22 April 2016 year “Power-plant engineering needs not so much support as adequate demand”
Journal “Energy without Limits”, No. 2 (37) April – May, 2016

Today, domestic power-plant engineering has once again found itself at the crossroads. On the one hand, the Capacity Supply Agreement program, providing it with a significant number of orders, has essentially been completed. On the other hand, the market is substantially influenced by sanctions restrictions on deliveries of high-tech products. Mikhail LIFSHITZ, Chairman of the Board of Directors of the industrial holding “ROTEC,” sat down to discuss the problems, advancements and emerging challenges for the domestic power-plant engineering industry.

Pragmatic approach

The program for new capacity construction in the country has essentially been completed. Today, new facilities in the power supply system are isolated instances. Towards which markets is domestic power-plant engineering directing its efforts under such conditions? How is it planning to survive after completing the construction boom in power engineering?

In my opinion, this is a rather strange wording of the question. Undoubtedly, new equipment for new facilities is the most expensive and most attractive market segment for engineering workers, but this is far from the whole market. However, if we plan to develop the modern economy, this means that it will need a modern and effective power supply system; thus, power-plant engineering will not stand idle.

The Capacity Supply Agreement program (CSA) was just aimed at making the country’s power supply system more modern and effective…

The facilities constructed within the scope of implementation of the CSA program are in fact new and effective equipment, but this is only 10% of the entire installed capacity of the domestic power supply system. The other 90% is constituted by the technological base, which is already more than 30 years old, and the age of some facilities exceeds 60 years. The performance of this equipment appears commensurate. In fact, the problem of rapid ageing is only increasing with each passing year. Today, the upgrading of these capacities is one of the most promising directions in the development of domestic power-plant engineering.

Possibly, I shall express a seditious thought, but I am sure that the construction of new facilities in the country was not the optimum path. We spent much efforts and funds for the construction of new facilities that increased total system capacity by 10%. But, to my mind, such a result could be achieved much more cheaply and effectively by upgrading operating facilities with an increase in the installed capacity of basic equipment. Our work with the “Mosenergo” facilities is an example of such an approach. Today, we’re upgrading T-250 turbines and increasing their unit capacity to the range of 295 – 330 MW. This is just the required 10%. At the same time, CAPEX is three times lower than under the construction of a new facility, because the work concerns only the equipment and does not significantly involve permanent buildings and infrastructure.

But today, the case in point is that additional capacities are not required anymore; furthermore, excessive capacities should be taken out of operation…

In many respects, this is such an accounting approach to the complex technological branch. In the beginning, we drew frightful crosses and said that the system had no sufficient capacities; now, we say that the economic situation has changed and that excessive capacities are not required. At the same time, we speak of the fact that domestic industry should grow and develop and this a priori will increase the demand for energy resources. You may perform abstract mathematical calculations for a very long time but you should not forget that even a relatively-modest power facility has very sophisticated equipment with extended operational periods and powerful infrastructure. Its withdrawal from operation requires as much money as the liquidation of any complex industrial facility. I am sure that measures for the upgrading and adaptation of operations under new conditions will, for many so-called excessive facilities, be several times cheaper and more effective that their liquidation. This is the more pragmatic approach to the problem.

By the way, I would like to say some words about the pragmatic approach. Upgrading also requires significant investments, but today, the situation is such that the income of the branch barely even covers repair works…

I agree that today, the field for financial maneuvers in domestic power engineering is considerably limited. Taking into account the upgrading scale required by the system, it is quite possible that today, power engineers need the state’s support. But, in my opinion, we should not focus only on the paradigm of quarterly budgets even in this, not the simplest, situation.

Any equipment requires inputs for maintenance and repair. Let us assume that the cost of the service maintenance of a gas turbine for 10 years is equal to the cost of purchasing one such turbine more. Furthermore, when you repair the equipment, you only restore its current parameters. And as physical depreciation increases, its performance will drop and fuel consumption will grow. You will lose noticeable money. In future, you will lose even more money because the cost of repair of the equipment with old parameters will only increase. The threat of emergency stops will also gradually increase.

Upgrading is absolutely another situation. You change per se the basic unit specifications. Even if we do not speak of increased capacity, undoubtedly, we speak of improved performance and lowered fuel consumption. Before, we – together with “Mosenergo” – had implemented a large-scale program for the replacement of pumps at 19 power-generating units, whereupon their use for own needs dropped by an average of 10% and they did not require any additional expenses for their repair for almost 10 years. And the project payback period was 1.5 years. On the whole, if you begin not only from current costs but also from the mid-term economic effect, it is not difficult to calculate that high-quality upgrading will help save on your costs for the repair program for approximately 5 years. Additionally, fuel costs are lower and unit upgrading is more rapid than new construction. Financial sources for its implementation appear from here.

Safety in online mode

Safety and reliability are important issues for power engineering. What does the monitoring and “red line” system for the operation of equipment constitute at present?

Sophisticated electronic systems are widely used throughout today’s world; they make it possible to assess the technical condition of specific equipment parts and units during the whole life cycle. These are, first of all, remote monitoring centers which perform collection and analytical processing of data obtained from the equipment for large groups of facilities. We also have such center. It is located in the town of Khimki and had been functioning for a year already. But this is not only monitoring – our center makes it possible to forecast deviations in the operation of the equipment!

The systems usually make it possible to perform comparative analysis of equipment condition in identical operational modes and record parameter deviations from the standard in online mode. The system is associated with some empirical equipment model and records deviations in its operation from this ideal with specific frequency. Such monitoring systems have been used for quite a long time and they are sufficiently effective. But time marches on…

Today, standard monitoring systems, in essence, see events that have already occurred, and warn about their consequences. They accumulate a large data array but they cannot prognosticate possible events in advance. At the same time, just the high-quality prognosis makes it possible to significantly change functionality and achieve a manifold increase in control efficiency. This is the key difference between our PRANA equipment-condition monitoring system and the conventional configuration.

We have designed our own adaptive model system, which considers the operation of absolutely specific equipment under absolutely specific conditions. The system deeply structurizes and details local data, but it not only saves this information. Using the method of similarity-based modeling (SBM), it assesses doubtful conditions even before revealing an actual defect and accordingly makes it possible to dramatically increase the time lag for “alarm signal.”

Such a prognosis for assessing possible problems as early as possibly makes it possible to significantly decrease costs, avoid expensive emergencies and, good God, accident repairs and purchases. This is not only the answer to the question “about money.” This is one of the most effective answers to questions about providing for the safety, reliability and efficiency of the operation of power-generating facilities. These are key issues for the power industry.

The PRANA system was developed by “ROTECH” itself, and we are proud of it.

We are ready to give odds

We have logically approached the problem of import substitution. How do you assess this process? Which imports can and should be substituted in domestic power-plant engineering?

Today, there is too much populism on this topic. I do not presume to assess other branches, but I can assess fully the situation in our branch. The engineering level or level of production potentialities of domestic power-plant engineering is not at all worse than any other today. This may be said both concerning the development of our own technologies and localization of the Siemens, GE, Alstom technologies and engineering centers at domestic production sites. As concerns the engineering and production of steam turbines, we even significantly surpass many foreign manufacturers. Thus, the point is not what we can and what we cannot. The point is what it is necessary – and who will provide the demand – for these products.

Power plant engineering is complex, science-intensive, long-cycle production. The manufacture of any new product means significant investments. Significant investments are possible only in one case: if there is an understandable, long-term demand for the product. Another variant means the exceedingly-expensive constructions of cloud-castles that nobody needs.

The situation with domestic production and servicing the potentialities of the hot-path elements of gas turbines is a good example. Formerly, nobody in our country counted on the development of gas turbine technologies in power engineering. The emphasis on these technologies was made only in the process of implementation of the CSA program and it was more favorable to order the works on the hot-path in foreign countries. But the situation began to change both because of external reasons and because of the increasing demand for these services according to the natural deterioration of equipment at gas stations. And we reacted immediately. We put into operation a workshop for the restoration and perspective production of the hot-path elements of gas turbines at the Ural Turbine Plant. We’re already planning the full localization of all critical technologies at this production site over the next two years. This will require our significant investments, but they are justified by the demand. We know for whom and when these services will be necessary.

So, a significant bit of slyness is present in the discussion of difficulties in import-substitution – at least, in our branch. If there is sufficient demand, the branch is quite ready to react to it by itself. In this case, state support would likely be more effective in terms of the development and introduction of fundamentally-new high-tech products.

To what extent is it expedient today to speak of the development of the export direction in domestic power-plant engineering?

As concerns equipment, we have something to offer to the external markets. For example, our steam turbines and auxiliary systems are quite competitive. Today, domestic enterprises are outfitted with equipment and technologies. The problems of references, confirmed experience in the operation of such equipment are more important in this case for the market. Any of your technological innovations will be assessed by the external market as a risky experiment without this data. But the main problem of domestic exports rests with another issue. The sale of any long-cycle product implies the use of significant credit resources. And today, credit cost alone is the most serious restriction on the Russian export of high-tech equipment. Conditionally, if your product costs one billion and it is supported by credit servicing at a rate of 7%, a product with a similar price and quality and with a credit servicing cost of 0.5% leaves you virtually no chances on the market. Even the hypothetical decrease in price cannot offset this tremendous difference in the cost of financial services. This is the main problem on today’s external market, and it will be very difficult for domestic equipment to compete abroad without normal export financing.

Sergei Karaulov 

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