Usi ng Condi t i on Based Ri sk

Management (CBRM) t o Demonst r at e

t he Benef i t s of Di f f er ent Asset
Repl ac ement St r at egi es
I nt r oduc t i on
Asset management
increasingly important for
electricity network
companies
Requirement to plan and
implement effective and
economic replacement
programmes
Condition based risk
management (CBRM)
developed as a practical
response to these
requirements
Condi t i on Based Ri sk Management
Heal t h I ndex
Heal t h I ndex
0
A Heal t h I ndex :
Is not a substitute for engineering expertise and judgement
Is a consistent and logical means of combining relatively
complex information
Is an indicator of likely remaining life
Pr obabi l i t y of Fai l ur e
Heal t h I ndex Pr of i l e: now
Heal t h I ndex Pr of i l e: + 10 year s
Asset Ri sk
Risk is defined as the possibility of loss or misfortune arising
from the failure of network assets
Four consequence categories:
- Network performance
- Safety
- Financial
- Environmental
For each consequence category:
- Quantify average consequences
- Quantify individual asset criticality
Ex ampl e Cr i t i c al i t y Fac t or s
Consequence Category Criticality Factor
Network performance
Number of customers supported
by the asset
Network configuration
Safety
Physical location
Proximity to people
Insulation medium (for switchgear)
Financial Rating of asset
Environmental
Proximity to watercourse / other
environmentally sensitive location
I mpr oved Est i mat i on of Ri sk
Range of possible failure scenarios
Combines all scenarios into a single measure




m
k
k I
m
k
k I k I j I
PoF CoF PoF CoF
1
,
1
, , ,
Minor
Catastrophic
Ri sk Pr of i l e: now
Ri sk Pr of i l e: + 10 year s
Over al l Ri sk Pr of i l e
Opt i mi sat i on of I nvest ment
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Discounted investment
Discounted investment
Discounted delta risk
Discounted investment
Discounted delta risk
Total cost of replacement
Optimum
replacement
period
Opt i mi sed Repl ac ement Pr ogr amme
Asset with life remaining
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Discounted investment
Discounted delta risk
Total cost of replacement
Optimum
replacement
period
Asset due for replacement
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Discounted investment
Discounted delta risk
Total cost of replacement
Optimum
replacement
period
Future investment plan
0
2
4
6
8
10
12
14
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
N
u
m
b
e
r

r
e
p
l
a
c
e
d
$0
$2
$4
$6
$8
$10
$12
$14
I
n
d
i
c
a
t
i
v
e

r
e
p
l
a
c
e
m
e
n
t

c
o
s
t

(
$
m
i
l
l
i
o
n
)
Number replaced
Replacement cost
Summar y
View of network risk, both now and in the future
Short-term investment prioritisation
Long-term capital investment forecasting
Express benefit of investment in financial terms
Optimise investment for maximum benefit