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Palisade User Conference. Maximising the Net Present Value of Investment in the Maintenance of Assets - Ujjwal Bharadwaj, TWI Ltd, Cambridge, UK. April 22 nd & 23 rd London. Presentation Outline. Overview of TWI Risk Management Risk Based Asset Management

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palisade user conference

Palisade User Conference

Maximising the Net Present Value of Investment in the Maintenance of Assets

- Ujjwal Bharadwaj, TWI Ltd, Cambridge, UK

April 22nd & 23rd

London

presentation outline
Presentation Outline
  • Overview of TWI
  • Risk Management
  • Risk Based Asset Management
  • The Risk Based Approach to Plant Maintenance
    • Qualitative Assessment
    • Quantitative Analyses
    • Risk Based Optimisation
  • Benefits of using the RB methodology
  • Some issues
  • Questions
what is twi
What is TWI?
  • Independent Research & Technology Organisation for welding and joining related technologies
  • Serves industrial member companies/government
  • Non-profit distributing and limited by guarantee of members
  • Derives from The Welding Institute and the British Welding Research Association
key figures
Key Figures
  • 530 + staff
  • 300 graduate status
  • 3500 industrial members from
  • 66 countries world-wide
  • 4 major UK locations
  • 4 overseas operations and training bases
where is twi hq
Where is TWI HQ?

On Granta Science Park 8 miles South of Cambridge

twi uk locations
TWI – UK Locations

North East

Yorkshire

Wales

Cambridge

twi overseas
TWI Overseas
  • Operations/training in Malaysia, Brazil, Iran & China
  • Associates in Australia, France, Ukraine & US
  • Agents/presence in US, India, Korea, Japan, Indonesia, Italy, Saudi Arabia and the United Arab Emirates, Kazakhstan.

Training base at Malaysia

key industry sectors served
Key Industry Sectors Served

Aerospace

Automotive

Construction

Equipment,

Consumables & Materials

Electronics

Medical

Oil & Gas

Power

risk management
Risk Management
  • Risk:
    • Combination of the probability of an event and its consequences (ISO/IEC Guide 73)
  • What is Risk Management?
    • Direction and control with regard to risk
    • In a financial setting
      • Concerned with events that pose opportunities for gain as well as potential for loss
        • Currency fluctuation, interest rates etc
    • In an engineering setting
      • Risk is a combination of occurrence of harm and the severity of that harm ( ISO/IEC Guide 51:1999 )
      • Harm is physical injury or damage to the health of people, or damage to property or the environment
  • Risk management process…
slide11

Risk Management Strategic Objectives

Risk Assessment

Risk Analysis

Risk Identification

Risk Description

Risk Estimation

Formal Audit

Modification

Risk Evaluation

Risk Mitigation

Risk Acceptance

Risk Communication

Monitoring

risk based asset management
Risk Based Asset Management
  • Asset Integrity Management
    • Ensure integrity of engineered systems
    • ‘Fit for purpose’ throughout asset lifecycle
    • Ability of an asset to perform required function effectively and efficiently whilst safeguarding life and the environment
  • Objective: Maximize returns, minimize risks
        • Safety, Health and Environmental (SHE) risks
        • Business risks
risk based asset management1
Risk Based Asset Management
  • Attributes of a good RBM for asset mgmt
    • Consistent, Transparent and Auditable
    • Identify potential and active DMs of plant
    • Plan inspection, such that residual risk for each DM is within acceptable limits
    • Increased reliability, safety and availability
    • Reduced scope of work for shutdown inspection
failure rate over asset life cycle
Failure rate over asset life cycle

Infant mortality failures

Infant mortality failures

Wear out failures

Failure

rate

Constant random failures

Life of the asset

failure rate over asset life cycle1
Failure rate over asset life cycle

Infant Mortality

Stage

Ageing/ Final Stage

Useful Life

Failure

rate

Operating Life

the ageing stage in a plant s life
The Ageing Stage in a Plant’s Life
  • Accumulated damage e.g.
        • Thinning due to Corrosion/ Erosion
        • Fatigue due to Cyclic Stresses
        • Creep due to high temperature
  • Remaining Life Assessment/ Estimates
        • Prediction for replacement/maintenance
        • Deterministic
        • Probabilistic
          • to capture the uncertainty involved
the risk based approach to plant maintenance
The Risk Based Approach to Plant Maintenance
  • Risk is a combination of probability of an event and its consequence (API 580)
  • Step 1: Preliminary Risk Analysis of the System
    • By Qualitative Risk Analysis
    • Identify high risk components
  • Step 2: Detailed Risk Analysis of identified System components
    • By Quantitative Risk Analysis
    • Develop a probabilistic RL model of the degradation mechanism
  • Step 3: Optimisation
    • Such that financial benefit is maximised
qualitative risk analysis
Qualitative Risk Analysis
  • System Analysis
    • ETA using @Risk Precision tree for all sub components
    • System boundaries, failure criteria specified
    • Data used
      • Historical (local)
      • Specific data
      • Generic
      • Expert Opinion
qualitative risk analysis1
Qualitative Risk Analysis

Component

Likelihood

Consequence

Risk Score

Elec Control

High

Medium

48

Gear Box

Low

Very High

40

Yaw System

Low

Medium

24

Entire Turbine

Low

Very High

40

Generator

Medium

High

48

Hydraulic

Low

High

32

Grid Connection

Medium

Low

24

Blades

Medium

Medium

36

Brakes

High

Medium

48

Axle/ Bearing

Medium

Medium

36

Mech Control

High

Medium

48

Entire Nacelle

Medium

Medium

36

Coupling

Medium

Medium

36

Tower

Medium

High

48

Foundation

Low

Very High

40

  • qualitative analyses
  • semi quantitative analyses
quantitative risk analysis
Quantitative Risk Analysis
  • Qualitative Analysis highlighted a structural

component as high risk.

  • FMEA identified

three main damage mechanisms

    • Corrosion
    • Scouring
    • Fatigue
  • Corrosion chosen to illustrate Risk Based approach
  • Probabilistic Corrosion Model gives failure rate with respect to years of service.
quantitative risk analysis1
Quantitative Risk Analysis
  • Main input is distribution of corrosion rate (CR) reflecting the uncertainty involved.
  • Remaining life model:
  • RL= (Tstart - MAT)/ CR

Tstart= Starting wall thickness (mm)

MAT=Minimum Allowable Thickness to maintain integrity (mm)

CR=Corrosion Rate (mm/yr)

  • Probability of failure is P(RL<0)
quantitative risk analysis2
Quantitative Risk Analysis

Marine Atmosphere

Splash Zone

High Tide

Low Tide

Quiet Sea Water

Mud Line

Typical Corrosi

on Rate of Steel, mpy

  • Corrosion rate estimate
  • Curve fitted over historical values using @Risk
  • Expert opinion
quantitative risk analysis3
Quantitative Risk Analysis
  • Repeated sampling of values from input distributions gives PoF based on RL for the considered DM.
risk based optimisation 1 3
Risk Based Optimisation (1/3)
  • Risk expressed in Expected Values (EV)
  • EV= PoF x CoF
  • Consequences of failure mainly lost production
  • The Optimisation model finds the time of replacement of the plant when the Net Present Value (NPV) is the maximum over planning period
  • The optimisation weighs the EV of replacement with the EV of not replacing to identify the optimum year of replacement.
potential benefits from using the risk based methodology
Potential Benefits from using the Risk Based Methodology
  • Target SHE and business risks
  • Maximize return on investment in O&M by risk prioritising
  • Better understand DMs
  • Better control and prevent unexpected system outages
  • Identify and eliminate gaps in existing integrity mgmt process at a site
  • Provide an auditable path for integrity mgmt
some issues
Some issues
  • Limitations of the optimisation tool
      • For complex systems, non-linear optimisation tools required.
      • Increasing dependencies require more computing power.
  • Limitations of the methodology
      • Used mainly in the Ageing phase when time dependent damage has accumulated. Needs to be used in conjunction with an overall strategy for plant/equipment life management.
      • More suitable to business critical systems as opposed to safety critical systems.
  • Availability and quality of data
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