The Effect of Parameter Uncertainty on Hydropower Asset Replacement Cost Models
Publication: ASCE-ASME Journal of Risk and Uncertainty in Engineering Systems, Part A: Civil Engineering
Volume 6, Issue 3
Abstract
Hydropower asset managers use whole-life cost models to better manage risk costs and asset replacement strategies for their hydroelectric powertrain and balance of plant assets. Whole-life cost models can be simplified to four main input variables: Weibull scale () and shape () parameters that inform the probability of failure; a planning horizon , indicating the frequency of the decision-making opportunity; and a cost ratio (CR) that compares unplanned outage costs with planned outage costs. Both the probability of failure models and the cost estimates suffer from high uncertainty and a lack of information regarding confidence bounds. The sensitivity of model results to the uncertainty inherent in the CRs is highly important for informing facility and fleet-wide decision making. Weibull shape and scale parameters were modeled at errors for a wide range of CRs. This sensitivity study reveals that (1) a error in the shape parameter imparts a 0.04% to 5.89% change in the optimized annualized cost (OC) over the range of CRs; (2) at CRs above 1.4, the 4-year () error in the scale parameter causes a change in optimal point (OP) of replacement of 2 to 4 years; and (3) as CRs increase, the impact of errors on OP first measured as 7 years decreases to less than 1 year by the time CRs reach 2.4.
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Data Availability Statement
Some or all data, models, or code generated or used during the study are available from the corresponding author by request. Code and data for Figs. 1–4 and whole-life cost model code and data for Figs.5 and 6 are available from the corresponding author by request.
Acknowledgments
The authors would like to express appreciation to Dr. Brennan Smith for guidance in his role as the water power program manager at Oak Ridge National Laboratory (ORNL), and to Rui Shan for assistance in visualization of Figs. 5 and 6. We are grateful for the reviews provided internally by Charlie Horak and externally by Mark Parrish of the US Army Corps of Engineers. The authors would like to extend a special thanks to the US Department of Energy’s Water Power Technologies Office for financial support.
Disclaimer
This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.
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©2020 American Society of Civil Engineers.
History
Received: Aug 25, 2019
Accepted: Feb 24, 2020
Published online: Jun 26, 2020
Published in print: Sep 1, 2020
Discussion open until: Nov 26, 2020
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