INFRASTRUCTURE & ASSET MANAGEMENT STRATEGIC WATER AND POWER INFRASTRUCTURE IN ABU DHABI

Transcription

1 INFRASTRUCTURE & ASSET MANAGEMENT STRATEGIC WATER AND POWER INFRASTRUCTURE IN ABU DHABI ASMA AL FALASI & KEITH PAINTIN, TRANSCO In 1998, Law (2) was passed by the Government of Abu-Dhabi concerning the restructuring of the water and electricity sector. On January 1 st, 1999, the Abu-Dhabi Water and Electricity Authority (ADWEA) was set up as an entity, wholly owned by the government and responsible for ensuring that the group of companies under its umbrella control were set up and running. Prior to that date, the Water and Electricity Department (WED) was the responsible body. ADWEA is now the focal point between the government and the group companies, with Transco being responsible for Transmission and despatch of electricity and water services. The Distribution elements are controlled by Abu Dhabi (ADDC) & Al Ain Distribution (AADC).

2 Over time, each company has evolved in its own direction, but realignment was now required to ensure that all parts of the Group are working together and support a unified strategy. This need resulted in the creation of an ADWEA Strategic Transformation Project (ASTRO). The principal objective of ASTRO is the alignment of the group, vertically and horizontally, thereby ensuring mutually supported objectives that act in concert to deliver an agreed set of sector level goals. Transco s core business is responsibility for the planning, construction, and operation of the Water and Electricity transmission network within the Emirate of Abu Dhabi and, where required, the UAE. In addition, to meet the real-time demand for water and electricity transmission, Transco must ensure the availability of appropriate infrastructure necessary to service future demand. Transco is responsible for reliably, securely, and safely transmitting water and electricity from Independent Water and Power Producers (IWPPs) to the distribution networks operated by ADDC and AADC, as well as playing a lead role in the planning and development of an interlinked transmission grid with the other Gulf States and contributing to the running of the Emirates National Grid. The following table provides some key statistics for the electricity business. ASSET CLASS UNITS 400KV 220KV 132KV OHL KM CABLES KM T/F NO S/GR NO REACTORS NO TABLE 1 KEY TRANSCO STATISTICS There are a number of external factors that need to be included within our forecast and planning. ABU DHABI 2030 VISION The Government of Abu Dhabi has completed a vision for how the emirate should be planned and developed by This framework provides the central core of the supply and demand forecasts, and consequently provides a long term direction for the provision of utilities to support this vision.1 It is important that this development plan is supported by the provision of suitable infrastructure that will cater to both current and future demand requirements. NUCLEAR REQUIREMENTS The Government of Abu Dhabi has intentions to begin utilising nuclear power, with the first generator scheduled to go online in 2017; however, the unit size (4x1400 MW) raises serious planning and operational challenges for the system as it is around three times bigger than the largest unit currently installed. As most of the water consumed in the UAE comes from desalination, the water production provision adds an extra complexity dimension into the planning process. ABU DHABI NATIONAL OIL COMPANIES EXPANSION Oil plays an important part in the economic success of Abu Dhabi. There are major expansion plans for this industry and Transco needs to be able to ensure that their power and water requirements are catered for. This requires close cooperation between the two industries to ensure that the expansion of the utility network timescales meet with the oil companies requirements. ECONOMIC OUTLOOK Abu Dhabi is not immune from the wider economic issues that have occurred in other economies throughout the world. The government requires a return on their investment and wants to see us delivering value for money projects. This is a fine balancing act. On the one hand, there is the need to provide the network for expansion, yet on the other hand there is the risk of stranded assets and/or over capacity in the network with the result of assets that are underutilised, and therefore do not represent Value for Money. REGULATORY PRESSURE Like most utilities, Transco operates within a regulatory framework similar to that of the UK. This requires Value for Money investments and a holistic view. The mix of growth plans, investment requirements, and demand realisation ensure that the regulator needs to be kept in the loop on progress and updated with the latest views and information. This ensures that the relationship with the regulator is sound and there is joined up support in the development of the Abu Dhabi power and water infrastructure development. Unlike other regulated jurisdictions, the form of regulation is based on a post review of capital already committed. This approach contributes to uncertainty and leads to additional regulatory burden and intrusion. It also creates pressure on the business to ensure that efficiency in planning and delivery is at the forefront within our business planning and business process design. In order to maintain linkage with practices adopted in other jurisdictions, the company has embarked upon a number of strategic business initiatives. This has led to the business being able to make significant improvements in what is a comparatively short period. As the business has sought to grow and ensure efficient and effective practices, the regulator has also sought to employ practices proven in more mature regulatory environments. Consequently, the scope and depth of regulatory reporting has increased. Unlike other jurisdictions, the regulatory function in Abu Dhabi includes a supervisory element. This ensures that regulatory justification

3 requires a level of detail not normally addressed by other utilities. As such, all activities need to be managed in a manner that ensures full transparency in both execution and efficiency. These increased regulatory duties necessitates that Transco continually considers regulatory aspects as they may arise during each phase of the planning, construction, and operation of the network. Transco operates as a true multi-utility business. This means that, where able, we adopt common business processes. However, from a regulatory perspective, the business is accounted separately. This separation between delivery of operational duties and regulatory licensing and accounts requires Transco to operate in a manner that is able to demonstrate clarity in cost allocation between different services. Our operating cost projections, as reviewed annually by the regulator, therefore need to ensure that cost allocation between each service is identified and reflects the impact of different network growth forecasts. PLANNING FOR GROWTH Transco aims to continue to develop, operate and maintain a safe, flexible, accessible, robust, reliable and efficient transmission system that meets the needs of its customers in a manner consistent with its License obligations and other business requirements. This is achieved through a structured asset management process that is cognizant of best practice asset management principles for the development and stewardship of both power and water transmission networks. The requirements for transmission system investment are determined through a process starting with stakeholder engagement and the identification of requirements, concept formulation, scheme definition and then implementation through to operation and maintenance and then asset decommissioning as shown in the diagram below. Vision, Mission, Values, Business Policies, Goals and Risk Lessons learnt / Continuous Improvement Stakeholder Requirements Concept Definition Implementation Handover and Closeout Operate and Maintain Terminate / decommission Ongoing Activites: Programme Management / Requirements, Benefits and Quality Management / Stakeholder Management / Team Management / Performance Monitoring and Control / Supply Chain Management / Information and Reporting / Cost Management / Health and Safety As Required Activities: Risk Management / Change and Configuration Management / Issue Management Organisation: Organisational Structure / Roles and Responsibilities People and Processes: Communication / Teamwork / Leadership / Conflict Management / Negotiation / Resources Given the stage of development of Abu Dhabi, the transmission asset base is relatively young while demand growth is high. As such, the requirements for transmission development and its associated investments are primarily driven by the demand and generation backgrounds and the resulting power transfers on the transmission system. There are uncertainties associated with the demand and generation backgrounds as with any forecasts and plans. These will affect future planned power transfers on the transmission system and hence the way the transmission system develops. Using scenario analysis, the planned power transfers on the transmission system are established for various demand-generation scenarios. Given the differences in scenarios, envelopes of possible transfers are established. The scenario analysis establishes the most likely (best-view) planned power transfers across each of the identified transmission corridors that is used as a basis to inform how best to develop the transmission system as shown in the figure overleaf. Figures 1 and 2 below show the current power systems and the expected demand requirements in 2017, showing the extensive growth required by Transco to support the Government vision.

4 FIGURE 1 TRANSCO CURRENT POWER NETWORK FIGURE 2 TRANSCO PLANNED POWER NETWORK IN 2017 Transmission system options are explored to meet the system needs for the range of planned transfer requirements and reinforcement schemes identified. These options are compared using whole life costing techniques to identify least regret solutions. As there will continue to be a degree of uncertainty in the realization of the volume, location and timing of demand and generation backgrounds in any given area, these are continually monitored. Transco is fortunate in that the average age of our assets is relatively young compared to many other Transmission utilities. This provides us with a number of opportunities when considering the whole life approach to these assets. We have the opportunity to get our asset data correct. We are working on developing a mobile hand held data capture device, for both asset and maintenance data. We are moving from a time based maintenance regime to a risk and condition based regime. Given that many assets are relatively new, we can monitor their condition and performance from commissioning in the harsh operating environment we face. This helps us understand the real working life for many of these assets. The current expansion plan allows us to ensure that we can use modern technology to ensure that our equipment is the most appropriate available. STRATEGIC TRANSFORMATION The main objective of ASTRO is to deliver the strategic transformation of ADWEA through the implementation of a best-in-class strategy execution framework throughout the organization. From a group perspective, there were certain core objectives that ADWEA needed to put in place to enable Transco and the rest of the group companies to be able to complete their strategy maps. This included:

5 Updating its own objectives and strategic direction and identifying clear strategic themes; Once the strategy and objectives had been identified, then there was a requirement to translate these high level goals into associated strategy maps and components of a balanced scorecard; Communication was identified at an early stage as a critical success factor in order to allow the group companies to shape their contributions; Build and implement the strategy and methodology based on understanding throughout the organisation as a long-term goal. This goal recognised that the success of the project was based on employees being aware of the project, its aims and how their role would be seen as an active ingredient to success. At a Transco specific level, these actions allowed the company to align the strategic priorities with those of ADWEA. Once this had been agreed, it was then important to ensure that the Transco priorities were in alignment with the rest of the group. As Transco is the transmission arm of the group supplying the distribution arms (ADDC & AADC), strategic alignment is crucial to ensuring that the overall group delivers what the stakeholders are expecting. The next stage was to align strategic priorities with the company s stakeholders requirements and to identify the strategic gaps. This was a key element in ensuring the alignment and management of all the initiatives. It was seen as an important element in clearly demonstrating how this strategy fits together with the current activities of the company. A diagram that captures all of the interrelationships is shown in Figure 3. This strategy map has provided an important contribution to the communication process as it allows those not familiar with the details to appreciate the issue, and the tasks needed to develop and understand the strategy. FIGURE 3 TRANSCO STRATEGY MAP Development of this approach has taken a significant effort not only within Transco, but across the ADWEA group. This had been facilitated by expert consultancy support and the setting up of a core team within each company to co-ordinate and drive the strategic development within the company. The twin drivers of a significant increase in the Capital Programme and strategic alignment with other group companies has resulted in Transco reviewing how it should best manage a number of demands. HOW WE MADE PROGRESS Having a significant increase in network capacity to deliver and aligning the corporate strategies across the group companies highlighted several challenges to Transco. There was recognition that the Capital Assurance that was in place to support the capital programme needed greater control and rigour along with greater connectivity of the asset monitoring systems. Risk management was also identified as being inconsistent and fragmented. To enable these challenges to be met, the company decided to embark on a systematic process of improving its Asset Management capability; this would ensure that the required Capital Programme could be achieved yet also position the company to deliver the strategic alignment required from ASTRO as well as reinforce the internal systems and procedures. This resulted in Transco seeking to embark on a series of actions which would allow the business to become accredited to the internationally recognised PAS55 specification for Asset Management. One of the philosophies of a PAS55 approach is a drive for continual improvement, so it was important to recognise that changes would be inevitable not only to achieve PAS55 accreditation, but thereafter. WHAT IS PAS55? PAS55 is a specification issued by the British Standards Institution (BSI). It was first published in 2004 and then revised in PAS55 has been so successful and popular that the process has started for converting it into an ISO standard in It is based around a quality management framework for the optimised management of physical assets. It is applicable to

6 ...any asset intensive business, where significant expenditure, resources, performance dependency and/or risks are associated with the creation/acquisition, utilization, maintenance, or renewal/disposal of assets....any organisation that has, or intends to manage or invest in, a significant portfolio of assets, or where the performance of asset systems and the management of assets are central to the effective delivery of service product or other business objectives;... organisations where there is a business or public accountability requirement to demonstrate best value in the safe management of assets and provision of associated services. 2 This specification provides the WHY things should be done and the WHAT should be done, but it does not provide the HOW things should be done that is left to the organisation itself to decide and ultimately implement as this would be too prescriptive and would limit the applicability of the specification. An important understanding of this specification is an appreciation that it applies to the whole lifecycle of the asset from recognition of need, to design, through construction, operating and maintaining, during its useful life and finally the decommissioning of the asset. A challenging timescale of 18 months was developed for this project, as the company wanted to gain the benefits as early as possible. This timescale also provided momentum for change and on-going learning. A longer target date was considered to be too risky in terms of losing momentum and staff engagement. We needed to demonstrate that this project was not just a passing phase, but a significant step in improving our Asset Management capability to allow us to get to where we need to be. BENEFITS In October 2011, Transco was externally assessed by an independent auditor approved by the Institute of Asset Management (IAM), against the requirements of PAS55. After providing some 300+ documents and 18 interviews/workshops with over 35 people, the company was assessed as being compliant with PAS55, the first company in the Middle East to be recognised in this manner. Some of the key high level areas where benefits have been realised are: Clear links and a line of sight between our ASTRO strategic plan and business unit asset management activities; Development of a formal Asset Management Policy; Ensuring the information is current and consistent; Implementing a formal risk framework that is consistent across the business; Taking a whole lifecycle approach to long term planning; Implementing a tracking process for failure analysis. For Transco there are a number of areas that have undergone a refresh. By reviewing the organisation processes and practices against a holistic Asset Management framework there are several key areas that were in need of enhancement. Project Governance Our end to end Project Governance has been reviewed and enhanced to give greater control over the whole life of the project. Emphasis has been placed on the whole life cost comparison for potential options. Our construction Consultants and Contractors have been actively engaged in the changes being implemented within the project governance process, with appropriate information on progress and issues passed through to Transco in a consistent format and to a regular timescale to allow the company to have an up to date view of our portfolio of projects. Programme Management Office The Company decided to develop a Programme Management capability to manage the company s portfolio of projects. This team has developed a suite of web-based dashboards that can be customised to the individual user s requirements. This reporting capability allows availability of up to date reporting in as many different ways as the users request at the click of a button as long as there is web access either by PC or smartphones. The speed of reporting relies on the information being received from our partners in a timely manner with the required data quality, hence the upfront engagement to ensure that they are with us on this journey. Root Cause Analysis (RCA) As part of our Asset Management capability, the company had enhanced its RCA processes and procedures. Previously these were only initiated for major failures; however these are now carried out for all asset failures. This allows us to not only understand the causes behind the major failures but also the small and many minor failures. These incidents may be small in cost on an individual basis, but by looking at the causes from a central perspective it is possible to identify trends and patterns of failures. Learning from this analysis allows us to take appropriate action, for example, this may be changes in an asset standard, modifying maintenance regimes and so on and so forth. This type of fault analysis has also been used in other areas of the business to identify the root causes of poor performance in business processes, resulting in better communication and data flow between departments. Risk Management This plays a major role in PAS55. Within Transco, this was carried out in an infrequent, inconsistent manner. It was therefore important that we developed a consistent coherent approach to this subject. The risk management framework identified the following four main areas: Health and Safety, Asset Level (including operational), Project Level and Corporate Level risks. Management of these aspects was achieved by the formation of a Risk Management Team led by one member of the executive management team. The remit of this team is to ensure identification and reporting of risks, as well as the implementation of appropriate mitigation actions. Utilizing this approach has allowed the company to understand and be able to articulate the risks it is facing. It is also possible to identify and prioritise risks and the associated mitigating actions. We have also recognised that additional support and training is required in this area to ensure that we have the appropriate skills and competencies in place to drive risk management through the business so that we can take informed decisions and be aware of the impact of those decisions. One of the key aspects to PAS55 is a joined up set of processes and procedures. However, this has to be supported by a culture of teamwork. TRANSCO has 31 nationalities working for it; this creates barriers in terms of language, culture and attitudes. Developing a system of cross functional processes and procedures has broken many silos within the company and improved the internal communications to ensure that there are informed decisions for the benefit of the company overall. Communication is playing a fundamental role in the transformation of Transco. Our documentation and processes were not previously joined up, highlighting the lack of co-ordinated actions. By adopting a PAS55 approach, this has resulted in the need for

7 a communications strategy to be developed that caters for internal and external stakeholders. Several mechanisms have been introduced to assist in developing the communications within the company. Our intranet portal has been redesigned with input from representatives from each of the departments in terms of design, content, and functionality. There are also quarterly update presentations on key initiatives within the company as well as regular news updates on the portal. Staff satisfaction surveys are carried out to monitor progress and to assess how our initiatives are working and what areas need to be developed further by giving staff the opportunity for input into improvement actions. WHAT HAS TRANSCO LEARNED FROM THIS EXERCISE? Through the PAS55 process, we have learned the importance of communications and cross functional working to help drive knowledge and joined up understanding across the business. We also learned to look for continual improvements in processes and procedures, by utilising the skill and knowledge of the staff actually carrying out the tasks, as well as how to identify and manage risk and use it to inform decision making. We achieved significant progress within the company by adopting this approach and would encourage other utilities to use the PAS55 framework as a vehicle for improving their business capability. We have already started planning for being accredited with the ISO55001 Asset Management Standard when it is approved in The Government of Abu Dhabi has a vision of the future, and how they want Abu Dhabi to be perceived and operate. Being able to provide the required infrastructure to support these plans is a key focus for TRANSCO in the coming years. Without critical infrastructure, these plans will not materialise. 1 More information on this vision can be found here 2 PAS55-1:2008, pxi.