Next-Gen O&M Solutions: Transforming the Landscape of Power Plant Productivity

The power generation industry has undergone a remarkable transformation over the past several years, with the shift from regulated monopolies to a competitive landscape introducing new complexities and expectations, particularly in the realm of operations and maintenance (O&M).

As the industry continues to evolve, so too must the strategies and solutions employed to ensure the efficient and reliable operation of power plants. Here we explore the evolution of O&M solutions, examining their historical context, current challenges, and future directions. By understanding these dynamics, power plant owners and operators can better navigate the intricacies of the modern energy landscape.

Historical Perspective on O&M

The late 1990s marked a pivotal moment for electric utilities as the deregulation of an industry previously characterized by local and regional monopolies introduced a wave of change. This period saw the rise of sophisticated investors with a higher appetite for risk and return, and as a result, the traditional model of utility monopolies that offered stable and low-risk returns began to give way to a more complex and nuanced industry structure.

Initially, third-party O&M services were relatively rudimentary. The model involved transitioning plant staff to the employ of the O&M contractor, providing a project manager for support, and reporting to the ownership group. This basic approach sufficed when the industry was still grappling with deregulation and the California energy crisis. These early services focused on compliance, maintenance activities, and basic operational reporting—laying the groundwork for more sophisticated O&M solutions to enter the market.

A rising need for more advanced and specialized O&M solutions became apparent as the industry matured. The increasing involvement of financial entities such as private equity in power plant ownership, coupled with the complexity of modern energy systems, necessitated a higher level of expertise and innovation in plant operations. This significant shift catalyzed the development of comprehensive O&M strategies designed to maximize efficiency, reliability, and profitability in an ever-changing energy landscape.

Complexity of Modern O&M

Fast forward to today, and the O&M landscape is vastly more intricate. Modern O&M solutions must navigate stringent laws and regulations governing worker health and safety, environmental compliance, and North American Electric Reliability Corp. standards. The decline of long-term power purchase agreements (PPAs) in favor of more variable market constructs further complicates the scenario.

1. Outsourcing of operations and maintenance (O&M) services, such as those provided by IPSC, is today a common practice at power generation and other energy facilities. Courtesy: IHI Power Solutions Corp. (IPSC)

Modern power generation methods have also grown in diversity, encompassing fossil fuels, wind, solar, biomass, and energy storage technologies that each bring unique requirements for staffing, maintenance, and reporting. Plant owners now expect O&M providers (Figure 1) to not only manage these complexities but also to add value beyond traditional service offerings.

Providers are also tasked with developing plant cultures that are highly trained and adaptive to different market constructs, whether they involve long-term PPAs, capacity markets, or energy-only markets. The presence of renewable energy has significantly impacted supply and long-term pricing, requiring operators to be more flexible and innovative in their approaches.

Each technology within the modern power generation mix necessitates dramatic differences in plant staffing; routine, preventative, and corrective services; management; and reporting interfaces. Moreover, the expectations from owners have increased, demanding O&M providers to go above and beyond in delivering value and ensuring the optimal performance of power generation assets in an increasingly complex environment.

Enhanced O&M Expectations

Today’s O&M providers are adapting to heightened expectations through several key strategies to underscore the significant value of third-party O&M, especially in contexts where owners lack robust operating experience and resources or are venturing into new geographies. O&M companies are now providing:

■ Project Management. Effective project management ensures that all aspects of plant operations are streamlined and optimized—while engaging closely with plant managers to eliminate performance obstacles—leading to higher levels of performance and efficiency.

■ Programs and Procedures. Developing consistent standards, and ensuring staff training and qualification by creating comprehensive training programs that ensure all personnel are well-versed in the latest operational procedures and safety protocols.

■ Plant Assessments. Conducting regular assessments and ongoing performance evaluations against key standards such as safety, environmental compliance, and operations helps to identify areas for improvement to maintain peak operational efficiency.

■ Best Practices. Implementing and communicating best practices across all plants to foster continuous improvement. This includes sharing lessons learned from failures and successes to create a culture of knowledge and improvement.

■ Economies of Scale. Leveraging workforce and supplier relationships to reduce costs and enhance service. By pooling resources, O&M providers can achieve cost savings in areas such as spare parts, insurance, and response times.

2. A remote operations center, such as this cutting-edge design by IPSC, can provide power generation plants with seamless, 24/7 virtual O&M support. Courtesy: IPSC

■ Remote Operations. Enhancing operator performance through remote management (Figure 2), particularly in critical reliability operations, provides real-time monitoring and management, leading to quicker response times and reduced operational errors.

Next Generation of O&M

Looking ahead, the next generation of O&M solutions is less about technology and more about cultivating a holistic, integrated culture that permeates both plant and corporate staff. This cultural shift can significantly enhance client value and brand reputation. Important elements of this approach include:

■ Performance Recognition. Achieving industry-wide recognition for innovation and operational excellence via awards and accolades, which not only boost morale but also enhance the reputation of both the O&M provider and the plant owner.

■ Strategic Partnerships. Leveraging deep industry knowledge to facilitate introductions to potential business and financial partners by building strong networks and relationships to open new avenues for growth and collaboration.

■ Advocacy. Ensuring client interests are represented in policy discussions in legislative or regulatory matters with material business impacts.

■ Financial Proficiency. Training plant staff to understand and manage the plant’s profit and loss to ensure better decision-making and more efficient operations.

■ Innovative Planning. Challenging the status quo to develop plans that enhance efficiency and performance through creative thinking and innovation, leading to significant improvements in plant operations.

Role of Technology in Next-Gen O&M

While culture and strategic partnerships are crucial, technology also plays a significant role in the next generation of O&M solutions. Advances in digitalization, data analytics, and automation are transforming how power plants are operated and maintained. Such solutions can include:

■ Digital Twins. The use of digital twins—virtual replicas of physical assets—allows operators to simulate and optimize plant performance. These models can predict maintenance needs, optimize operational parameters, and improve overall efficiency.

■ Predictive Maintenance. Leveraging data analytics to predict equipment failures before they occur. Predictive maintenance reduces downtime and maintenance costs by addressing issues before they become critical.

■ Advanced Monitoring Systems. Implementing sophisticated monitoring systems that provide real-time data on plant operations enable operators to make informed decisions and quickly respond to any issues.

■ Automation and Artificial Intelligence (AI). Utilizing automation and AI to enhance operational efficiency. Automated systems can handle routine tasks, allowing human operators to focus on more complex and strategic activities.

Building a Sustainable Future

Sustainability is another major initiative for next-gen O&M solutions. As the energy sector increasingly embraces renewable sources, O&M providers must adapt to the unique challenges and opportunities presented by these technologies. Among the items of concern are:

■ Integration of Renewables. Developing expertise—including specialized knowledge and operational strategies—in managing renewable energy assets such as wind, solar, and energy storage.

■ Environmental Compliance. Ensuring that all operations adhere to stringent environmental regulations by staying abreast of changing regulations and implementing practices that minimize environmental impact.

■ Energy Efficiency. Implementing measures to improve the energy efficiency of power plants like optimizing operational processes, upgrading equipment, and utilizing energy management systems.

■ Carbon Reduction Strategies. Developing and integrating strategies to reduce carbon emissions as the industry moves toward a low-carbon future.

The power generation industry stands on the cusp of a new era in O&M services. The evolution from basic third-party operations to comprehensive, value-driven partnerships reflects the increasing complexity and sophistication of the sector. By embracing next-gen O&M solutions, power plant owners can achieve higher productivity, enhanced efficiency, and a stronger competitive edge in an ever-evolving landscape.

A robust strategic O&M partner will not only provide the expertise needed to mitigate operational and technological risks, but also offer strategic value that strengthens client companies and drives industry innovation. As the industry continues to evolve, the role of next-gen O&M solutions will become increasingly critical in ensuring the efficient and reliable operation of power plants.

—Doug Machon is director of Business Development at IHI Power Solutions Corp.