BT Fleet Mobile Generators

BT’s required compliance following on from the Edinburgh Oil spillage incident and SEPA actions.

Scottish Water Environment (Oil Storage) Regulations 2006 & UK Environmental legislation.

Report prepared by Gary Winter & Rob Smith.Power Policy Team

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UK Environmental Legislation and Regulations

What are the regulations:-These are environmental legislation that apply to any quantity of mineral oil or liquid containing contaminants stored in tanks or containers on BT sites from the 1st April 2010.

Where do the regulations apply :-

The Water Environment (Oil Storage) (Scotland) Regulations 2006 only apply in Scotland. There are similar regulations in England and Northern Ireland, namely the Control of Pollution (Oil Storage) (England) Regulations 2001, Control of Pollution (Oil Storage) Regulations (Northern Ireland) 2010. There are currently no similar regulations in Wales.

What is the impact to BT and why :-Any mobile generator deployed at a BT site in Scotland must store all mineral oils within a double skinned tank and have an alarmed bund to contain 110% of the contents of the largest tank.

Any mobile generator storing in excess of 200 litres of mineral oil deployed at a BT site in England or Northern Ireland must have similar oil storage arrangements.

BT’s fleet was not designed for leakage containment of any mineral oil and so does not comply with the current regulations.

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Executive summary

• The BT mobile generator fleet currently consists of 448 serviceable sets, 228 are larger trailer mounted units. These 228 (10 to 500kVA+) sets are directly affected by the current Oil Pollution Regulations; a sample has been initially assessed and it is considered all have been found not to be compliant with the current regulations.

• The use of non-compliant mobile generators leaves BT open to unlimited fines in the event of a fuel or oil spillage affecting the environment, damage to BT’s environmental reputation and criminal prosecution.

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Indicative cost comparison table The options considered available to BT for compliance with the Oil Pollution Regulations are detailed below.

Options considered

Description Budget estimate

Notes

Option 1 Hire replacements

£3.5M (a year additional)

Sole reliance on hire replacement via agreedhire contracts, decommission the whole of the BT mobile fleet. Based on a average hire of 107 extra sets a year with a total cost of £5.9M (current run rate plus the deployed BT fleet replacement)

Option 2 Remedial upgrade

£3.04M Prioritised to Scotland first. A program of upgrades phased in across the rest of the Country and spread over 2 years. Requiring an up front survey of all fleet mobile sets (£40K).

Option 3 Renew everything

£9.5M Implementation of a replacement program to spread the cost with priority given to sets deployed in Scotland. Anticipate a 3 year renewal program.

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Conclusion• Option 1 Shutting down the BT fleet will release currex budget spend,

efficiency’s gained in releasing resource back into field engineering. Removes the requirement to upgrade if future regulation requirements change. The disadvantage is the loss of a readily available mobile option, disbanding of a dedicated specialist team and the public relations benefit from a BT internal generator fleet.

• Options 2 Refurbishment of a asset that is near end of life, would a sufficient return be gained? Possible reliability issues and susceptibility to compliance issues with future regulation changes.

• Option 3 New BT fleet, a costly option but a genuine improvement, cost could be deferred over a period of years and a renewal program phased in standardising the fleet. Maintaining public relations benefits and a rapid response capability with a BT internal generator fleet.

Recommendation

Option 1 Shutdown the BT Mobile fleet and replacement by sole reliance on the BT hire contract suppliers.

Strategic direction from Service Enablement senior management is requested.

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Summary of Benefits• Benefits of Option 1• Improved reactive call out response than current model.• Removes future penalty payments for BT – Unlimited Fines• Improved reliability - Use of ‘Younger’ Hired Mobile

Generators.• Improved fuel efficiency of modern Mobile Generators.• Removes the requirement to upgrade when future

regulation requirements change in England and Wales.• Efficiency’s to be gained in releasing 7 x FE plus 2 x part

time resource back into field engineering from Tuffnell Park & Loughborough.

• Tufnell park closure would realise significant property cost savings

• The increased Mobile generator requirement would generate additional Value Based Discount Spend when negotiating future Mobile Generator Hire Contracts.

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Summary of Benefits• Cost benefits of Option 1• Efficiency’s to be gained in releasing 7 x FE plus 2 x part

time resource back into field engineering from Tuffnell Park & Loughborough and off hire Fleet – Annual cost saving of £368K

• Tufnell park closure would realise annual property cost savings – appoximate lease cost per metre x 368 square metres square = £350 x 368 = £128K.

• The increased Mobile generator requirement would generate a an indicative Value Based Discount Spend of 10% when negotiating future Mobile Generator Hire Contracts @ £5.9M = Annual cost saving of £590K.

• Improved fuel efficiency by using of modern Mobile Generators = 15% reduction in fuel costs.