Weather hits utilities

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See class and model on asset strategy and a paper and model on risk/resilience, for my colleague and utility expert Bob Thurlby. More …

Recent bad UK weather has caused another round of severe damage and disconnections for households and businesses. For suppliers, increasingly frequent and serious events pose major challenges. These concern not just how to respond when events occur, but also how to set a mid- to long-term strategy for most reliable service, most resilient to damage and disruption, whilst not spending so much that the business fails. To appreciate the scale and seriousness of this issue, try scanning reports on the damage and cost arising from Hurricane Sandy in 2012.

The first model looks at the general issue of maintaining a network of equipment assets – which inevitably ages and becomes less reliable – by making good spending choices on maintenance, reconditioning and replacement, as explained in the video from the strategy dynamics online course.

The second model looks at the more complex issue of preparing for major incidents (so it is a more complex model!). As explained in the paper presented to the 2012 System Dynamics conference, this requires good choices on a wider range of factors so that, when bad things happen, [a] the network suffers the least damage [b] any damage that does occur imposes the least possible disruption to customers and [c] damage and disruption are rectified as soon as possible.

Utilities certainly need detailed and extensive spatial models of their actual equipment and networks, in order to plan for and respond to specific incidents of damage and disruption, but simple, aggregated models such as these provide an easily understandable high-level picture of the strategic issues and choices that need to be made.

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