Getting more for less

ABB has developed a decision-support tool to help power plant managers solve one of their most pressing problems - how to determine the optimal tradeoff between short-term net revenues, long-term asset costs, and risk exposure.

One of the biggest challenges facing power plant managers is how to find the balance between running a plant aggressively to maximize earnings, and running it smoothly to extend component lifecycles and minimize production costs.

To do this they need a decision-support tool that computes the most advantageous tradeoff between revenues earned from energy sales and market trading, and the cost of producing that energy in terms of plant degradation and component wear. ABB's Lifecycle Optimizer - launched at Power-Gen Europe 2004 in Barcelona - has been developed and successfully tested to achieve those objectives.

By using Lifecycle Optimizer, plant managers can compute and compare different operating strategies. They can determine the revenues, costs, and net income from running the plant at, say, constant base load or at peak capacity when energy prices are highest.Revenues from trading in power, fuel, or emissions can be set against the generation and lifecycle costs of raising or reducing production, and the effects this would have on component wear and maintenance intervals.

Risk factor scenarios such as unplanned outages and the response of asset managers or traders to market pressures are also taken into account.

Significantly, Lifecycle Optimizer gives plant managers the tool they require to secure profitability when the first phase of the European Union's Emissions Trading Scheme (ETS) comes into force in January 2005.

The optimizer covers a wide range of factors that will enable managers and traders to decide whether to exceed the plant's CO2 allowance or sell the surplus, and the impact that decision will have on plant profitability.

Lifecycle Optimizer has already been successfully tested at a customer site in the United Kingdom.