At a glance
- Many of Zurich’s power market customers have invoked emergency planning and business continuity plans
- The challenge our customers are facing is that the pandemic is not the typical short-sharp-time-bound events
- Blurring the traditional lines between emergency planning and business continuity
Many of Zurich’s power market customers have invoked emergency planning (EP) and business continuity plans (BCP) to manage the challenges of the current pandemic; and what an amazing job they are all doing. The start of 2020 was no different from other year, with business as usual routine operating activities set out in mature asset management strategies. Plant and equipment failures were undoubtedly forcing a well-oiled maintenance team to work longer hours and additional days to return the asset to the National Grid, keeping the lights on and returning the revenue stream to the asset owners account. Asset-life was normal; however, the pandemic forced a real-time test of the organisational plans set up to minimise the impact on the business from large-scale external events.
Typical emergency plans set out how to manage events such as fire, explosion, flood and trespass. With the continuity plans setting out how the organisation manages the aftermath: how this limits the impact on production, how it upholds the brand reputation and ultimately how the business returns to normal.
The challenge our customers are facing is that the pandemic is not the typical short-sharp-time-bound event [there isn’t a loss event to deal with]. Instead this is a protracted change to the external environment that influences operational decisions. Blurring the traditional lines between emergency planning and business continuity.
Creating a secure operating environment
The first challenge owners and operators had to overcome is: ‘how do they keep the virus off site?’ Knowing that a single virus carrier can infect up to three people in the UK quickly led to discussions on how sites can isolate themselves: vital but for many not possible. Contractors form a critical mass for many maintenance activities with many working across multiple sites. This challenge has led to power stations forming a dedicated 24/7 operations workforce, each member living on site, away from their immediate families. Sites have established new procedures for maintaining the 2-metre distancing requirements with all staff and contractors completing a specially designed COVID-19 induction.
The virus doesn’t care about work-planning, it doesn’t know that asset integrity inspections are planned. The management team cannot afford for scheduled checks to be cancelled; it will result in the unit becoming non-operational indefinitely in the pandemic environment. Zurich Risk Engineering and our Engineering Inspections team have been able to support essential maintenance inspections. For example, for those sites completing work defined under the Pressure Systems Regulations (PSSR 2000). Working closely with customers our Risk Engineers and Engineering Inspectors are attending sites and completing assessments that [results permitting] allow the generating unit to return to service, minimising the impact to the National Grid ESO.
The Original Equipment manufacturers (OEMs) have established their own internal procedures to support the industry and to minimise the likelihood of their teams becoming overwhelmed with the virus, potentially reducing the support provided. The commitment to complete major and minor outages is being met through carefully controlled team work and on-site distancing.
There was little time for our customers to plan for the specifics of a pandemic and it is unlikely that, ‘managing the impact of a pandemic’ formed part of their EPs. Our customers have experienced a large percentage of staff and skills shortages due to either those who battle with the disease and those self-isolating at home. Recruiters have been reaching out to their contacts, checking on availability, seeing what is possible for site cover. Staff have been calling colleagues, both those still working and those retired in an effort to develop staffing plans, filling gaps either real or forecast.
You’d be forgiven for assuming power stations wouldn’t need to be preserved during a pandemic, however the world of the electricity market still rotates, customers still need supplying. National Grid ESO still needs to balance the system and the aim of the regulator to reduce consumer bills remains strong. Although not specific to a pandemic, preservation of power stations remains complex and demanding and depending on the duration of the preservation, requirements to fit additional air-moving and drying equipment present a big challenge. The likelihood of preservation becomes greater when the national demand for electricity drops by around 10 percent, as it has done. Those gas fired power stations whose business case was made previously at the margins with peak load and two-shift generation are now forced into preservation for undefined periods. The challenge extends itself beyond the preservation but also into the return to service, a risk phase akin to that of commissioning a new unit and one requiring explicit knowledge and experience from the operations and maintenance team. As part of the BCPs our customers will be working on asset specific strategies for safely returning preserved assets.
Supply chain challenge
The industry, like many, has seen a huge squeeze on the supply chain with many products either now not available and have a significantly longer lead time. The recent reduction in CO2 [up to 33 percent drop in supply] is a real risk to the power industry as many sites use the gas to purge hydrogen cooled generators when the units are prepared for maintenance or have an emergency requirement. CO2 is also used to suppress fires and is a critical product for the safe operation of property and assets. Insufficient stocks of CO2 present both a safety and commercial risk leaving sites to determine if operation can continue. So why has there been an impact on CO2 stocks? Well, the pandemic has reduced the global consumption of petrol which in turn has reduced the need for ethanol, CO2 is a by-product of ethanol production and hence when these facilities shut down the world does not receive its CO2.
CO2 is just one example of how the power industry is having to re-work supply chains to protect strategic spares and to provide contingency arrangements. Zurich has been able to support industries across the world through our strategic partnership with Risk Methods, the leading supply chain risk management solution. Using artificial intelligence, the solution identifies the real threats to a supply network, immediately presenting the impact on that chain from disruptions. Our customers have been able to assess and revise critical supply chain relationships as a result of the analysis.
Pandemic shaping asset management
Rising to the challenge of this pandemic is an ongoing task, requiring the constant attention of an organisation’s operational and strategic team, bringing together the efforts of technical, managerial, procurement, legal and HR employees, creating a single team combining in-house staff and contractors to create the optimum solution.
Owners and operators have worked through the interface between their EP and BCPs and developed an organic and living management plan to counter the demands of a pandemic, implementing new and novel operating procedures and maintenance methodologies.
Maintaining production has focussed the minds of the collective stakeholders and with every success. The aim to maintain normality has in fact produced new ways of working through innovation and a can-do mindset; a real ‘keep calm and generate’ mentality.