Sophisticated Biomass Plant Operations Yield Excellent Economics

Plant operators who treat their facilites as investments and implement sophisticated plant operations processes create lasting economic value.
By Douglas Machon | November 23, 2010

A carefully developed plant operations approach represents a critically important variable to optimize the production, commercial viability and plant profitability of biomass power generation facilities. Bridging the gap between a good project plan and a profitable power plant requires an integrated operations capability that should be implemented early. Early involvement demonstrates to the financial community the cohesion to bring operations expertise to bear early enough to make a difference in optimization of process technology in order to help mitigate technology and operations risks, as well as the commitment to establish value through cost-effective, long-term operations performance.

Investing in Plant Operations

Exceptional performance begins by treating plant operations as an investment, not an expense.  Doing otherwise has been demonstrated to be a disastrous strategic decision.  Why?  Because in the absence of an owner-aligned, experienced, sophisticated, proactive, performance-oriented operations capability, even the best project plan will fail to reach pro forma expectations.  This holds true for the owner attempting to save money by developing an untested internal operations capability or one who hires a conflicted party to watch over their handy work.

Best Practices Starts with Pedigree

Simply stated, there is no substitute for the experience gained from operating assets under a wide variety of conditions.  Equally true is that excellence in plant operations cannot be established and sustained without a sophisticated support and oversight structure.  Few organizations possess the collective institutional platform required for exceptional plant operations. 

Project financing entities will expect that operations success will best emanate from those firms that can demonstrate the capacity to provide the following: 

• Alignment: Management of the asset to the owner’s priorities, not the original equipment manufacturers (OEMs)

• Safety and Compliance: Adherence and implementation to all local, state, and federal compliance laws in the areas of safety, environment and North Electric Reliability Corp. through defined approaches

• Procedures: Development and implementation of custom-designed systems descriptions and operating procedures that detail exactly what it takes to operate the plant

• Maintenance: Implementation of a custom computerized maintenance management system in order to capture costs and maintenance history of all equipment and parts used

• Performance: Continuous development of operating options to maximize plant performance beyond OEM contract guarantees

• Optimization: Encourage participation in enhancement initiatives based on industry users’ groups, extensive training, industry conferences, specialized workshops and an experience database

• Warranties: Formal fault-scrutiny designed to proactively identify warrantee issues and potential serial failures  

• Relations: Enhancement of community relations by providing a consistent relationship with the regulator, off-takers, landowners and environmental agencies 

• Reporting: Development and implementation of reporting standards and requirements

• Oversight: Continuous project management and oversight of asset and implementation of performance engineering and optimization efforts, as needed.

The Results

Owners who treat plant operations as an investment and actually do implement sophisticated plant operations processes create lasting economic value:

• Obtain standard commercial financing

• Maximize employee safety

• Operate in compliance

• Avoid fines and penalties

• Mitigate technology risk

• Eliminate or minimize forced outages

• Minimize unscheduled repairs

• Maximize uptime

• Attain higher productivity/performance

• Optimize profitability.

Author: Douglas Machon
Business Development, NAES Corp.