WEL Networks | 2018 Asset Management Plan 202 APPENDIX B APPENDIX B: CONDITION BASE RISK MANAGEMENT (CBRM) CBRM is a methodology for establishing the optimum level of renewals developed by EA Technology, a UK based energy consultancy. The methodology assists electricity distribution businesses to deliver effective asset related risk management. CBRM is a structured process that combines asset information, engineering knowledge and practical experience to estimate future condition, performance and risk of network assets. The CBRM process can be summarised as follows: 1. Asset condition – ‘Health indices’ for individual assets are derived and built for different assets categories. Current health indices are measured on a scale of 0 to 10, where 0 indicates the best condition and 10 the worst. 2. Link current condition to performance – Health indices are calibrated against relative probability of failure (PoF). The health index / PoF relationship for an asset class is determined by matching the health index profile with the recent failure rate. 3. Estimate future condition and performance – Knowledge of asset degradation is used to ‘age’ health indices. The ageing rate for an individual asset is dependent on its initial health index and operating conditions. Future failure rates can then be calculated from aged health index profiles and the previously defined health index / PoF relationship. 4. Evaluate potential interventions in terms of PoF – the effect of potential renewal, refurbishment or changes to maintenance regimes can then be modelled and the future health index profiles and failure rates modified accordingly. 5. Define and weigh consequences of failure (CoF) – a consistent framework is defined and populated in order to evaluate consequences in significant categories such as network safety, performance, financial and environment. The consequence categories are weighted to relate them to a common relative monetary ($) unit. 6. Build risk model – For an individual asset, its probability and consequence of failure are combined to quantify risk. The total risk associated with an asset category is then obtained by summing the risk of the individual assets. 7. Evaluate potential interventions in terms of risk – the effect of potential renewal, refurbishment or changes to maintenance regimes can be modelled to quantify the potential relative risk reduction associated with different strategies. 8. Review and refine information and process – Building and managing a risk-based process on the basis of asset specific information is not a one-off process. The initial application will deliver results based on available information and, crucially, identify opportunities for ongoing improvement that can be used to progressively build an improved asset information framework. It is important to emphasise that the methodology is flexible enough to address the specific characteristics and operational context for each category of assets. How we approach the key components of the CBRM process is described below. Define Asset Condition The first stage in the CBRM process is to derive a numeric representation of the condition of each asset in the form of an AHI. Essentially, the AHI is a means of combining information that relate to its age, environment, risk and duty, as well as specific condition and performance information to give comparable measure of condition for individual assets in terms of proximity to end of life and PoF. Figure B.1 below illustrates the AHI. Figure B.1 CBRM Health Indices Condition Bad Poor Fair Good Remnant Life At EOL (20 years Probability of Failure High Medium Low Very Low Health Index 10 0