A Practical Approach to Service-Oriented Life Cycle Cost considering Asset Health Index and Digitalization in Power Converters

The practical application of a Life Cycle Cost (LCC) analysis on power converters for energy storage systems is described in this study. The main goal is to suggest a cost-effective structure for allocating converter expenses, where factors such as the cost of electric energy and annual production must be taken into account. The approach includes a number of key phases, such as calculating CAPEX and OPEX as well as classifying and estimating total costs using the Woodward model. The study also stresses the need for updating cost values regularly, linking LCC with business decisions such as equipment depreciation and reinvestment. This contribution is significant since it includes the use of cloud computing for maintenance improvements together with the adoption of IoT technology solutions for data collecting, as well as the application of Asset Health Index (AHI) for failure rate update and monitoring. Consequently, it has been positively proven that the multi-detail decision-making asset management model covers the search for a sustainable alternative in the domains of general asset, sustainability, and economic value. The findings indicate that the application of this LCC methodology can significantly improve power converter management by utilizing digital technologies and assisting in the development of service-oriented business models that maximize efficiency.

Keywords: Asset management, Asset health index, Digitalisation, IoT & Digital twins, Life cycle cost, Power converters, Reliability, Servitization, Sustainability, Woodward model.