Factors to consider to avoid risk and increase reliability in your power generation facility.
IHI Power

Selecting the right operations and maintenance (O&M) provider for a power generation facility can be a challenging task. The right partner will provide financial, safety and operational benefits while ensuring the plant performs as intended. 

Why Use an O&M Services Provider?

O&M services comprise the technical services required to operate and maintain a certain level of performance in a power generating system. 

These services often draw on skill sets that are not available at the company contracting an O&M provider. Without viable O&M support, many power plants would not be able to operate safely and efficiently. 

The benefits of using an O&M services provider in the power generation industry may include:

  • The ability to mitigate the risks involved in operating the facility and protecting employees.
  • Expertise in the power generation industry, particularly with the technology employed by the given plant.
  • A reduction in overhead and the use of in-house resources.
  • Improved financial returns for investors provided by value-added opportunities. 

For these reasons, it makes economic and business sense to find an O&M service provider with which the organization can develop a strong partnership.

Mitigating Risks

Mitigating risks is one of the most important reasons for using an O&M provider. This goal is accomplished by using methods that include:

  • implementing an effective safety program and fostering a corporate culture based on safe practices
  • understanding and implementing procedures to ensure environmental compliance
  • identifying and addressing single points of failure that can negatively impact systems and components
  • complying with all contracts, permits and agreements related to corporate assets
  • providing an on-site team with the required level of training and experience
  • ensuring that all service providers and on-site teams follow safe practices as defined by the O&M partner

An O&M provider will engage in all of the preceding activities to minimize any of the risks associated with power generating plants. 

Important Considerations

Once satisfied with the value of working with an O&M provider, the search for the right partner can begin. Several factors need to be considered when conducting this search, all of which should contribute to the selection of a provider with the appropriate qualifications:

  • The service provider’s safety and environmental record are critical factors when making a selection. All of the other benefits of an O&M provider are irrelevant if it does not operate in a safe and environmentally conscious manner. 
  • The provider needs to have experience with the specific type of power generating technology it will be supporting.
  • Experience in the energy market associated with the facility is important for making the appropriate competitive decisions. 
  • The chosen partner should be able to provide corporate support for required services that fall outside of the O&M contract.
  • The value to the organization needs to justify the cost of engaging an O&M provider. 

All of these aspects of an O&M service provider are important. The candidate organization’s ability to maintain facilities in a safe and environmentally friendly way should never be compromised for financial considerations. 

The search for an O&M service partner should be approached methodically. There are many steps that, taken together, will ensure that the selected provider can address the specific needs of a power generating company. The process should generally flow through the following stages.

A request for proposal (RFP) is developed and bids are obtained from qualified service providers.

The contracting organization evaluates the bids and determines which potential providers should be identified for further consideration. 

Current and former clients of the candidate providers should be contacted for information regarding their satisfaction, or lack thereof, with the services rendered.

At this point, a subset of providers should have been culled from the initial list, which can then be investigated more closely to determine the most appropriate partner.

Negotiating the financial implications of the O&M contract and evaluating the differences in value provided by the finalists is the next step in the process. The outcome of this evaluation should identify the provider whose qualifications address the organization’s needs. 

A Typical O&M Contract

Many components make up a typical contract between a power generating company and an O&M services provider. While the final contract between the two parties may vary to some degree, in general, the items are typically included or excluded as responsibilities of the O&M provider are explained here.

  • Full custodial responsibility for a given enterprise asset
  • The responsibility for training and maintaining a qualified plant staff
  • The development of long-term and strategic operational and budgetary plans
  • Evaluating suppliers and procuring the parts, materials and services necessary for the operation of the facility
  • Responsibility for ensuring that all regulatory standards are met and the plant complies with all applicable guidelines
  • Reporting on and managing data related to operational services provided
  • Developing, standardizing and implementing operational and maintenance procedures
  • Ensuring the availability of spare parts and minimizing excess inventory without increasing risk
  • Identifying a transition team that will assist in the process of delivering the contracted services

In addition, the majority of O&M contracts do not cover:

  • permit renewals or other types of environmental consulting
  • support for North American Electric Reliability Corporation (NERC), safety or environmental audits
  • engineering support for projects designed to improve the facility
  • contract negotiations with labor unions
  • performing studies that help determine if staffing and compensation are at appropriate levels

Make sure that the terms of the contract are understood and that the provider fulfills enterprise requirements. 

Real-Time Remote Monitoring Is Crucial

An O&M partner performs many activities related to the safe and efficient operation of a power plant. One of the most critical is conducting real-time monitoring of the facility and the components necessary for power generation. 

The following are some of the reasons that real-time monitoring is a vital responsibility of an O&M provider: 

  • Remote monitoring enables the reduction of labor required to provide around-the-clock capabilities for dispatching technicians.
  • The efficiency and availability of systems and components can be maximized with real-time monitoring.
  • Remote monitoring reduces the time spent troubleshooting and addressing faulty or malfunctioning equipment, allowing outages to be avoided.
  • Enhanced cybersecurity can be implemented with remote monitoring, which is essential as components become more connected and present network entry points for malicious actors.
  • Compliance with NERC standards for ensuring systems are operational is facilitated by remote monitoring.
  • Coordination of lockout/tagout procedures when many teams need to work on the same equipment is
  • more easily accomplished with a remote monitoring solution in place. 

The introduction of smart and internet-connected components has increased the need for remote monitoring. With a reliable remote monitoring solution in place, a generating plant will be less likely to experience unexpected outages and better serve its users. 

The benefits of contracting an O&M partner provide real value to power generating companies. The knowledge and experience the O&M services provider brings to a facility can improve operational efficiency and address gaps identified with a lack of in-house resources. An effective O&M partner will result in more uptime, fewer outages and the minimization of expensive equipment failures.

Circling back to the most important aspects to consider when choosing an O&M provider, look for one with a stellar safety and environmental record. Make sure the contract spells out the real-time monitoring responsibilities of the partner and that it is well-versed in the specific type of equipment used by the company. 

With the right partner, a business will flourish and customers of the power generating company will be happy that the lights are always on.