating capacity systems which require Figure 3. Market for Steam Turbines (1995-2005) smaller capacity additions favor combined cycle 300-450 MW and 500-700 MW Dominate in the 50 Hz Market. power plants in the range 100 to 300 MW which can The 60 Hz market is very small. be easily accommodated with a large gas turbine and a 50Hz 60Hz Africa steam turbine located on a single shaft. Countries with North & South America smaller grids or special grid requirements prefer multi- 16% Asia/Pacific shaft combined cycle plants with several smaller gas 12% Eastern Europe turbines in the same power range combined with one class Western Europe Others or more steam turbines. In the case of more difficult output fuels (e.g. fuels containing contaminants that affect thisin their combustion) or customer preferences for robust, 4% share highly reliable technology, well-proven gas turbine 1% 4% 1% 1% 2% products are preferred over more sophisticated units Market >300 300-500 500-700 >700 >300 300-500 500-700 >700 with higher efficiencies. Output classes (MW) Output classes (MW) Countries with large grids and high power demand growth favor combined cycle plants in the range 600 to A Standardized Approach 2,500 MW which can be served by 2 to 6 parallel units Basing their approach on such demand analysis of either as single shaft or multi-shaft plants. For peaking orders, equipment suppliers have developed standard power or power systems with very low cost fuels, gas plants. A standardized approach for combined and turbines in an open cycle system serve the power range open cycle power plants is clearly more viable than for between 50 and 300 MW. Projections of orders shows steam power plants. This is primarily due to: the market fairly evenly divided between countries with 50 Hz or 60 Hz frequencies. However, given the · huge development cost limits all suppliers to a very projected growth in the U.S., the 60Hz market is now restricted number of gas turbines for different projected to have a moderately larger share than previ- power ranges. ously estimated. Power plant suppliers find it prudent therefore to have a product mix consisting of high per- · gas is a homogeneous fuel (compared to coal), so formance GTs using natural gas as well as more robust the designer does not need to take into account sig- plants using non-natural gas fuels. nificant fuel quality variations Coal-fired Steam Power Plant Only about 10% of Siemens has defined twelve basic power plant con- steam power plants are projected to be ordered in 60 cepts (Fig. 4); four of these are for open cycle gas tur- Hz markets in the period 1999-2003 (Figure 3). In the bine plants, six for combined cycle plants and two for case of 50 Hz markets, the two most important power coal-fired steam power plants (with sub- and super- ranges are between 300 to 500 MW and 500 to 700 critical technology). Each of these concepts covers a MW. The range above 700 MW with supercritical range of power, efficiency, and fuel specifications and technology represents a small but growing share. also includes some modification for heat extraction. In designing these 12 basic power plant concepts design- ers generate the overall plant concept (design and lay- 4 Tailor-Made off the Shelf Figure 4. Reference Power Plant Data Ref. Power Plant Type Frequency Output Efficiency (%) Fuel Gas Turbine Power Plants GT PP 2.84.2 60 Hz 200-220 MW 33.5-34.0 Gas/Oil GT PP 2.94.2 50 Hz 300-320 MW 34.0-34.5 Gas/Oil GT PP 2.84.3A 60 Hz 340-360 MW 38.0-38.5 Gas/Oil GT PP 2.94.3A 50 Hz 480-510 MW 38.0-38.5 Gas/Oil Combined Cycle Power Plants GUD 1S.64.3A 50/60 Hz 100-105 MW 53.7-54.0 Gas/Oil GUD 1S.84.3A 60 Hz 250-260 MW 57.8-58.0 Gas/Oil GUD 1S.94.3A 50 Hz 360-380 MW 57.8-58.0 Gas/Oil GUD 2.84.3A 60Hz 500-520 MW 57.8-58.0 Gas/Oil GUD 2.94.3A 50 Hz 700-760 MW 57.8-58.0 Gas/Oil GUD 2.94.2 50 Hz 470-480 MW 52.2-52.3 Gas/Oil Steam Turbine Power Plants ST PP 300/450 50 Hz 2x300-2x450 MW 38.0-39.0 Coal ST PP 500/700 50 Hz 2x500-2x700 MW 40.2-41.6 Coal out), the system piping and instrumentation (P&I) A first step towards a more flexible design is to pro- drawings, the civil works, the design of the main com- vide options to the reference version for each major ponents and major piping larger than 80 mm OD. functional unit (Figure 5). For example, "via-ship" is the reference for the functional unit "coal supply" with Power Plant Modularization Over the last decade, delivery "via rail" as an option. Choosing the option in modular design, fabrication and construction of power this case does not greatly change the remainder of the plants has gained widespread acceptance worldwide. power plant. However, in the case of the functional For the concept to be successful, the approach needs to unit "boiler", the reference is a supercritical once- be able to tailor each power plant as closely as possi- through boiler and the option a subcritical (drum-type) ble to the client's needs without requiring major boiler. Choosing the option in this case requires modi- redesign of key plant components. The subsequent fications in the main steam line, ash handling, etc. Just question was how these conflicting requirements of as in the automotive industry, power plant designers standardization and customization could be molded have had to develop a limited number of platforms into a successful approach. The Siemens' approach to (basic power plant concepts) into which optional func- modularization is described. tional units and modules can be included as engines or special car seats are in a car platform, without signifi- Energy Issues 5 Figure 5. 2x700 MW Steam Reference Power Plant Main condensate High pressure Low pressure Coal Delivery Boiler Feed Pumps pumps turbine turbine Generator Reference by ship Supercritical 2x 50% 2x 50% H 30-100 N 4x 8 m2 THDF 115/67 once-through electric electric 250 bar motor drive motor drive 540/560°C Option by rail Drum 3x 50% 3x 50% H 30-63 N 4x 10 m2 THDF 115/53 167 bar electric electric 540/540°C motor drive motor drive 2x 50% N 2x 10 m2 ` steam turbine drive 1x 30% electric motor drive cant changes to the platform itself. The key to flexible bine itself is a standard product, this functional unit design lies in properly breaking down the power plant can be broken down into modules such as the flange to into adequate functional units and these units into flange gas turbine and quite a few other modules, modules such that most options will only directly depending on fuel, local conditions, NOx requirements effect a single module or, at the most, one or two in the and service requirements. surrounding system environment. This approach should permit requested modifications to be accom- Design and Use of Modules Both for combined cycle modated via selected options with minimal time spent units and for steam power plants, more than 100 mod- on re-configuration. ules are defined. These functional units are treated as "black boxes" for which space is reserved in the basic Similarly, for a combined cycle plant, the functional power plant. Since the modules for combined cycle units are arranged around the main components, the and steam power plants overlap, approximately 150 gas turbine and steam turbine. Even though the gas tur- modules are needed in one to four options. The overall 6 Tailor-Made off the Shelf Figure 6. The Computer Tools Plant Acquisition, Project Processing concepts sales, order Service and products preparation Engineering Purchasing Construction 2-D/3-D Computer Aided Design (CAD) Document/Data Management Project Management and Control Database Sales and Bid Preparation Office Communication Purchasing Office Applications engineering effort for this was around 50 staff years at In addition, for each individual module, the plant sup- Siemens. plier tries to reach a common understanding of its specification with a group of subsuppliers (following A large database of project-independent modules has the suppliers' own procurement guidelines) so that been built up. Each module file contains the P&I draw- each subsupplier can provide its optimized technical ings, geometric information, bill of quantities, isomet- solution within the space and system limits. ric calculation, schedules and associated documenta- Worldwide procurement can be achieved and facilitat- tion. To some extent, these modules can be prefabri- ed by requiring each subsupplier to achieve his task cated. Sometimes these modules (e.g. switchgear pan- within the module boundaries. els) are designed to be shipped in standard containers to the plant site. If, for a given project, a module with Technological Improvements In addition to the fac- a given option is used, then a simple computer com- tors described above, technological deployment has mand, more or less a mouse click, is sufficient to link lead to performance gains and cost reductions. Use of the neutral module to the specific project. supercritical technology has achieved efficiency improvements in the range of 2-5% for coal-fired Preconditions for Modularization To realize the eco- plants, compared to subcritical technology. Changes in nomic advantage of the modular approach, the client the firing temperatures can significantly increase gas needs to permit the supplier to use this approach in turbine output and efficiency of gas-fired plants. bidding for a project. The approach uses a small num- ber of basic power plant concepts with a finite number Automation of plant design Computerization is the of modules and is applied by a supplier to a major key to modularization because of the enormous amount share of orders for new plant. of data generated, processed and shared between differ- Energy Issues 7 ent groups involved in the engineering of modular design and construct modular power plants in develop- power plants. Typically, computer applications include ing countries. For example, Siemens KWU has moved 3-D modeling, computer automated engineering (CAE), its project design and management for projects in Asia computer aided engineering design (CAD), scheduling, and Australasia to its regional office in Kuala Lumpur, cost calculation, construction control, procurement con- Malaysia. Detailed engineering design work for trol, cost control and document management. This ulti- Siemens' thermal power plant projects will be carried mately results in time savings in engineering and con- out by a subsidiary located in New Delhi, India. struction as well as increased flexibility for the cus- tomer. This approach is state-of-the art in the supply Most OECD power plant suppliers are actively sourc- industry for fossil fuel-fired power plants. The approach ing suppliers in developing countries; some have orga- of Siemens AG is given below as an example. nized vendor fairs, in countries such as China, Philippines, Malaysia, Thailand, Brazil and Argentina. A computer tool for planning and logistics was devel- Because of repeat orders, the modular approach pro- oped using commercially available software. This is vides a longer than normal period in which to evaluate schematically shown in Figure 6. It includes the use of potential component vendors. a data bank, 2D and 3D graphic information software, software for plant structure, plant construction and Conclusions control as well as another software for communication The development and implementation of a new basic and work flow management. The management system power plant concept for greenfield fossil fuel-fired for data and documents is the hub where all data and projects with a defined number of modules responds to documents are stored and from where people engaged the worldwide trend towards considering electricity as in a project wherever their location can search, copy, a commodity. As with other commodities, the market mail and store their work inputs and outputs. will reward low-cost electricity producers and their suppliers: Development of this software tool, flow analysis and testing, including all work specifications, required about · For the electrical utility, the concept has lead to sig- 250 staff-years and 2.5 calendar years. The training pro- nificant reductions in project implementation time gram for staff is considerable and ongoing. In addition and cost as well as in project risk. In addition, plant the system requires rigorous and timely inputting of availability has been enhanced through the provi- data, an aspect that very experienced engineers have dif- sion of reliable optimized modules at least cost. ficulty coping with as they have to adjust long estab- lished practices to a new way of working. · For the supplier, the concept has been a key feature in maintaining competitiveness during a period of Impacts on Design and Manufacturing in price decline. Developing Countries Early indications are that this approach, combined with the impacts of globalization · The modular structure can also be of advantage will cause more design and project management work when investigating replacement power plants for to shift to developing countries. Most of the major existing sites needing rehabilitation in built-up areas power plant suppliers, are building up capability to where greenfield sites are in short supply. 8 Tailor-Made off the Shelf This paper is one of a series on fossil fuel generation tech- nologies. The others are on super critical, open cycle, combined cycle and integrat- ed gasification combined cycle technologies. Issues that are pertinent in develop- ing countries are addressed. The series has been pre- pared by staff at Siemens KWU in collaboration with the World Bank. Energy Issues is published by the Energy, Mining and Telecommunications Sector Family in the World Bank. The series is intended to encourage debate and dis- semination of lessons and ideas in the energy sector. The views published are those of the authors and should not be attributed to the World Bank or any of its affiliated organizations. To order additional copies please call 202- 473-32427. If you are interested in writing an Energy Issues note, contact Kyran O'Sullivan, editor, internet address, kosullivan@worldbank.org. The series is also available on-line at http://www. worldbank.org/html/fpd/ energy/ The World Bank also publishes the Viewpoint series. Viewpoints are targeted at a multidiscipli- nary audience and aim to promote debate on privatiza- tion, regulation and finance in emerging markets, espe- cially in the energy, transport, water, and telecommunica- tions sectors. The series aims to share practical insights and innovations that cross sectoral boundaries. The series is available on-line at www.worldbank.org/html/ fpd/notes/notelist.html