Risk Based Asset Management

1. Risk Based Asset Management Decision Support and Comparison of Solution Alternatives Guendel – Germany – Session 5 – Paper 1202

2. Agenda • Motivation for the development of RBAM • RBAM-Methodology • Example • Summary and forecast Guendel – Germany – Session 5 – Paper 1202

3. Motivation for development RBAM • Necessity of an easy and tough as well as systematic an holistic methodology for deciding in uncertain situations • Methodology need to adapt to different situations • Ambition: • Transparent decision progress. • best usage of resources (money or people) • Achievement of most efficient projects Guendel – Germany – Session 5 – Paper 1202

4. RBAM-Methodology • Our RBAM-Methodology works in 4 several phases: • Risk analysis and development of solutions • Evaluation and selection of measures (horizontal optimization) • Matching of resources and prioritization (vertical optimization) • Monitoring of the non performed measures Phase I Risk analysis Development of solutions Phase II Evaluation Selection of measures Phase III Matching of resources prioritization Phase IV Monitoring Guendel – Germany – Session 5 – Paper 1202

5. RBAM Methodology - Phase I • Risk Analysis and development of solutions • Defining starting position for all fields of action • Defining consequences on business objectives • Creation of solutions • Showing just the really important / relevant facts • Consolidate available information Guendel – Germany – Session 5 – Paper 1202

6. RBAM Methodology - Phase II • Evaluation and Selection of measures • Calculation for every solution alternative • Summation of Costs and Benefits per year, discounting to base year and calculation of efficiency • standard conversion factor makes comparison of different business objectives possible • Plastic idea Guendel – Germany – Session 5 – Paper 1202

7. RBAM Methodology - Phase III • Matching of Resources and Prioritization • Different measures are ranked with the efficiency factor • Only measures with efficiency-factor > 1 are done (means: higher benefits then costs) • Realization of measures until resource budget is reached • Shows necessity of budget • Makes sure, that only most efficient projects are realized Guendel – Germany – Session 5 – Paper 1202

8. RBAM Methodology - Phase IV • Monitoring • Non implemented measures are monitored (Risk register) • Value of Risk Register reflects the statistical risk Guendel – Germany – Session 5 – Paper 1202

9. Example • Replacement of an old internal gas pressured cable • Comparison of 3 solution alternatives (chart 5) • RBAM analysis has shown: • Complete replacement as the best technical solution • Complete replacement as the most efficient solution • Complete replacement improves Network configuration Existing cable Complete replacement Replacement by sections Guendel – Germany – Session 5 – Paper 1202

10. Summary and forecast RBAM… • is a methodology for a holistic view of economy • supports the identification of smarter solutions • provides transparency regarding the impact of measures in relation to our business objectives • improves the communication with the commercial departments due to a translation of the technical challenges into the monetary world Guendel – Germany – Session 5 – Paper 1202

11. Thorsten Schmude Head of Network-Strategy Vattenfall Europe Distribution Hamburg GmbH Vattenfall Europe Distribution Berlin GmbH Bramfelder Chaussee 130 22177 Hamburg P +49 40 – 49202 8920 thorsten.schmude@vattenfall.de Thomas Gündel System-Strategy Vattenfall Europe Distribution Hamburg GmbH Bramfelder Chaussee 130 22177 Hamburg P +49 40 – 49202 8580 F +49 40 – 49202 7030 thomas.guendel@vattenfall.de Thank you for your attention! Guendel – Germany – Session 5 – Paper 1202