Expert Risk Articles

Combined Cycle Power Plant Risks

In October 2007, AGCS Risk Consultant Ruediger Beauvais visited a Client’s Combined Cycle Power Plant in Spain, just one Stop on his constant World Travels.


The risk surveys of Ruediger Beauvais take him all over the world.

September 5, 2007

Let's see, what language is it today? Spain this week, Argentina next week, next month Côte d'Ivoire and Mexico. So Spanish today. Ruediger Beauvais has been taking Spanish lessons for some time. But the language that unites him and his client today is really "power plant."

Based in Spain, the client is one of the largest private power companies in the world, with operations on four continents. Beauvais has been working with them for years as part of the risk consulting area of Allianz’s corporate insurance business. Beauvais, with about 10 years of experience as a risk engineer and another five years working for a power plant equipment maker, is well acquainted with combined cycle power plant risks.

Today the job is inspecting a combined cycle power plant in the Spanish province of Cadiz. The Spanish phrase for combined cycle is el ciclo combinado—in a combined cycle, natural gas (gas natural) is burned to drive a gas turbine (turbina de gas), and the exhaust heat is transferred to boilers to heat water and drive a steam turbine (turbine de vapor). Less wasted heat, less CO2 exhaust.

It is a fairly new plant with new models of turbines installed. Beauvais has yet to see these new models in action. He would inspect the plant as a normal part of the services that accompany the client’s insurance package with AGCS, but these new prototype turbines are nearing the end of their break-in phase, and now the operator has had enough experience with them to say whether they are operating according to expectations.

Beauvais has met the client's risk manager (administrador de riesgo) several times; they have a pleasant working relationship. He has also been to Spain on many occasions over the years, and he knows the local AGCS colleagues well. But for today's site visit there is also an element of personal interest. He wants to see the new machines in their working environment. He is drawn by the language that unites him with his counterparts.

Soft facts of engineering

"You never stop being curious," Beauvais explains, "It's what makes a good risk engineer, but our business is as much about qualitative soft facts as it is about numbers and data, maybe even more so." His assessment of this combined cycle generator and of the plant in general will result in recommendations for both the client and Allianz Global Corporate & Specialty (AGCS), as well as influence discussions about the structure of the risk solution when the two companies meet to renew their contract.

He will gather with colleagues from the Madrid AGCS unit to meet the plant director as well as its jefe de explotacíon, the chief of operations. The meeting begins with a comprehensive discussion about the experience of working with the new combined cycle turbines. "This kind of talk is a lot more important than most people realize," explains Beauvais, "because it's here where we really find out how well the machines are performing. It’s especially important with new equipment that might have ‘teething’ problems."

Naturally, wherever Beauvais goes to visit a client, they put on their best face. "It's always like that, so when you've done a lot of inspections, you know what things to look for," Beauvais says, "But the plant was really in great shape that day." He had already done all his homework on the generator, reading documentation like maintenance reports, so it was the face-to-face meeting that made the big difference. Risk management in general is next on the list, and so the group goes on a general tour of essential areas. This begins with the control room, and then moves to the other remaining turbines. It then covers aspects like housekeeping and that perennial concern: fire prevention. Here, too, the plant is performing well.

It is the kind of visit Beauvais likes: when no real problems stick out. And it affirms the strong relationship his company has with the client. The client is in a market that places significant value on personal contact—and that is another language that unites them. After a final assessment meeting it is time to go together to a bodega for a collegial round of vino y tapas.

All in a day's work, unique but with the same theme. Côte d'Ivoire may be different, working in French without bodegas, but still there are power plants.

Download "Global Risk Dialogue" spring 2008 (1 MB)