CBRM Condition Based Risk Managementpdfs.findtheneedle.co.uk/8139-CBRM-Brochure[1].pdf · The management of networks is being transformed by the systematic use of practical knowledge

CBRMCondition Based Risk ManagementInvesting in optimal network performance

Creating Value through Knowledge

EA Technology Consulting Limited EA Technology Consulting Limited

EA Technology Consulting Limited

“Condition Based Risk Management’s greatest strength is that it enables users to make more intelligent business decisions on asset management. It is ultimately a financial planning and a network performance tool.”

What is Condition Based Risk Management?Condition Based Risk Management (known as CBRM) is a powerful process that enables companies to use current asset information, engineering knowledge and practical experience to predict future asset condition, performance and risk for their network assets.

EA Technology has developed the concept of CBRM into a comprehensive management methodology, which is well proven by users worldwide and ready for immediate implementation.

Who should use CBRM?Our CBRM solution is purpose-designed for asset managers and asset management engineers who are responsible for most types of low-voltage, medium-voltage and high-voltage electrical assets.

CBRM provides users with greatly enhanced abilities to make more intelligent business decisions on both the day-to-day operation of their networks, and their long term investment programmes.

Why use CBRM?The development of CBRM originated from two key drivers, which have increasingly become interlinked.

Condition-based asset managementTo manage the renewal of ageing networks cost effectively, it is vital to define current asset condition and link this to current and future performance.

The management of networks is being transformed by the systematic use of practical knowledge and experience (of degradation, failure, condition assessment, effects of environment, duty, maintenance history etc), combined with improved information management and increasingly effective non-invasive condition assessment techniques.

Risk managementThe facility to quantify and manage risk is increasingly recognised as a primary business driver, both by electricity company managers and industry regulators. The development of more sophisticated ways to factor the risks and consequences of failure into condition-based asset management has made our latest CBRM solution an extremely powerful management system.

Total Risk 2006 - 2026

Ris

k, £

M O

pex

equi

vale

nt

Year

50

40

30

20

10

02005 2010 2015 2020 2025 2030

OutcomeUsing the above model, the increased future risk is clearly identified and the mitigating effect of various intervention strategies can be considered. CBRM then provides a documented and transparent decision-making framework that enables the optimum network investment strategy to be identified.

CBRM exampleThis example of CBRM modelling shows how projected annual risks would change over 20 years for an operator with 22,000 km of 11kV underground cable, assuming no investment.

Risk is quantified in US$millions.

12000

10000

8000

6000

4000

2000

01 2 3 4 5 6 7 8 9 10

Health Index Profile in 2006

Km

s of

cab

le

Health Index

Performance27.04

Safety1.18

Financial7.40

Environment0.48

2006• Most assets have low (good) Health Index• Average faults 577 per year

TOTAL RISK$36.10m

12000

10000

8000

6000

4000

2000

01 2 3 4 5 6 7 8 9 10


Km

s of

cab

le

Health Index

Performance29.76

Safety1.30

Financial9.52

Environment0.52

2016• More assets have higher (medium) Health Index• Average faults 964 per year• Small risk increase in all categories

TOTAL RISK$41.10m

12000

10000

8000

6000

4000

2000

01 2 3 4 5 6 7 8 9 10


Km

s of

cab

le

Health Index

Performance65.16

Safety2.68

Financial20.82

Environment1.08

2026• Majority of assets in higher risk category• Average faults 2039 per year• Network performance risk rises by $38m per year compared with 2016, including a massive increase of 46m CMLs and 1m Cls

TOTAL RISK$89.94m


How CBRM worksSIX steps to smarter asset management

Mea

sura

ble

dete

riora

tion

but n

oin

crea

se in

PoF

Sign

ifica

nt d

eter

iora

tion

-sm

all i

ncre

ase

in P

oF

Serio

us d

eter

iora

tion

-si

gnifi

cant

incr

ease

in P

oF

Prob

abili

ty o

f Fai

lure

Health Index

0 5 10

Step 1:Systematic collation of available information to define asset condition, includes:• Results of specific condition assessment

procedures• Practical knowledge and experience of assets

Derive a health index (HI) for each asset, apply CBRM methodology to:• Link current HI to Probability of Failure (POF)• Predict future HI and POF (of individual assets)• Estimate future failure rates (for groups of assets)

If necessary identify critical information gaps and cost effective means to improve condition related information:• Maximise information retrieval from routine

inspection and maintenance activities• Application of latest non invasive instruments and

techniques• Expert data interpretation

Step 2:

Step 3:


Num

ber o

f Ass

ets

Health Index Category

0-1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 9-108-9 10+

60

50

40

30

20

10

0

2007

2017 - no replacement

2017 - 2.5% replacement per annum

Ris

k (£

mill

ion

OPE

X)

Year2005 2010 2015 2020 2025 2030

35

30

25

20

15

10

5

0

no replacement

2.5% replacement per annum

Targeted intervention

OPE

X (£

)

Year0 5 10 15 20 25 30

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

Opt

imum

repl

acem

ent y

ear

Discounted delta riskDiscounted investmentSum

Quantify risk for each asset by combining POF/performance data with user specific inputs on:• Consequences of failure• Criticality of the asset

Model future risk over time, using multiple investment scenarios:• With maintenance intervention or replacement• Without maintenance intervention or

replacement

Use CBRM’s versatile risk models to create management information which can be used to:• Define and justify future spending requirements• Influence corporate decision making• Optimise risk profile

Step 4:

Step 5:

Step 6:


What is ‘risk’?‘When prioritising assets for replacement, the ones in worst condition may not be the ones that present the biggest risk’DefinitionRisk in the context of CBRM is defined as ‘the possibility of loss or misfortune, arising from the failure of a network asset’.

The four primary risk categories used in CBRM are based on electrical transmission and distribution network operators’ common business drivers:

Network Performance – outage frequency and time (customer minutes lost and customer interruptions)Safety – fatalities and injuriesFinancial – monetary losses and additional costsEnvironmental – oil loss, SF6 escape, pollution from fires etc.

Secondary categories, including loss of reputation and regulatory or legal compliance, generally arise from the primary risk factors.

Quantification The basic unit of risk quantification is financial, because all the risks factored into CBRM have cost implications.

CBRM calculates the costs associated with risk on the basis of:Consequences of failureThis uses the operator’s average cost of failure of each type of asset and/or incident over the previous 10 years to evaluate the cost of future risks. It includes safety and environmental consequences as well as performance issues.

Criticality of assetsThis factors in the importance of each individual asset (in each of the ‘consequence of failure’ categories) relative to other assets e.g. the criticality of risk in one transformer, in relation to other transformers.

NOTE: EA Technology’s CBRM model recognises that the costs associated with each of the risks above vary considerably between different network operators and countries, so they can be weighted accordingly.

CBRM toolTypical failure mode



EA Technology – the CBRM PioneersEA Technology has effectively been at the forefront of developments in CBRM for more than 40 years:

• Experience We have been in the asset management business since we were originally established in 1966, as the research and development arm of the UK electricity industry. We continue to develop solutions in close partnership with network operators worldwide.

• Knowledge Our database of patterns of deterioration in network assets is unrivalled – built up from thousands of results over decades. We also have exceptional abilities in converting raw condition data into valuable management information.

• Technology We are world market leaders in instruments for live assessment of asset condition, especially in the field of measuring Partial Discharge (PD) activity. Our best-selling UltraTEV DetectorTM won the Queen’s Award for Innovation in 2007 and is supported by a comprehensive portfolio of condition assessment tools unique to EA Technology.

• Consultancy We have developed our CBRM solution in close collaboration with network operators across the world, as a fully comprehensive asset management solution. It is supplied fully supported by our Consultancy Business, which has experience of tailoring it to the requirements of individual network operators worldwide.

The global CBRM communityEA Technology’s CBRM solution is increasingly the first choice of asset owners across the world for:

• Compliance with statutory and corporate asset management requirements

• Capital budgeting & prioritisation

• Risk management

• Maintenance optimisation

• Network performance

• Privately owned asset intensive businesses

• Regulated asset intensive businesses

OfficesClients

Key:

A member of the EA Technology Group

Contact EA Technology Consulting Limited

Capenhurst Technology ParkCapenhurstChester, UK

CH1 6ES

t. +44 (0) 151 347 [email protected]

www.eatechnology.com

Documents

CBRM Condition Based Risk Managementpdfs.findtheneedle.co.uk/8139-CBRM-Brochure[1].pdf · The management of networks is being transformed by the systematic use of practical knowledge