Risk approach Vs actual performance

Distribution Network Operators (in the UK) – Power failure risk management Vs actual performance (during severe weather)


Risk management approach:

“Risk is the potential for unwanted negative consequences from some events. Resilience is the ability to prevent, withstand and recover from those events” (Slack, 2012. P.468). Consumer power failure is an inherent risk for all power distribution businesses; further enhanced when power lines are above ground, as in the case of SPN, due to exposure of variable weather conditions. Other possible causes of failure are technological, human error, product failure, capacity constraints, ageing assets, trees falling on overhead power lines and flooding. Such risks cannot be passed to third parties due to the nature of the business and therefore need to be prevented, mitigated or quickly recovered from, by SPN’s operation team.

Failure recovery measures (Fig.1) are implemented by SPN operations’ team to restore power after any event of power cut. Operation teams and contact (call) centre staffs work round the clock to keep power on, however, the risk of power cuts has been much higher in recent years due to ageing infrastructure and a variety of extreme weather conditions.


Fig.1 Failure recovery processes of SPN

As indicated in fig.1, in the event of a power failure, consumers call to DNO’s call center, informing staff of the location where the power has failed. A complaint is logged in to the system by call center staff on receipt of a call and immediately visible to the Control engineering team. Actions are taken by Control engineers to restore power from the Control room by releasing spare capacity; this should avoid longer power failures. However, it is not always possible to restore power from Control room and in such scenarios; local field crews are approached by the Control engineer to attend the location, in the hope of a quick repair and restoration.

If this effort is successful, the call center is informed to update the system. “if mitigation planning has identified appropriate training, job design, emergency procedures, and so on, then the financial liability of a business for any losses should a failure occur will be reduced” (Slack, 2012. P.485). DNO should develop a mobility plan of its operation staff in major distribution areas, in the case of UKPN – SPN, EPN and LPN, so that regional, specific criticality could be dealt with using joint efforts. Operational staff should be trained to attend jobs in any of three DNO areas when and if the need arises.

Targeted risk management vs actual performance (Christmas 2013):

“The problem of determining a restoration plan for distribution network supply is a multi-objective, combinatorial nonlinear problem with constraints in the uncertainty environment” (Popovic and Popovic, 2004, pp. 221-28). Performance objectives were set by UKPN’s management team for safe, secure and reliable power distribution to all its seven million consumers in the three power distribution areas: SPN, LPN and EPN; provided that enough return on invested capital would be generated for its shareholders. Three main corporate objectives are set by UKPN – cost efficiency, ‘respected corporate citizen’ and ‘employer of choice’. The question is – were these objectives fulfilled during the severe weather events of Christmas 2013? SPN’s performance in this period is compared with its performance target set by management, using radar chart below (fig.2), in scale of 1 to 5. It is evident that SPN failed to meet the performance objectives set by its parent firm UKPN; thousands of consumers were left without power for longer than 24 hours (Branston. 2014).


Fig.2 Performance Objective Comparison

After the deregulation of the Electricity supply industry in the UK in 1990, private investors were allowed to own and operate DNO companies. Cost efficiency was one of the topmost priorities set by UKPN’s management, which had overstretched its available resources for reliable and resilient power distribution operation. As per Branston (2014), only two hundred and one control engineers and field crews were available on 23rd December 2013 in the SPN operation team compared to an average of five hundred and fifty staffs’ availability in other DNO companies.

All normal operation of the network could be safely managed by the SPN operational team, however, under severe weather conditions, there was inadequate staff available either to keep power on or answer the calls of affected consumers. By the SPN management making cost efficiency paramount for the business, the operation team failed to achieve speed (2 out of 4), the safety of consumers (3 out of 5), staff availability (2 out of 4) and quality of service (2 out of 5).

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