1. Executive Summary
TransGrid is committed to providing value to the community through investment in a safe, secure network enabling a stable market at the lowest cost to our customers. Our success criteria is demonstrating that the Asset Management Planning processes deliver this commitment; essentially that they are optimising cost risk and performance.
To enable this TransGrid has completed an end to end review of the Asset Management Planning process to better define the inputs, required outputs and gaps in the existing process. This has resulted in significant improvements in process definition and awareness, alignment, asset information and supporting systems.
2. Description of Project
This project is one of the core capability initiatives that has been delivered through an Asset Management Excellence program to support managing the fundamentals of asset management – Cost / Risk / Performance.
2.1 Key Challenges
The Asset Management Planning process incorporates all asset facing activities and expenditure related to new assets, replacement assets, routine and corrective maintenance. It derives the most significant capital and operating expenditures of the business, contributing around $200M capital and $60M operating expenses each year. The resulting plan of work has a direct influence on all of the objectives of the business.
The stakeholder analysis in TransGrid’s Strategic Asset Management Plan identifies the core stakeholder needs that must be balanced:
- Consumers (our electricity end users) focus is on affordability and reliability.
- Security holders of the business have expectations around the delivery of the Business plan (Safe/Reliable, Efficient and Growth).
- Our economic regulator wants to ensure that all expenditure demonstrably provides benefit to consumers.
- Our network safety regulator wants the confidence that all network safety hazards are being managed As Low as Reasonably Practicable (ALARP).
- Direct connected customers (generators, other networks and large loads) want timely and cost effective connections that meet their reliability obligations.
- The National Electricity Market participants want an open and reliable network that minimises constraints on energy flow.
Figure 1: TransGrid’s Stakeholders
2.2 Gap Analysis
The following elements of best practise asset management were used to review the AM Planning Process for potential gaps.
2.2.1 Stakeholder Feedback
Australian Energy Regulator (AER)
The AER issued its five year determination of TransGrid’s revenue in early 2018. Feedback throughout this process indicated the key challenge for the acceptance of the proposed capital program was a clear articulation of the benefits, both economic and safety. This is particularly the case where any increase in expenditure out of line with long term trends was proposed.
NSW Independent Pricing and Regulatory Tribunal (IPART)
IPART’s independent audit program as the NSW Safety Regulator highlighted their critical interest in the Asset Management Planning process through its audits in late 2017 and 2018. A consistent theme was that the capital and maintenance investments are a key control for Network Safety. The level of investment must be tested for adequacy via additional expenditure compared with the incremental decrease in risk (i.e. the ALARP principle). This is required to meet with societal expectations and regulatory expectations.
2.2.2 Applying the principles of the Asset Management Information Strategy
Enhancements to the Asset Management Information Strategy have been focussed around improved identification of the information required to make the decisions that support the asset management objectives. As the asset management programs of work are the most influential activity with respect to delivery of value for the business, the need to improve the linkages and quality of key asset data to support investment decision making was clearly identified.
2.2.3 Alignment of Asset Management Objectives, Stakeholder needs and Decision Criteria
Work enhancing the Strategic Asset Management Plan was completed with the aim of more fully identifying the stakeholder needs, their link to AM objectives and defining the decision criteria to be applied. This has resulted in better application of AM principles of Value and Alignment.
Figure 2: TransGrid’s Asset Management Strategy
The application of these inputs and techniques identified key gaps in the following elements of the AM planning process:
- Clarity of decision making criteria.
- A need to improve critical information and provide an integration of information from various sources for analysis.
- The desirability of an increased awareness of how the elements of the end to end planning process fit together.
- A reinforcement of the need to clearly align the stakeholders needs with objectives through to the programs of work to clearly articulate the economic and safety benefits.
2.3 Key Activities
In order to address these gaps the following activities were undertaken
2.3.1 Improved definition of the decision making criteria
As part of the review of the Strategic Asset Management Plan further stakeholder consultation was undertaken. This, coupled with key information on the current performance of the network, Asset Management System and future developments allowed the clarification of the investment criteria as either:
- Investing where it is of benefit to consumer.
- Investing to meet the required level of safety set by safety regulators on behalf of consumers and the general public.
2.3.2 Representing the end to end process
To improve understanding and to show the role of the various systems a clear representation of the end to end process for Asset Management Planning was considered essential. It has been developed as shown below.
Figure 3: Integrated Asset Management Planning Process
This diagram enables the full range of inputs, sources of information, systems and output requirements of the end to end planning process to be fully communicated. Using this insight we have taken the process further to suit the maturing environment at TransGrid.
2.3.3 Development of the Asset Analytics Tool (AAIT)
There was a need for a single system to integrate a number of disparate sources of information and provide an engine to provide a single view of commercial and risk factors when performing options analysis. A further requirement was the need to do the NPV and disproportionality analysis for each option, then be able to roll up the total portfolio for reporting and visualisation. An Asset Analytics and Insights tool was scoped and delivered. The tool was built using a proprietary platform developed by PowerPlan.
The breadth and role of the tool is shown in the blue box in the diagram above and its implementation has provided material benefits to the business as described in section 2.4.
The project to develop the tool was commenced in late 2017 with the final production version roll out in July 2018.
2.3.4 Data cleansing and improvement
In line with the objectives of the Asset Management Information Strategy, the data needed to make the core investment decisions was identified and reviewed.
The initial cleansing relied on data extracts created by the linkage with TransGrid’s ERP (Ellipse) with AAIT and matching these with other relevant sources of information. These sources included the initial risk calculations, asset condition information and location based asset criticality, which previously were all kept in separate spreadsheets.
For each asset class further specific data cleansing was applied so that there was consistency of asset information across all assets. For transmission lines, separate structure sub-components such as the foundation, conductor and earth wire were created as assets, so that the transmission line risk model could be transferred into the AAIT. This meant that an additional 200,000 assets were created in the system. Also, asset information and failure curves for these components, that are stored in the Geographic Information Systems (GIS) and reliability databases, were mapped over to these new assets.
For substation assets, specific data cleansing activities involved mapping the asset criticalities and likelihood of consequences to the locality of the equipment. Failure curves based on asset sub-types (e.g. air core reactors vs. oil filled reactors, Magnetic Voltage Transformers vs. Capacitor Voltage Transformers) were also implemented.
For digital infrastructure assets, the bulk of the data cleansing involved matching of the primary and secondary protection relays so that the probability of failure for protection pairs were linked. Other data cleansing activities included assigning likelihood of consequences for relay type and for faults occurring at a particular site.
2.3.5 Awareness, communication and change activities.
The control of the changes and awareness of these to staff at all levels across the organisation was managed through the executive level Asset Management Committee, managerial level capital and operating review committees and working group forums.
Familiarisation and training and awareness activities associated with AAIT was undertaken with all asset managers and strategists during the project roll out. Presentations were given to a wider business unit audience and also through the relevant Asset Management committees.
Control of data enhancements followed TransGrid’s standard Asset Management Change procedures.
2.3.6 Program and Project Management
The delivery of the AAIT was a major IT project and subject to the organisational governance and project management processes, including a Project Manager, monthly reporting to the project sponsor and executive, change management and relationship management with the vendor. The project was delivered within the approved budget.
The development of the revised Strategic Asset Management Plan, including stakeholder requirements, decision criteria and refined objectives was integrated into the business and usual business planning process. Oversight of the key changes to core elements of the Asset Management System is via the Asset Management Committee. This is chaired by an Executive Manager with oversight of the overall Asset Management functions and includes the entire TransGrid executive leadership team.
2.4 Implementation and Benefits
TransGrid is now using the Asset Analytic and Insight Tool (AAIT) to perform capital investment prioritisation within budget constraints, in order to demonstrate the highest benefit to the consumer and managing network wide risk to an acceptable level.
The AAIT has allowed TransGrid to perform optimisation based on quantitative analysis on the investment portfolio and provide swift decision making based on the insights provided. Being able to see the impact of deferring or accelerating a project against the investment portfolio has been a great benefit, as multi-year investment analysis can now be conducted on all projects in the portfolio in a single view. This has been deployed successfully in the creation of the budget for FY20 and 21 and forward.
The output of the tool is able to present a view of the economic benefit to consumers for each investment, and conversely the level of risk to the community should the investment not proceed. From a safety regulators perspective it is also possible to show the expenditure that is being deployed to meet each of the key network safety objectives – worker safety, public safety, bushfire and reliability.
The tool can also handle the need to apply varying disproportionality factors to demonstrate the level of investment is sufficient to meet network safety regulation, consumer and public requirements.
The methodology and tool has created additional linkage between the capital and operating programs of work, and also allows for the operating costs of each project option to be factored into the overall NPV analysis. This strengthens the ability of TransGrid to consider capital and operating expenditure trade-offs across the lifecycle of an asset and the asset portfolio.
A recent independent audit initiated by IPART of TransGrid’s Asset Management System against the Network Safety Regulations was completed in early 2019. The visualisation of the end to end process was an important part of demonstrating how the process meets the need of controlling Network Safety to ALARP.
The delivery of this initiative involved wide consultation across the business involving the life-cycle, with the predominant resources for delivery coming from the Asset Management team. The main teams involved were:
Asset Management – Asset Analytics and Insights
- AAIT requirements definition
- User testing and configuration
- Data cleansing
- Reporting development
Corporate Services – IT Portfolio and Delivery
- Project Management
- Corporate system configuration and architecture management
Asset Management – Asset Systems and Compliance
- Development of Network Asset Strategy
- Stakeholder engagement
- Change management of core Asset Management System changes.
4. General Comments
Figure 4: TransGrid’s Asset Management Excellence Program and Award Overview
Figure 5: AAIT Screenshot