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Diesel Power Plants – Alexander Schroeder17 September 2020
© Munich Re – all rights reserved page 1
17 September 2020Alexander Schroeder
Diesel Power Plants
Agenda
1. Introduction
2. Risk Assessment
3. Risk Inspections
4. Summary and Questions & Answers
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why Diesel?
insurance aspects
get a real feel of your risk
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Diesel Power Plants – Alexander Schroeder17 September 2020
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Introduction 1
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IntroductionHistory
Reliable, proven technology (patented by Rudolf Diesel, 1893)
Broad and long-standing experience, worldwide
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MAN Energy Solutions production facilitiesin Augsburg, Germany, formerly called „MAN Diesel“
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IntroductionTechnology
Combustion engine with compression ignition
High torque, limited speed
Two-stroke or four-stroke
Wide range of fuel injection principles
Turbocharger
High efficiency of up to 50% (petrol engine (Otto cycle): up to 40%)
Good emission behaviour; high noise emissions
Scalability (size and number of cylinders)
Continuous technical improvements turngood old Diesel engines into high-tech equipment!
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IntroductionApplications
Mobile and stationary applications
Commercial capacity range from ~50 kW (vehicles; emergency gensets) up to 80 MW (vessels)
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IntroductionApplications
Very large rotating parts
Compact construction
Complex casing: water jacket, fuel lines
High-end machining
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IntroductionFuel
Cost of fuel represents about 75% of total lifetime operating cost!
Gaseous fuel (natural gas, LPG)
Liquid fuel (“diesel fuel”, Heavy Fuel Oil, Light Fuel Oil)
Bio-fuel (vegetable oils; gas from landfills – hydrogen sulfide!)
Multi-fuel (for instance, natural gas + HFO + LFO)
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Diesel Power Plants – Alexander Schroeder17 September 2020
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IntroductionDiesel Power Plants
Typical engine ratings for Diesel Power Plants: 8 MW … 18 MW (large plants may have engines rated up to 50 MW)
Important manufacturers: Wärtsilä, MAN, Mitsubishi Heavy Industries,Hyundai Heavy Industries, Cummins, MTU, Caterpillar, …
& Chinese& Indian & …
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IntroductionDiesel Power Plants
Power generation: base load and back-up capability
Relatively low Capex; Opex (staff, maintenance, fuel) rather high (up to 400 USD/MWh)
Quick start and ramp-up to full load
Load change tolerated
Flexibility in plant capacity since engines / blocks can be run independently
Engines / blocks can be added at a later stage
Addition of HRSG & STG possible17 September 2020 13Diesel Power Plants - Alexander Schroeder
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Diesel Power Plants – Alexander Schroeder17 September 2020
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IntroductionDiesel Power Plants
Sturdy technology, “work horse”, tolerates dust, humidity, heat, cold
Suitable for power generation in less developed countries or in remote areas: poor infrastructure (low power capacity, difficult fuel supply), peak load buffer (grid stability issues),rural communities (island mode), remote industrial plants (cement, mining)
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Risk Assessment 2
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Risk Assessment
Engineering Insurance: Machinery Breakdown & Loss of Profit; Construction & DSU
Property Insurance (PAR with or without MB, with or without BI)
Operational Power (covers for large utilities may contain a larger share of Diesel)
Base load Diesel Power Plants
Peak load / peak shaving Diesel Power Plants, also in connection with renewable energy plants
Emergency/Stand-by Diesel Power, e.g. industrial plants, hospitals, data centers, cold stores
Black-start Diesel Power for power plants and industrial plants
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Risk AssessmentConstruction
Easy to build, easy to install
Proven engine technology
Low Capex
Suitable for remote locations
Reliable plant technology
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► Contractor experienced with DPP?
Keep to original project schedule!
► OEM in charge of Testing&Comm.?
References for particular engine type?
► What drives the principal?
DSU calculation transparent?
► Plant fire standards?
Logistics, manpower, workshops?
► OEM responsible for plant design?
Manufacturers’ warranties?
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Risk AssessmentConstruction
Serial Loss Clause!
No cover for Phased Hand-over / Initial Operation without a clear understanding of the programme and only with appropriate clauses and premium!
Fuel Quality Clause!
Exclude Pollution & Contamination! (for instance, NMA 1685)
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Risk AssessmentOperation
Flexible operating regime possible
Sturdy work horse
Maintenance possibly in-house
Explosion of engine unlikely
Fuel flexibility
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► Right skill set of staff?
Operation & Maintenance contract?
► Maintenance philosophy?
Condition Monitoring?
► Long-term Service Agreement?
Spare parts, consumables, facilities?
► Fire detection & suppression?
Safe fuel handling?
► Fuel quality?
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Diesel Power Plants – Alexander Schroeder17 September 2020
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Risk AssessmentOperation
Basis of loss settlement! (ideally, New Replacement Value)
Fuel Quality Clause!
Exclude Pollution & Contamination! (for instance, NMA 1685)
Plant Testing & Commissioning Clause! (for instance, LMA 5197)
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Risk AssessmentCauses of loss or damage
Wear & tear including corrosion, leading to major breakdowns
Fire, primarily from leakages (engine, lube oil unit) and on transformers
Overload and incorrect operation, particularly start-up/shutdown
Fuel issues, air inlet issues contamination, particles
Generator
Poor maintenance, for instance:shaft train alignment vibrationlube oil deterioration corrosion, abrasionleakages
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Risk AssessmentCauses of loss or damage
IMIA Working Group Paper on Diesel Engines:
50% operational failure (!!)
30% external factors
20% manufacturing failures
source: IMIA WGP 103
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BI: up to 70% of engine value
PD: up to 30% of engine value
Risk AssessmentSum Insured / PML
Rule of thumb, if no TSI available: value of plant in the range of 450,000 to 600,000 USD per Megawatt
PML FLEXA (fire):100% value of the affected unit
+ 50% of any neighbouring unit
and/or damage to other surrounding property
PML Machinery Breakdown:
100% value of the affected engine
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Risk AssessmentLoss example
Oil leak on engine cylinders fire on (1) engine affecting (2) neighbouring units
Insured value of plant (4x 10MW, manufactured 2007): EUR 24m
Insured value of (1) engine: EUR 2m
Unfortunately, “new for old” basis…
Negotiated repair cost : EUR 6m !!
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Damage to lube oil unit and to exhaustsource: Munich Re
Risk AssessmentLoss prone elements
Cylinder liners, pistons, connecting rods, crankshafts = “heart” of the engine push for greater power output & higher efficiency
leads to increased load (temperatures, forces) on these parts
Turbocharger: fatigue, poor air quality breakages
Fuel injection system: high pressure leakages fire
Transformer: failure of insulation fire impact on whole plant
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Risk AssessmentRepairs
Critical spares & consumables on site?
Lead time for spare parts? Cost (off-the-shelf or re-engineered)? Shipping?
Workshop nearby? Heavy weight, high-precision machining (shafts, casings)!
Lifting, transport, logistics?
Skilled contracted labour available?
OEM support possible on site?
… time horizon for successful completion…?
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Risk Inspections 3
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Risk Inspections
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5x 9 MW Wärtsilä W20V32source: Munich Re
Risk InspectionsAgenda items for DPP surveys Fuel
Auxiliary services: cooling system (incl. coolant), heat exchanger tubes, air handling
Engine Mechanical: turbocharger, coupling, operating parameters, periodic testing (shaft deflection, fuel injector pressure, crankcase inspections)
Lube oil
Engine Electrical / Generator: periodic testing (block/lube oil heater; insulation resistance, winding resistance, field ground, brush inspections)
Air inlet and exhaust: filtration/conditioning, stack inspection
Switchyard: lighting protection, transformer insulating fluid testing
Control Room: protection relay testing (self-testing & bench testing)
Fire Protection
Operation & Maintenance
Learning from Losses and/or Near Misses17 September 2020Diesel Power Plants - Alexander Schroeder 29
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Risk InspectionsFuel and Lube Oil – examples
Testing, delivery, storage of fuel oil
Regularly test fuel to spec
Drain water daily: fuel tank, tank water separator
Filter receipt fuel oil to moderate particle content (20µm)
Micro-biologic growth testing
Testing, delivery, storage of lube oil
Store containers away from weather
Pre-filter lube oil (5µm)
Regularly (400…500 hrs of ops) test lube oil to spec: viscosity, total base number, water content, ICP-AES spectroscopy,Fourier transformer infrared (FTIR) spectroscopy
Viscosity as given by engine manufacturer
Preferred sample point: from lube oil pump, secondary is sump/reservoir17 September 2020Diesel Power Plants - Alexander Schroeder 30
source: Munich Re
Risk InspectionsFire Protection – examples
Automated or manual systems for fire fighting and detection(NFPA 37: Installation & Use of Stationary Combustion Engines)
Challenge: large amounts of combustible fuel right next to electric generator
Control systems, shutdown procedures, alarm procedures
Fire brigade nearby, or trained site personnel? Fire drills?
Availability of sufficient fire water
… and many more questions!
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Risk InspectionsOperation & Maintenance
Operation & Maintenance contract with OEM in place?
Long-term Service Agreement (LTSA) with OEM in place?
Spare part inventory, shared pool of spares?
Significance of maintenance in plant operation: cost vs benefit?
Staffing: inhouse and skilled contractors?
Maintenance regime: predictive, preventive, corrective maintenance?
(Online) Condition Monitoring of temperature (bearings, lube oil, generator, …), pressure (fuel, air, filters), vibration (bearings, shafts, …), electrical readings(batteries), transformer (DGA, thermography, …), etc.– inhouse, or 3rd party vendor, or remotely by OEM?
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Risk Inspections“Maintaining diesel engines for reliable operation” by HSB
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The Hartford Steam BoilerInspection & Insurance Co. (HSB)
founded in 1866,since 2009 a Munich Re company
Loss Prevention and Preventive Maintenance documentson HSB homepage
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Summary 4
Summary
Well-known and reliable technology, but under constant development
Challenges in operation and maintenance often underestimated
Losses mostly out of incorrect operation, and fire
Losses are comparatively costly
Make the right choices, assess your risk carefully (underwriting & inspections)
Further reading: IMIA Working Group Paper WGP 103 – Diesel Engines HSB – Maintaining diesel engines for reliable operation
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Use the code: 88 47 68 9
Feedback Form - Diesel Power Plants
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