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?