Partners in Success

Service Agreement for Boiler Feed Pumps

Partners in Success

During the late 1970s, failures in boiler feed pump systems resulted in significant availability losses to the utility industry worldwide. Also power stations of the South African utility Eskom have suffered from such incidents. Due to the significant effects of boiler feed pump performance on overall plant operation, Eskom Generation and Sulzer decided to enter into a partnering agreement in 1993, with the goal to jointly improve performance. Since the start of the service alliance, the 2 partners improved the pump availability to over 99.9%. Eskom, the state-owned utility of South Africa, supplies 90% of the electricity used in South Africa and generates around twothirds of the electricity produced in the whole of Africa. The company operates 17 coal-fired power stations in the country, and has a generating capacity of 39,000MW, including hydropower, nuclear, and gas-turbine stations. During the late 1970s and1980s, Eskom suffered from operating and component failures in boiler feed pump (BFP) systems, which resulted in significant availability losses, despite the 50 or 100% redundancy at its power stations. BFPs are the heart of a thermal power plant, and their failure leads to the outage of the full generating train and thus to notable reduction in generating power (Fig. 1).

Maintenance of Specialized Equipment
Maintenance of highly specialized equipment, such as BFPs, requires full knowledge of the product and the maintenance process needed for associated equipment. It can, therefore, not reside entirely with the user. Increased efficiency, reliability, availability, prolonged plant life, and profitable plant operation are requirements relating to BFP maintenance. In the 1980s, maintenance and service contracting for these pumps was founded on a traditional outsourcing basis, where the parties seldom followed joint goals. In the early 1990s, Eskom and Sulzer explored the possibility of entering into a partnership. Partnering links the long-term interest of customer and supplier, with both striving to fulfil jointly created and targeted metrics. Due to the high number of Sulzer BFPs—152 installed and operational in Eskom power stations at the time—and the availability of Sulzer’s local refurbishment capabilities, Eskom and Sulzer Pumps signed a partnering agreement in 1993 with the objective of achieving high availability of the feed pumps. The element of risk sharing and mutually agreed objectives make the partnership strikingly different from the traditional customersupplier relationship. This basic contract still remains in place today and is renegotiated every 3 years.

Mutually Beneficial Partnership
The primary purpose of the partnering agreement is maintenance to ensure the integrity of Eskom’s BFP population by working as partners in implementing Eskom’s business objectives in a way that is mutually beneficial and cost effective. This approach implied aspiring a long-term relationship based on trust, dedication to common goals, and the understanding of each party’s expectations and values (see STR 3/1995, p. 16). The signed agreement reflects this concept and names a number of common objectives, notably

  • to work towards a long-term relationship considering the interests of both parties
  • to work towards agreed performance targets
  • to pool all relevant information
  • to optimize plant operations
  • to continually update plant technology
  • to constantly improve productivity
  • to continuously improve quality
  • to follow appropriate maintenance policies

Pumps at 12 Power Stations
The scope of the BFP partnering agreement covers the maintenance of the main and standby feed pumps at 12 power stations, together with other large pumps, e.g., condensate extraction pumps (CEP), cooling water pumps, as well as principal auxiliaries, e. g. valves, gear boxes, lube-oil systems. In the process, Sulzer has developed technicians with excellent knowledge of Eskom’s production processes, who are placed at the various power stations and considered part of the on-site maintenance teams. Today, Sulzer operates a team of more than 50 technicians who cater to Eskom’s pumping requirements. Addtionally, Sulzer’s research and design department in Winterthur (CH) supports the South African team with the latest developments in pump design.

Agreed Criteria
Eskom classified objectives of its electricity production to identify the expectations from its partner Sulzer. The objectives and contractual outputs had to allow both partners to achieve their individual company goals. Eskom aims at lowest cost of production and  Sulzer seeks to achieve goodshareholder return. Both parties selected the performance parameters, and thus the measure for Sulzer’s output, according to 4 key criteria:

  • Simple to understand
  • Easy to obtain and record, preferably from existing information systems
  • Auditable when serving as basis for payments
  • Reflecting the efforts of Sulzer as closely as possible

One of the hurdles in compiling a performance-based contract was determining the performance required for each measure. These targets were intended to stretch the potential plant production while remaining fair to both parties.
To identify these outputs, Eskom power station engineers identifiedperformance parameters important for the plants. They also stated their concerns about the plant and the contractor’s performance at that time. The original list of about 15 items was then condensed to 4 practical measures, which were later updated to incorporate some station specific measures.
Applied to the specific task, the performance measures are:

  • Availability of BFP (Fig. 2)
  • Reliability of BFP (Fig. 3)
  • Call-out response time
  • Management-report submission response time
  • Various power-station specific measures

Incentives for Both Partners
Setting the monetary value of incentives was another crucial point;as the value of incentives had to be such that both parties must want the bonus to be paid and, conversely, neither must want a penalty to be incurred.
This meant that the improved results should enhance the Eskom business such that the cost of the bonus is well covered and that input of Sulzer’s effort is not so great as to offset the value of the bonus. Based on the above philosophy, the following incentive keys were agreed upon.

  • Availability incentive 45% of total incentive
  • Reliability incentive 40% of total incentive
  • In cases where stations have unique requirements, the above are adjusted to allow a station-specific incentive of 15%

With both the partnering agreement and a reliability initiative aiming for 90% availability, 7% planned and 3% unplanned unavailability, Eskom generation performance including BFPs has taken leaps forward in reliability and availability. Since its inception, the availability of the plants covered by the partnering agreement has improved over each 6-month review period. Reliability has been maintained at a high level with a perfect record achieved during some review periods.

Reliability Improved
In addition to the currently installed 199 BFP units and 86 CEPs, the partners added a number of important process pumps to the agreement, including some not originally manufactured, but now nonetheless maintained and overhauled by Sulzer (Fig. 4). All pumps are required to achieve the same level of performance. The length of equipment life reflects the long-term nature of the contract. Several BFPs have exceeded 100,000 running hours between overhauls.
Reliability is measured by the number of automatic emergency shutdowns (“trips” in power station jargon) of turbine-generator units. During the last 14 years, 7 unit trips attributable to the equipment in the partnering agreement were recorded; and for the last 6 years, no unit trips occurred. Availability is measured by comparing pumps up-time against the total operating hours of the turbine-generator unit. At 99.91% (2006 figures), plant availability at Eskom compares extremely favorably with the world standards of 98.5%.

Cost Reduced
Costs to Eskom have decreased as a result of continuous productivity improvements, as have hours lost per pump (Fig. 5). Acombined team manages the purchasing of spares and generated substantial savings during the first 5 years of the contract using a centralized system for spares inventory. Most of the BFPs have high running hours, and is it important to retain the long-term health of plant and equipment. A continuous plant condition assessment guarantees that both Eskom and Sulzer plan ahead for the replacement of auxiliary plant components (Fig. 6). This will ensure that neither partner, nor the plant, is at risk due to the failure of components with limited life expectancy (Fig. 7).

Long-Term Partnership
The success of the alliance can be assessed by looking at the improvements that have been achieved. Cost productivity has improved substantially and pump reliability and availability are as close to perfection as is realistically achievable with a fleet that is ageing steadily. Cooperation on all levels ensures that the partnership is a success for both parties. The continuation of the alliance is desirable and benefits both participants, who will drive it into the future.

Cadle, Johan, et al. "Partners in Success." Sulzer
Technical Review
. 2/2008: 20-23. 












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