Combined Cycle Plants. The Energy Trilemma

01/10/2012
    During the first decade of the 21st century, the Spanish power sector in general and especially electricity generation has undergone major and deep transformations characterized by three fundamental aspects:
    During the first decade of the 21st century, the Spanish power sector in general and especially electricity generation has undergone major and deep transformations characterized by three fundamental aspects:
    • A growth of 4% per year in electricity demand
    • The need for new generating power to meet the domestic market's new demand
    • And a strong investment period undertaken by the power companies, led by combined cycle plants and renewable energy systems, thereby increasing the installed capacity.
       
     
    What is the Current Situation?
     
    At different levels, and for a couple of years, we have been faced with a very complex and unstable economic situation with an unpredictable length (duration), characterized among other things by reduced financial flexibility and a sharp drop in electricity demand due to the contraction of the industrial activity, and to a lesser extent, the slowdown in consumption.
     
    In the case of conventional electricity generation (coal-fired and combined cycle plants, mainly) this situation is exacerbated, firstly, by the current energy mix and the rise of renewable energies (leading to a reduction in thermally generated electricity, one of the collateral damages of renewable energies) and, secondly, by coinciding with low energy prices and increased fuel costs, especially natural gas, directly affecting the former in terms of usage and availability.
     
    First of all, we could say that the impact of renewable energy on thermal generation, supported by fossil fuels, has been remarkable in recent years. In this regard it has entailed a substantial decrease in the number of service hours for this type of plants and, on the other hand, it has forced them to operate discontinuously (cyclically) to meet the demand for electricity in those time slots in which renewable generation was and/or is insufficient, therefore becoming a wildcard for regulation.
     
    Just recently added to this, the Royal Decree on aid for domestic coal, which has led to a new shift in the sector and has had a significant impact: premiums for domestic coal to the detriment of imported coal, being dispatched using a system based on restrictions to guarantee supply and the elimination of lost profits due to inactivity.
     
    Therefore, the incentivized domestic coal will displace an equivalent amount of imported coal and occasionally gas in some plants that have had to make heavy investments to reconvert and refurbish in order to comply with environmental requirements, which will lead to these investments being less profitable or having longer return periods. 
     
    This is obviously a situation that was difficult to imagine less than 10 years ago when Spain began the construction of combined cycle power plants on a massive scale, which at that time were considered an advanced concept of generation based on improved energy efficiency and environmental friendliness, as a result, among other reasons, of reusing the combustion heat to increase the yield of the electricity production process and its lower CO2 emissions, respectively.
     
    Are There any Forecasts?
     
    In this tense economic environment the key players in the national energy system's value chain, from generation to distribution, have conducted different PEST (Political, Economic, Social and Technological) studies of this market, for the short, medium and long term, and the prospects shown in the results have been somewhat disturbing, as they have highlighted:
    • A forecast of flat growth in electricity demand until 2020
    • A change in the scenario for 2015 due to the impact caused by the EU's environmental requirements on coal-fired power plants and by the default/stagnation of the renewable energy plan (which would be an opportunity for the combined cycle plants)
    • And a 3% annual growth in electricity demand over the next decade (driven by an upturn in the economy and the electrification of transportation)
       
    How do We Face this New Scenario?
     
    It is more than likely there will be two keys to dealing with this reality: Operating flexibility (closely linked to the Smart Grid concept) and reduced operating and maintenance costs. We can't propose another scenario without assuming the risk of losing what has been achieved during this time.
     
    Experience tells us that these setbacks, unavoidable in these times, are a challenge for any organization, regardless of its size, status or disposition, so if they are unable to adapt quickly and flexibly, their results may not meet expectations, which could lead to doubts, fears and mistrust.
     
    Handicaps
     
    Current combined cycle power plants, while having the latest improvements in place to operate cyclically, have practically all been designed to operate as baseload plants, that is, continuously.
     
    However, the behavior of the gas and electricity markets and the capacity of the energy mix, especially the renewables, together with the versatility and operational flexibility of this type of plants, make this design hypothesis no longer valid. This is proven by the way in which such plants currently operate, as they have become peak load plants or cycling plants.
     
    Thus, these plants are forced into stops, starts and load variations much more frequently than initially expected, resulting in a variable rate greater than that considered by the main equipment's manufacturers, and with side effects that are already visible, especially for the supervision and inspection services, which are noting a progressive degradation.
     
    All of this will force the technicians and managers to increase their efforts so that plants are not out of operation due to a lack of foresight in their maintenance and upkeep, as the plant's availability and its rapid response when connecting to the network are vital in the rate periods due to their direct influence on the operation's P&L account.
     
    Future Challenges
     
    Having accepted cyclic (or cycling) operation as the most common operating system today - and the most likely one for the medium-term - and having evaluated its technical and economic impact, the sector needs to join forces in a new direction.
     
    In this regard, it is appropriate to mention that Gas Natural Fenosa, with Applus+ Norcontrol's support, has been studying this cycling phenomenon and its implications, both economic and technical, for several years.
     
    Therefore, in this scenario, a key consideration will be identifying the most appropriate method for cycling, based on the timing and nature of the equipment, the operational and/or maintenance constraints, the consequences and underlying effects of each type of facility upkeep method, the best available technique for evaluating the assets, the potential to mitigate and/or prevent the damages associated with both the service and the equipment's low idle items, etc. These are some of the main courses of action in which to make progress and concentrate efforts.
     
    In the coming years, we will be forced to reinvent ourselves in order to adapt the way we work to this new situation in terms of implementation of functional tests for equipment to ensure its availability, development of appropriate equipment upkeep plans, suitability of the predictive and legal (regulatory) maintenance plans, development of procedures to reduce consumption (electricity, water, steam, chemicals, etc.), definition of upkeep programs and time schedules, human resource management, reduced ancillary consumption, and restructuring of future investments, etc.
     
    Everything mentioned here represents, first of all, some of the areas in which we should and can innovate and delve further, always on the basis of a common denominator, the concept of useful life management and competitiveness, a traditional concept which is also very much in vogue.
     
    Therefore, the technological challenge we face is no longer achieving a compromise between reliability, sustainability and economy, but to advance simultaneously on all three aspects: the Energy Trilemma.