1. Speaker: Company: PRESENTATION © Euromaintenance 2008 – Belgium - www.euromaintenance.org 1 Brussels 8-10 April 2008 A Risk Based Approach to Electricity Distribution System Asset Management Dag Eirik Nordgård NTNU / SINTEF Energy Research Co-author: Company: Co-author: Company: Maren K. Istad SINTEF Energy Research Kjell Sand SINTEF Energy Research

2. Content Introduction MV Electricity distribution systems What is it System and component characteristics Maintenance and reinvestments in distribution systems Risk management in distribution systems Risk assessment in maintenance and reinvestment decisions Methods and approaches Example: Risk assessment for MV overhead lines Measuring risk and performance Concluding remarks © Euromaintenance 2008 – Belgium - www.euromaintenance.org 2

3. G Import/Export Production Transmission Sub- transmission MV Distribution 420 kV 300 kV 132 kV 66 kV 22 kV 11 kV 230 V 400 V G G G LV customers Electricity Distribution systems – What is it? © Euromaintenance 2008 – Belgium - www.euromaintenance.org

4. Transmission / sub-transmission © Euromaintenance 2008 – Belgium - www.euromaintenance.org

5. MV Distribution system © Euromaintenance 2008 – Belgium - www.euromaintenance.org

6. LV Distribution System MV/LV Sub-station © Euromaintenance 2008 – Belgium - www.euromaintenance.org

7. G Import/Export Production Transmission Sub- transmission MV Distribution 420 kV 300 kV 132 kV 66 kV 22 kV 11 kV 230 V 400 V G G G LV customers Focal area for this presentation © Euromaintenance 2008 – Belgium - www.euromaintenance.org

8. MV System and component characteristics MV electricity distribution systems: An already existing infrastructure - most of it being built during the last 50 years Having challenges of handling an ageing infrastructure Putting emphasis on maintenance and reinvestments MV distribution system characteristics: Widely geographically dispersed Vast amounts of components Majority of static components (e.g. overhead lines, cables and transformers) Minority of the components have moving parts (e.g. load breakers, sectioning switches, transformer tap-changers) Component lifetimes are typically 30 to 60 years – with large variations in average lifetime In many cases there are few maintenance activities which can prevent the degradation of the distribution system components, and if the component condition is questioned, reinvestments (partial or total) of components are the available option. Hence maintenance and reinvestment decisions are closely related. © Euromaintenance 2008 – Belgium - www.euromaintenance.org

9. Risk management in Distribution Systems “What do we actually do when we manage a business? In our view, we manage the risk – of safety and environmental incidents, adverse publicity, loss of efficiency and productivity, and loss of market share.” V. Narayan - “Effective maintenance Management – Risk and reliability Strategies for Optimizing Performance” © Euromaintenance 2008 – Belgium - www.euromaintenance.org

10. Risk management concept Risk assessment Risk analysis Risk estimation Source identification Risk evaluation OK? Risk treatment Risk retention Risk optimization Risk transfer Risk avoidance No Yes Risk acceptance Risk communication Decision making Risk management are coordinated activities to direct and control an organization with regard to risk – including the tasks of risk assessment, risk treatment, risk acceptance and risk communication © Euromaintenance 2008 – Belgium - www.euromaintenance.org

11. Consequence categories There are several consequence categories which are relevant for distribution companies, including: Economy Safety (occupational and public) Company reputation Environmental impact Quality of supply Fulfilling of contractual obligations. There will be interdependencies between the different consequence categories – and unwanted events will often have impact on more than one category at the time. © Euromaintenance 2008 – Belgium - www.euromaintenance.org

12. Risk assessment Risk assessment requires some kind of modeling of the entity in question – choosing risk analysis methods to perform risk analysis. Different risk analysis methods exist with different degrees of detail and data demand – from aggregated pragmatic approaches to highly detailed models. The vast number of components in the electricity distribution system makes it is unrealistic to perform a thorough risk assessment on every component or sub-system in the grid. More pragmatic and generic approaches must therefore be adapted. Other analyses will also contribute to the overall analysis and understanding of the problem, e.g.: Load flow analysis NPV-analysis of expected future cash flows © Euromaintenance 2008 – Belgium - www.euromaintenance.org

13. The aim for risk assessment The overall aim of performing risk assessment should be: Not to seek the “correct objective solution”, Rather contributing to a risk-informed decision basis for the decision maker’s evaluation of the problem at hand © Euromaintenance 2008 – Belgium - www.euromaintenance.org

14. Methods for risk assessment Informal risk assessment ”Gut feeling” Qualitative / semi-quantitative risk assessment QRA Quantitative risk assessment Qualitative Demand for resources – Effort Degree of explicit modeling Quantitative InformalFormal © Euromaintenance 2008 – Belgium - www.euromaintenance.org

15. Example: Establishing maintenance strategy for MV overhead lines Based on work performed for a group of Norwegian electricity distribution companies Semi-quantitative risk analysis is used for the task © Euromaintenance 2008 – Belgium - www.euromaintenance.org

16. Establishing maintenance strategies: Identification of maintenance entities. Dividing the actual system into a suitable grouping of entities. Risk analysis concerning each of the maintenance entities. Identifying unwanted events, Quantifying probabilities for the events Quantifying consequences of the events Estimating risk. Finding possible maintenance actions to control risk. Evaluation and adaptation of results. Through discussions of existing practice and the results from the risk analysis, a maintenance strategy is formulated. © Euromaintenance 2008 – Belgium - www.euromaintenance.org

17. Identification of maintenance entities For the analysis of MV overhead lines the following sub-components were identified: Poles (including traverse, insulators,..) Phase conductor Line trace Pole-mounted switches Cable terminations Pole-mounted MV/LV sub-stations © Euromaintenance 2008 – Belgium - www.euromaintenance.org

18. Poles (including traverse, insulators,..) Line trace Phase conductor MV / LV substation Switches Cable termination

19. Risk consequence categories For each of the maintenance entities risk estimation was performed with regards to the following consequence categories: Safety Environmental impact Reputational impact Economy © Euromaintenance 2008 – Belgium - www.euromaintenance.org

20. Risk analysis – component Poles Though brainstorming and discussions among a group of company experts the following unwanted events were identified: © Euromaintenance 2008 – Belgium - www.euromaintenance.org

21. Grouping of risk impact © Euromaintenance 2008 – Belgium - www.euromaintenance.org

22. Location in risk matrix for Safety Some of the 14 initial events are not relevant with regards to the consequence category safety, and are hence not included in the matrix. Events 10 and 11 have been identified as being the most critical with regards to safety in our risk mapping. # 10 - Fall down from (and / or with) pole # 11 Person climbing in pole and touching live MV parts © Euromaintenance 2008 – Belgium - www.euromaintenance.org

23. Risk evaluation and adaptation of results Based on the risk analysis for safety – the maintenance strategy gives emphasis on the following maintenance activities: Control of occurrence of rot in poles, and Vegetation management near overhead lines The intervals for the maintenance activities are established based on existing practice and the experience and knowledge of the company experts. An important result from the process is the documentation of what risks are considered and what measures have been chosen to meet the risk challenges. © Euromaintenance 2008 – Belgium - www.euromaintenance.org

24. Measuring performance and risk Distribution system asset management Actual outcome Possible outcome(s) Performance indicators Improvements? Risk indicators Important to measure critical parameters of the distribution system asset management process. Both looking backwards (on performance achieved) and forwards (on parameters affecting future possible outcomes) © Euromaintenance 2008 – Belgium - www.euromaintenance.org

25. Concluding remarks I Electricity distribution companies in Norway are now in the process of adapting the principles of risk management as guidance for their asset management. There are of course some challenges included in this process. Three key challenges are: Changes in mentality. Challenge the existing way of thinking Establishing a culture for risk management Tools and methods. Development of methods to support distribution system decisions An important part of this will be documentation of risk evaluations performed Input data for analyses. Finding / choosing numerical values to be used in computations is a challenging task. Experience shows that one often will find little help in statistical data due to lack of representative data. One has to choose an approach where the (possible) input from statistical values is used in combination with expert judgment. Improving the registration of maintenance data for to aid statistical analysis. © Euromaintenance 2008 – Belgium - www.euromaintenance.org

26. Concluding remarks II Important: The results from the risk analyses will not provide “objective correct results” It will rather contribute to problem overview, understanding and solution The search for the “objective answer” is a path that leads to little but frustration (since the ‘one and only’ objective answer does not exist..). The aim of risk assessment should therefore be to contribute to a risk informed decision for the decision maker The responsibility of asset management decision making can and should not be replaced by the calculations in a risk analysis model, but the results from the analyses should instead contribute to the basis for making good decisions. © Euromaintenance 2008 – Belgium - www.euromaintenance.org

27. Speaker Name : Function : Department : Phone : Mobile : Fax : E-mail : Company Name : Main activity : Address : Zip code : City : Country : Web site : © Euromaintenance 2008 – Belgium - www.euromaintenance.org 27 Brussels 8-10 April 2008 Contact Dag Eirik Nordgård PhD-candidate / Research Scientist Department of Electrical Power Engineering +47 73 59 76 63 +47 93 22 16 79 +47 73 59 72 50 Dag.E.Nordgard@elkraft.ntnu.no NTNU – Norwegian University of Technology and Science University Sem Sælandsv. 11 N-7491 Trondheim Norway www.energy.sintef.no/prosjekt/RISKDSAM