THOUGHT LEADERSHIP

Breathing new life into ageing assets: asset management in practice in PNG

The remote Ok Menga hydropower station in the Western Province of Papua New Guinea is vital to the operation of the Ok Tedi mine (OTML). It offers an example of just how expensive it can be when ageing power stations deteriorate and become increasingly unreliable.

The Ok Menga hydropower station provides almost three-quarters of the power needed to operate the mine, with the remaining power generated using expensive diesel fuel. The local power network is isolated and not connected to any of the country’s electricity grids, so any failure of the Ok Menga power station is costly.

If one of Ok Menga’s two generating sets is out of action, replacing that amount of hydropower (about 30 MW) with diesel-generated power could cost around AUD$650 000 a day in fuel alone. Worse still, a full outage of the power station could cause the mine to shut down, losing copper, silver and gold production worth around AUD$4 million per day!

The Ok Tedi mine had been scheduled to close in 2015, so preventative maintenance had not been a high priority for its owners, and the Ok Menga power station had become run down. When the mine’s proposed closure was delayed to 2025, a new operational strategy was needed to wring at least another ten years of useful and reliable life out of the more-than-30-year-old Ok Menga power station.

OTML needed the help of skilled asset management experts to extend the life of the Ok Menga power station, so it engaged specialist power and water consulting firm Entura to conduct an extensive condition assessment and come up with a risk mitigation plan to get the best out of the station in a cost-effective way. This also included building the skills and knowledge of OTML staff who had not had any formal training for years.

Ok Menga’s unique challenges

Although Ok Menga had many of the same asset management issues as any other hydro plant, it also presented some unique challenges in terms of risks and maintenance strategies. Its isolation and association with a large mining operation challenged many of the conventional rules fundamental to asset management in larger power utilities.

Leigh Smith, specialist consultant in asset management at Entura, explained: “In our asset management approach, we needed to take into account how the particular characteristics and circumstances at Ok Menga created differences for aspects such as the design life, planning outages, access to the plant, the holdings of critical spare parts, and the consequences of faults. For example, because outages at Ok Menga incur such high costs, we needed to replace rather than refurbish machinery, because they couldn’t have the machines offline for long.”

Bringing risks under control

Entura applied its best-practice asset management approach at Ok Menga by thoroughly assessing the condition, performance and remaining useful life of all aspects of the station, and developing a risk mitigation plan including urgent actions to remedy serious risks, and ‘quick wins’ to improve the state of the station quickly, cheaply and effectively.

As Leigh explained, “We report the condition of the plant in terms of business risk, and the mitigation strategies we propose are all about reducing risk to a level that’s acceptable to the business in cost-effective and practical ways”.

Quick wins and priority actions

At Ok Menga, two ‘quick win’ projects were identified to mitigate critical risks. The main inlet valves were difficult to access and in poor condition with no critical spare parts on site, and the original analogue turbine governors installed in the 1980s needed replacing but no governor spare parts were available.

“A failure in either or both of these areas was seen as likely in the foreseeable future and would create serious consequences of a prolonged forced outage for one unit or even the complete station,” said Leigh.

Replacements for the main inlet valves would take more than 18 months to deliver, so an emergency repair kit containing critical spares was ordered immediately. Replacement of the governor controllers with newer digital technology was also rapidly initiated to quickly reverse declining reliability.

Leigh said, “Getting these ‘quick win’ projects going straightaway was imperative and immediately reduced very significant risks.”

As well, at Ok Menga, three priority asset risk mitigations were identified relating to the station’s rock trap, unit 1 turbine and the dewatering and drainage system. The rock trap was found to be full, and cleaning it out was initiated quickly. Ok Menga’s unit 1 turbine was worn so the unit 1 runner and cassette were replaced. The security of the dewatering and drainage system had been degraded and it was at risk of failure so Entura recommended that it be upgraded to a system with greater reliability and redundancy.

“Because these priority actions minimised damage to turbines, avoided possible turbine malfunction, and reduced the risk of the powerhouse being flooded, they made a big contribution to reducing the owner’s overall risk exposure,” said Leigh.

Building capacity

To fill skill gaps at the Ok Menga power station, Entura developed an Australian-accredited program to train new and existing hydro operators. Local staff were included in the asset management process and have now had first-hand exposure to best-practice techniques.

“The owner of this power station is very committed to a sustainable future, and this extends to its staff.  The platform is now set for local staff to build on their newfound knowledge and continue to improve their understanding and skills in asset management,” explained Leigh.

Entura has developed its knowledge of asset management through our involvement over the past 100 years with the extensive power and water assets of Hydro Tasmania, Australia’s largest renewable energy producer. Our approach to asset management is recognised as best practice.

“We have spent considerable time learning and developing our systems and knowledge, and this enables us to deliver cutting-edge asset management techniques to our clients without the expense they’d incur if they started from first principles,” said Leigh.

Entura’s holistic best-practice asset management approach at the Ok Menga power station delivered a range of benefits including reducing immediate and longer term risks, and increasing the knowledge and skills of local staff – saving OTML the time and cost of developing its own in-house programs.

If you would like to discuss how Entura can assist you with assessing your hydropower plants or other power or water assets to minimise risk and maximise efficiency and useful life, please contact Leigh Smith on +61 419 884 318 or Shekhar Prince on +61 412 402 110.

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June 11, 2015