WITH a portfolio of 10 power stations, Southern Hydro has been one of the outstanding successes of the Australian generation privatisation programme. Its various owners have seen the company’s equity more than triple since the business was first sold in 1997, despite a draught prevailing over these years.

In a market glutted by some of the world’s cheapest coal fired base-load generation Southern Hydro’s chief executive, Simon Maher, explains how the company has focussed upon renewable energy and fast response peaking power to earn premium returns.

‘We sell our capacity in the energy derivatives market as a form of insurance against the extreme spot prices that can arise from time to time. Such prices are largely driven by heightened air conditioning load growth. We have also successfully marketed the environmental benefits of our electricity to a customer base now willing to consider such matters.’ he says.

The company trades its plant through Australia’s National Electricity Market pool, but, due to limited water resource it is only able to generate 20-25% of the time. Consequently, it aims to generate during higher priced periods; typically occurring during periods of high demand and/or supply side difficulties. Extensive analysis, forecasting and control centre experience and intuition go into optimising this aspect of the trading operation.

With the support and advice of power consultant Sinclair Knight Merz, Southern Hydro recognised that by uprating and refurbishing its existing power stations it could significantly boost its generating capacity. As a result, the company has undertaken upgrades at the Eildon and McKay Creek power stations in Victoria. At Eildon, two early 20th century 7.5MW hydro turbines have been brought back to life after lying dormant for 44 years, while a major turbine upgrade is underway at McKay Creek that will see the 40-year-old station producing more than 50% above its originally installed generating capacity by the end of 2004.

Eildon power station

At Eildon, Southern Hydro is now able to generate an additional 15MW of renewable power during peak demands on the Victorian power system. On average the station produces about 225GWh of electricity a year.

The turbines used at Eildon were originally installed in the Sugarloaf irrigation and hydro power project in 1929. They were shifted to the new power house when that scheme was submerged by construction of the larger Eildon dam in the early 1950s. The machines ran for only two years until the lake rose to beyond their head capacity.
With the new electricity market providing high prices at times of peak loading on the system, Southern Hydro considered whether the old units could be brought back into service.

Sinclair Knight Merz was asked if it was possible to uprate the sets so that they could operate safely at lake levels up to 285m (the full lake level is 290m). The team established that the machines could be restored to service and that it was possible to achieve the target lake level, even though it would subject the turbines to twice the original design water pressure.

The re-commissioned units utilise Southern Hydro’s existing water entitlements, while allowing them to make more effective use of the water through greater flexibility in power generation.

Sinclair Knight Merz staff from New Zealand and Australia worked closely with Southern Hydro to deliver the project.

They provided overall and detailed hydraulic, mechanical and electrical designs, control system definition and software development, project management and commissioning services. Specialist contractors were employed for transformers, electrical equipment and hydraulics.

outhern Hydro staff carried out most of the dismantling and reassembly work, which provided valuable training and left the owner with detailed knowledge of the units.
Sinclair Knight Merz project manager Paul Caplen, says the company partnered with Southern Hydro to deliver the project after it became clear that a turnkey solution would not be as economic.

‘In the partnering arrangement, we were able to adjust the degree of refurbishment to match actual needs and Southern Hydro’s preferences as the existing plant condition was revealed,’ he explains. ‘We worked to understand Southern Hydro’s real needs, which were to get the units running again, stay under budget and meet the all-important need to complete the project in time to service the summer peak demand requirements of the National Electricity grid in Australia.’

The work was executed on a multi-contract basis, and the units were successfully commissioned in February 2001.

McKay Creek

At McKay Creek power station, Sinclair Knight Merz was brought in by Southern Hydro to undertake a major turbine upgrade that would enable it to produce more than 50% above its originally installed generating capacity. The station, owned and operated by the Southern Hydro Partnership, is equipped with six vertical generators driven by 4-jet Pelton turbines originally supplied by Boving.

Commissioned in 1960 with original ‘nameplate’ ratings of 16.78MW, the turbines previously operated at a maximum of 20MW for a limited period of time.
On completion of the upgrade, McKay Creek will have a continuous capacity in excess of 150MW, together with fast start and response capabilities.

Sinclair Knight Merz carried out a Feasibility Study into the upgrade. John Arnold, Sinclair Knight Merz project manager, says his Victorian based team drew heavily on the specialist expertise from the firm’s Hydro Group, which is based in New Zealand.
‘The feasibility study involved extensive desk-top modelling of the station and a comprehensive ‘water-to-wire’ analysis of the entire scheme.’ He explains. ‘We recommended that Southern Hydro leverage off other international design expertise, and suggested they commission three international turbine manufacturers to carry out preliminary studies that would investigate options for increasing the turbines’ output and efficiency.

‘We knew that the existing turbine casings would be significantly undersized for the targeted new output, so we recommended this be a focus for the manufacturers’ studies,’ Arnold adds.

Southern Hydro accepted the recommendations and in mid 2002 commissioned three turbine manufacturers based in Norway, Slovenia and the Czech Republic, to carry out the studies.

One of the manufacturers was modelling a similar turbine for another project in South America, so the opportunity was taken to use that model to estimate the effect of the small turbine casings.

The modelling concluded that the station could be uprated to a nominal output of greater than 150MW (6 x 25MW at the generator terminals) without detrimental effects whilst improving overall turbine efficiency.

The model testing also supported the findings of Sinclair Knight Merz’s work and the preliminary turbine studies, that the increased output could be achieved with replacement runners and injector modifications, but without significant alterations to the turbine casings or inlet piping.

Based on these findings, Southern Hydro entered into a contract with GE Energy in December 2002 to uprate the Station, and appointed Sinclair Knight Merz to act as Owner’s Engineer for the duration of the project.

‘As of July 2004 the upgrading for four of the turbines was completed, on time and within budget,’ says Arnold. ‘In conjunction with the turbine upgrades, new control and governor systems and hydraulic oil systems were installed so as to achieve improved performance, efficiency and reliability.’

In addition, the generators were totally refurbished and new static excitation systems, electrical protection equipment and cooling water system modifications were installed The remaining four turbines are on schedule to be completed by the end of this year.

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Sinclair Knight Merz
Southern Hydro