Why third-party operations and maintenance makes sense

Paul Boughton

Power plant operators are increasingly turning to third-party companies to manage their operations, maintenance and construction activities – reducing plant down time and maintaining peak generating efficiency as a result. Sean Ottewell reports

Wood Group GTS and Apex Bethel Energy Centre have signed a three-year operations and maintenance (O&M) agreement for the Bethel Energy Centre in East Texas, USA. 

Under the US$12 million (£9 million) contract, Wood Group GTS will be responsible for care, custody and control of the facility when it begins commercial operation in 2017. Construction is soon to begin for the plant, which will utilise compressed air energy storage (CAES) technology.

CAES is a way to store energy generated at one time for use at another time. At utility scale, energy generated during periods of low energy demand (off-peak) can be released to meet higher demand (peak load) periods.

“We needed an O&M partner willing to work with us during the development stage of the project. In Wood Group, we found a highly experienced O&M service provider with an excellent reputation in the industry and is well respected by investors,” said Jack Farley, ceo of Apex. “Their customer-focused technical and commercial engagement made the negotiation of the service agreement very productive. Also, their ability to work within a tight schedule along with the OEM, which has minority interest in the facility, was critical to meeting our schedule.”

“As the O&M partner for APEX we are able to minimise technical and commercial risks, while incorporating a transparent and flexible contracting structure,” said Frank Avery, president of Wood Group GTS - Power Plant Services. “Our customer-focused programmes, practices and procedures apply to facilities with all OEM turbine technologies and platforms, and have been honed from a solid foundation of operating experience and continuous improvement. With a risk-based approach to plant performance and availability, regulatory compliance requirements, and financial performance, we can stay aligned with our customer’s goals and objectives,” he added.

In Canadian news, Millar Western Forest Products has awarded Pöyry a contract for the engineering, procurement and construction management (EPCM) services for an anaerobic bioenergy project at its Whitecourt pulp mill in Alberta.

The project involves integration of anaerobic hybrid digesters into the pulp mill's existing aerobic effluent treatment system. Recovered organic material will be converted to biogas, used to fuel two reciprocating engines that will produce up to 6MW of renewable green power for use by the mill itself. Recovered heat from the engine exhaust gas will be used in pulp drying to reduce the use of natural gas.

Pöyry's scope of work comprises typical EPCM services such as project management and scheduling, overall engineering management and detail design services, procurement and contract administration, cost control, construction management and co-ordination of the commissioning activities. The planned startup of the plant is August 2015.

"This project is a good example of utilising innovative technology in a smart way to convert organic waste material to renewable energy. It is also an important EPCM reference for Pöyry in North America," said Ari Asikainen, president of Pöyry's regional operations in North America.

In related news, Electrowatt-Ekono, part of the Jaakko Pöyry group's energy business, has been awarded an engineering contract by Stadtwerke Münster for the expansion and modernisation of its heat and power plant in Münster, Germany. Electrowatt-Ekono's services include conceptual design, permitting, detailed design, project management, site supervision and commissioning. The total contract value is € 1.8 million (£1.4 million).

Stadtwerke Münster operates a combined heat and power plant providing district heating and power for the city. The project is designed to modernise the plant by installing a combined cycle gas turbine system, generating 220MW of thermal power and 80MW of electricity. The heat supply will be backed up by two auxiliary boilers. The increased capacity will improve the cost effectiveness of the heat supply in line with the new law concerning combined heat and power generation, also reducing the environmental impact of the plant.

In Jordan, First Solar has signed an agreement to provide engineering, procurement and construction (EPC) services for the 52.5MW Shams Ma'an photovoltaic (PV) power plant. The company has also finalised a long-term operations and maintenance (O&M) contract for the project. First Solar co-developed the project with Jordan's Kawar Group.

"We are proud to have been given this opportunity to leverage our industry-leading expertise in project development to create a truly remarkable renewable energy asset. We now look forward to delivering a world-class power plant that will directly contribute to efforts to address the country's urgent energy needs," said Ahmed S Nada, vice president for the Middle East at First Solar.

The power plant - which will be the largest photovoltaic (PV) facility in the Middle East - is an important component in Jordan's strategic diversification of its generation portfolio, which is intended to boost energy security. Part of the Ma'an Development Area (MDA) initiative in southern Jordan, construction is expected to begin next year, with completion due in 2016. At that point the facility will supply an estimated 160 million kilowatt hours (kWh) of electricity per year, which is equivalent to approximately one percent of Jordan's annual energy output.

Finally, the city of Alexandria in Louisiana, USA, has contracted Wärtsilä to supply a gas-fired power plant for long-term supply of peaking power. The contract was signed in March 2014.

The new power plant will have an output of 60MW from seven Wärtsilä 34SG engines running on natural gas. The project is an extension of the existing DG Hunter generating station.

“These units will have the capability of powering critical infrastructure for the city in the event of a major grid failure due to storms or other natural disasters. The project will also ensure Alexandria remains diverse in fuel sources, while increasing insulation from unexpected changes in the power supply market,” noted city mayor Jacques M Roy.

Alexandria has recently become a part of MISO, the Midwest Independent System Operator, the grid to which the city is connected. According to Wärtsilä, the efficient and flexible nature of its engine technology enables fast response to peaks in demand with excellent load-following capabilities. The units will be capable of reaching full load in just five minutes. Furthermore, says the company, with the generation of electricity located close to the consumer demand, transmission costs and efficiency losses are minimised.

Wärtsilä is a global supplier of flexible baseload power plants of up to 600 MW operating on various gaseous and liquid fuels. Its portfolio includes unique solutions for peaking, reserve and load-following power generation, as well as for balancing intermittent power production.

 MHPSE powers up

The Mitsubishi Hitachi Power Systems Europe (MHPSE) global joint venture has started up in Germany. Both the Hitachi Power Europe business and its workforce have been transferred to the company and are now working in Duisburg under the umbrella of parent company Mitsubishi Hitachi Power Systems (MHPS).

"Our new stakeholder combines the strengths of Mitsubishi and Hitachi in the energy plant construction field," said Rainer Kiechl, ceo of the MHPSE board of directors. "This creates a considerable product and operating result potential for Mitsubishi Hitachi Power Systems Europe."

He added that MHPSE has amassed a lengthy track record in erecting turnkey coal power plants and utility steam generators in Europe and Africa and that the MHPS joint venture is ranked amongst the globally leading companies in the gas power plant/combined-cycle power plant field. This is not to forget the green technologies, flue gas cleaning and in the geothermal and fuel cell sector.

"These products admirably supplement our portfolio to date," he added. "The need for modern, environmentally-friendly and economic plants for power and heat production is growing throughout the world. As part of the MHPS Group, we will fully take advantages of these opportunities." 

Mitsubishi Heavy Industries (MHI) and Hitachi have also bundled their thermal power plant technology business into the Mitsubishi Hitachi Power Systems group, which now aims to become the world’s leading in thermal power plant construction company.

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