Best Practices in Execution of Thermal Power Project

BEST PRACTICES IN EXECUTION OF THERMAL POWER PROJECT

Presentation by A.K.Mehra

06.06.08

BEST PRACTICES IN EXECUTION OF THERMAL POWER PROJECT

1) PREAMBLE

• KSK Energy ventures pvt.ltd is a young & upcoming Power company with a grand & ambitious vision to enter into select few in high power league owning Mega Power Project .

• From building a small power plant of 43 MW ,company has taken giant steps in constructing 135 MW & then 540 MW Power plant and now 1800 MW and later 3600 MW in near future.

• For building such high capacity plants the company shall need to use advanced techniques ,best practices and experienced as well as young & energetic staff

• In order to effectively fulfill these objectives whole lot of efforts have to be put up by us in the right direction.

1)Preamble (contd)

•We all try our best ,but some times we are perplexed as to what is the right direction?

•This question has no cent percent correct answer, as the answer may differ in certain situations and for different projects, but over the years & through experience one can at least point out the right direction and the Best practices to follow that direction.

• In order to understand what could be the right direction and best practices in execution we have to first understand our objective .In simple words the objective of any company shall be ?

2) Objective

“To Complete the project “•Capable of delivering the required output consistently over its entire lifespan at optimum operating cost.• In schedule time•At optimum cost•Maintaining highest quality standards•With zero accident•With the pleasing aesthetics•Complying with environmental aspects •Fulfilling social obligations•With pride & attachment ,job satisfaction for every employee working on the project

How to achieve this objective ?Let us discuss.

3) LIFE CYCLE OF THE PROJECT

Perceived Power needs

Project Objectives/Scope

Feasibility Study

Conceptual Plan/Preliminary design

Design & Engineering

Construction Plans & Specifications

ProcurementConstruction

Completion of Construction

Commissioning Tests

Acceptance/

Operation & Maintaince

Completion of useful life

Disposal/Renovation & Modernisation

3) Life Cycle Of The Project(contd)

• The execution of Project involves 5 main processes i.e. Planning, Designing, Financing, Constructing and operating

• However Unless the perspectives of all 5 specialists are integrated and coordinated effectively, excessive cost and delays on the project can occur

• in order to effectively integrate and coordinate different perspectives, role of Project Management is vital

• Every Management desires timely completion of project in cost effective fashion and subsequent operation at optimum efficiency over entire life cycle of the project

• However as per the survey in USA as well as in India about 90 % of Projects finish over budget and behind schedule.

• How to avoid this ?and what are the aspects we generally neglect.

3) LIFE CYCLE OF THE PROJECT (contd) MAJOR ISSUES

a) We neglect our O & M colleague on the pretext that we are saving some capital cost

The operation phase of the project is not considered by us seriously while formulating the Project Plan.

Keep in mind that your operation colleague has to deliver output consistently over 30 years. It may also could be you. Please keep his operational comfort in your mind while finalising layout, Designing & sizing of equipment. Your saving of little cost today may result in higher operational costs.

b) Optimising costs at one stage may not be beneficial if cost escalation or delays occur at other stage for example saving money in design may not be wise if construction cost exceed,or operation and maintaince costs increase

for ex. Purchase of low efficiency motor shall be cheaper but the operating costs shall be higher

3) LIFE CYCLE OF THE PROJECT (contd) MAJOR ISSUES

c) Communication and co-ordination among various constituents essential for success of any project

Our communication methods are still outdated,relying mainly on telephonic/courier communication. Advanced methods of Satellite communication/Video conferencing are not followed

d)Introducing new material and innovative methods /automated construction are always desirable as these speed up the construction process

e) Quality and safety are the important issues

Adequate attention is not given by us for safety concept.resulting in injuries/loss of life and increase in stoppage time of Project

Similarly though we are quality conscious we expect it to happen it on its own .We also pay small attention to aesthetics

4) Feasibility StudiesLocation/Criteria For Selection Of Sites

• The following criteria is normally adopted for selection of site for new projects.

i. Water-

• Availability of water within a radius of 25 Km.

As per the present practices @ 12 MCM water per annum is adequate for 1x500 MW unit. This includes contingencies for failed monsoons

• Construction of Barrage may be necessary at some of the locations to take care of summer requirement


ii. Land

• Availability of non fertile /barren land (at least 90 % shall be non fertile

• Minimum use of forest land

It is desirable to estimate the total area required for project and acquire entire land in one stroke,

Failure likely to result in delay & increased cost

Tentative layout necessary to verify adequacy of land

iii. Rail/road infrastructure

• Availability of rail line for transport of material & coal within 25 km.

• Nearness to all weather road


iv. Minimum resettlement/rehabilitation

• The site shall be free from resettlement/rehabilitation issues to the minimum extent possible.

v. Minimum impact on archeological sites/wild life

• Site shall not be near to archeological site or near to the wild life protected forests.

Vi Vicinity to Airport

• The site shall not be in the vicinity of Air Port

4) Feasibility StudiesLocation/Criteria For Selection Of Sites•V) Fuel Linkage

• Regular coal linkage is necessary .@ 4.8 MMT of coal is required per annum for 1000 MW Power Plant.

•Locating plant near colliery saves transport costs of coal.

•Presently Mega power project coal plants are being located near sea face to take advantage of Sea transport of imported coal shipped through sea.

•However in view of achieving Load Balance & Local aspirations and in view of sound Rail network it is possible to locate plant anywhere ,where all other inputs such as water, Land are available.


vi)Load patterns

•Since Demand is much more than the supply this aspect has become irrelevant in present circumstances.

vii) Environmental aspects

•A Detail study is required to be carried out for environmental impact

•The Electrostatic precipitators should be capable of limiting emission levels to 50 mg/nm3.

•The concrete measures are required to be taken up for effectively limiting Coal,Ash and water pollution within statutory limits


viii) Social aspects

•Generation of jobs,local employment,job to Local contractors are some of the issues which are required to be taken into consideration

•Improving the life standard of the local community shall be one of the aspect taken into consideration

•This can be in the form of improvement of infrastructure,improvements of markets ,constructing hospital, Temples etc

•It is necessary to involve co-operation of Local responsible leadership

5) DETAIL PROJECT REPORT

The Detail Project Report (DPR) forms basis for preliminary design of the project. It contains following aspects.

i. Objective and scope of the Project

ii. Location of the Plant

iii. Availability of Land for Main Plant and Ash Disposal

iv. Availability of Water

v. Availability of Coal

vi. Layout of Plant

vii.Brief Technical description of Main equipment

viii.Infrastructure

ix. Environmental Aspects

x. Cost Estimates

5) DETAIL PROJECT REPORT (contd)

xi. Financing Plan

xii.Staff Pattern

xiii.Office Accommodation

xiv.Residential Accommodation

xv.Statutory clearances

xvi.Rehabilitation/Resettlement Plan

xvii.Commissioning Schedule

• We shall discuss only some of the major aspects

6) SIZING OF UNITS/SELECTION OF TECHNOLOGY

The sizing of unit depends on

• Power Requirement

• Space constraints

Higher size unit requires less space

• Delivery schedule

• Proven performance

• Capital availability

• Cost considerations

Higher the size of unit, less the cost /MW

Single unit of double capacity costs less than 2 units of half capacity.

Comparative costs of various unit sizes500 MW unit cost/kw is @ 85 % of 300 MW unit800 MW unit cost/kw is @ 90 % of 500 MW unit

6) Sizing Of Units/Selection Of Technology

Comparison of 2x50 % vis-à-vis 1x100 % capacity unitsCost /kw for 1x100 % is less by 14 % than 2x50 % units

6) Sizing Of Units/Selection Of Technology

Selection of technology at the initial stage plays vital part in determining the cost and time schedule

Design engineer shall be faced in deciding upon some of the choices

• Type of BoilerDrum type or Tower Type

Tower type Boiler requires less space but difficult to maintain due to more height

• Sub critical or Super criticalSo far plant with super critical technology is not

commissioned in India though these are under construction at NTPC s plant of 660 MW capacity

6) SELECTION OF TECHNOLOGY (contd)

• The advantages of super critical boilers are that these are highly efficient ,consume les fuel,and have less emission.

• Efficiency of these Boilers is @ 41-42 % against 37-38 % of conventional Boilers.These are in extensive use in USA & Japan.The poor record of usage in India is on account of non availability of Local Manufacturers

ii. Type of cooling Towers

• Natural Draft or conventional forced draft

• Natural Draft cooling towers involve higher capital cost but involve less O& M costs

5) SELECTION OF A TECHNOLOGY (contd)

iii. Ash Handling Plant

High Concentrate or conventional

iv. Reverse osmosis plant in place of conventional plants

This technology is in use in 400 MW Gregory plant in Texas USA. Suitable for converting even industrial waste water to DM water suitable for Boiler

iv. Single stream coal conveyors

• These are only few examples and purpose is not to detail the various available technologies.

Designer has to decide on technology based on cost and advantages

6) LAYOUT OF PLANT

While Planning layout of Plant following aspects are of immense importance and need special consideration.

i. Wind Direction- This is specifically necessary to decide location of Coal Handling Plant and cooling tower

ii. The location of coal plant w.r.t.main plant and wind direction shall be such that coal dust shall always flow away from Main Plant as well as cooling tower

iii. The location of switchyard w.r.t.cooling tower shall be such that water particles do not flow towards switchyard equipment

iv. The front face of Main Plant shall not be obstructed by any Building /structure (except functional requirement)and shall be aesthetically built

v. The main entrance road of the plant shall be lined with trees on either side of the road.

6) LAYOUT OF PLANT (contd)

v. In order to have day light in TG Hall semi transparent moulded fiber panels shall be provided along with steel/aluminum paneling.This shall save Unnecessary ‘switching on’ of illumination lamps in TG Hall during day time.

vi. The location of Mills can be on either side of Boiler or after Boiler depending on availability of space on width/length wise

vii.There shall be no equipment mounted at sub zero level

viii.Even cable trench bottom in any of the ancillary building shall be at least 0.5 m above the developed outside level ,surrounding that building.These measures are necessary to avoid Flooding.

6) LAYOUT OF PLANT (contd)

x. All fire fighting line shall be laid over ground.This facilitates repairs .

xi. cables outside main plant shall be laid over ground on structures

xii.In case of 2 units the control room shall be common.This reduces operation Staff strength besides close inter unit co-ordination

xiii.Service building ,workshop building,stores shall be provided with Semi transparent sheets for day light.

xiv.No oil filled transformer shall be provided inside main plant ,reduces leakages, maintaince ,and fire hazards

• Water cooled transformers shall be avoided as far as possible to prevent likely failures on account of water leakages from cooler tubes.

7) COST ESTIMATION

• Before taking up any project it is necessary to estimate the capital cost of the project as accurately as possible

• Inaccurate estimates (too High) cause Over commitment

• Inaccurate (too Low) estimates cause bad decisions-

The return of investment calculation shows that project is worth,when it is not .

• Capital costs of the Project include

a) Land Acquisition,development

b) Planning & feasibility studies

c) Architectural & engineering design

d) Construction including material equipment and labor

e) Interest

7) COST ESTIMATION

Capital costs (contd)

f) Taxes

g) Special T & P

h) Overheads

i) Operation & maintaince costs

Basis of cost estimates shall be

• Historical cost data

• Vendor catalogues

• Price indices

• Cost estimation software available

• Operating cost to be evaluated and should form integral part

8) PROJECT MANAGEMENT & PROJECT MANAGER

• The role of Project Manager & Project Management is very vital for successful completion of the project.

• Project Management is the art of directing and coordinating human & material resources by using modern management techniques to achieve predetermined objectives of scope, cost, time and participation satisfaction.

• While accomplishing above objective, there are potential

conflicts with regard to scope, cost, time, quality and constraints due to human, material and financial resources. These conflicts are to be resolved by making necessary tradeoffs or alternatives


PROJECT MANAGER & HIS ROLE

WHAT IS PROJECT MANAGER OR WHAT DOES HE DO ?

• He is the first to be hired & fired. • He should ask himself following questions What do I do ? Why do it ? Does the management approve? Does the final user care ?• His role is comparable to that of cricket Captain.• Captain need not be great fielder,but he should be a chief strategist, likewise Project Manager need not be highly technical but must have a human approach• He should be visionary and should believe in winning with the team provided to him.


PROJECT MANAGER & HIS ROLE


• He should know who should stand where,who should bowl/bat when & where,likewise project manager should know who is capable of doing particular work & accordingly allot him the work•He should be aware that he has to win in the allotted time & overs .Project manager has to be sure that he has to implement the project in time & in allotted Budget•He should be ready for the changes •He should see that the persons sitting in the balcony is the management who has reposed faith in him and the Spectators in stand are the persons who have put in their money to watch & win the game in this case the users who need consistent & reliable supply at affordable price.•If he understands all this then only he can win .

8) PROJECT MANAGEMENT & PROJECT MANAGER PROJECT MANAGER & HIS ROLE


• He should provide environment which encourages individuals to grow & take risk .This mandate must also come from top Management• He must foster an environment in order to grow Skills and foster new ideas for company• Project Manager must complete his project on time, in budget & with full integrity.• So to answer the question what does Project Manager do , the project manager has to be chief Mentor, Planner,negotiator, cheerleader,strategist and much more• He should be the one who reports with ethics & Integrity even when situation is ugly• If Project Manager does not take on these responsibilities then he shall end up with being most expensive monkey posted due to misfortune of the management

ProjectManger

Time Management

Quality Management

CommUnicatIonManagement

RiskManage

ment

CostManage

ment

IntegrationManage

ment

Procur Mentmanagement

ScopeManagement

HumanResources

management

8) PROJECT MANAGEMENT & PROJECT MANAGER PROJECT MANAGER & HIS ROLE

Successful Project

Well defined scope

Extensive Early planning

Good leadershipManagement &

First line supervision

Positive Public

relations Proper ProjectTeam

chemistry

QuickResponse to changes

EngineerConcernedWith total

project


C) KEY FACTORS FORSUCCESS/FAILURE

Failed Project

ILL defined

scopePoor

management

Poorplanning

CommuniCation breakdown Unrealistic

Scope Schedule & budget

Many Changes

Various stages

Lack of project control

FAILED PROJECT8) PROJECT MANAGEMENT & PROJECT MANAGER

9) SAFETY ASPECTS

• Safety has dual benefits i. It improves quality of human lifeii. It reduces time and cost• Safety is however, the most neglected area in construction of our

projects• Occurrence of 2 to 3 fatal & several non fatal recordable

incidences are common in our projects• Besides there are several incidences in which there is no human

injury but the losses to the property and time lost are severe• We consider safety as the stand alone issue for which only

contractor is responsible• There are no serious efforts to Benchmark this parameter unlike

project schedule,quality of work etc.• We do not seriously record/analyse the cause of the accident and

there are incidences of repetitions

9) SAFETY ASPECTS

As per the safety survey the causes of fatal incidences are Fall from structure 20.8 %Fall from/with ladder 4.3 %Electric shock 16.5 %Crushed run over by construction Eqpt 12.5 %Collapse of civil works 3.8 %Falling objects 4.6 %Lifting operation 4.3 %Transport operation 26 .0 %Other causes 7 .2 %

9) SAFETY ASPECTS (contd)

• Even though, target has to be Zero incident rate,in practice it is not achievable.The 1 st target shall be to reduce no. of incidences from running to future project

• The safety culture to be developed by imparting training to Departmental executive/non executive as well as Contractor working staff

• It is recommended to verify safety record of the Agency before awarding the contract.This shall form the part of qualifying requirement

10 QUALITY CONTROL

• Establish separate Quality control cell at site reporting directly to Project in charge

• Prepare detail Quality plans as per manufacturers/suppliers recommendations.

• The person responsible for Quality supervision has to report the deviation beyond permissible limit to Project in charge and acceptance beyond permissible deviation shall be discussed with the core group/Manufacturer and recorded if accepted

11 ) INCENTIVE

• Most powerful tool for motivation.• Pre declared incentive shall be paid limited to max. 3-4 months

pay linked with commissioning schedule/Major Milestones • For agency also pre declared incentive can be paid for

completion of his scope of work.

12) CONTROL OF PROJECT PROGRESS

Project schedule control has to provide for• Mechanism to report work performance & progress• Action to capture schedule status & analyze trends • Process for modifying/changing and updating schdule• Measures to deal with contingencies and adverse impacts Microsoft Project software is used for Monitoring & controlling

the project Progress.• Weekly Project progress vis-à-vis target discussed & reported to

higher management with constraints & possible corrective measures

• For major contracts the progress , & forecast along with the required resources shall be discussed in presentation form so that it can be analysed quickly & correctly

13) BUDGET & COST CONTROL

• Prepare Budget get it approved from competent authority before commencement of Financial year

• The Budgetary Provisions are made for each & individual item• Project Manager or other authority is not allowed to spend even

small amount on any other item which is not included in approved Budget

• Even for Spending from Contingency fund the Permission is obtained from next Higher authority

• Any supply/work order for The expenditure on individual item is issued through the cost control software,and the software locks out the clearance in case the item is not included in Budget or in case the Budget Provision on that item exceeds the Budgeted amount

• For proper control the fund availability ,expenditure , & requirement shall be intimated once a week

13) BUDGET & COST CONTROL (contd)

• Monthly Budget performance vis-à-vis Target including scheduled & actual payments shall be discussed in monthly meeting

• Mechanism such as reserve fund has to be developed to take care of contingency requirements

• Process for approving Budget changes has to be specified and time bound.but such changes have to be minimum & justifiable

14) MEASURES TO EXPEDITF WORK

a) Employ 2 different civil agencies for SG and TG civil works so that there is no total stoppage of work in case of problem with one civil agency

b) For similar reasons one agency is barred from taking 2 different works in the plant.

c) Use of Batching plants is compulsory for civil agencies.with the above provision naturally there shall be minimum 2 Batching Plants for civil works

d) post staff manufacturing units to monitor & expedite supply of equipment for their Projects

e) Senior corporate Management level person visits to SEDC/ Manufacturing units for expediting supplies

14) MEASURES TO EXPEDITF WORK (contd)

i) Boiler Drum Lifting

Novel method of Lifting of Boiler Drum lifting is now employed with Strand Jacking System as described

• System is similar to drawing water from well. The bucket full of water is load ,the rope tied to the bucket handle is the bottom anchor to the load,the rope itself is strand,your body standing on top of the well is jack,the left and right hand fist grips on the rope are the jack bottom and top anchor

• For raising the bucket you transfer the grip from left to right alternately till bucket comes up.


i) Boiler Drum Lifting (contd)• Advantages

a) Impact loads associated with start & stop of conventional winch operation and horizontal force are non existant.

b) Temp rise worry due to frictional forces is non existant

c) Rigging takes only 3-4 days against 10-12 days

d) Work stoppages on welding & hindrances due to long ropes are avoided

• Elaborate winch arrangement is avided• Power requirment is less.• Requires lesser manpower and tension and lesser stress• @ 8-10 hrs are required for lifting operation• In case of any Power supply failure the Drum can remain

safely for days.


j) Civil Works Time Saving Measuresi. Use of Automatic elevating scaffolding & horizontal rebar

feeding Machine Reduces Labour and useful for Precision positioningii. Use of Assembly Rebar Machine Allows assembling of rebar into blocks through automated

operations in accordance with the data loaded into memory from CAD Model

iii. Use of Left in shuttering/Doka Shuttering Fast Shuttering Erection ,Smooth finish and early release of

areas for E&M erectioniv. Use of Threaded Coupler for reinforcement tying reduction in reinforcement timev. Use of Batching Plants/pumps/transit mixersvi. Use of Automatic welding/cutting Machines

15) MY EXPERIENCE OF IMPLEMENTATION OF PROJECTS

A) At MAHAGENCO

• I was associated with implementation of Thermal power projects at 210 MW Parli 4 & 5 units, 500 MW Chandrapur 5,6,7 units ,210 MW Khaperkheda 3 &4 units and 250 MW New Parli & Paras projects.

• 210 MW Parli unit 5 was executed in 34 months, 500 MW chandrapur 7 in 44 months. These were records prevailing then. Khaperkheda unit 3 was executed in 30 months, shortest time ever taken by Mahagenco for any of the unit so far.

i. Rapport with civil wing

• I enjoyed excellent rapport with civil wing. Every morning I, & the civil head used to meet at pre decided location and take the site round jointly.

15) MY EXPERIENCE OF IMPLEMENTATION OF PROJECTS (contd)

• This gave an impression to lower civil and E & M staff that the decisions are taken jointly, and enthused a sense of bonding between all the E &M and civil staff .

• All the problems related to co-ordination & priority were decided during this joint round and this gave encouraging results.

ii. Monitoring of project schedule

• After joint round the meeting was held with civil and E &M executive engineers and main plant agencies ,where all the works required to be carried out next day /one week were discussed with commitments. These were reviewed next day and so on.

• During the commissioning stages the activities were discussed in detail and reviewed with engineers and main plant contractors daily.


iii. Site decisions

• Normally some mistakes occur in design drawings. Some of these can be rectified at site without any functional deficiencies. This was done and intimated to design office saving lot of time in to & fro correspondence.

iv. Dealing with contractors/agencies

• The contractor should be considered as your equal partner in completion of project and his difficulties should be sorted out immediately .In case any additional work, beyond scope is carried out this should be evaluated reasonably and recommended for additional payment if justified.


v. Dealing with local public/farmers/others

Here every one out This sorts out no. of grievances .No favor to be shown to any agency/political party .same treatment to all

vi. Appreciation

Appreciate any good work done; encourage staff & contractors to do better.


B) At KSK with Chinese(SEDC)

• Chinese people are very patient & Hard working

• They have vast experience in design of power generation as the Chinese installed power plant capacity is almost 6 times of our capacity.

• They however work as per chinese norms and these differ considerably in some cases

• They are very wise & make use of any lacuna/ deficiency or clarity in our specifications/agreement. We have to be very careful in specifying our requirements in specifications/agreement

• They are very cost conscious and try to reduce their cost sharing if they find any opportunity. We have to prevent such situation

15) MY EXPERIENCE OF IMPLEMENTATION OF PROJECTS (Contd)

B) At KSK with Chinese(SEDC)

•They are not tired of repeating same statements over days We have to be very firm in curtailing these discussions after fixing some time limit•They do not fully understand our working culture and therefore in order to convince our point, need lot of persuasion •Capable of working for longer duration •They are very observant and keep track of all happenings•Their erection expertise at Warora is however yet to be proved.•Need to be handled with care

Documents

Best Practices in Execution of Thermal Power Project