Resiliency Doesn’t Just Happen: Assessing Risk and Mitigating Through PlanningPosted to Guidehouse in the Utility Management Group
- Sep 14, 2021 7:28 pm GMT
Resiliency is one of the hottest topics across the electric utility industry and many others, including gas, water, communications, and transportation. Across the globe, countries are electrifying more and more of their economies, and electric utilities bear the burden of being the enabling service to all others. David Hutchens, the CEO of Fortis, recently stated at the Edison Electric Institute 2021 Global Electrification Forum, “We are the life-plug of the economy. Nothing works without our electrons, if you look around the economy. When you have that mantle of reliability, resiliency, security you’re always talking about those things.” Hutchens’s words exemplify the focus of this article: Resiliency doesn’t just happen. It must be planned for, thought about, and executed.
Resilience to Face Weather, Cyberattacks, and Other Risks
In the last 20 or so years of my utility industry experience, the concept of resilience has become increasingly popular. This coincides with the increasing frequency and severity of environmental, weather, and security related events. There’s no need to think far back to recall the impacts of hurricanes, such as Ida (2021), Maria (2017), Sandy (2012), Katrina (2005). and Andrew (1992). Additionally, the 2021 Texas power crisis, the August 2020 Midwest derecho, and the 2015 South Coast blackout demonstrated that hurricane zones aren’t the only places impacted—and therefore concerned about resiliency.
In the IT sector, the Colonial Pipeline Ransomware Attack (2021), the Burlington Electric hack (2016), and the Ukraine power grid hack (2015) remind us all that bad things do happen—and yes, it can happen to us. Beyond our grid assets and technology infrastructures we’ve learned that even regional and global health issues, such as the COVID-19 pandemic, brings risks.
An increase in extreme weather events has led to increased pressure from regulators and stakeholders for utilities to invest in resiliency planning efforts, incorporate climate impact analyses, and develop mitigation strategies. According to the 2021 Public Utilities Fortnightly survey results, over half of respondents (54%) found that resiliency due to increasingly extreme weather events is the biggest challenge to utility operations from climate change, while 30% of respondents reported that intermittent renewables were the biggest challenge. Mitigation efforts, along with investment in resilient infrastructure, were highly ranked by respondents in the 2020 State and Future of the Power Industry survey.
Society seems to understand the need for a resilient electric grid, and the electric utility industry is indicating that the resiliency challenge is a priority. Now we need to act. That action comes in the form of thorough risk assessment capability that is tightly coupled with enterprise-level integrated resilience planning capability. I refer to these as capabilities partially because of my enterprise architecture background, but mostly because these are capabilities we need to develop in our utility organizations. These are not one-and-done projects or events; they’re the ongoing ability to comprehensively assess risks and the ability to link these risks to resilience plans for everything we do.
Thorough Risk Assessment Capability
Nearly all utility organizations perform some sort of risk assessment and likely have their preferred risk assessment methodologies (such as event tree analysis, fault tree analysis, or hazard and operability study). These methodologies should not constrain us from thinking more largely, holistically, and comprehensively across the enterprise. Patricia Hoffman, Principal Deputy Assistant Secretary for the U.S. Department of Energy’s Office of Electricity recently presented on the topic, saying, “Let’s first talk about resilience. Resilience must encompass an all-hazards thinking, and it comes down to thinking about risk and risk mitigation.”
Risk assessment should not be limited to a biannual departmental event. It needs to be ongoing and have an integrated model and structure with the rest of the organization. How are supply chain risks impacted by European cyber events? How do cloud IT risks impact storm outage restoration? How will asset maintenance programs impact supply chain dependencies? Risks must be analyzed within the context of the entire enterprise because, as we drive efficiency and performance, the systems and processes and the people involved are becoming tightly coupled.
Enterprise-Level Integrated Resilience Planning Capability
Resilience planning is typically an afterthought or a label that’s added to line items within an organization’s annual budget. For electric utilities, this planning usually occurs in the transmission or distribution areas—the poles and wires. Resilience will be the category used to justify undergrounding feeders, adding loops, adding switches and reclosers, and other activities. All are very worthy resilience activities. However, if distribution management systems, work management systems, or field crews aren’t just as resilient as the poles and wires, then we can find ourselves right back in the same situation. We need to consider the complexity and interrelatedness of the systems of systems necessary to provide resilience in our planning activities. Here, resilience planning should have an integrated model and structure with the rest of the organization to facilitate enterprise-level resilience.
Modeling technology and risk assessment techniques enable us to plan for and incorporate resilience into our complex energy delivery ecosystem, we need to use them. Miguel Stilwell d’Andrade, the CEO of EDP Group, summed up the topic with the following:
“It shows that having resilience built into the system, having prudent risk management, redundancies built in, that’s important, particularly for critical infrastructure, for companies that are managing such an important infrastructure of the economy. If you don’t have resilience, if you don’t have prudent risk management, you get hit by what seems to be a once in a hundred-year type of event, but they do happen. It shows that it pays to prepare, and in that sense, fortunately, it’s gone well so far.”
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