Asset aspirations [utilities risk management]

The need to manage assets effectively is one of the hottest topics currently occupying UK regulator Ofgem and the utilities. As ever, the core question is how to strike the right balance between the reliability and quality of supply, and the cost of capital and revenue expenditure. The principle of a move from asset management based on age to asset management based on condition is already widely accepted. In addition, industry players are increasingly accepting that risk as a function of probability and consequences of asset failure must be factored into asset management regimes. One approach, condition-based risk management process (CBRM), has been developed to help electricity companies manage their ageing assets in an environment of ever more demanding regulation.