Underwriting & loss control

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  • 1. UNDERWRITING & LOSS CONTROLIN COMBINED CYCLE POWER PLANTSPRESENTED BY Sudhindra B. Kodagali Senior Underwriter Property & Engineering
  • 2. Objectives● Combined Cycle Power Plants ● Introduction – Trends, Advantages, Working cycles ● Underwriting considerations ● Loss Control ● Insurance covers © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 3. Increased Deployment of Gas TurbineTechnology in Power Plants ● More private operators due to liberalization ● Increase in gas production world wide and development of Gas Turbine technologies ● Increasing need to find environmentally friendly methods of power generation ● IT development allowed better control and accounting record of complicated power flows ● Development of new techniques in transmission and distribution of Electric power by creating national and International networks ● Drop in prices of GTs due to strong competition © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 4. Preference for Gas Turbine Power Plants● Low initial costs compared to other types of power plants● Less space requirements● Less time required for installation● Increased unit capacity due to technological developments● Increased efficiency● Low maintenance costs, though operational costs are higher● Higher reliability● Low NOx emissions● Increased fuel spectrum © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 5. Section of Gas Turbine © Copyright 2011 TRUST All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 6. Types of Gas Turbine Plants - SimpleCycle © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 7. Types of Gas Turbine Plants - CombinedCycle © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 8. Main Manufacturers ofLarge Combustion TurbinesEurope : Siemens and AlstomNorth America : GE and SiemensJapan : Mitsubishi © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 9. Underwriting Considerations● Continuous Product Development: Lead to increased power plant risk exposures. Firing temp and compression ratios are being increased to achieve higher efficiency ● Firing temp levels directly affect operating metal temp. Latest models of ‘F’ and ‘G’ class turbines operate at 300 to 400 degrees firing temp more than previous ‘E’ class turbines,● Prototype Models: Regular upgrade developments of Gas Turbines made it difficult to distinguish a prototype model from a proven model. A GT to be judged as prototype as long as the first model of the series has not reached 8000 hours of trouble free operation. Higher deductibles to be applied for covering manufacturer’s risk © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 10. Underwriting Considerations● Operating Conditions: To check whether GTs are operated under standard conditions like use of special fuels, new elements leading to increased efficiency● Quality of fuel● CAT exposures● Operating Cycles: Base load and peak load. Peak load station with frequent starts and stops is subject to extensive thermal fatigue● Risk management practices: Fire fighting systems to be operational before commencement of testing © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 11. Underwriting Considerations● Completion Date Monitoring (ALOP): Periodical monitoring of work progress program and assessment of actual date of commissioning in case of ALOP cover● Parts of Limited Life: Items like turbine vanes and blades to be subject to depreciation (Mre 333) © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 12. Loss Analysis and Control - CausesLosses are classified in to three categories of causes byInternational Machinery Association:● Design faults: About 35% of all loss repair costs are in respect of Prototypes of new models or components. Design cover has to be selectively given. LEG 3 to be given for proven models.● Human Errors: This depends on quality of staff, management and implementation of quality and process regulations. These failures are estimated to produce 50% of losses. © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 13. Loss Analysis and Control - Causes● Operational losses: Losses caused by faulty operation, natural disasters, fire, wear and tear. Approx 15% of losses are attributed to this category and this could be improved by good plant design, automatic diagnosis program routines and good fire fighting system installation before commencement of Testing phase. © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 14. Loss Analysis and Control - Prevention1. Use of risk based maintenance and inspection programs ● Combustion inspection, ● Hot gas path inspection, ● Major overhaul,2. Use of proactive maintenance schedules3. Diagnostic monitoring ● Vibration analysis, ● Thermography, ● Endoscopy © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 15. Conclusion● The demand for insurance protection would increase in the coming years● The level of rating to be set at adequate levels to at least cover the burning costs, CAT loss reserve and admin costs● Careful approach is required to cover manufacturer’s risk specifically for models not satisfactorily proven. For wider covers we adopt very high deductibles for testing and commissioning risks,● Higher preventive maintenance standards to be applied. © Copyright 2012 TRUST RE All rights reserved. No part of this presentation in all its property may be used or reproduced in any form or by any means without a written permission
  • 16. Thank YouSudhindra B KodagaliSenior UnderwriterProperty & Engineeringskodagali@trustre.com(973) 17517195