RISK BASED DAM PORTFOLIO MANAGEMENT IN AUSTRALIAThird National Dam Safety ConferenceRoorkee, India, February 2017

Angus SwindonNational Director Power & WaterEntura, Hydro Tasmania

OutlineDam Portfolio Management – Australian ContextHydro Tasmania’s Dam Portfolio Management Introduction to Hydro Tasmania Business Hydro Tasmania’s Dam PortfolioDam Safety Management & the use of Risk Guidelines and Standards which inform the Dam Safety Programme Programme Arrangement Risk Acceptance Criteria & Assessment Risk Mitigation - CAPEX Risk Management - OPEX Program Performance AssessmentExamples of Risk Mitigation ProjectsConclusion

Dam Portfol io Management in AustraliaAustralia experienced a major dam building era in the 1900’s Oldest dams late 1800’s, rapid expansion post WW2 Large portfolio’s predominantly publicly owned Moved towards multiple use recognition New dams / redevelopments commonly using PPP

Current situation characterised by Ageing & deteriorating infrastructure Increasing community expectations & risk awareness New understanding & changing standards Shi ing societal priori es → Reduced public funding Centralised management, fewer diversified skilled resourcesDifficult to continue to manage as historically

→ risk based instead of standards based

Dam Safety Management & RegulationState based oversight – no National LegislationResponsibilities remain with the owner4 states/territ have DS Legislation & Regulation, 3 states/territ don’tPeak body providing leadership and guidance is ANCOLDANCOLD is an active member of the International body ICOLD

Key ANCOLD Guidelines

ContextInternal - Business priorities, Nature of portfolioExternal – Regulation, Public expectations

Dam Management ActivitiesSurveillance – Inspection, Monitoring, ReviewsOperations & maintenanceCapability, Information, Preparedness

Rectification ActivitiesUndertake maintenance, orInvestigate, design & undertake major works

Risk Assessments

IsThere aDeficit?

Is ittolerable?

Yes

Yes

No

No

Basic DS Programme Process

Hydro Tasmania owns, operates and maintains

29 hydropower stations 55 major dams + 150 smaller dams188 headwork gates and valves22 canals19 tunnels43 pipelines58 machines

System configuration2 large inter-annual storages5 seasonal storagesRun-of-river

Australia’s largest clean energy producer Australia’s largest water manager

HYDRO TASMANIA

Hydro Tasmania Group

Owner / Operator

Developer

Retailer Professional Services

The Hydro Tasmania Journey

1914 1940 1960 1980 1989 1994 2005 2008 2011 2014 2017

Our history starts

Multiple projects developed

Major Tasmania industrialisation

Start of external

consulting

Anthony scheme completed (last major)

Internat. consulting expansion

Australian Offices

established

Entura Brand launched

Africa

Entura JV

NEM Entry

Retail (Momentum)

Entura India Opened

23 Earth fill

14 Concrete Gravity

12 Concr Faced Rock Fill

2 Bitumen Faced Rock Fill

2 Gravity Arch

2 Thin Arch

Hydro Tasmania’s 55 Prescribed Dams

11

Cethana Dam – 110m High CFRD

Gordon Dam – 140m High Double Curvature Arch

Population at Risk

Severity of Damage & Loss

Negligible Minor Medium Major

0 142 Very Low 27 Low Significant

1-10 Low 6 Significant 2 High C

11-100 x Significant High C 4 High B

101-1,000 x x 20 High A

>1,000 x x x 3 Extreme

Hydro Tasmania’s Dams

Portfolio by ANCOLD Hazard Category – 204 Dams in total

14

ISO 31000 (f igure 3) Risk Management Process

$150M+ $750M+

Likelihood

Impact (Consequences)

Insignificant1

Minor2

Moderate3

Major4

Extreme5

Catastrophic6

A. Almost Certain L M H E E E

B. Likely L M H E E E

C. Possible L L M H E E

D. Unlikely L L L M H E

E. Rare L L L L M H

F. Extremely Rare L L L L L M

Catastrophic+7

E

E

E

E

E

H

Business Risk Framework

Probable Loss Of Life

0.1 11 10 100 1000

1:106

1:105

1:104

1:103

1:102

High

Extreme

Moderate

Low

ANCOLD Public Safety Risk To Life Criteria

Probable Loss Of Life

0.1 11 10 100 1000

1:106

1:105

1:104

1:103

1:102

High

Extreme

ModerateLow

Prior to Mitigation

Current Assessment

Public Safety - High Risk Since PRA Completed

Probable Loss Of Life

0.1 11 10 100 1000

1:106

1:105

1:104

1:103

1:102

High

Extreme

ModerateLow

Dam5

Dam2

Dam6

Dam9

Dam3

Dam7

Dam4

Dam10

Dam1

Prior to Mitigation

Current Assessment

Dam8

Public Safety - High Risk Since PRA Completed

Probable Loss Of Life

0.1 11 10 100 1000

1:106

1:105

1:104

1:103

1:102

High

Extreme

ModerateLow

Dam2

Current High Risks

Public Safety - High Risk Since PRA Completed

$21m $11m $16m $12m $16m $11mSummary Cost Estimate for FYE

AnalysisDesign & Contract Prep

Risk Mitigation Activity

& Bus. Case Approval

Possible early start / pipeline

20152010 2011 2012 2013 20142009

Dam 4

Dam 3 $40m

Dam 6

Dam 9

Dam 8

Dam 10

$3m

$5m

$25m

Dam 5

Risk Mitigation Schedule mid Programme - 2010

$6m

$38m

Program 1 $5-6m pa

$3m

$5m

Interim Measures being investigated - Structural works 2017

$1m

$7m Dam 1

$13mDam 2

Life safety Risk vs Time (2000-2020 and beyond)

0.00E+00

1.00E-02

2.00E-02

3.00E-02

4.00E-02

5.00E-02

6.00E-02

7.00E-02

8.00E-02

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Year (with tick mark at June)

Life

Saf

ety

Risk

(liv

es/y

ear)

10 Year Plan Previous Plan

Past 10 years plan (complete)

10 Year Plan Period Future years

Potential range of risk variance over 10 year plan periodR

isk

Yr 0 Yr 10 (now) Yr 20 Yr 30

Time

Hypothetical Risk Reduction Pathways Over Time

Alternative #2 –defer program

Quick WinsComplete

Dam #1 complete

Dam #2 complete

Dam #3 complete

Dam #4 imminent

Alternative #1 –defer program

Original Program

Alternative #1Alternative #2

DAM PORTFOLIO RISK REDUCTION PATHWAYS

Reece Dam – 122m High CFRD

Catagunya Dam – 49m High Post Tensioned Concr

Rowallan Dam – 43m High Earth & Rockfil l

0.000001

0.00001

0.0001

0.001

0.01

0.1

1

0.01 0.1 1 10 100 1000 10000Financial Loss ($M)

Annu

al P

roba

bilit

y of

Fai

lure

$10M$1M$100k$10k

High

Extreme

Moderate

Low

What drives action here?

Hydro Tasmania Financial Risk Criteria

26

Dam Sustainability RatingVery Low Low Significant High C High B High A Extreme

1 2 3 4 5 6 7

5 2 1 1 H H E E

4 3 2 2 1 1 H H

3 5 4 3 3 2 2 1

2 6 6 5 4 4 4 3

1 7 7 7 6 6 6 6

Sustain Score

DSRdb Consequence Rating

Ancold Hazard Category

Deficiency Category

Sustain Rating System Within IBRM - Dams

Surveil.O&MDeficiencies

High Risk HeightenedAwareness

DS Risk Management “Balancing Act”

Risks

Increased Scrutiny- Monitoring- Investigation- Reporting- Priority works

Increased focus on• routine inspections• monitoring installations• quick wins• addressing outstanding issues• flood warning system• emergency preparedness• use of contractors• training of field staff

Major Intervention

Response

DS Program Performance Assessment Example

Compliance - Current Status Previous Report Status

Issue Compliance Management Compliance Status

Management Status

Dam Surveillance B B

Dam Operations and Maintenance B B

Regular Reporting A A

Audits and Reviews A A

Performance of Dams with Heightened Safety Awareness A A

Investigation and Resolution of Dam Safety Deficiencies A B

Emergency Preparedness A B

Maintaining Personnel Capability & Access to Key Technical Information A A

Communication with External Stakeholders A A

Echo Dam Fi lter Upgrade

Echo Dam Fi lter Upgrade

EmbankmentCore

Zone 2ASand Filter

Zone 2CDrainage

Zone 3Rockfill

31

Cethana Dam – Spil lway Upgrade

32

Cethana Dam – Spil lway Upgrade

Catagunya Dam Restoration

34

Catagunya Dam Restoration

Rowallan Dam Embankment Upgrade

EmbankmentReconstructionStrengthen

Walls

InvestigateFoundation

Monitor SpillwayErosion

Rowallan Dam Embankment Upgrade

ConclusionsEstablish the context of portfolio management – this is critical Regulatory environment External stakeholders Shareholder demands & risk appetite Business capacity & priorities Establish goals, objectives & measures Financial Risk Program delivery & performanceReview and monitor performance of the above, incl changesReport outcomes, identify areas for improvement and reset targets

Questions

Follow ENTURA Online For Insights