01-10-2012, 12:20 PM
Grid maintenance expenses
Grid maintenance.ppt (Size: 2.94 MB / Downloads: 22)
Overview
Maintenance expenditure on the grid has increased significantly above CPI during the period of the Settlement
There is a need for further increased maintenance expenditure
Forecasts for next two years are $115.7 M and $119.8 M respectively (cf 2009/10 draft forecast outturn of $104.7 M)
The main drivers for increased maintenance expenditure are:
Increased scope of work on ageing assets
particularly the replacement of components of transmission line conductors and towers (lines projects have increased from $6.4M in 2006/07 to $19.1M in 09/10)
Accumulation of work deferred from previous years that cannot be delayed further without significant risk
Increased complexity of undertaking work
Trees Regulations, Resource Management Act requirements, Landowner relationships
Limited availability of skilled labour and increased input costs
Growth in the number of substation assets to be maintained
Background
Allowances for grid maintenance within the Settlement were based on historic levels adjusted only for CPI.
An increasing quantity of grid assets (particularly transmission line components) is now reaching condition criteria where maintenance replacement is required
This “wave of work” is expected to continue for several years
Maintenance has increased above CPI during the period of the Settlement
Some non-critical maintenance has been deferred in previous years to keep total operating expenditure within acceptable limits
Transmission Lines
Maintenance expenditure has increased over the period of the Settlement by approx 15 % p.a.
Routine maintenance cost drivers:
Increased scope of work as a result of changes in risk management stance in accordance with Good Electricity Industry Practice:
increased frequency of condition assessment (particularly following Otahuhu earthwire incident in 2006)
pro-active management of access roads and bridges (particularly following Berryman case)
more conservative management of trees close to lines (following serious safety incidents and actual tree strikes)
Increasing complexity of work (Trees Regulations, Resource Management Act requirements), and increasing landowner engagement
Increased input costs (contract hourly rates have increased above CPI, despite focus on cost-effective procurement)
Substations
Maintenance projects are variable between years, typically $5 – 10 M p.a.
Dominated by major planned and forced repairs of power transformers, and maintenance projects on buildings
Forecast for 2010/11 includes provision for:
Further transformer repairs, including temporary arrangements to restore security
Expect a small number of major failures to occur each year until the older transformers are retired over the next 15-20 years
Emerging requirements for new project work to review seismic strength of existing substation buildings in response to new standard NZS 1170
OPEX efficiency initiatives
OPEX savings will follow capital replacements:
Replacement of maintenance intensive types of circuit breakers:
Air blast
Minimum oil
Replacement of maintenance intensive outdoor 33 kV switchyards with indoor switchboards
Replacement of aged single phase transformer banks
Replacement of HVDC Pole 1 converter stations
Review of outsourced contracting arrangements in progress:
Improve contractor performance
Simplify contract management
Achieve cost efficiencies