Asset Management Implementation

Technical Proposal

Borna Energy Development Technology Co.

 Asset Management Implementation
Technical Proposal

Table of Contents
1 Introduction ..............................................................................................................................2
1.1 Document scope ...............................................................................................................5
2 References .................................................................................................................................5
3 Abbreviations ...........................................................................................................................6
4 Deliverables ..............................................................................................................................8
5 Operation, Maintenance & Inspection Philosophy ...............................................................8
6 Maintenance engineering ........................................................................................................9
7 RAM AND SYSTEM OPTIMIZATION .............................................................................10
8 RCM and Criticality Assessment .........................................................................................11
8.1 RCM Methodology........................................................................................................11
9 Risk-based Inspection (RBI) .................................................................................................14
9.1 Fixed Equipment ...........................................................................................................14
9.1.1 Probability of Failure .............................................................................................. 14
9.1.2 Corrosion Loop ....................................................................................................... 14
9.1.3 Consequence of Failure........................................................................................... 14
9.1.4 Risk Management activities .................................................................................... 14
10 Spare part management ........................................................................................................15
11 Condition-based maintenance (CBM)..................................................................................15
12 life cycle information (LCI) management............................................................................16

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Asset Management Implementation
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1 Introduction
An asset is anything that has value, or potential value, to an organization. It could be a brand,
intellectual property or a physical object.
An asset management system is a set of interrelated and interacting elements of an organization,
whose function is to establish the asset management policy and asset management objectives, and
the processes needed to achieve those objectives.
Organizations that implement good asset management practices will achieve improved business
performance and competitive advantage, through the realization of greater value from their assets
and the confident delivery of their business objectives.
Good asset management practices help an organization to make better asset investment decisions.
They improve the clarity and consistency of value-for-money and satisfaction of stakeholder
expectations in both the short and long term.
The value impact of decisions will differ across different asset life cycle stages. This graph shows
costs in red and benefits in green and how they typically vary over the stages of an asset’s life
cycle.
Decisions at the design or asset selection stage have the greatest opportunity to improve or damage
value over the whole life cycle. Up to 30% of total life cycle costs can sometimes be eliminated
by good decisions at this stage.
It is important that any design specifications that are used during the acquisition of an asset set out
its functional requirements and exactly how these are to be achieved.

Figure 1-1 Asset Life Cycle Cost

Implementing an integrated approach to asset management introduces better risk management

within an organization. This helps to:
• build customer, regulator and local society confidence
• reduce financial and performance losses

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• improve safety
• enhance reputation
• minimize environmental impact, and
• reduce liabilities, such as insurance premiums, fines and penalties.
An informed, risk-based approach to managing assets leads to higher operational reliability, which
in turn delivers better levels and consistency of service to meet or exceed the expectations of
customers and other stakeholders.
Asset owners and investors want high asset performance and availability, confidence in their
responsible stewardship and good return on their investments.
Effective asset management can benefit such stakeholders through:
• lower total asset life cycle costs
• higher asset performance
• higher confidence in robust governance
• better value-for-money, and
• confidence in sustained future performance.
Asset buyers, designers and fabricators have interests in meeting a specified requirement at lowest
possible cost and in the quickest possible timescales – they are often motivated by ‘on time, on
budget’.
Effective asset management can benefit this group because it can enable:
• more objective evaluation of design alternatives based on real, whole life cycle costs and
risks
• handling of trade-offs between short term gains and long-term consequences, or between
Capital and Operating expenditures
• standardization and the management of obsolescence or technology changes, and
• improved supply chain relationships.
Eventually the benefits of asset management can be summarized:
• improved financial performance
• better asset investment decisions
• more robust risk management
• improved services and outputs
• the ability to demonstrate social responsibility
• the ability to demonstrate compliance
• enhanced reputation
• improved organizational sustainability
• improved efficiency and effectiveness
• better motivated staff
• improved supply chain relationships
• the ability to evaluate asset, investment or strategy alternatives more objectively

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• the ability to explore the trade-off between short term gains and long-term consequences,
and
• the ability to identify efficiencies of standardization and supply chain relationships.
For a power generating company, assets are the power plants, wind turbines, substations etc. We
sometimes also talk about an ‘asset system’, which is a group of assets that work collectively for
a particular purpose. The term ‘asset portfolio’ is used to describe all the assets owned or managed
by an organization, such as an electricity transmission system or all the sites and facilities owned
by a power generating company.
To have an effective power generating facility with high availability and reliability, implementing
an asset management system is crucial. This is done using ISO 55000 as the foundation and the 39
subjects that the Global Forum for Maintenance and Asset Management (GFMAM) and the
Institute of Asset Management (IAM) use to describe the scope of an asset management system,
sometimes referred to as the asset management landscape, Figure 1-2.

Figure 1-2 Asset Management Landscape

The idea is to have an effective system and organization which results in an effective life cycle
delivery. Life cycle delivery has 4 stages. These stages include:
• asset creation and acquisition, where client needs are identified and the right solution is
determined
• asset operation, where the assets are operated in a manner that achieves deliverables,
while optimizing the value of the asset and ensuring the control of risk

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• maintenance delivery, which involves scheduling and delivering inspections, planned
maintenance activities that are compliant with asset plans, the control of activities to meet
agreed criteria and the management of faults and incidents, and
• asset decommissioning and disposal, which includes the safe removal and disposal of
assets from the system.

1.1 Document scope

The purpose of this document is to present an Asset Management Strategy where major hazards
shall be managed to minimize personnel exposure, preserve life, minimize injury and limit
business losses arising from accidents that could reasonably be anticipated.
Through this initiative, a systematic operation and maintenance and spare part strategy will be
developed applicable to different types of components, ensuring an optimal level of operating
performance (availability) at reasonable efforts (operating expenses) through a transparent and
traceable approach. This is achieved through employing risk- and reliability-centered maintenance
approaches that deploy data-driven concepts such as condition-based maintenance.
The two main activities are:
• Operation: The objective is to minimize the failures and plant shutdowns. The efforts of
operation actions should focus on having an installation working 24/7. Operation actions
refer to activities contributing to the high-level management of the asset such as remote
monitoring, environmental monitoring, electricity sales, marketing, administration and
other back-office tasks.
• Maintenance: The goal of this activity is to minimize the time of a plant shutdown due to
a failure and to obtain maximum availability and integrity. Maintenance activities include
corrective maintenance, preventive/ proactive (condition-based) maintenance and the
management of spare parts warehouse. Maintenance accounts for the largest portion of
O&M effort, cost and risk.
This document is applicable in the design phase; Concept, FEED and EPC and as well as
commissioning and operation phase.

2 References
[1] DNVGL-ST-0145, Standard, Offshore Substations, April 2016.
[2] ISO 19901-9 Specific requirements for offshore structures — Part 9: Structural integrity
management.
[3] IEC 60300-3-11 Reliability Centred Maintenance.
[4] IEC 62271 suite - High-voltage switchgear and control gear.
[5] API 580, Risk-based Inspection, Third Edition 2016.
[6] API 581, Risk Based Inspection, Third Edition 2016.
[7] SAE JA1011 ‘Evaluation criteria for reliability-centered maintenance (RCM) processes.
[8] API 579, Fitness For Service, Second Edition 2007.

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[9] DNV-RP G103, Non-Intrusive Inspection, January 2011.
[10] DNV-RP-F116, Integrity management of submarine pipeline systems, 2015.
[11] Marvin Rausand, Risk Assessment, Theory, Methods, and Applications, Wiley, 2011.
[12] IEC 60812, Analysis techniques for system reliability – Procedure for failure mode and
effects analysis (FMEA).
[13] IEC 61508-1:1998, Functional safety of electrical/electronic/programmable electronic
safety-related systems – Part 1: General requirements.
[14] IEC 61508-2:2000, Functional safety of electrical/electronic/programmable electronic
safety-related systems – Part 2: Requirements for electrical/electronic/programmable
electronic safety-related systems.
[15] IEC 61508-3:1998, Functional safety of electrical/electronic/programmable electronic
safety-related systems – Part 3: Software requirements.
[16] IEC 61508-4:1998, Functional safety of electrical/electronic/programmable electronic
safety-related systems – Part 4: Definitions and abbreviations.
[17] IEC 61508-5:1998, Functional safety of electrical/electronic/programmable electronic
safety-related systems – Part 5: Examples of methods for the determination of safety
integrity levels.
[18] IEC 61508-6:2000, Functional safety of electrical/electronic/programmable electronic
safety-related systems – Part 6: Guidelines on the application of IEC 61508-2 and IEC
61508-3.
[19] IEC 61508-7:2000, Functional safety of electrical/electronic/programmable electronic
safety-related systems – Part 7: Overview of techniques and measures.
[20] IEC 61511-1:2003, Functional safety – Safety instrumented systems for the process industry
sector – Part 1: Framework, definitions, system, hardware and software requirements.
[21] IEC 61511-2:2003, Functional safety – Safety instrumented systems for the process industry
sector – Part 3: Guidance for the determination of the required safety integrity levels.

3 Abbreviations
No. Abbreviation Description

1 CAPEX Capital Expenditure

2 CBM Condition Based Maintenance
3 CMMS Computerized Maintenance Management System
4 DNV-GL Det Norske Veritas – Germanische Lloyds
5 EA Energy Availability
6 EPC Engineering, Procurement, Construction
7 FEED Front End Engineering Design

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No. Abbreviation Description

8 FMECA Failure Mode Effect and Criticality Analysis
9 FMEA Failure Mode Effect Analysis
10 GIS Gas Insulated Switchgear
11 HSE Health, Safety, Environment
12 HV High Voltage
13 GT Grid Transformer
14 HVAC High Voltage Alternating Current
15 IEC International Electrotechnical Commission
16 LAN Local Area Network
17 LV Low Voltage
18 MEL Master Equipment List
19 MTBF Mean Time Between Failure
20 O&M Operation & Maintenance
21 ONS Onshore Substation
22 OPEX Operational Expenditure
23 OSS Offshore Substation
24 PAS Production Availability Studies
25 PM Preventive Maintenance
26 PPM Planned Preventive Maintenance
27 RAM Reliability, Availability, Maintainability
28 RBI Risk-Based Inspection
29 RCM Reliability-Centered Maintenance
30 SCADA Supervisory Control and Data Acquisition
31 SECE Safety and Environmental Critical Elements
32 SEU Scheduled Energy Unavailability
33 UPS Uninterruptible Power Supply
34 WTG Wind Turbine Generator

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4 Deliverables
There are many deliverables within an asset management implementation but the main focus of
this proposal is on the system engineering during the design and construction of a power generating
plant as well as the operation and maintenance part of the life cycle delivery. Therefore, the below
products can be delivered:
• Maintenance management
• Development of operation and maintenance philosophies and strategies
• Maintenance optimization, standardization and re-engineering
• Condition-based maintenance (CBM)
• Manning analysis
• Barrier maintenance and management
• Asset preservation programs
• Failure mode effects and criticality analysis (FMECA)
• Reliability-Centered Maintenance (RCM)
• Risk-based inspections (RBI)
• Reliability, availability, maintainability analysis (RAM)
• Development of asset functional hierarchies
• Spare parts and tools evaluations, with associated economical assessments
• Vendor assessments and management

5 Operation, Maintenance & Inspection Philosophy

The purpose of the O&MI Philosophy is to frame the O&MI basis for the design engineering. The
O&MI Philosophy will be formed based on Employer’s O&M requirements. The Content of the
O&MI includes, but is not limited to:
• Project Descriptions: Location, maps warehouse etc.
• Operations philosophy/ requirements
o Organization, Manning, Work-cycles, Visits (Planned/unplanned), Transport,
Resupply etc.
o Black Start considerations: This is the initial start of the platform after a total
shutdown where all power has been lost. Visit required, etc.?
o Energization considerations: When energizing the power plant (e.i wind farm)
transmission system, it is done sequentially to reduce the magnitude of energization
transients. A major complication is the transformer inrush current, resulting in a
voltage dip at the point of common coupling between the wind farm operator
compound, and the Transmission System Operator compound. Certain grid code
requirements of voltage fluctuations are set forward by the Transmission System
Operator, to maintain a sustainable operation of the national grid.

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o Normal Operation Considerations: Switching off the ac cables can result in
excessive transient, temporary and sustained overvoltage conditions on the power
system. Switching surges can also be significant with long cable systems.
Energizing and de-energizing switching operations can result in significant
transient over voltages and over currents on the power system. Switching studies
can develop a set of operating procedures.
o Operation/Remote Control considerations: Various control procedures shall be in
place for protection of the equipment. E.g., the transformer has to be operated below
a certain temperature limit. Exceeding this limit will greatly increase the chance of
hot spots in the windings that will reduce the expected lifetime of the transformers.
o Emergency Operation considerations: Emergency operation can be a situation with
power outage where the emergency generator is supplying power for the auxiliary
equipment. It can also be a situation where a fault in e.g., a cable requires a
reduction in power.
o De-energization considerations: Shutting of a circuit breaker does not mean the
voltage immediately decreases to zero. E.g., The HVAC equipment can be charged
and needs to be de-energized in a controlled manner.
o Evacuation considerations: Procedures for evacuation of personnel from the
offshore/onshore substation will be prepared. The situation can occur if a major
accident happens when at the same time maintenance crew are visiting the
substation. The likelihood is however very little that the two events should happen
simultaneous.
• Maintenance & Inspection philosophy/ requirements
o Approach and methods for M&I Engineering
• Sparing: Philosophy, Definitions, strategy, etc.
• RAM Methods and Requirements
• Material Handling Philosophy
• Lifecycle/ Obsolescence Approach
• OPEX calculation Approach
• Training Philosophy

6 Maintenance engineering
During the design, construction or operation phases of the plant, the following maintenance
engineering goals shall be achieved:
• Ensure that the target production availability is meet (using RAM study)
• Detail the type and frequency of preventive maintenance tasks (FMECA)
• Optimize the PM tasks according to equipment criticality (RCM)
• Define insurance (capital) spares and operational spares requirements.
• Define tool and consumables requirements.

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• Prepare maintenance plan (procedures, manpower, tooling, spare parts and
consumables)
• Define maintenance activity performance indicators and reporting requirements.
• Prepare the Computerised Maintenance Management System (CMMS) with its asset
registers, maintenance plan, stock control functions, etc. for the operational phase.
The maintenance engineering tasks is performed in the following sequence:
1) RAM
2) Asset Register
3) Equipment hierarchy
4) FMEA
5) Criticality analysis (RCM)
6) Capital insurance spare parts analysis
7) RCM-based maintenance plan

7 RAM AND SYSTEM OPTIMIZATION

RAM (Reliability, Availability and Maintainability) is an aid to the designers as it will identify
bottlenecks in the design and identify those components that have a significant effect on the system
reliability and availability. The output from RAM assessment can be used as a justification to
modify the design, to increase capacity or provide redundant trains of equipment. It also provides
assurance that the design can meet its operational targets prior to actual manufacturing and
installation activities.
The RAM study is provided for proof of availability of the plant and optimization of design to
achieve the most cost-effective design during the life cycle of the asset. The dependencies between
CAPEX and OPEX are considered to decide the design alternatives that create the best profit for
the client over the asset life cycle.
The cost of ownership of the installation and equipment takes into account the labour, spare parts,
tooling, means and specific supports necessary to maintain the asset as well as the costs related to
the installations and equipment obsolescence management and to the energy required to operate
them. Below figure illustrates the development of RAM and system optimization:

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Figure 7-1: RAM and system optimization

8 RCM and Criticality Assessment

The overall objective of the RCM (reliability centered maintenance) and the following FMECA
(Failure Mode, Effect and Criticality Analysis) is to develop a risk-based and reliability-based
foundation for maintenance activities, function tests and inspections. The RCM process ensures
that maintenance activities, function tests and inspections are done only where it creates value and
is required according to safety, environment, cost related to production loss and repair cost. Hereby
the foundation is created for a high performance and reliable maintenance, test and inspection
program.

8.1 RCM Methodology

Each system or equipment shall be risk assessed in order to assign a criticality rating using
Employer’s risk matrix. The colored regions of the risk matrix represent High (red), Medium
(yellow) and Low (green) criticality levels. These criticality levels will be used to select
appropriate maintenance strategy for equipment, also for work order prioritization in operation
phase.

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Figure 8-1: RCM Methodology

The aim is to start the assessment at a high level and gradually become more detailed. In this way
the impact of the failure of a system is taken into account when assessing the packages and
equipment contained within the system. Input from MEL will be used to break the hierarchy down
to tag levels. In case MEL lacks necessary information, other data sources such as P&IDs and
Electrical One (Single) Line Diagrams will be used. Any inadequacy should be corrected prior to
attempting to assign criticality ratings.
FMECA will form the basis for RCM assessment. By identified consequences of main equipment
failures, sub-equipment inherits the main function consequence combined with component
reliability data for allocation of criticality. The combination of failure consequence and reliability
data lays out a fundamental maintenance strategy on equipment level incl. maintenance activities,
test – and inspection requirements, and spare part strategy on equipment level. The FMECA and
data management can be developed in our inhouse RCM, FMECA and Maintenance tools before
upload to the CMMS system. Figure 8-2: The FMECA road map

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Figure 8-3: FMECA Road map

Figure 8-4: Decision tree pr. IEC 60300-3-11

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For Condition Monitoring, it should be assessed, if it is technically feasible and if so, would it be
reasonable.

9 Risk-based Inspection (RBI)

To establish an effective risk management program, first a thorough assessment of the system is
performed. This assessment helps to have a list of the items working in a plant that are prioritized
per their severity. Risk-Based Inspection (RBI) is a systematic way of developing an optimal and
cost-effective mitigation actions/inspection plan for Fixed Equipment, Pipeline and Structure
systems. RBI may be used to manage the overall risk of a facility by focusing Inspection, Testing
and Monitoring efforts on the equipment with the highest risk.
The term Risk is a combination of Probability of a Failure (POF) and Consequence of an accident
resulted from that Failure (COF). In the following, methodology for the assessment for different
equipment class is explained.

9.1 Fixed Equipment

RBI working process for the fixed equipment is shown in Figure 9-1. The risk defined for this
equipment class is Loss of Containment and risk mitigations are implemented to prevent it.

Figure 9-1 RBI work process for fixed equipment

9.1.1 Probability of Failure

The most important part of a RBI assessment is identifying the active damage mechanisms on the
equipment. Corrosion and mechanical damages are the most well-known damage mechanisms that
are evaluated during a POF assessment. The severity of a mechanism is the key for assigning the
Probability of Failure of the equipment.
9.1.2 Corrosion Loop
Corrosion loop is a collection of the lines with the same material properties that are in an area,
working under the same process condition Therefore, they will have the same active corrosion
mechanisms. This helps the assessment to be done in a more effective way and will help a better
planning, execution and reporting of the inspection in the future.
9.1.3 Consequence of Failure
Since the main risk for fixed equipment has been defined as Loss of Containment, the consequence
of a failure depends on the type of containment as well as the process parameters like pressure and
temperature. Personnel safety, damage to environment and business losses are three COFs that
considered during the COF assessment.
9.1.4 Risk Management activities
Risk will be identified considering POF and COF and Risk Mitigation plans are determined
according to the RBI results. These are included corrosion management activities, inspection,
monitoring systems and chemical treatment as well as Key Performance Indicators assignment.

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10 Spare part management

Spare part strategies will be prepared to optimize the maintenance activities. Input will be given
to procurement package at this stage of the project. During this it will also be determined if any
critical spare parts should be stored in the facility in case of breakdown, or if they can be stored at
supplier premises.
The spare part analysis will ensure that the right spares are available to ensure the overall reliability
and availability of the facility.
The selection and sparing of equipment shall consider minimum life cycle cost and the need to
minimize visit frequency. Calculated evaluation of capital spares and insurance spares includes:
• Spare part criticality and equipment criticality for the production
• On stock vs. not on stock scenarios
• CAPEX and OPEX cost
• Storage cost
• Mean time Between failure
• Time to repair
• Production loss
• NPV
• Stock Level recommendation

11 Condition-based maintenance (CBM)

Condition-based maintenance (CBM) strategy is developed in order to address the principles for
reliability and maintenance for specific equipment or systems. Projects shall first evaluate the need
for establishment of CBM strategy, and develop equipment specifications in accordance with
Employer’s O&M philosophy and requirements. Equipment with CBM capabilities will receive
corresponding maintenance regime for efficient execution of maintenance needed.
The CBM strategy shall demonstrate how reliability and maintenance activities are aligned to
client’s corporate, regional and project objectives.
The CBM program shall define reliability and maintenance strategies that encompass:
• Operations monitoring.
• Condition monitoring incl. Predictive maintenance.
• Preventive maintenance.
• Repair/replace as required
FMECA and RCM analyses shall be performed and be used as the foundations upon which the
maintenance programs are established. This will ensure effective use of resources, and that
equipment with higher risk receives more attention, thus higher production availability.

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Figure 11-1: Types of maintenance strategies

In order to establish effective condition-based maintenance programs:

1) Projects shall consider the specification of equipment and associated instrumentation to
enable condition and remote monitoring to be easily implemented.
2) Where condition monitoring has been specified within the maintenance strategy, projects
and regions shall capture baseline data during construction and commissioning and
handover. Baseline data will be used for future comparisons.
3) Projects shall implement a process through which condition data is gathered, analyzed,
interpreted, using a variety of online and hand-held monitoring techniques, to support risk-
based decisions on the management of critical equipment.

12 life cycle information (LCI) management

Information about an organization’s assets is an essential component of effective asset
management and provides input to decision making tools and analytical techniques. This enables
‘information based’ decisions to be made that ensure that organizations can maximize the value
they can gain from their assets.
However, as information can be expensive to gather and maintain, it is important that there are
robust processes in place for defining what information is required and how it is to be used. This
includes specifying the accuracy and currency of the data that is required.
For many organizations, the provision of asset information can be a complex and costly task. The
way organizations have met this challenge will have evolved over many years. This has often led
to an unstructured and potentially costly approach to the provision of this information, with data
quality inadequacies often going unrecorded.

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When implemented along similar lines as the ‘parent’ asset management system, the
implementation of an asset information management system can overcome these constraints in
terms of role identification and process documentation.
In the past, handover of plant design information was often restricted to design drawings and paper
documents. Use of this information in managing the operation and modification of the plant was
restricted to manual processes, or the information had to be redefined in a format suitable to the
required application. Having the plant design and equipment information in computer processable
form increases the efficiency and effectiveness of the operational phase of the plant.
By using a consistent context for data definitions, the information used in the various aspects of
the plant’s life-cycle can be brought together. This allows information to be integrated, shared and
exchanged in a consistent, computer processable form.
Life cycle information (LCI) is technical information required for all phases of a plant’s life cycle
and shall ensure efficient project execution as well as safe and efficient operation.
LCI is the management of critical information throughout the entire life cycle of an asset for the
maintenance and support of the project for the life time of the asset.
The scope of work for Project LCI is to organise, collate and handover data in the required format
into the system in a timely manner in order to support the effective execution of the project
including: construction, mechanical completion, commissioning and to support the development
of an Operations and Maintenance programme.
Significant cost savings are expected from standardization of component specifications. The
information about these specifications is required in computer processable form for easy
incorporation into plant designs and requirements.

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Email: [email protected]

Web Site: www.bedt-co.com