A Study on the Methodology for Economic Replacement Life Evaluation for Power Equipment Asset Management

Power companies worldwide have been installing and expanding numerous power facilities to meet the energy demand driven by economic growth. These facilities need to be replaced sequentially to reduce the risk of failures. However, it is practically difficult to uniformly replace a large number of facilities each year due to constraints such as budget limitations, adjustments to outage planning, and construction capacity. As a result, there is a need for an efficient long-term equipment investment plan and a strategic equipment investment plan through asset management. Therefore, this paper analyzes the methodology for economic life evaluation to develop medium to long-term investment strategies for power facilities. It examines the changes in the economic replacement life of the equipment based on the impact of failures and variations in the discount rate from an economic perspective. The goal is to establish a foundation for medium to long-term equipment replacement strategies. © 2024 Korean Institute of Electrical Engineers. All rights reserved.