Best Practices To Cut Costs For Power Plant Operations

Regardless of the industry, reducing the costs for power plant operations is always a desire of every company. However, when it comes to power plants, there’s very little you can compromise on to achieve a reduction in your overall expenditure. After all, making any cost cuts might put the lives of executives and frontline workers in danger.

That being said, there are a few ways businesses can find means to cut costs, without endangering the lives of their resources, by changing a couple of operations and support functions. These support functions include technical services, engineering and outage planning, etc. For example, plants that are working on baseload missions should remain fully staffed and resourced; however, intermediate and peaking plants can change shift routinely, which still fulfilling their objectives.

In this article, we have provides the best practices you can follow to cut costs spent on power plant operations:

Margins Matter More Than Production

Every plant manufacturer is finding ways to increase production; however, increasing production is of no use if the incremental output is not profitable. Hence, trying to obtain maximum production from assets is not always the best option. Instead, you need to get an in-depth understanding of the fiscal terms of your contractual operating agreements, especially when it comes to product sharing, tax regimes, and cost recovery mechanisms. This will provide you with sufficient data to determine if increasing production will hurt or benefit your brand.

Scrutinize Every Cost

Before you can determine which costs you can cut, you need to have a detailed understanding of each cost and its drivers. Instead of focusing on cost buckets, you need to analyze each fundamental driver to gauge the cost for every item, which can be used to determine the overall importance of that driver. Ideally, there are three types of cost drivers that provide various degrees of content, as listed below:
Raise Approval Level For Certain Costs

If you’re looking to save costs on your power plant operations, you need to raise the approval level for expensive, non-recurrent costs. This will not only give you the chance to determine which cost is crucial, but it will also encourage your team to conduct proper research and create a compelling reason for the cost, before asking for approval. While effective temporary, you don’t want to rely too much on this tactic as you may end up losing time providing approvals instead of doing something that can help the company grow.

Reduce Usage Volume & Frequency

In some cases, reducing the number of consumables or the usage frequency can result in a substantial profit. For example, by reducing the volume of chemicals injected to treat wells, you can save some fund, while not drastically changing the power plant operations process.
Use Technology

New technologies and better standardization provide multiple opportunities for you to carry out the power plant operations differently and in a more cost-effective manner.

There is no definitive way that can guarantee to save the costs of power plant operations; however, these best practices are sure to put you in the right path, while ensuring the safety of your employees!