Building risk-based investment programmes for the Smart Grid era

Risk models, built by accessing and using detailed asset information in conjunction with engineering knowledge and experience, have been shown to be a very powerful basis for defining, justifying and optimising investment to renew ageing networks. At the same time, electricity distribution networks have been evolving from relatively predictable conditions in terms of load growth and asset capability towards much more dynamic behaviour. "Smart Grid" technology, in particular, empowers electricity generators and consumers, leaving the network operator with the challenge of maintaining a stable and continuous electricity supply. This creates significant challenges: not only for day-to-day operations, but also for investment planners, where incorrect decisions can result in "stranded" (i.e. non revenue-generating) assets worth millions of pounds. The authors propose that the opportunity now exists to extend the use of proven asset-based risk models to enable the development of robust and cost-effective investment programmes that can better cope with future uncertainty. It is believed that this will be essential to ensure that the full benefits of Smart Grid implementation can be realised, both in terms of cost and effectiveness.