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Quantifying Electrical Distribution RiskCanadian Airports Electrical Association – CANEW 2014
Date October 1st, 2014Author Shawn BALDING
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Shawn Balding• Offer Manager for Schneider Electric Canada Field Services• Journeyman Electrician• Electrical Engineer
• Previously was the North American R&D Hardware manager for Power Logic and ION meter development, as well as chair and risk assessor of a global offer safety committee
How do you quantify and communicate your electrical distribution risk to management?
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Risk Reaction Spectrum
Without a structure or framework in place, everyone will have their own interpretation of
any given risk.
The Challenge in Quantifying Risk
The Challenge in Communicating Risk
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Enterprise Risk ManagementA framework for identifying, communicating, and managing risks and
opportunities.
A Justification & Application Guide to Deploying ERM at Airports
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http://www.trb.org/Publications/PubsACRPProjectReports.aspx
Excerpt from example ERM Policy
“…We will involve, empower, and giveownership to all of our staff in the identification and management of risk.”
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http://www.trb.org/Publications/PubsACRPProjectReports.aspx
Example Airport Risk Tolerance Map
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Example Airport Risk Appetite Statements
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“If it ain’t broke, don’t fix it.”
Example Airport Risk Tolerance Map
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The aging infrastructure install base and the retiring generation of knowledge in maintaining it. This is particularly true in electrical
distribution.
Drivers in Operational Risk
Leading Cause of Unscheduled DowntimeAging equipment (45%) and insufficient maintenance (28%) are the leading causes of unscheduled downtime, according to respondents.
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Other 6%
Operator Error21%
Insufficient Maintenance28%
Aging Equipment45%
*Source: PLANT ENGINEERING Maintenance Study February 2014 (n=317)
Average Age of Installed Electrical Distribution Systems
39% of the installation base is more than 20 Years old*
14*Source: ARC Strategies Survey March 2011
1 – 5 Years
6 – 10 Years
11 – 20 Years
21 – 30 Years
31 – 40 Years
Over 40 Years
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The aging infrastructure install base and the retiring generation of knowledge in maintaining it. This is particularly true in electrical
distribution.
Drivers in Operational Risk
1971
1975
1979
1983
1987
1991
1995
1999
2003
2007
2011
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
Canadian Population Growth
Total
Less than 50 Years
50+ years
Po
pu
lati
on
Age Distribution of Canada’s Population
36% of the population base is over 50*
16*Source: Stats Canada
Age Distribution of Canada’s PopulationFor 2014, 1100 Canadians will turn 65 years old everyday*
This will increase steadily over the next fourteen years to 1450 per day in 2028
17*Extrapolation from Stats Canada Census Data
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
0
100,000
200,000
300,000
400,000
500,000
600,000
396,279
529,076
64 Year Old Canadians*
Example Age Distribution of the Labour Force – Public Service
Knowledge Management challenges have never been
greater and will continue to grow
18*Source: Treasury Board of Canada
Popu
lati
on
Industry Experience
Q: For approximately how long have you worked in a plant or engineering-related position?
33% of plant maintenance staff have 30 or
more years of experience*
19*Source: PLANT ENGINEERING Maintenance Study February 2014 (n=317)
Less than 5 Years
5 – 9 Years
10 – 19 Years
20 – 29 Years
30 – 39 Years
More than 40 Years
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The equipment is going to keep getting older and the people with the bulk of the tacit knowledge in how to maintain it are going to
keep retiring.
Drivers in Operational Risk
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Enterprise Risk ManagementA framework for identifying, communicating, and managing risks and
opportunities.
This may be how you decide to, or how you are asked to, manage these drivers of Operational Risk.
ERM Requires…A mature, robust, & sustainable method for risk identification & prioritization
> Identification & Prioritization
- Identified risks should be assessed in terms of financial and non-financial impact and likelihood to enable prioritization and focus of resources for mitigation and control. A breadth of functional expertise is critical to the risk identification and assessment process, incorporating operational excellence, strategic decision-making, technical knowledge, and the external operating environment.
22http://www.trb.org/Publications/PubsACRPProjectReports.aspx
ERM Requires…A mature, robust, & sustainable method for risk identification & prioritization
> Sustainable means that it can survive the experience lost through retirement..
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What does this look like for my Airport?
http://www.trb.org/Publications/PubsACRPProjectReports.aspx
“Should risk assessment demand quantitative analysis, it is likely that
additional expertise will be required.”
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• Operational Risk Identification• IEEE Based Age and Stress Level Analysis• Software Based Risk Assessment & Criticality Mapping• Recommended Actions
An Advantage Electrical Distribution Assessment (MP4) is:
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How Mature is your Risk Identification and Prioritization?Level 1Undeveloped
Level 2Formalized
Level 3Established
Level 4Embedded
Level 5Optimized
• Risks are not formally captured
• Assessment (if performed) may not use a scoring scheme or may use inconsistent variables
• Alternative methods for risk identification are considered when planning risk identification sessions
• The sources of knowledge to be used are clearly identified (e.g. lessons learned, keywords, Hazard Lists, and external functions/ experts)
• A qualitative assessment is carried out using a consistent, defined, scoring scheme
• Risks are categorized
• Risk owners are identified
• Policy describes scoring criteria and impact probability assessment
• Risk maps are used to illustrate assessment results
• Risks are centrally consolidated/ aggregated and challenge provided where appropriate
• Emerging risks are formally considered and evaluated
• A team based approach is used to identify risks
• Risk identification is conducted outside regular schedule
• Employees know how to report emerging risk
• Risk quantification takes into account the impact on other parts of the airport
• The risk of not pursuing opportunities are captured during the risk identification exercise
• A risk assessment process is in place
• The assessment process includes advanced procedures for quantifying risks
http://www.trb.org/Publications/PubsACRPProjectReports.aspx ACRP 74 Appendix B
Leading Cause of Unscheduled DowntimeAging equipment (45%) and insufficient maintenance (28%) are the leading causes of unscheduled downtime, according to respondents.
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Other 6%
Operator Error21%
Insufficient Maintenance28%
Aging Equipment45%
*Source: PLANT ENGINEERING Maintenance Study February 2014
How You Plan to Reduce Unscheduled DowntimeThirty-one percent of respondents mentioned implementing better preventive maintenance in order to decrease future unscheduled downtime.
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Other 6%
Better/More Monitoring 8%
Equipment Modernisation20%
Improved Preventative Maintenance
31%
*Source: PLANT ENGINEERING Maintenance Study February 2014
Better Training/Management
14%
How You Plan to Reduce Unscheduled DowntimeAn Advantage Electrical Distribution Assessment (MP4) produces four plans
Maintenance PlanModernisation Plan
Monitoring PlanManagement Plan
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Other 6%
Better/More Monitoring 8%
Equipment Modernisation20%
Improved Preventative Maintenance
31%
*Source: PLANT ENGINEERING Maintenance Study February 2014
Better Training/Management
14%
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Step 1 Step 3Step 2 Step 4
Operational Risk Identification
• Identify Unwanted Events
• Map Critical Distribution Points
Analyze the Distribution
System
• Asset Life Cycle• Operational
Stress• Safety/
Regulatory/ Design Issues
Operational Risk Assessment
• Reliability/ Unavailability Mapping
• Criticality Mapping
Recommended Actions
• Addressing Deficiencies
• Four Plans for Improvement
ManagementPlan
Assessment Recommendations
Monitoring Plan
SystemProductivity/
Reliability
Time
Initial Performance
What you need from your system
MaintenancePlan
Modernisation Plan
Date of AdvantageAssessment (MP4)
Original Installation
DeficiencyCorrectionsPerformance
Degradation
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How do you quantify and communicate your electrical distribution risk to management?
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Questions?