TECHNiCAL BROCHURE

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Asset Management Decision Making C1.25
using different Risk Assessment
Methodologies

Members
Eric Rijks, Convener (NL), Gérald Sanchis, Secretary (FR),
Gary Ford (CA), Earl Hill (US), Yury Tsimberg (CA), Athanasios Krontiris (DE),
Philipp Schütt (CH), Gerd Balzer (DE), Kjell Sand (NO), Roberto Zacheo (IT),
Robert Kuik (NL), Jeroen Schuddebeurs (NL), Doug Pankhurst (AU),
Herman de Beer (AU), Miro Zunec (SI), Simona Voronca (RO)

Introduction CIGRE Publications on Asset

WG C1.25 regards Asset Management as a total
business concept that comprises the management
of risks for the business values arising from the asset
base itself and risks that may arise from an in-adequate
response to changes in the environment. Asset
Management includes sustainment as well as system
planning aspects. The activities and practices of an Asset
Manager attempt to optimally manage assets, and their
associated performance, risks and expenditures over
their life cycle, for the purpose of achieving the required
quality of service in the most cost-effective manner.
The objective of WG C1.25 is to provide insight into
the current and future application of asset management,
risk management and the information needed for these
processes in electricity transmission companies in order
to prepare for future challenges. The TB contains the
following deliverables as set out by the TC of CIGRÉ
for WG C1.25.
1 - A comprehensive overview on CIGRÉ’s work on
Asset Management.
2 - A description of how Electricity Transmission
Companies include environmental impact in
their Asset Management decision making.
3 - An overview of how utilities quantify the
monetary consequences for events impacting
business values that are not directly measured in
financial terms.
4 - A description of the application of Risk Indicators
for transmission assets and the transmission
system by Electricity Transmission Companies.
Management
Over the past several years electric utilities have been
in a transition from vertically integrated structures into
market oriented organizations. During this transition,
many companies have adopted the asset management
organizational structure and have implemented risk based
asset management decision-making processes. Through
this transition period, CIGRÉ has produced many Technical
Brochures and other publications on topics related to
asset management. Therefore, the Technical Committee
requested that WG C1.25 prepare a survey of recent CIGRÉ
publications on asset management topics. This survey was
summarized and published in an Electra article in June
2012 [1] and a detailed report on the survey is presented in
the TB. The study focuses on six asset management topics:
Condition Assessment and Monitoring, End of Life Issues,
Asset Management Decision Making and Risk Management,
Grid Development, Maintenance Processes and Decision
Making, Collection of Asset Data and Information and
references all relevant TB’s published by CIGRÉ SC’s in
recent years. As several groups within CIGRÉ continue to
investigate topics related to asset management, coordination
and communication of concepts can be facilitated through
regular updates such as provided in the TB.
Including Environmental
Impact in Asset Management
Decisions
One of the drivers, for this is that many industries, •••

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including the electricity transmission business,
have become increasingly aware of the impact of
industrial activities on the environment.
Based on the Kyoto Protocol and supported by
standards (ISO 14064), a carbon balance assessment
is used to identify the actions for the reduction
of carbon emission connected to the activities of
Transmission System Operators. A familiar method
applied for asset management decision making is
the use of a risk assessment matrix. With this risk
assessment matrix the severity of events that can
impact the business values can be assessed using a
combination of the likelihood and magnitude of
impact of the event. The CO2 footprint is considered
a part of the impact score on the business value
“environment”. This risk matrix can be considered
as a first filtering in the investment decision making
process. In the optimization of the investment
options the CO2 footprint is calculated and taken
into account in the decision making process.
Other cases of environmental impacts of electricity
transmission assets are discussed in the TB such as
a number of cases on SF6 handling, including the
agreement on SF6 handling between SF6 producers,
manufactures and users of electrical equipment in
Germany. A case on oil spillage from transformers
and oil pressure cables illustrating a risk based
replacement policy is also included.
Quantitative Evaluation of
Risk Treatment Plans for
Grid Development and
Sustainment
With the increasing interest in, and use of risk-based
investment decision-making there is a need to
investigate how utilities factor into their business
case analyses, in quantitative terms, the impacts of
events on business values that are not immediately
quantifiable in monetary terms. Methods range from
the well-known health index-criticality weighting
methods, to multi-criteria decision support analysis,
to fully monetized risk-based business case analysis.
Development of capital sustainment plans using
Health Index – Criticality is one of the early and
common methods. Based on a combination of health
index-based probability of failure and the weighted
estimates of criticality, assets can be flagged for
replacement in a long-term replacement plan.
Multi-Criteria Decision Analysis (MCDA) studies
methods and procedures to formally incorporate
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multiple conflicting criteria into the management
planning process. Essential to MCDA is the
C1.25
assumption that the decision maker has a set of
values and preferences, and that these values can be
modeled. The use of MCDA in Asset Management is
justified when not all aspects that matter (and must
be considered) can be given a monetary value.
The TB provides an example of fully monetized
risk-based business case analysis. A fully monetized
power transformer risk model combines condition
information with technical life data and failure
consequence information to quantify the risks of
operating the existing fleet of transformers over time.
This model does not predict end-of-technical life; it
quantifies the risk of retaining each transformer in
service and facilitates comparison of the risk cost of
alternate refurbishment and replacement strategies.
Using scenarios, the model enables the optimisation
of the volume and timing of replacements and
refurbishments.
Risk Indicators
The goal of the asset manager is to optimize the
balance of cost, risk and performance of the electricity
transmission grid. To do this, organizations apply
risk based decision making for grid development
and asset sustainment programs. One key way to
use risk is through the application of risk indicators.
Risk indicators will ideally provide measures of the
level of risk of a particular activity. Risk indicators
provide information about risk performance or
risk exposure, and can be leading (predicting future
performance – to the extent practical) or lagging
(past performance). Risk indicators can be specific
to an equipment item or class of items, or can be
system wide. The TB provides examples of risk
indicators currently applied and under development,
in the electricity transmission business.
System risk indicators provide a measure of the
likelihood that the grid will be able to serve its main
purpose, to supply customers reliably. An example
of the development of an “Integrated Risk Indicator”
which will combine measures of past performance,
regulatory violations and equipment condition, is
discussed in the TB. Other cases provide examples of
tools that measure the expectation or probability of
loss of load to customers based on generation and/or
transmission capability. Equipment risk indicators
measure the likelihood an individual equipment
item (or group of similar equipment) will fail with
adverse consequences. The brochure presents a
number of case studies relating equipment condition
and risk associated with the equipment item. •••
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Conclusions
In the present context, sustainability approaches,
and especially carbon consumption, develop a new
conscience on the impact of industrial activity
for the environment. While collecting cases
and examples from the participating electricity
transmission companies it was recognized that the
level of implementation of environmental impact in
Asset Management decision making differ.
The examples of business case analysis provided
in the TB illustrate that a range of methods from the
fully monetized approach to other approaches that
consider impacts on business values in a quantitative,
but not fully financial, manner have been applied.
To enable the asset manager to obtain a valid
risk assessment and determine the risk treatment
options, the asset manager needs to have relevant
data available, such as: asset data, data on
internal and external developments such as asset
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condition and operational factors (e.g. loading and
maintenance history). From all the considerable
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amount of data, the goal is to find those parameters,
which indicate potential risks for the assets of the
company. Therefore the concept of risk indicators
was introduced and illustrated.
The survey on Asset management publications
by CIGRÉ demonstrates that the area of Asset
Management is very wide and covers many topics.
The Study Committees of CIGRÉ are doing
important work in this field. As several groups within
CIGRÉ continue to investigate topics related to Asset
Management, coordination and communication of
concepts can be facilitated through regular updates
such as provided in the TB. 
References
WC C1.25, “Overview of CIGRÉ publications on Asset
Management Topics”, CIGRÉ Electra, June 2012