It’s an exciting time to be involved in the gas-fired generation market. Even though renewables represent the largest share of new utility-scale generation being added, natural gas plants are holding their own, thanks to rapidly improving technologies that are yielding some amazing efficiencies for combined-cycle units. Heat rates and efficiencies of combined-cycle plants coming online now are significantly better than plants built even five years ago. Because renewables are steadily increasing their share of the generation market, intermittency factors are creating a growing need for flexible power supplies that can quickly ramp up or down, depending on grid conditions. Today’s combined-cycle units are ideally suited for both peaking and baseload capacity.
Cost is becoming an even more important factor for adding new gas generation and this places a premium on maximum efficiencies in designing and building these new units. With many combined-cycle plants coming in at 1,000 megawatts and larger, designing and constructing these massive installations require new and better efficiencies in engineering design and construction.
Modularization: The New Best Practice
With the progress made in new advanced class gas turbines, it goes without saying that efficiencies in engineering, procurement and construction must follow suit. Modularization is the key. Though not a new trend in power plant construction, modularization is becoming a core component of integrated engineer-procure-construct (EPC) project delivery. Construction of enormously complex projects such as power plants and refineries traditionally has required hundreds of skilled crafts at field locations performing dozens of different tasks on-site, including custom welding and specialized fabrication.
Modularization of many specialized components reduces much of the risk of variability because many prefabricated modules and piping can be produced in controlled environments off-site, then scheduled and sequenced to provide a balance of predictability and efficiency. This approach is a proven and significant factor in workplace innovations and safety and quality improvements.
The key change is that field crews are more focused on assembly rather than constructing the entire plant out of loose parts. By taking more pressure off the field construction crews, we can reduce the numbers of crafts on-site, which is especially important when many areas are experiencing acute labor shortages. Modular construction is gaining popularity because owners are seeing proof it helps mitigate hundreds of variables on these projects. Eliminating variables achieves control and consistency, which in turn enhances work-site safety, quality and predictability of construction results.
More Opportunities for Innovation
The competition to provide fully integrated EPC services around newer technologies being introduced to gas turbines has gotten tighter in recent years as some have left the market. One area where competitors can differentiate involves efficiencies around heat recovery steam generators (HRSGs). With the larger advanced class gas turbines, a lot more exhaust comes off the back end of the turbine, providing more available heat to make steam. That, in turn, is leading to bigger boilers, which present another opportunity to modularize and gain construction efficiencies. Often for these projects, the bidding will be based around the same turbine package, but there is more room for innovation around the HRSG, the piping layout and sequence of shipping. Those factors can add up and have a bigger effect on project execution efficiency.
In selecting HRSGs, many customers prefer to buy the lowest-cost equipment but fail to consider the total installed cost (i.e., the purchase price plus the installation cost). We have found that evaluating the differences in total installed cost (TIC) — with a renewed emphasis on constructability — is a better way to determine the right fit for a project. For balance of plant scope, there are significant potential savings by minimizing welding in the field, since much can be done on the modules in the shop at a fraction of the cost.
Putting the Pieces Together
Imagine buying a toy for your child, and you can choose between one that comes in 1,000 pieces or one that comes in 10 larger pieces at a lower cost. Which would you pick? It’s an oversimplified analogy, but it offers some insight into the advantages of advanced class gas turbine projects — and how an integrated approach to handling design and construction can be scaled up for highly complex power projects.
Most of the turbine compartment for the latest generation of equipment is prefabricated off-site and then shipped in a series of modules, including much of the necessary piping. This approach reduces the need to stick-build enclosures, saves project costs and enhances quality control. Each hour of engineered and prefabricated efficiency saves multiple hours of field construction time. As we have proved by using a state-of-the-art fabrication facility, the efficiencies of modular design — for combined-cycle plants and other industrial applications — are amplified by maximizing integration throughout the entire project cycle.
The ease of constructability is directly connected to how much effort the original equipment manufacturer (OEM) has put into designing the hardware for that purpose, and so results can vary. But many OEMs are committed to this approach and more efficiencies are on the way. Enhanced modularization with the right project partners means the latest, largest equipment can be installed in a comparable time frame to older technology with minimal additional complexity.
Addressing Labor Challenges
On every construction project, labor and materials are the two largest variables in producing accurate cost estimates. In tight labor markets, availability of skilled labor can be a major concern, depending on location. One major issue the industry is grappling with is the skills gap between trades and crafts from the baby-boom generation and younger-generation workers. The gap in skills and capabilities can be significant. When considering that each job site is unique, experience and quality become key concerns.
In tight labor markets, the key to success is planning an effective labor strategy as early as possible during the bid process. The labor strategy must be implemented at the start of the project and look for opportunities to start work earlier. Spreading out the work helps to lower the overall manpower demands. In this scenario, fabrication shops that are set up to produce specific types of work in a controlled and consistent manner, similar to a factory setting, can greatly improve project outcomes. Workers within these shops are performing the same operations day in and day out, following structured processes and procedures that help remove variability and enhance quality. Completing fabrication work within off-site shops reduces the craft density at the construction site and minimizes work to be done at heights. Reducing the on-site density significantly reduces safety risks, particularly on space-constrained sites. Prefabrication also reduces weather-related risks because work is performed within a controlled environment.
Focus on Planning
Introducing modularization into complex construction plans requires an intense focus on scheduling, logistics and supply chain management. Often, the sequence of work must be modified. For example, detailed engineering on a combined-cycle facility using modularization must be completed significantly earlier than a traditional execution method to provide schedule certainty. That’s because subcomponents must be procured, built and shipped to the fabrication facility for integration, rather parts simply being procured and sent directly to the construction site as loose components.
The need to complete detailed engineering earlier in the project requires close collaboration and consolidation of procurement activities. Under a more traditional project approach, owners would directly procure engineered equipment — such as combustion gas turbines, steam turbines and HRSGs — for their facility. However, this sometimes creates complications that impact schedule and construction. With the contractor having no meaningful influence or control over procurement of long-lead-time items, the ability to directly obtain critical equipment data or manage the schedule is reduced or lost completely.
Loss of control over this critical procurement function can have a further impact on sequence of design. Long-lead-time items such as alloy piping may need to be among the first items designed so they can be procured and built into the module, even if these items traditionally would be delivered to the site later in the project.
Supply chain quality and control is essential for maintaining predictable costs and schedule. A risk tolerance matrix enables the team to identify potential or previous issues with a specific supplier and work in collaboration with that supplier to mitigate risk. For example, the contractor can arrange to have an inspector or representative within a fabrication shop to verify that weld procedures for chrome alloy piping are completed correctly.
A thorough cost assessment is necessary to determine if a modular construction approach would be the most cost-effective option. Though on-site construction costs will benefit, a modular approach can have the potential to generate significant transportation costs. This factor should be weighed against availability of labor — on-site versus off-site — and other project risks, such as extreme weather that could delay the project.
Still, the name of the game is controlling risks due to variability. Modularization through prefabrication shops can replicate and scale output based on project needs while maintaining consistent quality. Work within the prefabrication shops lessens potential weather-related delays and can significantly reduce labor density on the project site, reducing safety related risk. All these factors layer up to predictable outcomes.
Contractors and clients interested in pursuing modular construction techniques must have strong project management, supply chain management and logistical controls to see that materials are sent to the locations needed, when they are needed, to maintain the project schedule.
With today’s push to reduce surprises on major capital projects, achieving predictability in all phases has never been more important.