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03 July 2001

Manufacturers prepare for summer of shortages

by Bob Felton

Strategies: Production halts, power reserves, rain dances.

With Californians anticipating hundreds of hours of rolling brownouts or blackouts this summer, drought-arrested hydropower generation in the West, maxed-out power generators everywhere else, production shifting away from California toward already straining grids, and political brawling preventing action on long- or short-term power solutions, plant operators can look forward to a tumultuous summer.

Some of the reactions to the nation's continuing power problems are counterintuitive:

• In the Northwest, aluminum smelters discovered they could make more money by closing down their operations and selling their power on the spot market or back to the generators, so that's what they did. Now, the Bonneville Power Administration (BPA) has asked them to stay off-line for up to two years. The producers are agreeable because aluminum prices have been soft, and a cut in production will firm them up. Roughly 8,000 jobs will be lost, with average salary and benefits of about $58,000. Alcoa hasn't laid off idled workers, though, because BPA agreed to reimburse the company for their salary and benefits.
• BPA operates 29 hydroelectric plants in the Northwest, where less than 2 inches of rain have fallen since 1 January. Thinking to help, the Yakama Indian tribe performed a rain dance and sent BPA a bill for $32,000—small change compared with the cost of thousands of idled aluminum workers. BPA declined to pay anyway. "It was pretty much a blow to me to hear from the BPA administrator that he couldn't find the funds to assist in this," a tribal member told the Associated Press.

Traditionally minded operators disinclined toward locking the doors or hiring witch doctors are pursuing more conventional alternatives: reviewing their contracts with the power company, tuning their equipment to run as efficiently as possible, and investigating alternative power supplies that will carry them through fluctuations and enable safe shutdown if shortages develop.

Rising demand, increased sensitivity

Nationwide, the demand for electricity is growing at a rate of 2% to 3% per year. In Silicon Valley, with its concentration of high tech companies, the demand is growing at a rate of about 10% per year.

Ironically, the power problems are arriving just as, looking for the communications advantages of the Internet and nonproprietary operating systems, manufacturers are putting conventional PCs on the plant floor in greater numbers, increasing their exposure to power-related shutdowns. Further, problems can be caused by events far less dramatic than rolling shortages.

Though inertia will keep much manufacturing equipment operating satisfactorily through transient power irregularities, the same is not true of most computers; the power spikes and sags that afflict practically all electricity users can make computers blink. When those irregularities hit—more than 60 times a year at a typical manufacturing facility, according to a study prepared by the Electric Power Research Institute—the cost can range from $6 to $40 per kilovolt ampere (kV.A) if a vital PC is disabled.

Worse, if the computer controls the automation controls, an entire plant could go down, even if the machinery shrugged off the disruption. At most plants, the solution is a combination of generators and uninterruptible power supplies (UPSs) that power the computer and heavy equipment till they can shut them down normally.

Engineers generally divide UPSs into "online" and "standby" units, with further subdivisions according to features and the activation mechanism. Office computer systems typically rely on standby units. Because interruption of factory automation activities may be so consequential, online units are usually preferred for regulating power flow because they filter out input transients and are available with outputs ranging from less than 1 kV.A to several megawatts.

Additional considerations are run time, or the time required to shut everything down safely. Getting this right can be difficult in plants with intricate processes that deploy multiple subsystems. The power backup should be reanalyzed for adequacy when capacity expands or other changes are made to the processes, and personnel should be trained in the steps to follow when a shutdown is necessary.

UPS demand will grow

Plant engineers and information technology managers might be fretting about the future, but UPS manufacturers are rocking along. American Power Conversion Corp., a major UPS manufacturer, reported a 16% increase in first-quarter 2001 revenues and a whopping 71% increase in per-share income for the same period. The company's large systems segment revenues grew 132%. A company spokesperson, however, refused to address questions about unit sales volume, production figures, or on-hand inventory, saying only that California's "generated a lot of awareness. I can tell you it has affected our call volume."

Company president Roger Dowdell elaborated in a statement issued with the company's earnings report: "We face an interesting environment in our business. The need for power availability solutions has never been greater. Power quality, reliability, and capacity are at the forefront of people's minds as a result of California's struggles, and 24 by 7 system availability is no longer optional for many end-user applications."

International Power Technologies, Inc. issued a white paper entitled, "Evaluating Uninterruptible Power Supplies" in 1997 that today seems prescient.

"Due to environmental and nuclear safety concerns," the authors wrote, "the construction of new power plant capacity is increasing at only half the rate of the increase in power demand, according to the North American Electric Reliablity Council. As a result, almost every region of the U.S. is expected to have inadequate electric power capacity by 1999.

"The same is also true for large parts of Western Europe, Southeastern Asia, and other areas of the world. Faced with a shortage of power, utilities are forced to cope with excessive power demand by scheduling 'rolling brownouts' in certain areas during peak demand hours."

The paper further speculates that deregulation might affect the quality of power. "When electricity has to travel a long distance from where it is generated to where it will be used, it is exposed to increased hazards and other disturbances that can significantly reduce power quality. Also, deregulated power may have to travel through the transmission lines of several different electric power companies before arriving at its final destination. As a result of this increased interdependency between utility transmission lines, a power hazard that occurs in a distant location may actually cause a blackout over a large geographical region that is thousands of miles away."

New York State, where officials fear summer shortages, awarded American Power Conversion a contract in early May to provide power supply equipment to more than 200 agencies.

American Power Conversion's big numbers don't surprise business analysts. A Frost & Sullivan study released in July 1999 predicted the American market for UPSs would grow at an annual rate of 15.6% until 2004, reaching annual revenues of $5 billion. A 2001 report prepared by Business Communications Co. estimated the worldwide UPS market would be almost $10 billion by 2005.

Venture Development Corp. took a look at the UPS market in August 2000 and found that "overall, average UPS prices have eroded during the past few years and will continue to fall as competition intensifies and the markets continue to mature. However, with suppliers enhancing the feature set/functionality of offerings, the average price declines are not expected to be as pronounced as in the past."

One of the most common new features is a computer interface that allows monitoring power quality and managing response via the Internet. Operators can now rely on the UPS to oversee a safe, unattended shutdown and restart; provide power diagnostics; broadcast warnings of impending power problems; and perform sequential shutdowns. Further, thanks to the Universal Serial Bus standard, most of the new UPSs are plug and play. IT

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• Relief in sight?