Electricity is often considered the primary catalyst needed for growth in the modern world. It has remarkable applications in so many diverse fields that it has nearly become an existential requirement.
A company engaged in generating, transmitting and distribution of electricity is often referred to as Electric Utility. Among these utilities those who are engages in generation often utilize different techniques to generate energy which range from using fossil fuel, solar energy, and geothermal power and even nuclear energy. Energy production also involves a large number of complex processes which mandate the need for proper evaluation of each of those activities. In this scenario there is a huge scope for using KPIs for performance evaluation.
KPIs are the basic financial and non-financial metrics that define and measure the performance of activities required to fulfill organizational goals. These are the indicators that bring to light the loopholes in the functioning of an organization. A balanced scorecard organizes these indicators into different perspectives. The balanced scorecard for an electric utility company may have four major perspectives: financial perspective, operation perspective, customer and environmental concerns and employee and training perspective. Each of these perspectives has some key performance indicators that reflect the factors responsible for success. Financial perspective consists of factors such as operational expenses and fuel cost. The unit that is generally used for measuring these parameters is mils per kWh. Often the cost range may vary depending upon source utilized to generate electricity. However KPIs can invariably help in tracking them to relevant standards and subsequently reducing them.
The operation perspective includes KPIs such as equivalent forced outage factor, % increase in production capacity etc. For a energy generation utility, operations KPIs are often cornerstones across which efficiency strategies can be devised.
Employee perspective has KPIs like number of injury incidents and number of technical training sessions. The customer and environmental concerns contains the measures like percentage of service targets met and number of regulatory penalties. The process of generating electricity at times uses such fuels that have dangerous effects on the environment and living beings. KPIs like number of reliability targets met, measuring regularity penalties go a long way in addressing environmental concerns.
There is an urgent need to search for such resource portfolios that are cost effective and preferably environmentally friendly. In this scenario possibly the most effective measures are the KPIs that together develop a balanced scorecard for defining and measuring the outcomes of a process. KPIs for electricity production can be utilized to drive a balance between higher productivity and environmental considerations. In addition they are critical to increasing the efficiency of production which is the mandate for nearly all energy utilities.
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