In power, every day is critical. When people flick a switch, they expect the power to be there instantly. Globally the demand for power is increasingly driven by a growing population, mass urbanisation, and rapid industrialisation of nations like China and India. The consequence for those in power generation, transmission and distribution is a need to achieve greater productivity and reliability, in a climate of stricter environmental targets, severe supply interruption penalties, tighter budgets and tougher operating conditions. For power generator systems, many of which supply emergency power for key infrastructure, such as hospitals and pumping stations, this is particularly critical.

Most companies are aware that reducing Total Cost of Ownership (TCO)1

over the lifetime of machinery is key to

extracting the best value. However, an international survey of power companies commissioned by Shell Lubricants2


businesses underestimate the potential productivity gains and cost savings from effective equipment lubrication.

Only 32 percent of the companies surveyed believe effective lubrication can help improve equipment availability, while 49 percent stated they wouldn’t expect higher-quality lubricants to help reduce maintenance costs.

In general, the cost of lubricants accounts for less than 5% of a power generation company’s total operational expenditure3


Yet Shell Lubricants believes lubrication can deliver significant business value through improved system efficiency, reliable equipment protection, and longer oil and equipment life. When evaluating the effect of lubricants on TCO, Shell Lubricants considers the end to end impact on maintenance budgets and processes, and also any costs related to lost production during equipment downtime.

1 2

In fact, optimising lubrication can help extend component life, reduce maintenance costs and limit unplanned downtime, contributing to savings far higher than the price of the lubricant itself. Understanding how lubricants contribute to TCO is the first step to realising potential savings.

There are two key elements to seizing this opportunity; the first is selecting the right lubricant; the second is effective lubrication management.

Total Cost of Ownership (TCO) is defined by Shell Lubricants as the total amount spent on industrial equipment, including cost of acquisition and operation over its entire working life, including costs of lost production during equipment downtime.

Survey commissioned by Shell Lubricants and conducted by Edelman Intelligence, based on 212 interviews with Power sector staff who purchase, influence the purchase or use lubricants / greases as part of their job across 8 countries (Brazil, Canada, China, Germany, India, Russia, UK, US) from November to December 2015. 3 Source:



No.111 page 1

Unlocking Efficient, Reliable Power

In reality, power companies are incurring significant costs from errors in equipment lubrication. Companies surveyed admitted that around six in ten incidences of unplanned downtime in the last three years were likely due to their incorrect selection or management of lubricants. In addition to impacting reliability, this is having a financial impact, with 26% of companies estimating that these shutdowns cost their business at least $250,000 (£197,000) and one in five (18%) state that costs have exceeded $1 million (£790,000).

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