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22nd IPMA World Congress “Project Management to Run” 9 - 11 November 2008, Roma, Italy

Project management of a 400 MW Combined Cycle Power Plant in Southern Italy G. Zuccaro1 Senior Project Manager 1. Abstract
Foster Wheeler Italiana (FWI) designed and built a 400 MWe Combined Cycle Power Plant in Teverola (Caserta) for SET. The plant is located near to the CET Power Plant, partially owned by FWI, inside the existing Indesit white products factory. The Owner is a project company, majority-owned by the Swiss power operator Rätia Energie (RE). The liberalization of the Italian power utility market, started in 1999, has allowed new players to compete in a previously highly regulated market. The Italian Power Exchange (IPEX), officially opened for trading in April 2004, gave fresh impulse to the new operators, looking for high efficiency power stations. The power deficit in Campania paved the way for many initiatives adopting state of the art technologies both in terms of efficiencies and emissions. The need to meet peak demands also required that the plant should achieve a high flexibility and quick start-up time. FWI’s scope of work included engineering, procurement, construction and commissioning through start-up, performance and reliability testing. Commercial operation was achieved in December 2006, ahead of schedule.

Figure 1 – General view of the 400 MW Teverola Combined Cycle Power Plant

2.

Keywords

Power plant; safety; schedule; logistics; constructability.

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Foster Wheeler Italiana Spa, Via Caboto 1, 20094 Corsico – Milan, Italy, ph : +39 024486.2139, [email protected]

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22nd IPMA World Congress “Project Management to Run” 9 - 11 November 2008, Roma, Italy

3.

The Background

FWI had earlier developed an initiative involving a combined cycle cogeneration plant in Teverola in the late nineties. Such an initiative allowed FWI to develop an expertise in promoting and developing power projects (BOO, Build, Own and Operate projects), solely or in association with other companies, and that this expertise was of paramount importance for the preparation of feasibility studies, environmental impact assessments (EIA), front-end engineering design packages (FEED) and executing the engineering, procurement and construction (EPC) phase of other projects. A dedicated project management team was assigned to the initiative from the early development phase and worked on the project up to the acceptance of the plant, maintaining a single point of responsibility and clear accountability. The Owner was looking for ways to enter the Italian power market and build a power plant taking advantage of the technical and execution capabilities as well as the expertise in power plant operation developed by FWI. One of the main targets was the design of a power plant that could allow quick load variations, following the demands of the utility market as well as being designed to allow frequent start-ups and shutdowns. The plant was to be built in an area where several other similar initiatives were already under development. It was therefore very important that it received the consensus from the local communities and that the risk of local resistance was minimized. This was achieved through extended information and use of state of the art technology, including provision for future improvements and potential for further reduction of emissions.

4.

The Technology

The plant, of the 400 MWe nominal power class, is based on one GE 9FA gas turbine and one re-heat steam turbine, in a multi-shaft arrangement. Such arrangement allows a higher flexibility to meet load variations and reduce startup time, especially for units used in a cycling mode. The thermal cycle is based on a three-pressure-level heat recovery steam generator designed and manufactured by FWI. An air-cooled steam-condensing unit was adopted for environmental reasons to minimize consumption of water, despite a slightly lower electrical efficiency. The electrical power produced is exported to the 380 kV network through a three-winding step-up transformer and an air-insulated switchyard, connecting the plant to the utility network. The connection is partially executed with a buried aluminum cable, partially with an aerial transmission line.

Figure 2 – Process Scheme as depicted on the operator screen

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22nd IPMA World Congress “Project Management to Run” 9 - 11 November 2008, Roma, Italy Attention to the environment and control of emissions has always been a priority, from project inception up to the final testing. Among other measures a machinery hall provides weather protection to the turbines while containing noise emissions. The need to contain noise emissions to a very low level, as well as providing a high degree of fire resistance to the structure, led to the selection of a concrete building. Use of pre-cast and pre-fabricated elements minimized the amount of work to be executed at site, reducing area density and associated safety risk factor, while concurrently minimizing erection time. The control room is adjacent to the machinery hall, allowing a more direct monitoring of the machinery, with the general administration offices, warehouse and a maintenance workshop located in a separate building.

5.

Success Factors

The main success factors identified for the execution of the project were: no injuries; acceptance of the plant by the local community; meeting a demanding execution schedule; maximizing involvement of local subcontractors; clear interfaces with subcontractors; logistics; maximize the time available for the commissioning and start-up. No injuries – Dedicated resources were assigned during each phase of the project and a detailed HSE plan was developed to achieve the ambitious target of no lost-time accidents. HSE requirements were identified very early during the engineering phase and reflected in the design of the plant and in the execution strategy. A hazard and operability study (HAZOP) was executed to provide inputs to design, address operational and maintenance problems as well as to serve as the basis for the application of the PED and ATEX directives. Almost 10,000 manhours were spent in the planning and preparation of HSE activities. Acceptance of the plant - Acceptance of the plant by the local community was facilitated by the decision to include in the plant design all the state of the art technologies concerning emissions. Particular attention was devoted to reducing stack emissions, noise emissions as well as light emissions. A refined landscaping plan was also included in the EIA, to mitigate the impact of the new power plant in the area. Demanding execution schedule - In order to meet the demanding execution schedule, a FEED was developed long before EPC contract award both to support the application for project permits and to prepare the orders for all the long delivery items. During FEED preparation an archeological campaign was executed as well as a geo-radar investigation to minimize the risks during the subsequent site preparation and excavation works. Even though the risk from uncharted underground obstructions is often excluded from a contractor’s risks in EPC contracts, it is generally a wise precaution to minimize the possibilities of findings. The selection of all the main equipment before contract award, as well as the execution of an aggressive procurement campaign, were also part of the execution strategy of the project focused on the “early curve”. Contrary to other industry sectors, where the engineering contractor can rely on the execution of significant “in-house” engineering, for power plants it is customary to make extensive use of packaged units and to rely on information provided by suppliers. Early vendor selection becomes therefore a key success factor for the development of all the interfaces and ultimately for the execution of the project. Contracts for the turbines, the boiler, the air condenser, the step-up transformer – all long-delivery items whose characteristics have a heavy impact on the overall plant design – were awarded within days from the EPC contract award. The rest of the procurement campaign was essentially completed within six months from EPC contract award. In twelve months from contract award all the major engineering deliverables had been issued for construction, the foundations were built, erection of main equipment started and pipe pre-fabrication underway. Piping is not generally considered as critical in power plants, compared to chemical and petrochemical plants. However the use of innovative and exotic alloys requires a high degree of attention. Several execution options were evaluated, including “delivered and erected” (D&E) supply from specialized international companies. The approach finally selected was based on a standard bulk material purchasing campaign with prefabrication and erection subcontracted to a local mechanical contractor. A specialized quality control company was, however, appointed to supervise prefabrication and erection of special alloy piping to minimize the risk of quality problems.

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22nd IPMA World Congress “Project Management to Run” 9 - 11 November 2008, Roma, Italy Involvement of local subcontractors - Local subcontractors were deeply involved in the execution of the project to exploit the positive contribute of their expertise and knowledge of the local situation. More than one subcontractor was selected for each trade, allowing greater flexibility in the use of resources and mitigating the risk of shortage of resources. Use of multiple subcontractors for each trade, while potentially more expensive, allows an inherent higher flexibility and dramatically enhances the possibility of intervening on the critical work-fronts. The tight execution schedule and the need to have direct control of erection priorities were the basis for the choice to directly procure bulk materials. Lessons learned from other projects led the FWI team to decide that the small local subcontractors necessary for the success of the project could not effectively procure materials as part of their scope of work. Interfaces - A detailed interface schedule, between the EPC contractor, the owner and turbines manufacturer was prepared before placing entering the relevant contracts. Contracts already included all interface points as well as a detailed execution program, minimizing the risk that interferences during the subsequent execution phases or “grey areas” could delay the actual execution of the work. Logistics - The success of a project depends on how effectively materials and resources are purchased and transferred from workshops and prefabrication yards to the erection site. Prefabrication close to the erection sites often means a significant reduction of shipping costs, as well as contributing to making the site less congested. An indication of the main erection quantities is provided in the table below.

Main Erection Weights HRSG Air Condenser Pipe-rack and other structures

Ton 3,500 2,500 600

Foundations Buildings Turbines HRSG Air Condenser Other Cables Electrical Control - Electrical Instrument

m3 8,000 2,100 2,000 1,200 3,000 m 60,000 38,000 55,000

Piping Carbon Steel Alloy Steel Stainless Steel

Av. size 8” 10” 3”

Ton 600 136 10

Table 1 - Main Erection Quantities A detailed constructability study was therefore executed with conclusions and recommendations identified shortly after contract award, so that they could be effectively reflected in the design of the plant and in the critical path network. The constructability study allowed the early identification of some bottlenecks, such as a limited storage area and limited access to the erection site, as well as some obliged erection sequences not obvious from the pure engineering standpoint. The recommendations included delivery of the boiler already pre-assembled in large modules, a prefabricated machinery hall (featuring for the first time pre-loaded, pre-cast concrete beams spanning 43m), and a large degree of pre-assembling of the air-cooled condenser. Prefabrication of such large modules however, in addition to increasing the size of the cranes to be booked long in advance, made the problem of storage areas even more important. Agreements were therefore made to hire additional storage areas in close proximity to the erection site, so that the erection activity could be executed seamlessly and protected from the variability of the transit time of materials. Time for commissioning – While erection activities are to some extent predictable, the same cannot be said of commissioning activities. Even a careful execution of engineering, erection and preparation activities cannot rule out the possibility of problems during the initial testing phases of the plant. It is therefore essential that proper time be allocated for such contingencies. This was achieved compressing the engineering, procurement and erection phases and using the “first firing” of the gas turbine as the key event determining the critical path of the project. This approach allowed availability of adequate margins for commissioning, testing, performance and reliability testing of the plant.
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22nd IPMA World Congress “Project Management to Run” 9 - 11 November 2008, Roma, Italy

6.

Schedule

The original early plan had established a target of 21 months to achieve first firing of the gas turbine, in order to maximize the time available for turbines commissioning and testing. This target led to the decision to manage the project always on the early curve of the progress, as well as the aggressive engineering and procurement campaign. First firing of the gas turbine was also the event used to determine the critical path of the project. Availability of a constantly updated critical path network was confirmed to be an essential tool for the management of the project. While sometimes the attention is mainly focused on the original critical path at the beginning of the project, the critical path is dynamic by nature and changes arising during project development can significantly alter it. Close monitoring is therefore essential also of the near-critical paths of the project, as: (i) under certain circumstances they are likely to become the critical path; (ii) a high number of near-critical paths make the timely execution of the project ultimately less probable. Project duration has in fact a probabilistic nature. If the contractor can afford such a strategy, no effort should be spared to execute the project on the progress early curve and to increase the float in the schedule of non-critical activities, as it ultimately increases the chances to complete on or ahead of time, providing a safety net against the possible events that can occur during project development. The program must be effectively communicated to all the parties involved in the execution of the project. While it is customary that EPC contractor adopt sophisticated networks including thousands of activities, it is common experience that these programs become very difficult to use for personnel not specifically trained. One of the key success factors is to distribute simplified and understandable information to personnel that, in the large majority, need only to know when certain activities need to be completed and have limited interest in the complex links and relations established among activities. Use of sub-contractors without specific knowledge of sophisticated critical path network techniques obliges EPC contractors to develop an integrated planning of the different trades involved in the erection operation. A common “understanding” and simplified tools to effectively communicate to all the parties involved is essential for the ultimate success of the execution strategy.

7.

HSE

An HSE plan was prepared and issued a few weeks after contract award, covering all aspects from engineering to commissioning. When compared to other industrial businesses, power plants have a larger scope for civil works; at the same time, statistically in Italy civil subcontractors have a less positive safety performance when compared to other trades. The diffusion among the contractors involved of a common safety culture was therefore considered a “must” from the beginning of the project. The HSE plan provided for continuous training of the workforce, dedicated safety officers for each subcontractor, in excess of legal requirements, as well as a reward mechanism addressing individual workers. The reward mechanism addressed the performance of individual workers and was accompanied by frequent management safety walks and safety talks. During these management safety walks, specific aspects of workers’ performance were analyzed, highlighting the potential risks connected with unsafe acts and behavior. A well-organized erection site with good housekeeping is less likely to have accidents than others. Close attention was dedicated to coordination of the different trades and separation in different shifts of operations whose concurrent execution may pose some safety hazards. Good examples are the execution of radiographies at times when only very few personnel are on site, or distributing building erection and work on turbine foundations in different shifts. Minimizing interferences, while allowing a smoother and often quicker execution of the work, ultimately minimize the risk of incidents. Distribution of work between the standard shift and the night shift has also saved time on the critical path. An area where this was very effective was the electrical substation, where the ability to work protected from the weather and around the clock permitted to recover former delays on the civil activities. A total of almost 1,000,000 direct man-hours were spent in the construction and commissioning of the plant, with workforce nearing 600 direct construction workers at peak, with no lost-time accidents.

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22nd IPMA World Congress “Project Management to Run” 9 - 11 November 2008, Roma, Italy

8.

Conclusion

The plant was delivered well ahead of time and to the owner’s satisfaction, exceeding performance guarantees and despite a certain number of adverse events both during the erection and the commissioning. All project targets were achieved thanks to the preparatory work, the constant application of project management techniques and the continuous monitoring of a properly staffed and experienced project management team. Application of project management techniques also to the early phases of the project – including feasibility study, EIA and FEED preparation – was confirmed to be of paramount importance for a smooth execution of the EPC phase after contract award. Early erection completion allowed more time to resolve some commissioning problems and, by the time reliability testing was successfully executed, also finishing work was complete. A limited work list was enclosed to the provisional acceptance certificate. No lost-time accidents were recorded. All issues with suppliers and subcontractors were amicably settled before plant completion. This allowed working always in a positive environment where work interruptions including strikes or site blockages were minimized. Close attention is paid to the “lessons learned” from the project to reflect them in the design and execution of future projects. The author wishes to thank SET and Rätia Energie for their contribution to the present paper.

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22° IPMA World Congress “Project Management to Run”

400 MWe Power Plant in Southern Italy
G. Zuccaro, Senior Project Manager, Foster Wheeler Italiana

9-11 November 2008, Roma, Italy
© Foster Wheeler. All rights reserved

22° IPMA World Congress “Project Management to Run”

Chapter no 1

Background

22° IPMA World Congress “Project Management to Run”

Background
• • • Italian Power Exchange opened in April 2004 New players allowed to compete in a previously highly regulated market Earlier initiatives including build, own and operate (BOO) lead to consolidated experience for preparation of – Environmental Impact Assessment (EIA) – Applications for permitting – Front-end engineering design (FEED)

22° IPMA World Congress “Project Management to Run”

Chapter no 2

The Project

22° IPMA World Congress “Project Management to Run”

The Project
• • • • • • 400 MWe combined cycle power plant Attention to environment and control of emissions always a priority Plant designed to meet frequent load variations Adoption of state-of-the-art technologies both for efficiency and emissions Plant already designed to meet future requirements of power utility market Multishaft design

22° IPMA World Congress “Project Management to Run”

Chapter no 3

Success Factors

22° IPMA World Congress “Project Management to Run”

Success Factors
• • • • • • • Safety first – No injuries Single point of accountability throughout the project Acceptance of the plant by local communities Involvement of local subcontractors Clear interfaces. Minimize changes Logistics and construction study Time for commissioning

22° IPMA World Congress “Project Management to Run”

Safety first
• • • Detailed HSE plan developed at beginning of the project Early identification of HSE requirements to include them in plant design and erection strategy Hazard and operability analysis (HAZOP) used as the basis for Pressure Equipment (PED) and Explosive Atmospheres Directives (ATEX) Continuous training of workforce. Frequent safety talks and safety walks, concentrating on practical aspects of workers’ behaviour Rewarding mechanism addressing each individual worker Maintain good housekeeping

• • •

22° IPMA World Congress “Project Management to Run”

Acceptance of the plant
• • • • • Use of state-of-the-art technologies to reduce emissions Machinery hall to limit noise emissions Refined landscaping plan to mitigate visual impact Involvement of local contractors Extended information of local communities

22° IPMA World Congress “Project Management to Run”

Execution strategy
• • • • 21 months to achieve ”first firing” of gas turbine Project always focused on the ”early curve” Early vendor selection a ”must” to complete engineering FEED package prepared well ahead of notice to proceed (NTP) to – Support permitting process. All permits available before project NTP – Serve as technical annex to the contract – Prepare inquiries for long-lead items – Minimize changes during project execution

22° IPMA World Congress “Project Management to Run”

Local subcontractors
• • • Knowledge and expertise of local work market Maximize local work content. Beneficial effect also on acceptance of power plant by local comunities More than one subcontractor selected for each trade – Inherent flexibility to mitigate shortage of resources – Dramatic improvement for critical work fronts Direct procurement of bulk material



22° IPMA World Congress “Project Management to Run”

Clear interfaces
• Detailed interface schedule prepared ahead of contract award – With Owner – With suppliers of major packages Interface schedule included – Physical interface points – Detailed execution program Minimize the risk of interferences or ”grey areas” potentially delaying execution of the work





22° IPMA World Congress “Project Management to Run”

Logistics
• • • • • Construction study for early identification of bottlenecks as well as required erection sequences Prefabrication outside the erection site to minimize congestion and area occupancy factors Minimize transit time from workshops and prefabrication yards to erection site Availability of areas to serve as temporary storage of large prefabricated components Protect the erection activity once started from the variability of transit time of materials

22° IPMA World Congress “Project Management to Run”

Schedule
• • Critical path is dynamic and project duration probabilistic Important to monitor near critical paths, as – Likely to become a new critical path – Elevated number of ”near critical” paths make ”in time” execution less probable – Float as a safety net against the unknown Changes, whether the result of engineering development or directed by Owner – Can significantly alter critical path – Even if do not affect critical path, consume float



22° IPMA World Congress “Project Management to Run”

Chapter no 4

Conclusion

22° IPMA World Congress “Project Management to Run”

Conclusion
• • • • • • No ”lost time accidents” during construction Plant delivered ahead of time Plant exceeded performance guarantees Number of changes reduced to a minimum Always a positive environment Close attention to ”lessons learned”

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