DNVGL.com

Deterioration analysis for utility assets

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Suzanne Jane Bradbury Suzanne Jane Bradbury
Team Leader (Strategy) & Principal Statistician

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Pipeline

Challenge

As part of an on-going Gas Distribution Network (GDN) initiative, DNV GL worked with the GDNs to develop a Monetised Risk Trading approach to value the overall levels of risk concerned with managing a distribution system, including the Distribution Mains asset group. Within the methodology, forecast levels of failure are required for each asset group to allow the impact of current and future investments on risk levels to be understood and compared. The approach developed to date has clearly identified the need to understand deterioration rates on assets which have significant current and future risk value and associated risk mitigation costs.

Solution

Undertake statistical analysis and geographic information system (GIS) analysis in order to distinguish and quantify the explanatory factors affecting failure and deterioration rates.

Benefits

Developing the Monetised Risk Trading methodology to include deterioration and failure analysis will enhance the GDNs ability to minimise risk across different asset groups. The methodology could also be applied to other assets as part of the Monetised Risk

Value

The purpose of the Monetised Risk Approach is to enable businesses to direct their expenditure to the ‘correct’ assets.  Current spend on mains replacement annually in the UK is £90 million. A saving of even 1% would equate to £900,000.  Additional savings can be made in repair costs and environmental costs.