DCS vendor strategic alliances
- Sargent and Lundy, Chicago, IL (United States)
The competitive nature of the utility industry, which is driven by forces of deregulation, causes utility managers to look for ways to reduce their generating station operating and maintenance costs. One method being used to optimize performance and reliability at operating stations is replacement of control systems with new distributed control systems (DCS). Installation of these systems can result in unit performance improvements and increased capacity, and reduction in forced outages, operating staff, and maintenance costs. While DCS installations continue to achieve these benefits, utility managers are looking for ways to reduce the capital costs of implementing control system replacement projects and thus improve the benefit to cost ratio. One such method is the establishment of a DCS Vendor Strategic Alliance. A DCS Vendor Strategic Alliance is a relationship established between a utility organization (or other user of DCS vendor products and services) and a DCS vendor. This relationship is a commitment by the buyer to purchase DCS vendor products and services over a predefined period of time (usually 5 to 10 years), in exchange for receiving those products and services at a rate below the current market value (10 to 20% below the market value expected when competitively bid). This paper discusses the concept of DCS vendor strategic alliances, reviews the benefits and drawbacks of the concept, and provides an actual case study experience. In addition, the paper discusses the noneconomic benefits of a DCS vendor strategic alliance that distinguish this relationship from a sample long-term purchasing agreement.
- OSTI ID:
- 389883
- Report Number(s):
- CONF-960426--
- Country of Publication:
- United States
- Language:
- English
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