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by Mikayla Bridge, Journalist, Utility Magazine

During his presentation at the 2022 Critical Infrastructure Summit, Joshua Thomas, Manager Asset Management Framework at Essential Energy, explored the utility’s asset management capabilities and network asset class strategies.

Mr Thomas has more than eleven years of experience across the asset management landscape in sectors such as defence, mining, education and utilities, and has worked at Essential Energy for over four years.

Essential Energy is a regional electricity distributor that owns, maintains and operates the distribution networks through urban and rural New South Wales, operating across 95 per cent of the state. The utility recently achieved its three year accreditation certification for ISO 55001 for its asset management system.

Due to varying environmental conditions, Essential Energy has had to develop unique approaches and asset management systems to meet customer needs and suit external environments.

Mr Thomas explored four case studies that demonstrate how Essential Energy is tackling these issues and optimising asset management, through a range of risk-based management strategies, value frameworks, investment strategies, inspection programs, condition identification processes, and field resourcing.

The future network

With the impact of climate change rapidly shifting Australia’s environments, networks and customers are requiring customised approaches for their asset management. This leads to the future network.

“Future network is really trying to look at the future and the ways customers are actually using and generating their own electricity now,” Mr Thomas said. “We need to ensure that our network is built and established together to be able to meet those future network demands.”

Mr Thomas outlined Essential Energy’s four corporate objectives when it comes to meeting future network demands:

1. Strengthen the core and enable the network
2. Drive connections and load
3. Facilitate electric vehicle adoption
4. Enable smart communities and new customer solutions

“The last three [objectives] really start to look at the future and the complexities, especially one standout being facilitating an electric vehicle adoption, which is quite a large challenge for us as an organisation,” Mr Thomas said.

Mr Thomas said that Essential Energy has gone through a large transformational change over the last few years. New asset management systems have been developed to ensure customer needs are being met and different functions work together seamlessly.

“The teams across Essential Energy work quite closely to ensure that we’re not missing any value as we go through and implement new processes, practices and software products to really manage our data.”

Two of these new systems, rolled out in parallel, are Essential Energy’s ERP and EAM systems.

“Even just rolling out one of those is quite a large change, but at Essential Energy, we’ve been doing them together.

“It has been quite challenging, quite exciting though to be a part of. Out of all this, there’s been lots of great lessons learned, but also lots of innovative things that we’ve been able to achieve as an organisation. Ultimately, that benefits the customers, which is really what we are here to do,” Mr Thomas said.

Mr Thomas highlighted a number of key case studies to demonstrate the front end of Essential Energy’s new asset management systems.

He presented four case studies which go through Essential Energy’s framework of developing new asset management strategies, from risk-based decision-making to end-goal technology.

Asset class strategies

The first case study delved into Essential Energy’s asset class strategies. Commencing three years ago, this study looked to revamp how the company developed strategies for its network assets.

“Ultimately, what we embarked on was developing risk based asset management strategies to inform future things that we need to do on our network and our assets,” Mr Thomas said. “We based our process off what is known as the SALVO process.”

The SALVO process, undertaken in the UK, looks to standardise the approach of developing risk based asset management decisions or strategies across the utility sector.

“We started with that as our framework. We then applied a lot of risk-based decision making steps.

“We undertook some detailed consequences of failure modelling, probability of failure modelling, and turned that into monetised risk models.We recognised pretty early on that this was going to be a very iterative approach.

“We had to then go and do pole top models, and then take a step back and join the models together. It was very iterative, very engaging across the business, but it really helped us to understand a baseline risk across all of our assets, and then the network as a whole.”

Mr Thomas presented a data sheet that represented a number of scenarios the company had considered over a 20 year period that looked at Essential Energy’s three core systems: overhead network, underground network, and substation network.

The point of this accumulated data was to deduce a monetised risk. The company then broke that risk up into different regions across New South Wales.

“This started to enable us to make much more granular decisions on where we should be potentially investing in the future. It’s really quite exciting. We’re moving to a much more predictive risk-based decision-making approach, rather than that reactive approach that we’ve seen in the past across the utility sector,” Mr Thomas said.

He said this hasn’t come without its challenges, estimating that approximately 70-80 per cent of the company’s time and effort was spent cleansing, validating and calibrating data.

“The next challenge, as we are rolling out our enterprise asset management system, is to then integrate what we’ve come up with over the last three years into our EAM system.”

Investment optimisation

Mr Thomas’ second case study looked at Essential Energy’s investment optimisation. This was the company’s next step towards developing a new asset management system, after developing asset strategies.

“This is using a software product from a company called Copperleaf, which looks to optimise the investments that we’ve come up with or identified through the strategy process,” Mr Thomas said. “Within the product itself is embedded what we call our value framework.”

Mr Thomas said Essential Energy is refreshing its current value framework, which the company used for the past four years.

“It’s something that continually improves as we gain a better understanding and knowledge of the risk and customer’s willingness to pay for certain levels of performance. The tool looks to enable that replicable consistent approach to applying value to our scenarios or options that we would like to invest on the network.”

Mr Thomas said the process helps the company narrow their focus in terms of projects and options, to ensure that every dollar counts.

Risk value work

Risk value work involves applying a risk-based approach to work that has previously been identified through inspection programs and has returned to the system. “It’s looking to really create a consistent approach to how we value the work coming through the pipeline, rather than a subjective approach that we have seen in the past. When an asset inspector inspects an asset on the network, it’s a very subjective approach,” Mr Thomas said.

“They’re identifying a condition, and it’s really up to their personal experience, knowledge and understanding of that condition and the impact of that condition as to how they might value it.” This largely affects the end result that is packaged and pushed through for completion in the field.

“This approach is being embedded within both our strategy space, but also within our EAM solution space, so that when we have our EAM up and running and works coming back into the system, this will be an embedded process within the system.”

Mr Thomas said that, though this is exciting, it also comes with its own set of challenges, particularly involving field resourcing.

“[These challenges] opened up a whole new world of how we can be innovative in our approaches, especially taking in the expert knowledge and understanding from our field crews into the front end of our decision making,” Mr Thomas said.

Digital asset management

The fourth case study looked at Essential Energy’s efforts to develop and create its digital twin through digital asset management.

“[The digital twin] enabled us as an organisation to apply a lot of things that have been previously in standards, policies and procedures onto that digital model of the network,” Mr Thomas said.

“This program, or digital twin, is enabling us to make more informed decisions, especially within the design teams and the planning teams.

Should we be using the same material when we go and replace this asset? If this bit of equipment fails, what’s the impact to the surrounding areas that it’s operating in? Lots of things like that.” Mr Thomas said there were ongoing discussions around digital twins and what they can provide for Essential Energy’s future asset management.

Moving forward

Essential Energy has recently implemented a range of transformational business changes across the organisation. This includes the company’s certification to ISO, which it achieved in December 2021. The certification, as well as other achievements, affect the investments and decisions around the company’s network and assets.

“[The ISO certification] was quite an exciting recognition of how far we have come as an organisation,” Mr Thomas said.

“Seeing all these things on one page is really just testament to the great work the organisation is doing in really trying to take leaps forward in how we make decisions on the network and our assets for the benefit of our customers.”

Moving forward, Mr Thomas said Essential Energy plans to become more agile to better cement the network’s resiliency in the face of climate change.

Register for free to watch Joshua Thomas’ presentation at the Critical Infrastructure Summit on demand by visiting here.

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