Value-Based Decision Making for UK Network Operators
In the United Kingdom, gas and electricity network operators have moved from a condition-led approach (where Asset Health Indices were king) to a risk-based approach, supported by common methodologies that monetise risk. Within each of the four industries (electricity distribution, electricity transmission, gas distribution, gas transmission), the individual organisations have come together to develop Common Methodologies.
The Common Methodologies are an important step towards greater consistency in risk mitigation and investment planning. However, they do not address the full scope of analysis required to make the highest value investment decisions. Copperleaf has identified a number of opportunities for network operators to gain an advantage by going beyond the Common Methodologies, such as a value-driven approach and coverage of the whole investment plan (not just risk-based intervention in existing assets). These opportunities can be realised through the implementation of a broader Value Framework for decision making.
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