NEWS RELEASE                                                                                        SEPTEMBER 2014

Revenue Potential for Outsourcing of Fossil-Fired Power Plant Processes Is More than $20 Billion/yr

Fossil-fired power plants around the world expend more than $400 billion to operate their facilities.  More extensive outsourcing could improve operation of these facilities with at least a 10 percent savings.  This is a multibillion dollar opportunity concludes the McIlvaine company in the latest additions to Fossil and Nuclear Power Generation: World Analysis and Forecast.

There are many ways to reduce costs. They include:

  • Reduce fuel costs and increase efficiency
  • Reduce other consumables expenditures
  • Decrease labor
  • Decrease other maintenance and operating costs
  • Improve fleet operations
  • Generate additional revenue streams

The operation of power plants is becoming increasingly complex.  Fortunately, there are new tools to deal with the complexity.  These tools can be most efficiently employed by specialists.  Remotely located optimization systems can operate plants more efficiently than onsite personnel.   Maintenance tasks can be scheduled based on need rather than routine.  This is in part due to smart valves and pumps which communicate their health automatically.

Fleets which include renewable generation (wind and solar) increase the complexity of management due to energy source fluctuations.  The complexity in environmental laws which require a fine balance between opposing needs make outside expertise particularly important. SO2 can be decreased, but CO2 is increased.  NOx can be decreased, but CO is increased. The operator must continually strike the optimum balance.  Day-to-day changes in the prices of pollution allowances, fuel and other factors make it desirable to outsource decisions to a supplier who can invest in the software and infrastructure to deal with these challenges.

There is a big potential to reduce the expenditure for consumables.  For example, all the filter purchases can be outsourced. Continuous monitoring tools such as broken bag detectors and continuous emissions monitors capable of measuring individual metals, acid gases and other pollutants allow a third party to remotely make filter inspection and replacement decisions. A medium size power plant can have more than 15,000 filters in operation.  Savings in purchasing and inventory can be significant with the large volumes involved.

The ownership and operation of pollution control systems can be outsourced. NIPSCO has outsourced the ownership and operation of a flue gas desulfurization system at the Bailly station since the 1990s.  Air Products and Mitsubishi formed a partnership to provide the operation and maintenance. The program was quite successful in meeting emissions goals and minimizing consumption of limestone and energy.

Another big potential is for outsourcing of a “continuing education” program for plant personnel. There are both general as well as specific needs. Many general training options are available, but outsourcing provides a unique option for supplying the specific day-to-day needs to make the important decisions.

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