systems and engineering technology using a systems approach in energy risk assessment dan wilson the...

SYSTEMS AND ENGINEERING TECHNOLOGY

Using a Systems Approach in Energy Risk Assessment

Dan Wilson

The Midlands Energy Graduate School II Annual Conference, 8th September 2011

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Frazer-Nash Consultancy

Around 350 engineers across eight offices

Services across Technical analysis Systems engineering Safety and environmental

analysis and management Range of markets:

Defence Civil and Military Nuclear Conventional and Renewable

Energy Transport Oil and Gas

Dorking

Warrington

Bristol

Burton-on-Trent

Glasgow

Plymouth

Dorchester

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Agenda

What is risk assessment?

What is a Systems Approach?

Applying a Systems Approach to a Renewable Energy scheme

Benefits of a Systems Approach

Requirements and Acceptance within risk management

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Agenda

What is risk assessment?

What is a Systems Approach?

Applying a Systems Approach to a Renewable Energy scheme

Benefits of a Systems Approach

Requirements and Acceptance within risk management

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

What is risk assessment?

How likely is it that a project will deliver to: Performance? Time? Cost?

Risk Assessments are conducted to: Inform investment

Inform Project Management

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Systems Approach

A systems approach is about:

Taking a ‘wide view’ across the system

Taking a ‘long view’ through the project

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Agenda

What is risk assessment?

What is a Systems Approach?

Applying a Systems Approach to a Renewable Energy scheme

Benefits of a Systems Approach

Requirements and Acceptance within risk management

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach

An Investment Proposition:

www.tidalstream.co.uk (licensed under Creative Commons Attribution 2.5 Generic)

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: A Wide View

Investment Considerations:

What is the return?

What is the risk?

Other considerations: Strategic positioning

Portfolio balancing

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Electricity

Energy Supply Industry

Generators Transmission Network Electricity Suppliers

Energy Markets

Network Operator

Electricity ConsumerBuy Supply

Sell Supply Buy Supply

Check Power Balance

Demand OutputAlteration

Demand OutputAlteration

BalancingCost

BalancingCost

PowerFutureValue

NotifyAgreements

NotifyAgreements

Electricity Electricity

Electricity

What Does an Energy Scheme Need to Do?

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Energy Supply Industry

Generators Transmission Network Electricity Suppliers

Energy Markets

Network Operator

Electricity ConsumerBuy Supply

Sell Supply Buy Supply

Check Power Balance

Demand OutputAlteration

Demand OutputAlteration

BalancingCost

BalancingCost

PowerFutureValue

NotifyAgreements

NotifyAgreements

Electricity Electricity

Electricity

Electricity

What Does an Energy Scheme Need to Do?

Provide Electrical Power Trade in the Energy Market Respond to output change demands

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: A Wide View

Device

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: A Wide View

Device

Device Site

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: A Wide View

Device

Device Site

Grid Connection

Transmission Point of Presence

(PoP)

Electrical Power Grid

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: A Wide View

Device

Device Site

Grid Connection

Control Equipment

Resource Monitoring

Operator

Resource Prediction

Control System Estate

Transmission Point of Presence

(PoP)

Electrical Power Grid

Electricity Trading Organisations

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: A Wide View

Device

Maintenance System

Device Site

Grid Connection

Control Equipment

Resource Monitoring

Operator

Port

Support Equipment

Maintenance Crew

Supply Chain

Resource Prediction

Control System Estate

Transmission Point of Presence

(PoP)

Electrical Power Grid

Electricity Trading Organisations

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: A Wide View

Device

Maintenance System

Device Site

Grid Connection

Control Equipment

Resource Monitoring

Operator

Port

Support Equipment

Maintenance Crew

Supply Chain

Resource Prediction

Control System Estate

Transmission Point of Presence

(PoP)

Electrical Power Grid

Electricity Trading Organisations

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: Long View

Concept Frozen Design Artefact Scrap/Waste

Design System

Installation System

Disposal System

System of Interest

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: Long View

Concept Frozen Design Artefact Scrap/Waste

Design System

Installation System

Disposal System

System of Interest

Technical Risk

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Technology Risk

How much will it cost to get the technology ready for deployment?

Research

Development

Operation

1 2 3 4 5 6 7 8 9

University of Edinburgh

Pelamis Wave Power Ltd

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: Long View

Concept Frozen Design Artefact Scrap/Waste

Design System

Installation System

Disposal System

System of Interest

Provider Risk

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Applying a Systems Approach: Long View

Concept Frozen Design Artefact Scrap/Waste

Design System

Installation System

Disposal System

System of Interest

Technical RiskOngoing Liabilities

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Agenda

What is risk assessment?

What is a Systems Approach?

Applying a Systems Approach to a Renewable Energy scheme

Benefits of a Systems Approach

Requirements and Acceptance within risk management

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Benefits of a Systems Approach

Structured and auditable assessment method to ensure everything is considered

Identify Dependencies

Target mitigation resources

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Structured Assessment

Device

Maintenance System

Device Site

Grid Connection

Control Equipment

Resource Monitoring

Operator

Port

Support Equipment

Maintenance Crew

Supply Chain

Resource Prediction

Control System Estate

Transmission Point of Presence

(PoP)

Electrical Power Grid

Electricity Trading Organisations

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Identify Dependencies

Device

Maintenance System

Device Site

Grid Connection

Control Equipment

Resource Monitoring

Operator

Port

Support Equipment

Maintenance Crew

Supply Chain

Resource Prediction

Control System Estate

Transmission Point of Presence

(PoP)

Electrical Power Grid

Electricity Trading Organisations

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Target Mitigation Effort

Device

Maintenance System

Device Site

Grid Connection

Control Equipment

Resource Monitoring

Operator

Port

Support Equipment

Maintenance Crew

Supply Chain

Resource Prediction

Control System Estate

Transmission Point of Presence

(PoP)

Electrical Power Grid

Electricity Trading Organisations

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Target Mitigation Effort

Concept Frozen Design Artefact Scrap/Waste

Design System

Installation System

Disposal System

System of Interest

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Agenda

What is risk assessment?

What is a Systems Approach?

Applying a Systems Approach to a Renewable Energy scheme

Benefits of a Systems Approach

Managing risk with Requirements and Acceptance

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Ongoing Management of Risk

Risk assessment is about Performance Time Cost

To deliver this: Requirements define what is required from each element.

Acceptance ensures that the project is on track to meet those objectives.

Perform

ance

Tim

e

Cost

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Requirements

Device

Generate Electrical PowerPower to Breakeven

Monitor ResourceAccuracySampling Rate

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Requirements

Device

Generate Electrical PowerPower to Breakeven

Monitor ResourceAccuracySampling Rate

Site

Resource LevelsEnvironmental ConditionsShipping Lane Constraints

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Requirements

Device

Generate Electrical PowerPower to Breakeven

Monitor ResourceAccuracySampling Rate

Site

Resource LevelsEnvironmental ConditionsShipping Lane Constraints

Grid ConnectionRequired Power

Quality

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Requirements

Device

Generate Electrical PowerPower to Breakeven

Monitor ResourceAccuracySampling Rate

Site

Resource LevelsEnvironmental ConditionsShipping Lane Constraints

Grid ConnectionRequired Power

Quality

Maintenance Systems

Supportable Failure Rate

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Requirements

Requirements have identified: What the system needs to be able to do to be a success

What constrains how it can be done

Requirements identify where risks may exist Quantify risk Mitigate the risk

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Acceptance

Time

Consequence

Design Manufacture Installation

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Acceptance

Probability Consequence

Time

Design Manufacture Installation

Risk Value =Probability x Consequence

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Risk Value =Probability x Consequence

Acceptance

Probability Consequence

Design Review

Factory Test

Commissioning

Time

Design Manufacture Installation

© Frazer-Nash Consultancy Ltd 2011. All rights reserved. SYSTEMS AND ENGINEERING TECHNOLOGY

Summary

Application of a Systems Approach to Risk Assessment gives: A structured approach to the identification of risks A means to fully assess the consequence Target mitigation effort

Application of a Requirements and Acceptance Process Identifies what is needed into distinct elements Identifies the constraints imposed by the environment and other

parts of the system Mitigates the risks through progressive acceptance

SYSTEMS AND ENGINEERING TECHNOLOGY

www.fnc.co.uk

Dan Wilson

Email: d.wilson@fnc.co.uk

Tel: (0117) 922 62 42

For more information;

“Utilising a Risk-Based Systems Approach in Renewable Energy Due Diligence”, Wilson, D.M., Rowley, P.R., Watson, S.J., IEEE Systems Journal, Issue 5, Volume 2.