service opportunity
Combustion Turbine Long-Term Maintenance
Decision Support Services
Lif e-Cycle Maintenance Cost
(not to scal e)
OE M OE M
Lis t Contract
Price
A long-term maintenance or parts contract (2nd bar) saves money
compared to purchasing parts at list price from the OEM. A third-
party parts supplier could save you even more. Future maintenance
costs could decrease even further as parts lives are extended and
parts become more widely available (4th bar, low end). But
shouldering the risk yourself could also result in even higher
maintenance costs if parts lives are shorter than expected or third-
party suppliers are not available.
SHOULD YOU COMMIT TO A LONG-TERM MAINTENANCE
CONTRACT? As new combustion turbine (CT) models
attain ever higher firing temperatures, maintenance risk has
become a central concern for project profitability. Over its
life cycle, a turbine’s maintenance costs can run two to three
times higher than its capital cost. And it is the most
expensive components, such as blades and vanes, that are
most prone to failure. Premature component failure—
particularly if you could not readily procure the proper
replacement part—could easily jeopardize project viability.
To help manage this risk, OEMs are offering long-term
service contracts—at a price they claim should save you
money over the long haul. Still, such contracts are
expensive, on the order of $10 million per year for 12 years.
As depicted in the bar chart, OEMs typically charge
premium prices for parts, even when “discounted” for the
service agreement. Third-party suppliers typically charge
less for parts and contracts, but can you count on them?
The long-term service model is changing the face of the CT
maintenance landscape, and could potentially shut third
parties out of business.
New Combustion Turbine/Combined-Cycle Design,
Repowering & Risk Mitigation
Prema ture Wear-Out
Quantify your risk and assess alternatives
Sole S ource Part Supply
before signing a long-term maintenance
contract
Unc ert ainty
Technology
Improvem ent Then again, the demand for lower-cost parts could lead to a
boom in alternative supply sources.
Third Variability Clearly, the decision whether to enter a long-term CT
Party
maintenance contract or to “self-insure” is not an easy one.
You’ll need to know your alternatives, and have a sound
basis for assessing your technical risk.
ASK THE EXPERTS Fortunately, there is one easy step in the
decision process: signing up for a consultation with
EPRIsolutions. Our seasoned staff can provide the expert,
unbiased advice you need to determine the best decision for
your unique situation. We’ll make you aware of your
options and quantify the value and risks associated with
each alternative. Although we don’t operate as your agent,
we’ll critique your proposed service agreement and arm you
with the knowledge you need to negotiate favorable terms.
As you wish, we’ll take a good, hard look at the following:
• Contract terms and conditions
• Parts costs and sourcing alternatives
• Reliability and maintainability statistics—and
anticipated risks—for your particular vendor model and
proposed duty cycle
• O&M costs and cash flow, using our CT Project Risk
Analyzer framework to compare costs, on a present-
worth basis, with other maintenance alternatives
• Unplanned maintenance costs, estimated by
extrapolating current statistics
• Business interruption costs and insurance
• Pro forma finances, comparing relatively fixed-cost
contracts against self-performed maintenance
November 2000
 (accounting for variability in parts life, unplanned
maintenance costs, contract deductibles and coverage
maximums, time value of money, etc.)
SOLID DATA FOR SOLID DECISIONS Our assessments are
firmly grounded in EPRI’s vast experiential database of CT
reliability and performance information. As a leader in CT
durability surveillance, we’ve got direct knowledge of the
field performance of new turbine models, and how that
performance stacks up to vendor promises. In analyzing
your situation, we’ll draw upon EPRI’s far-reaching CT
research programs, including:
• Design Evolution—Engineering assessment of new,
unproven CT designs based on design features and
similarity to earlier designs for which historical
statistical data are available
• Durability Surveillance—Monitoring, diagnostics, and
inspection of pre-commercial and early commercial
installations of new CT models
SET YOUR OWN SCOPE Maybe you’ve already decided to
adopt a long-term service agreement and need help
negotiating the terms. Or maybe you want a full analysis of
all the options available to you, with detailed risk
quantification. You set the scope, and we’ll customize the
consultation to your needs. Big or small, you’ll find that our
service saves you money in the long run by providing the
insights you need for confident decision making and a
successful CT project.
AVAILABILITY To order now, contact EPRI’s Customer
Assistance Center (EPRICAC) at 800-313-3774 or
askepri@epri.com.
CONTACT INFORMATION For more information on CT
Long-Term Maintenance Decision Support Services, please
contact your EPRI regional manager.

• Collaborative Data Collection—Reliability and

maintainability data on each model’s fleet of
commercial installations

• Focused Studies—Investigation and assessment of

critical technology areas, such as materials properties,
blade coating life, advanced NOX control and
thermo-acoustic burner instability

• Improved Components Initiative—Development of

commercial CT components for improved durability
and lower overall parts costs

• Risk Mitigation Framework—Integrated analysis and

economic assessment of operation costs, scheduled and
unscheduled maintenance, business interruption, and
risk mitigation options

© 2000 EPRIsolutions, Inc. All rights reserved. EPRI and EPRIsolutions are
registered service marks of the Electric Power Research Institute, Inc.

Printed on recycled paper in the United States of America

1001117

EPRIsolutions • 3412 Hillview Avenue, Palo Alto, California 94304 • PO Box 10414, Palo Alto, California 94303 USA
800.313.3774 • 650.855.2121 • askepri@epri.com • www.epri.com