NIE Networks:Using a risk framework in practice

USING A RISK FRAMEWORKApplying the Common Network Asset Indices Methodology in practice

April Hutchen, SEAMS Sam Gibson, NIE NetworksKyle Taylor, NIE Networks

2 nienetworks.co.uk

Background to the project

• The Common Asset Indices Methodology was developed by the GB DNOs, and subsequently approved by OFGEM in early 2016

• NIE Networks were looking at different tools to support their RP6 Price Control submission and Asset Investment Planning moving forward

• SEAMS started working with NIE Networks in November 2015 to support the RP6 submission

• This presentation will show how the CNAIM methodology has been used to support NIE Networks regulatory submission

3 nienetworks.co.uk

CNAIM overview

4 nienetworks.co.uk

Criticality overview

Type Safety Rating

CriticalityIndex

ConsequentialCost

NetworkSafety EnvironmentalFinancial

Reference Safety Cost

Safety Factor ReferenceFinancial Cost

FinancialFactors

ReferenceEnvironmental

Cost

EnvironmentalFactors

ReferenceNetwork Cost

NetworkFactor

Type Safety Rating

Access Financial Rating

Category Financial Rating

Type Environment

Rating

Size Environment

Rating

Location Environment

Rating

CustomerSensitivity

Number of Customers

Load

Type

Asset Register Category

5 nienetworks.co.uk

NIE Networks

• NIE Networks is the T & D network owner / operator• Wholly owned by Electricity Supply Board (Dublin), the semi-state owned Republic of

Ireland utility• Circa. 860,000 customers• Major industries…pharma, agri, IT, aerospace and tourism• Assets ranging from 275kV right down to domestic meters• Significant and growing penetration of renewable generation, both Large Scale and

Small Scale• Connections business recently opened to competition (>5MW customers), with

smaller connections to follow• Regulated by UREGNI (UR) in line with Ofgem practice• Currently in RP5, with RP6 due to start in October 2017, running to March 2024

6 nienetworks.co.uk

Why use the Common Methodology at NIE?

• Standardised assessment of asset Health and Criticality• Projection of future Health degradation• Application of agreed, national, failure rates and costs, and costs of intervention• NIE Networks observer to DNO Working Group• Adopted by OFGEM in early 2016• Monetises risk, both now and in the future• Ranks assets within category by cost of risk• Allocates Health and Criticality scores• Used primarily as a regulatory reporting tool• However, can we use the Common Methodology to produce investment proposals?

7 nienetworks.co.uk

SEAMS optimisation

• Input the ranked lists of assets, including risk costs and intervention options• Apply objectives

No investment Maintain risk within class Maintain overall risk

• Allow optimiser to carry out Cost Benefit Analysis, to determine optimum investment• Articulate reduction in risk in monetary terms• Articulate optimum blend of interventions

8 nienetworks.co.uk

Dashboard – Risk Matrix

8

9 nienetworks.co.uk9

10 nienetworks.co.uk

Assessment of approach

• A standardised (so defendable) approach to assessing Health and Criticality• Use of standardised failure rates and costs allows consistent ranking• BUT ... not true to individual DNO specifics (eg. London / Belfast / Inverness?)

• Similarly, SEAMS optimisation can absorb standardised (i.e. CNAIM) interventions • Develops an investment proposal based on agreed principles and costs• BUT ... Investment is not based on DNO’s own costs


So where next?

• Apply CNAIM to articulate Health and Criticality using standardised costs• Apply CNAIM methodology principles, but with DNO specific costs, to articulate

actual Health and Criticality of own assets• Apply SEAMS optimisation, again based on DNO specific costs, to develop a tailored

investment proposal (or series of proposals with varying objectives)• Consider grouped assets

Optimisation of switchboards, package substations• Can approach be applied to other asset groups (outside of CNAIM)?

Civils Control & Protection


Benefits of Cross Asset Optimisation

• Asset level models – consider all potential interventions

• Capital replacements, operational interventions, inspections

• Enables the trading of investment decisions across asset classes

• NIE Networks models currently include 5 major asset classes and can be quickly grown

• Allows ‘what if’ scenario analysis – minimise whole life cost or risk

What is my optimal investment profile with a 5% budget reduction? What is the cost required to reduce my global risk profile by 10%? What is the impact of moving £500K from wooden poles to substations?

• Cross Asset Optimisation delivers a typical cost savings of 7 to 17%


Conclusions & Recommendations

• The ability to model an asset base, providing a monetised view of risk• Standardised, so defendable• Methodical, data driven, objective, repeatable• Step change in regulated industries where investment programmes are projected

over the medium to long term• Data will never be perfect; start where you’re at!

• The environment can be built up – NIE Networks started with one asset class


HI / CI examples

1 2 3 4 5 1 2 3 4 5 1 2 3 4 51 1 12 45 12 5 8 70 2 1* 3** 6 2 47 6 7 7 3 703 3 1 4 3 1 1 3 4 44 4 4

48 12 5 9 51 6 7 7 3

* Denotes Oil Reconditioning** Denotes Two Cooler Replacements & One Bushing Replacement

1 2 3 4 5 1 2 3 4 5 1 2 3 4 51 1 12 257 45 27 17 30 376 2 2 29 31 2 247 55 23 26 25 3763 13 8 4 1 2 28 3 2 2 3 11 7 2 5 3 284 4 4

270 53 31 18 32 2 31 258 62 25 31 28

1 2 3 4 5 1 2 3 4 5 1 2 3 4 51 7 8 15 1 1 7 8 152 698 35 3 296 1032 2 186 186 2 866 51 2 113 10323 78 21 99 3 14 14 3 85 7 7 994 4 4

783 35 3 325 200 958 58 2 128

Health Score Index Health Score Index

Criticality Index

Criticality Index

Criticality Index

Criticality Index

Criticality Index

132kV Transformers

EHV Transformers


Criticality Index

Criticality Index

Health Score Index

Criticality Index

Health Score Index


EHV Switchgear

Health Score Index

Criticality Index

15 nienetworks.co.uk15

NIE Networks:Using a risk framework in practice

Data & Analytics

Transcript of NIE Networks:Using a risk framework in practice