LMS Network Asset Management Guidebook PDF

Introduction to Network Asset Management Guidebook
Introduction to
Network Asset Management Guidebook
LMS Harmonisation Programme

Copyright 2014 International Copper Association Southeast Asia Ltd
All rights reserved. No part of this publication may be reproduced or distributed in any form or
by any means, or stored in a database or retrieval system, without the prior written permission
of the publisher.
Foreword
I was delighted to be asked to write the foreword to this guide which I hope will provide practical
guidance to help organisations in the electricity industry on their Asset Management journey.
When I first visited the region a few years ago, not many people were talking about Asset Management,
let alone implementing Asset Management Systems in accordance with PAS 55. There were a few early
adopters like MTR and CLP in Hong Kong but these were the exceptions not the rule.
Over the last few years we have seen a significant increase in activity. I was pleased to present to the
6th LMS Harmonisation Forum on Asset Management in Bangkok in 2012. It was clear at that event that
interest in Asset Management was increasing across the region and this guidebook is a timely document
to support organisations in the region.
The IAM has been at the forefront of the discipline of Asset Management for 20 years and is committed
to the development and dissemination of Asset Management knowledge, training and good practice
wherever in the world there is a demand. We were delighted that our first international chapter was
launched in Malaysia in 2013 which represents the culmination of a number of years efforts from people
and organisations committed to developing Asset Management in the LMS Region.
Asset Management can play a vital role in addressing many of the challenges being faced by asset
intensive businesses around the world. These challenges include:
Growing demand and expectations from customers;

Increasing pressure to reduce costs whilst at the same time demonstrating that investment in assets
is sustainable over the longer-term;
Increasing demands to improve safety;
Increasing scrutiny about the governance of asset intensive businesses from stakeholders.
The development of an Asset Management approach that follows the framework described in PAS 55 or
ISO 55001 can significantly help asset intensive businesses to address these challenges.
I very much hope you find this document a useful guide in developing your asset management approach
and I look forward to the IAM supporting the LMS Harmonisation Programme in the future.
Richard Edwards
President
Institute of Asset Management
St Brandons House
29 Great George Street
BRISTOL
BS1 5QT
United Kingdom

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Acknowledgement LMS TWG #4

This guidebook has evolved out of the contributions of knowledge and experience by several power
industry and asset management professionals from the LMS and ASEAN regions, Asia and around the
world. While acknowledging the efforts of all those who have directly and indirectly contributed to the
preparation, review and publication of this guidebook, we would like to mention the following notable
contributors:
1. Late Mr. Hardanjit Singh Gosal: An Asset Management Expert who guided LMS Technical Working
Group #4 (Asset Management); laid the foundation of this guidebook by conceptualising its key
contents; and wrote three chapters.
2. LMS Technical Working Group #4: The following members of TWG #4 (Asset Management) were
involved in reviewing the first draft of contents and sharing their insights, which all helped to
improve this guidebook by many folds.
Suraphol Wiboonwipa Kitti Leangkrua

Director of Power System Maintenance Asst Manager, Power System Maintenance Division
Department, MEA PEA
Chairman
Ho Viet Thong
Ms. Janram Santiwongse Dy Director, Technical Department
Project Manager - International Service, MEA EVNHANOI
Secretary/Coordinator
Ms Dang Thi Lan Huong
Khun Chanthea Expert, Purchasing & Material Dept
Deputy Chief of Distribution, Technical Office EVNHCMC
EDC
Pham Quang Hoa
Heuangsixayphone Dalasene Dy Director, Technical Department
Deputy Director, Transmission System EVNNPC
EDL
Nguyen Phi Loc
Sornchai Buakaew Expert, Technical Department
Chief of Substation Equipment #1, Substation EVNCPC
Substation Equipment Maintenance
MEA Tran Cong Dien
Expert, Technical Department
EVNSPC
International Copper Association Southeast Asia (ICASEA):

Louis Koh Piyadith Lamaisathien Huynh Hong Tan
Programme Consultant Country Manager - Country Manager -
- Power Distribution Thailand Vietnam

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Acknowledgement LMS Utilities

The Harmonisation of Power Distribution Systems in the LMS will contribute to the expansion of the
ASEAN Power Grid. However, harmonisation requires a robust partnership and sustained effort over
many years.
The harmonisation of technical specifications together with the development of this guidebook is taking
the process a step closer towards the realization of the objectives as set out in the strategic roadmap for
the harmonisation of power distribution systems in the LMS.
Strengthening regional cooperation to build the capacity of both technical and functional staff would
not have been possible without the endorsement and support of:
Electricit du Cambodge (EDC), Cambodia: Central Power Corporation (EVNCPC), Vietnam:

Keo Rottanak, Managing Director Tran Dinh Thanh, General Director
Dr Praing Chulasa, Deputy Managing Director Nguyen Thanh, Vice General Director
Dr Chan Sodavath, Past Deputy Managing Director
Southern Power Corporation (EVNCPC),
Electricit du Laos (EDL), Lao PDR: Vietnam:
Sisavath Thiravong, Managing Director & CEO Nguyen Thanh Duy, General Director
Ho Quang Ai, Deputy CEO
Hanoi Power Corporation (EVNHANOI),
Vietnam: Provincial Electricity Authority (PEA), Thailand:
Nguyen Anh Tuan, General Director Numchai Lowattanatakul, Governor
Vu Quang Hung, Deputy General Director Chusak Anusaksatein, Deputy Governor Human
Resource Development
Ho Chi Minh Power Corporation (EVNHCMC),
Vietnam: Metropolitan Electricity Authority (MEA),
Le Van Phuoc, General Director Thailand:
Tran Khiem Tuan, Vice General Director Somchai Rojrungwasinkul, Governor
Somsak Srithongwat, Deputy Governor Business
Northern Power Corporation (EVNNPC),
Vietnam: International Copper Association Southeast
Nguyen Phuc Vinh, General Director Asia (ICASEA):
Du Cao Minh, Vice General Director Steven Sim, Chief Executive Officer
Bek Chee Jin, Chief Operating Officer

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Table of Contents
Foreword 1
Acknowledgements 2
Preface 10
1 LMS harmonisation programme and asset management

1.1 Asset management: Part of strategic road map
1.2 Guidebook: Key milestone for Technical Working Group (TWG #4)
2 Challenges for LMS utilities
3 Asset management guidebook

Chapter 1: Introduction 14
1 Objective and target readers
2 Scope
2.1 Depth and breadth of contents: Foundational
2.2 Focus on physical assets (distribution network)
2.3 Structured around PAS-55
3 Outline of contents
3.1 Four-step journey
4 How to use this guidebook?

Chapter 2: Assets, Asset Management, Drivers, Benefits, Principles and Standards 18
1 Assets: Definition, types and hierarchy
2 Asset management: Concept, definition and expanded understanding
2.1 Concept: Balance between cost, performance and risk
2.2 Definitions in PAS and ISO
2.3 Grounds-up understanding (answers to key questions)
2.4 What is not asset management?
3 Why asset management? Drivers and benefits
3.1 Drivers behind asset management
3.1.1 Aging infrastructure
3.1.2 Pressure to reduce losses
3.1.3 Capital constraints
3.1.4 Higher performance expectations
3.1.5 Need to manage risk
3.1.6 Bearing on regional and national development
3.1.7 Deregulation of power market
3.1.8 Tightening regulations
3.1.9 Pressure of growing demand
3.2 Benefits of asset management
3.2.1 Achievement of organisational strategic objectives
3.2.2 Higher performance and stakeholder satisfaction
3.2.3 Improved risk management and compliance
3.2.4 Sustainable high performance
4 Core principles of asset management
4.1 Line of sight: Alignment with strategic business objectives
4.2 Lifecycle management
4.3 Risk management
4.4 Systematic process
4.5 Focus on all time horizons: Short, medium and long
5 International standards/specifications of asset management

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5.1 PAS 55 specification

5.2 ISO 55000 series of standards
5.3 Alignment between PAS 55 and ISO 55000
6 Reflections and actions

Chapter 3: Asset Management Framework 30
1 Overall framework of asset management
2 Foundation of framework: Policy, strategy, objectives and plan
2.1 Asset management policy
2.1.1 What should a policy cover?
2.1.2 Industry examples
2.1.3 Tips for drafting an effective asset management policy
2.2 Asset management strategy
2.2.1 Guidelines for forming an effective strategy
2.2.2 Industry example
2.3 Asset management objectives
2.3.1 Guidelines for setting objectives
2.4 Asset management plan
2.4.1 Key features of asset management plan
2.4.2 Contingency plan
3 Alignment with other management systems: Plan-do-check-act

Chapter 4: Key Enablers of Asset Management Programme 40
1 Key enablers of asset management programme
1.1 Suitable organisational structure for asset management programme
1.1.1 Top managements commitment
1.1.2 Clear responsibilities
1.1.3 Documented and communicated
1.1.4 Three-part organisational model
1.2 Outsourcing of asset management activities
1.3 Training, awareness and competence
1.4 Communication and consultation
1.5 Documentation
1.6 Information management
1.6.1 PAS 55-1: 2008 recommendations
1.6.2 Status of information systems in LMS utilities (a snapshot)
1.7 Risk management
1.7.1 Types of risks in distribution business
1.7.2 Risk management process
1.7.3 PAS 55-1:2008 guidelines
1.8 Legal and other requirements
1.9 Management of change

Chapter 5: Implementation, Review, Continual Improvement, Transformer, Cable and MV
Switchgear Asset Management Programme 52
1 Implementation
2 Life cycle based management
2.1 Life cycle management: The big picture
2.2 Create / acquire new assets
2.2.1 Planning Stage

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2.2.2 Design Stage

2.2.3 Procurement
2.2.4 Installation
2.2.5 Commissioning
2.3 Operate / utilise assets
2.4 Maintain assets
2.4.1 Common maintenance challenges
2.4.2 Corrective Maintenance (CM)
2.4.3 Time Based Maintenance (TBM)
2.4.4 Condition Based Maintenance (CBM)
2.4.5 Reliability Centred Maintenance (RCM)
2.4.6 Maintenance strategies used by LMS utilities
2.5 Dispose assets
2.6 Key life cycle management processes
2.7 Status of life cycle management activities in LMS utilities
3 Tools, facilities, equipment
4 Performance assessment and continual improvement
4.1 Performance and condition monitoring
4.1.1 Key areas of performance monitoring
4.1.2 Types of monitoring and indicators
4.1.3 KPIs
4.2 Investigations of asset-related failures, incidents and non-conformities
4.3 Evaluation of compliance
4.4 Audit
4.5 Improvement actions
4.5.1 Corrective and preventive action
4.5.2 Continual improvement
4.6 Records
5 Management review
5.1 Focus of managements review
5.2 Outputs: Whats the outcome of review?
6 Asset management practices for distribution transformers
6.1 Typical gaps in transformer management
6.1.1 Detailed age profile of transformers
6.1.2 Failure mode/cause analysis
6.1.3 Transformer maintenance strategies
6.1.4 Transformer criticality assessment
6.1.5 Condition monitoring / Transformer Load Management (TLM)
7 Asset management for cables
7.1 Key elements of cable life cycle management
7.1.1 Cableasset registry
7.1.2 Technical design specifications
7.1.3 Procurement: Bidding and evaluation
7.1.4 Factory Acceptance Tests (FAT), Installation, Site Acceptable Tests (SAT)
7.1.5 Operations and maintenance
7.1.6 Power Cable Handbooks Volume1 & 2
8 Asset Management for MV Switchgear
8.1 Condition Based Maintenance of MV Switchgear
8.2 MV Switchgear Faults
8.3 Mechanical Monitoring of Circuit Breakers
8.4 Partial Discharge Testing
8.41 Transient Earth Voltage (TEV) Measurement

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8.42 Ultrasonic Detection

8.43 Instrument for TEV and Ultrasonic Detection
8.5 Switchgear Oil Analysis
8.6 Thermal Imaging
8.7 Health Index of Switchgear

Chapter 6: Case Studies 82
1 Case study: CLP Power, Hong Kong
1.1 Snapshot of CLP Power
1.2 Key driver behind adopting asset management: Market reforms
1.3 Asset management journey: Key Steps
1.3.1 First step: Restructuring of organisation
1.3.2 Strategic Asset Management (SAM) model
1.3.3 PAS 55 certification
1.3.4 Continuous improvements
1.4 Benefits of asset management programme
1.5 Lessons on asset management from CLP Powers experience
1.5.1 Sustained organisational commitment
1.5.2 Alignment of policy, plans and actions
1.5.3 Change management
1.5.4 Special communication mechanisms
1.5.5 Robust information system
2 Case Study: The Chugoku Electric Power Company, Inc. Japan
2.1 Overview of Chugoku
2.2 Assets
2.3 Maintenance processes
2.4 Asset facility and historic information management
2.5 Countermeasures for aging assets
3 Case study: Asset Management Plan of SP AusNet
3.1 About SP AusNet
3.2 Key drivers
3.3 Vision, mission and objectives
3.3.1 Vision
3.3.2 Mission
3.3.3 Objectives
3.3.4 Network performance KPIs
3.4 Key asset management strategies
3.4.1 Risk management
3.4.2 Condition monitoring
3.4.3 Asset maintenance
3.4.4 Information management
3.4.5 Operations management
4 Transformer life cycle management by Eskom Distribution, South Africa
4.1 Eskom Distribution
4.2 Eskoms transformer fleet
4.3 Eskoms transformer life management process
4.3.1 General assessment
4.3.2 Focused assessment
4.3.3 Conclusion

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Chapter 7: Status of Asset Management Readiness for LMS Utilities 98

1 LMS utilities: Assessment of Asset Management Activities
1.1 Assets in focus
1.2 Key assessment questions
1.3 Summary of assessment results
1.3.1 Overall asset management maturity level
1.3.2 Potential for significant improvements and benefits
1.3.3 Key gaps and areas of improvement
1.4 Assessment of asset management activities: Questionnaire and responses by LMS
utilities
2 Brief Profiles of LMS utilities
2.1 Electricite Du Cambodge (EDC)
2.2 Electricite Du Loas (EDL)
2.3 EVN Hanoi Power Network (EVN Hanoi)
2.4 EVN Hochiminh City Power Corporation (EVN HCMC)
2.5 EVN Northern Power Corporation, Vietnam (EVNNPC)
2.6 EVN Central Power Corporation (EVNCPC)
2.7 EVN Central Power Corporation (EVNCPC)
2.8 Metropolitan Electricity Authority (MEA), Thailand (2011 figures)
2.9 Provincial Electricity Authority (PEA), Thailand (2010 figures),

Chapter 8: Moving ForwardNext Steps for LMS Utilities 124
1 Asset Management: Challenges for LMS utilities
2 Four-phase roadmap
3 Short- and medium-term steps
3.1 Renewed strategic commitment of top management
3.2 Raising awareness across wider organisation
3.3 Create an asset registry
3.3.1 Inventory of assets (what do we own?)
3.3.2 Location (Where are our assets?)
3.3.3 Parameters (What are their key details?)
3.3.4 Health (What is the condition of assets?)
3.3.5 What is the remaining life of assets?
3.3.6 What is the financial value of assets?
3.4 Optimum performance levels, KPIs and benchmarking
3.5 Create a risk management framework
3.6 Criticality analysis of assets
3.7 Gap analysis and certification
4 Asset management: A perspective worth remembering
5 Short-, medium- and long-term asset management in power distribution utilities
5.1 Short-term asset management
5.2 Medium-term asset management
5.3 Long-term asset management

References 133

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Figures
Fig. 1.1: Structure of Guidebook 16
Fig. 2.1: Five Types of Assets 19
Fig. 2.2: Focus of Guidebook Medium Voltage Power Distribution Assets 19
Fig. 2.3: Hierarch of Assets 20
Fig. 2.4 Asset Management Striking a Balance between Cost, Performance and Risk 21
Fig. 2.5 Power System Losses (LMS utilities) 24
Fig. 2.6 Growth in Demand of Power in LMS Utilities 25
Fig. 2.7: Asset Management Leads to Performing and Sustainable Organisation 26
Fig. 2.8: Key Principle of Asset Management: Line of Sight between Organisations
Strategic Plan and Asset Management 27
Fig. 2.9: Key Principle of Asset Management: Lifecycle Management of Assets 27
Fig. 3.1: Overall Framework of Asset Management System 31
Fig. 3.2: PDCA Framework of PAS 55 38
Fig. 4.1: Key Enablers of Asset Management Programme 41
Fig. 4.2: Three-Part Asset Management Organisational Model 43
Fig. 4.3: Risk Management Process 47
Fig. 5.1 Asset Life Cycle 53
Fig. 5.2: Alignment from Corporate Objectives Down to Life Cycle Strategies of
Network Equipment 54
Fig. 5.3 Maintenance Strategies Based on Asset Condition and Importance 59
Fig. 5.4 Two-Tier Condition Based Maintenance Programme 61
Fig. 5.5 Transformer Health Index 61
Fig. 5.6: Transformer Criticality Assessment 71
Fig. 5.6: Transformer Criticality Assessment 72
Fig. 6.1: Mapping of CLPs PAS 55 Assessments 84
Fig. 6.2: Impact of Asset Management Program on CLP Powers Performance 84
Fig. 6.3: Chugokus Maintenance Cycle for Existing Assets 87
Fig. 6.4: Chugokus Countermeasures for Aging Assets 89
Fig. 6.5: Escalation Process for Excessive Moisture in Transformers 96
Fig. 7.1: Asset Management Maturity Scale 98
Fig. 8.1: Process for Establishing Risk Management Framework 128
Fig. 8.2: Map of GAP Analysis (PAS 55) 130
Tables
Table 4.1: Areas of Competency for Asset Management 44
Table 4.2: Categories of Risk and Response 49
Table 5.1: Status of Maintenance Strategies in LMS utilities 62
Table 5.2: MEAs percentage of transformer failure rate 70
Table 5.3: MEAs failure cause assessment 70
Table 6.1: Criteria for Replacement 88
Table 6.2: Asset Registry 88

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Preface
The application of asset management in power utilities dates back to 1990s when it was first introduced
for managing power generating assets. For transmission and distribution (T&D) side of the business,
however, it was early/mid 2000s when utilities started considering asset management as one of the
strategic priorities. With the publication of PAS 55 specification on asset management by British Standards
Institution (BSI) in 2004 and the subsequent revision of this specification in 2008, asset management
became a recommended practice among all utilities (including gas and water utilities). In Asia, CLP Power
of Hong Kong is credited to be the first Asian utility to receive PAS 55 certification (2007). In 2014, the
first ever series of ISO standards on asset management (ISO 55000) has been published.
The publication of this guidebook is, therefore, timely, and in step with the evolving importance of
asset management for asset-intensive industries. Today, asset management has progressed to a level of
maturity where an ample body of knowledge on proven asset management principles and practices is
now available and can be used applied beneficially.
The challenge, therefore, is not the lack of information on asset management, but rather too much of
it, often distributed across hundreds of articles, presentations, web sites and books. In addition, the
available information can often be generic (like PAS specifications) or applicable only to the developed
countries and not contextualised to suit the specific needs of the LMS power distribution industry.
Further, the information may be presented in a complex manner or in a much too simplified manner (like
bullet points in PowerPoint presentations).
The purpose of this guidebook is to overcome the above challenges and provide the power industry
professionals from the Lower Mekong Sub-region (LMS) with the most relevant knowledge on asset
management in a consolidated, easy-to-understand and systematic way. With this guidebook, the LMS
professionals can quickly get up to the speed in their understanding of what asset management is all
about; why it matters and what exactly needs to be done to implement a full-fledged asset management
system.
As LMS professionals gain new knowledge on asset management and implement its principles and
practices, the LMS power distribution utilities, in turn, stand to benefits in at least the following ways:
Increased knowledge of existing assets, and their criticality and condition

Reduced distribution losses
Improved emergency response
Greater ability to plan and pay for future network growth, and replacement of existing assets
Higher performance and customer satisfaction levels
Greater rationality for power pricing
Improved management of safety, environmental and other risks
Improved bottom line and prospects of fulfilling utilitys strategic objectives
As each of the LMS utilities moves to the next level of asset management, together they would also
achieve a bigger goal: Greater harmonisation among LMS power distribution systems.

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1 LMS harmonisation programme and asset management

To understand the origins of this guidebook and its significance for the LMS countries, it is important
to step back and shed some light on the LMS harmonisation programme that began in 2005.
The Lower Mekong Sub-region (LMS) is shared by Cambodia, Lao Peoples Democratic Republic (Lao
PDR), Thailand and Vietnam, the four countries that also have strong economic inter-dependence.
Recognising that harmonisation of the power distribution systems among the LMS countries can
accelerate their economic growth, a Memorandum of Understanding (MOU) was signed among six
partners in 2005. Under the MOU, these partners agreed to work together towards the harmonisation
of power distribution systems in the four LMS countries: Cambodia, Lao PDR, Thailand and Vietnam.
Currently, the harmonisation programme includes the following 10 partners:
Cambodia
Electricit du Cambodge (EDC)
Lao PDR
Electricit du Laos (EDL)
Thailand
Metropolitan Electricity Authority (MEA)
Provincial Electricity Authority of Thailand (PEA)
Vietnam
Central Power Corporation (EVNCPC)
Hanoi Power Company (EVNHanoi)
Ho Chi Minh City Power Company (EVNHCMC)
Northern Power Corporation (EVNNPC)
Southern Power Corporation (EVNSPC)
International
International Copper Association Southeast Asia (ICASEA)
1.1 Asset management: Part of strategic road map

Post MOU, in 2006 a comprehensive study of the power distribution systems in the urban areas
of LMS countries was undertaken. This study led to identification of the following six focus
areas:
Customer service
External funding
Functional training
Loss reduction
Power quality
Undergrounding

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Next, a strategic roadmap (for period 2005/2006 to 2014) was prepared, which envisaged the
development of standard processes along the following six tracks:
Track 1: Transformers
Track 2: Power cables
Track 3: Underground cabling design, construction and installation
Track 4: Conversion of overhead to underground cabling
Track 5: Asset management
Track 6: Demand Side Management (DSM)
To date, four technical working groups have been functioning on the above tracks:
LMS TWG #1: Power & Distribution Transformers

LMS TWG #2: Power Cables
LMS TWG #3: Conversion of Overhead Power Lines to Underground Cable System
LMS TWG #4: Asset Management Best Practices
1.2 Guidebook: Key milestone for Technical Working Group (TWG #4)
The objectives of TWG #4, which is responsible for the Asset Management Best Practices,
are as follows:
Promote common understanding of asset management fundamentals and best practices

among LMS power distribution utilities.
Promote understanding of the basic concepts and governing standards of asset
management.
Appreciation of the benefits of life-cycle management of assets, especially in enhancing
the performance and reliability of LMS power distribution utilities.
To meet the above objectives, TWG #4 has adopted the following strategy:
Step 1: Creating awareness

Hosting of 6th LMS Harmonisation Forum (Bangkok, June 2012) dedicated to International
Standards & Best Practices in Asset Management.
Step 2: Developing framework

Preparation of Best Practice Guide for Management of Network Assets in Power
Distribution Utilities in Lower Mekong Sub-region.
Step 3: Seminars
A series of workshops/seminars to be organised for staff of the nine power distribution
utilities in the LMS to explain the contents of the guidebook.
Step 4: Coaching and Mentoring

One-on-one coaching and mentoring sessions for each of the power distribution utilities.
With the publication of this guidebook, TWG #4 has achieved one of its important milestones.

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2 Challenges for LMS utilities

LMS utilities provide the most critical ingredientelectric power--for the economic development
of the LMS region. But these utilities face several challenges to their functional and financial
performance, and long-term sustainability. Most of these utilities have been operating for several
decades now, and, as a result, significant portions of their network infrastructure are aged.
Operating with aging equipment is not unusual, but unless managed well (i.e., operated, maintained,
disposed and replaced), these aged assets can lead to reliability problems or power quality problems
or consume disproportionate amounts of operating and maintenance costs or create huge spikes
of CAPEX expenditures in the future. In addition, these utilities also face other challenges, such as
capital constraints, relatively high T&D losses, high growth in demand for power, rising customer
expectations, increasing regulatory oversight, etc.
How effectively these utilities overcome the above challenges would also influence the trajectory of
the economic development of the LMS region. Stakes are high.
3 Asset management guidebook

Technical Working Group #4s original intent behind this guidebook was that it should serve as the
first step towards application of asset management principles in their simplest form.
This guidebook, which contains eight chapters, offers understanding of the following key aspects of
asset management:
What is asset management and why it matters?

Overall framework of an asset management system
Asset management policy, strategy, objectives and plan
Asset management pre-requisites/enablers (organisation, information management, etc.)
Risk management
Life cycle management
Maintenance strategies (including condition based and reliability centred maintenance)
Performance management, review and continual improvement
With the hope that this guidebook would help to fulfil TWG #4s original intent as mentioned above,
here is one final note:
One of the most important aspects of asset management is that it cannot be something the utilities
do on the side as one of their multiple activities; rather it must be the way the utility does business.
Asset management thinking must underlie every activity, every action and every decision that a
utility undertakes.

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Chapter 1: Introduction
1 Objective and target readers
The main objective of this guidebook is to raise the awareness about the key principles, benefits and
practices of asset management across power distribution utilities in the LMS region. By raising the
awareness, this publication aims to serve as the first step towards application of asset management
principles in their simplest form.
Based on the range of topics covered and the simplified way in which many of the complex issues
have been explained, this is a useful resource of all professionals, from top management to the
functional-level staff. For the top and senior management, it provides an understanding of the
overall framework of asset management and its benefits, and how asset management is directly
coupled with an organisational strategic plan. For middle-level management and functional level
staff, it provides insights into key asset management practices, such as life cycle based management,
risk management, asset registry, condition based maintenance, reliability centred maintenance, etc.
2 Scope
The scope of this guidebook is defined below from three different angles: Depth and breadth of
contents, types of assets and reference standard.
2.1 Depth and breadth of contents: Foundational

The field of asset management is huge as it encompasses technical, managerial and financial
aspects of a power distribution business; complete life cycle of wide range of assets, from
procurement to operations to maintenance to disposal; risk management; information
management; training; etc. The purpose of this guidebook is not to serve as the one-stop
resource of all applicable information related to asset management in power distribution
utilities.
Instead, the scope of this guidebook is limited to the basic principles and practices of asset
management. In that sense, its a beginners guide, which offers readers foundational
knowledge on the following key topics:
Asset management in nutshell

Key drivers and benefits
Overall framework of an asset management system
Asset management policy, strategy, objectives and plan
Asset management pre-requisites/enablers (organisational structure, information
management, etc.)
Risk management
Life cycle management of assets
Maintenance strategies (including condition based and reliability centred maintenance)
Performance management, review and continual improvement
Status of asset management in LMS utilities
Next steps for LMS utilities

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2.2 Focus on physical assets (distribution network)

Power distribution utilities own not only physical assets, but also the following assets:
Human assets
Financial assets
Information assets
Intangible assets (reputation, image)
This guidebook, however, is focused on the physical assets, and more specifically, on the
following key assets that typically form part of power distribution networks:
MV distribution transformers
MV overhead and underground cables
MV switchgear (circuit breakers, protection relays, etc.)
2.3 Structured around PAS-55

The asset management framework described in this guidebook is structured around PAS 55
specification, which was originally launched in 2004 and later updated in 2008.
Chapter 2 covers more information on the prevailing specifications and standards on asset
management.
3 Outline of contents
The guidebook includes eight chapters, which are arranged in the following structure:
Chapter 1: Introduction to the guidebook

Chapter 2: What is asset management and why?
Chapter 3: Framework of asset management
Chapter 4: Enablers of asset management
Chapter 5: Implementation of asset management programme
Chapter 6: Application of asset management in power distribution industry
Chapter 7: Status of asset management in LMS utilities
Chapter 8: Moving forward-Next steps
3.1 Four-step journey

Overall, the guidebook is organised to help readers progress through a four-step journey
towards greater awareness of asset management principles and practices (Fig. 1.1).
Step 1: Acquire foundational understanding of asset management

The chapters 2 to 5 provide readers with the following foundational knowledge:
What is asset management in a nutshell?

What are the key drivers and benefits?
Whats the overall framework of an asset management system?
What enablers/infrastructure is required for implementing an asset management system?

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What it takes to implement an asset management system (including for transformers

and cables)?
How to track and review performance, and achieve continual improvement?
With the above understanding, readers are ready to appreciate the next layer of knowledge,
which is how these principles are being successfully applied in other utilities.
Step 2: Learn from other utilitiesCase Studies
Step 4: Next Steps for LMS Utilities

Chapter 8
Step 3: Status of Asset Management in LMS Utilities
Chapter 7
Step 2: Application of Asset Management: Case Studies
Chapter 6
Step 1: Foundation Knowledge for Asset Management
Chapter 2-5
Fig. 1.1: Structure of Guidebook
Chapter 6 includes four case studies of the successful implementation of asset management
principles in four different regions of the worldJapan, South Africa, Hong Kong and Australia.
The objective of this chapter is to move the readers from theory into the world of application
and enable them to see how asset management principles are already being successfully
applied by other utilities.
Step 3: Status of asset management in LMS utilities

Having understood the basics of asset management (Step 1) and how asset management
systems are working in other utilities (Step 2), readers can now step back and review the
current status of application of asset management principles in LMS utilities.
This step shows how far each of the nine LMS utilities has progressed in the journey towards
full implementation of asset management programme.
Step 4: Next steps

Having done a reality check of where LMS utilities stand in their journey of adopting asset
management principles, this last step shows the path forward with some suggestions for
specific actions that can be implemented over the short-and medium-term.

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4 How to use this guidebook?

The purpose of this guidebook is to provide the foundational knowledge to enable LMS utilities
to advance their asset management programmes. At the end of each chapter is a short section
titled, Reflections and actions. The purpose of this section is to enable readers to review their own
situation in the light of the new knowledge acquire from the particular chapter and identify few
specific action steps to move forward.
To get best value out of this guidebook, please read, reflect on it and then act.

17|
Chapter 2: Assets, Asset Management,

Drivers, Benefits, Principles and Standards
Although most people understand what an asset is and what asset management means, this
understanding is usually grounded in the context of financial assets. This chapter helps readers to
orientate their understanding of assets and asset management to the physical assets that form the
network of power distribution utilities. Specifically, this chapter:
Defines assets in the context of power distribution utilities;

Defines asset management and also provides its conceptual and expanded understanding;
Introduces key principles of asset management;
Explains why asset management is important;
Highlights prevailing asset management specifications and standards.
1 Assets: Definition, types and hierarchy

In general, an asset is anything that brings value to the owner, but in the context of asset
management, PAS 55-1:2008 (more about this specification in item 5) defines an asset as:
Plant, machinery, property, buildings, vehicles and other items that have a distinct value to the
organisation.
Although PAS 55-1:2008 is primarily focused on physical assets, it also recognises that an
organisation holistically owns five different types of assets. Besides physical assets, the other four
assets are human assets, information assets, financial assets and intangible assets (reputation,
morale, intellectual property, goodwill, etc.). Fig. 2.1 shows the interdependence between physical
and other assets, and how the five types of assets fit into the overall business context.
When it comes to power distribution utilities, the focus is on medium and low voltage distribution
of power that flows in from high voltage transmission network, and goes out to households and big
consumers like industries (Fig. 2.2). Their main physical assets are:
MV distribution transformers
Primary (e.g., 33/11 kV)
Secondary (e.g., 11/0.4 kV)
MV power distribution cables (overhead and underground)
MV distribution switchgear (circuit breakers, protection relays, etc.)
SCADA control system
Other assets (building, test instrument, etc.)
The focus of this guide is on the top three assets listed above.

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Vital context: business objectives, policies,

regulation, performance requirements, risk
managment
Important interface: motivation,
communication, roles and
responsibilities, knowledge,
experience, leadership, teamwork
Important interface:
life cycle costs, capital
investment criteria,
operating costs, value of
asset performance
Important interface: reputation,

image, morale, constraints, social
impact
Important interface: condition, performance,

activities, costs and opportunities
Fig. 2.1: Five Types of Assets1
High Medium Household

Voltagea Voltagea Voltagea
Transmission Lines
Power Plant Carry Electricity Distribution Lines
Generates Electricity Long Distances Carry Electricty
To Houses
Transformer Neighborhood
Steps Up Voltage Transformer Transformers On Poles Step
For Transmission Steps Down Voltage Down Electricity Before It
Enters Houses
Source: USA National Energy Development Project (public domain)
Fig. 2.2: Focus of Guidebook Medium Voltage Power Distribution Assets
1
Source: PAS 55-1:2008, Asset Management (Part 1: Specification for the optimised management of physical asssets), BSI, 2008

19|
Further, as shown in Fig. 2.2, depending on the scope of operations of a power distribution utility,
the focus of its asset management programme would vary from individual assets (e.g., individual
transformers, distribution circuits) to asset systems (e.g., networks comprising transformers, cables
and switchgear serving specific villages or towns or factories) to asset portfolios (the whole fleet of
distribution networks under several divisions of a company).
Asset portfolio
Asset systems
Individual assets
Fig. 2.3: Hierarch of Assets
2 Asset management: Concept, definition and

expanded understanding
What exactly is asset management? To achieve greater clarity, it is better to start with the basic
concept.
2.1 Concept: Balance between cost, performance and risk

Originally, the term asset management is derived from the financial industry, where it is
applied to investment portfolios containing stocks, bonds, cash, options and other financial
assets. Financial asset management is a trade-off between risks and returns, and the goal is
to maximise returns from the available assets while not exceeding the acceptable level of risk.
But in the context of power distribution utilities, both the nature of assets and the goal of asset
management differ considerablyand so the processes required. Unlike financial assets, assets
of a power distribution utility are complex, long-life, static physical assets (transformers, cables,
switchgear) that cant be sold or bought easily. And these assets continuously depreciate both
in financial and physical sense, and need to be actively maintained, refurbished and replaced,
which requires money beside other things like manpower, instruments, etc.
Further, the purpose of asset management in the case of utilities has an added dimension (in
addition to cost and risk): performance. Utilitys assets are supposed to deliver a specified level
of performance (i.e., availability of power of right quality without interruptions) to customers.
Finally, power distribution business carries inherent safety, environmental and other risks.

| 20
In essence, asset management for power distribution utilities is about achieving a balance
between three key parameters: performance, cost, and risk. Performance means quality,
reliability and availability of power. Cost covers the complete life cycle from acquisition of
asset to operation and maintenance to disposal. And risk involves not only the risk of failure
or non-performance, but also the risk of safety, environmental and other regulatory non-
compliances. The three parametersperformance, risk and costinterplay with one another.
So attempt to achieve very high level of performance can jack up the cost while increasing risk
appetite can reduce the cost. Similarly, squeezing the cost, say maintenance cost, can affect
the performance as well as increase the risk.
Risk of not meeting Life cycle costs:

performance Acquisition,
requirements, non- operations,
compliance with maintenance,
regulations
Risk Cost disposal
Performance
Reliability, power quality,
Fig. 2.4 Asset Management Striking a Balance between Cost, Performance and Risk
But its important not to view the goal of achieving the balance between cost, performance and
risk as not an end in itself. This balancing act is a means to a bigger goal, which is to enable a
power distribution utility to achieve its strategic business objectives.
2.2 Definitions in PAS and ISO

PAS 55-1:2008 defines asset management as:
Systematic and coordinated activities and practices through which an organisation optimally
and sustainably manages its assets and asset systems, their associated performance, risks and
expenditures over their life cycles for the purpose of achieving its organisational strategic plan.
Dissecting the above definition, asset management breaks down into the following key
features:
The purpose of asset management is to help an organisation achieve the objectives of its
strategic plan.
Asset management involves striking a balance between three conflicting priorities: Asset
performance, risks and expenditures.
Asset management covers complete life cycle of asset and asset systems. In that sense, it
is not limited to one specific phase of asset life cycle, say, maintenance or operations.
In the end, it is a set of systematic practices or processes.

21|
ISO 55000:2014 defines asset management as:
Coordinated activity of an organisation to realise value from assets.
The definition in ISO 55000:2014 is more generic compared to PAS 55-1:2008.
2.3 Grounds-up understanding (answers to key questions)

From a higher perspective, asset management is about balancing cost, risk and performance
to achieve the objectives of an organisations strategic plan. But looking grounds up, asset
management is about finding answers to the following questions:
Assets
What assets we have? Where they are? What condition they are in?
What function do they perform?
Whats their useful life and remaining life?
Do we have enough or over or insufficient capacity in our asset portfolio?
Do we have some assets or asset systems that have become redundant or underused or
out-dated?
Value
What do our customers expect from us?
Whats the contribution of our assets to the value organisation creates for our customers?
Are we getting the most value from our assets?
How could we get more value for money from them?
Cost
Is our asset-related expenditure (capital investment and operating costs) insufficient,
excessive or optimal and correctly assigned across the asset portfolio?
Do we have some assets or asset systems that have become unprofitable or too
expensive?
Risks and compliance

Are we confident that the risks of our assets causing harm to people and the environment
are tolerable and at accepted levels?
Are we allowing future problems to develop (such as performance deterioration, risks,
expenditure requirements) in favour of short-term gains?
Existing system, processes and tools

Do we have a clear asset management policy, strategy and plan to ensure that we manage
our assets in a sustainable way? Are these in alignment with organisations strategic plan
and objectives?
Can we readily evaluate the benefits (performance, risk reduction, compliance,
sustainability) of proposed work or investment and, conversely, quantify the total impact
to the organisation of not performing such work, not investing or delaying such actions?
Do we have appropriate processes for such an analysis?
Are we continually improving our asset management system performance, and realising
the benefits of the improvements? Do we know what and where improvements will be
most effective?

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New developments
Are we optimising our asset management processes and techniques in light of the latest
developments in technology and field of asset management?
Quality of information
How accurate and precise is the available information on the above questions?
Can we answer all of these questions confidently, with a clear audit trail, and demonstrate
the answers to our stakeholders?
2.4 What is not asset management?

It is also important to understand what is not asset management. Often Reliability Centred
Maintenance (RCM), Condition Based Maintenance (CBM), managing equipment loading, risk
management, etc. are mistaken as asset management. In reality, these are just few of the tools
and processes that form part of asset management, but the whole is much bigger than these
individual parts.
3 Why asset management? Drivers and benefits

Why should a power distribution utility adopt a formal asset management system? This is an
important question because unless an organisation achieves clarity on why, it is unlikely to fully
commit itself to an asset management programmeand realise its full benefits. To answer why,
however, one needs to explore the following two sub-questions:
What are the key drivers behind an asset management programme?

What are the key benefits of an asset management programme?
Drivers are like pain-points that push for adopting asset management strategy, whereas benefits
are positive outcomes that ensue as a result of an organisation adopting an asset management
programme.
3.1 Drivers behind asset management

The business of power distribution revolves around assets that form the network--transformers,
cables, switchgear, etc. As a result, most of the major business decisions are asset related and
how these assets are managed (i.e., acquired, operated, maintained, disposed) has a direct
impact on a utilitys bottom line, reputation and competitiveness.
Apart from this direct connection between managing assets and organisational performance,
what else is driving the need for utilities to shift their business approach towards asset
management?
The following factors, some of which may become applicable to LMS utilities (e.g., industry
deregulation) only after couple of years, are fuelling the need to begin the journey of asset
management programme.
3.1.1 Aging infrastructure

Aging infrastructure, which poses several challenges, such as declining performance,
increasing maintenance costs and higher performance risks, is one of the common
drivers across utilities worldwide for adopting an asset management programme. Most
of the power distribution infrastructure in the LMS region was installed decades back
23|
and it shouldnt be uncommon, for example, to find many of the transformers to be

older than 20 years or even more.
With aging assets on one side and capital constraints on the other, power distribution
utilities have no choice but to adopt a comprehensive asset management programme to
ensure sustainability of reliable power supply.
3.1.2 Pressure to reduce losses

LMS utilities face a growing pressure to contain the T&D losses, which is one of the
objectives of an asset management programme. Fig. 2.5 shows the trends of power
system losses for eight LMS utilities. As evident from these trends, there is considerable
variation in losses across the LMS region.
15.3
13.7
11.98
10.78 EDC
10.32 10.14 EDL
HANOI
HCMC
NPC
CPC
SPC
MEA
3.6 3.46 3.39 3.44 3.51

3.14
2006 2007 2008 2009 2010 2011 2012
Fig. 2.5 Power System Losses (LMS utilities)2

3.1.3 Capital constraints
Power distribution organisations business involves extremely high capital costs, and
effective allocation and deriving maximum value from limited funding is increasingly
becoming a necessity for sustainable business operations.
3.1.4 Higher performance expectations

Along with growing demand for power, customer expectations are also steadily
growing: Utilities are under pressure to improve reliability and power quality, especially
as LMS economies attract more and more multinational organisations.
3.1.5 Need to manage risk

Power distribution business is inherently a risky business, involving financial (loss
of revenue, increasing expenditure), safety (public and occupation safety hazards),
performance (reliability and quality shortfalls), regulatory and environmental risks. And
these risks potentially impact multiple other elements of a national/regional economy:
industry, hospitals, national defence, etc.
2
Source: LMS Harmonisation Phase 2 Study. Presented at 7th LMS Harmonisation Forum in September 2013.

| 24
3.1.6 Bearing on regional and national development

Performance of power distribution utilities and economic progress of a region
or a country go step-in-step. Without reliable and high quality power, economic
development is not feasible.
3.1.7 Deregulation of power market

Trends from more develop countries show that at some stage in future, LMS countries
may have to gradually liberalise their power market, which would bring in new
pressures to improve performance and competitiveness. For CLP Power of Hong
Kong, anticipation of market reforms was one of the drivers to adopt a formal asset
management programme (see the case study on CLP Power in Chapter 6).
3.1.8 Tightening regulations

Tightening up of regulatory environment: Under pressure from retail consumers and
industry, national regulatory agencies are also tightening up the regulations (power
quality, reliability, customer service, cost, health, safety) governing power distribution
business. For example, utilities today have to cope with increasingly stringent
Guaranteed Service levels (GSL), Incentive Base Regulation (IBR), Minimum Service
Level (MSL), etc.
3.1.9 Pressure of growing demand

Growing demand: There has been steady growth in demand of electric power in the
LMS countries, further putting pressure on its aging power infrastructure (see Fig. 2.6).
8,000 7,857
2004 2011
7,000 6,800
6,000
5,000
5,000
4,095
4,000
3,000 2,670
2,028
2,000
1,500 1,582
1,000 750
327
273 409 251
0
EDC EDL HCMCPC HNPC MEA EVNNPC EVNCPC EVNSPC
Fig. 2.6 Growth in Demand of Power in LMS Utilities3

As an example of the applicability of above challenges to LMS utilities, in a forum on
asset management in June 2012 in Thailand, Hochiminh City Power Corporation (EVN
HCMC), one of Vietnams leading power companies, cited4 the following challenges:
High expenditure on maintenance and investment for refurbishment

Sudden system failure
Fast increasing electricity demand
Aging network
3
Source: LMS Harmonisation Phase 2 Study. Presented at 7th LMS Harmonisation Forum in September 2013.
4
Presentation by EVN HCMC titled, 6th Lower Mekong Sub region Harmonisation Forum

25|
3.2 Benefits of asset management

How well assets are managed affects not only the financial performance of an enterprise, but
also its performance, risk situation, occupational health of employees, the environment and, of
course, the price of power. For power distribution utilities, the benefits of asset management
programme include:
3.2.1 Achievement of organisational strategic objectives

The ultimate goal of an asset management programme is to enable a power
distribution utility to achieve its strategic objectives.
Long-term planning and performance sustainability.
Improved corporate reputation and image.
3.2.2 Higher performance and stakeholder satisfaction

Asset management programme leads to improved performance (higher reliability
and quality of power) and higher customer satisfaction.
Higher return on investment.
Best value-for-money within a constrained funding regime.
3.2.3 Improved risk management and compliance

Key objective of asset management is to strike a balance between conflicting
objectives of cost, performance and risk. Better management of risks is a natural
outcome of an asset management programme.
Improved health, safety and environmental performance.
3.2.4 Sustainable high performance

Ultimately, asset management capability moves an organisation towards high
performance and sustainable operations (Fig. 2.7).
Performance but Performing

Unsustainable/ Sustainably &
Output Performance
Uneconomic Economically
Under
Promising
Performing
Asset Management Capability
Fig. 2.7: Asset Management Leads to Performing and Sustainable Organisation5
5
Source: AMCL

| 26
4 Core principles of asset management

The whole concept of a successful asset management programme rests on certain key principles.
4.1 Line of sight: Alignment with strategic business objectives

The line of sight or alignment between the overall strategic direction of an organisation
and its asset management programme is one of key principles (Fig. 2.8). Asset management
programme is not a stand-alone initiative or an end in itself, but it a means to achieve the
strategic objectives of an organisation.
Corporate Objectives
& Strategy
Other Policies Asset Management Other Policies

Policy
Asset Management
Strategy
Asset Management
Objectives
Asset Management
Plan
Work Execution
Fig. 2.8: Key Principle of Asset Management: Line of Sight between

Organisations Strategic Plan and Asset Management 6
4.2 Lifecycle management

Asset management programme requires an organisation take the whole life view of its assets,
from procurement to utilisation to maintenance to disposal (Fig. 2.9). The focus on life cycle
based management helps in avoiding the compromise of long-term benefit in favour of short-
term gains.
Create
Dispose Operate
Maintain
Fig. 2.9: Key Principle of Asset Management: Lifecycle Management of Assets

6
Source: AMCL

27|
4.3 Risk management

Managing risks is one of the key enablers of a successful asset management programme.
Decisions like whether to opt for preventive maintenance or condition-based maintenance are
based not just on costs but also on the associated risks.
4.4 Systematic process

An asset management programmes promotes a methodical approach towards consistent,
rational and auditable decisions all across the organisation. Its a move.
4.5 Focus on all time horizons: Short, medium and long

Asset management helps an organisation to achieve not only its short-terms goals, but also
its medium and long-term goals.
5 International standards/specifications of asset management

For any organisation, one of the key milestones in the journey of asset management is formal
certification of its asset management practices against internationally recognised specifications/
standards. Such a certification reflects that an organisation is managing its assets following
internationally proven and accepted best practices. In this context, the asset management team
should be aware of the following two international specifications/standards:
PAS 55 specifications
ISO 55000 series of standards
5.1 PAS 55 specification

Originating through a multi-industry effort in the UK in 2004 and updated in 2008, PAS
55 (Publicly Available Specification) has been published by the British Standards Institution
(BSI) in collaboration with the Institute of Asset Management, and 49 organisations from 15
industries in 10 countries. Widely adopted across the world, PAS 55 has been translated into
Chinese, French, Portuguese, Russian and Spanish.
PAS 55 was drawn up to provide best practices in asset management for asset-intensive
industries, including utilities, and its focus is primarily the management of physical assets.
PAS 55 is published in two parts:
PAS 55-1: Specification for the optimised management of physical assets

PAS 55-2: Guidelines for the application of PAS 55-1
The specification is structured around the Plan-Do-Check-Act cycle, which is the process
typical of ISO standards.
5.2 ISO 55000 series of standards

Published in 2014, the ISO 55000 family of standards for asset management comprises three
documents:

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ISO 55000: Covers an overview of asset management, principles and terminology

ISO 55001: Defines the requirements for a management system for effective asset
management
ISO 55002: Provides guidance on implementation of ISO 55001
5.3 Alignment between PAS 55 and ISO 55000

ISO 55000 originates from PAS 55 and there are many similarities between the two, such as line
of sight between organisations strategic objectives and the objectives of asset programme;
life cycle based decision making; and focus on risk management.
There are some differences as well. Whereas PAS 55 is focused on physical assets, ISO 55000
targets all kinds of assets (physical, human, financial, information and others). As a result,
ISO 55000 uses more generic language that can be applied across wide variety of assets. In
addition, there are also some differences in terminology, general requirements, framework,
etc. You can get more information on the alignment between PAS 55 and ISO 55000 from:
http://www.assetmanagementstandards.com/
According the above Web site, it is likely that PAS 55 will continue to be popular as expanded
guidance on the management of physical assets.

What key physical assets we own?
Performance, risk and cost -- out of these three conflicting priorities that need to be balanced,
which one has so far dominated our operations and business? In other words, which of the
three we pay most attention to and which one currently receives least attention?
What are our answers to the questions listed in item 2.3 (Grounds-up understanding)?
Of the various drivers listed, which ones apply to our business most?
Which are the top three benefits that matter to us most?
Do we currently observe line of sight principle between organisational strategic objectives
and our asset management policies?
How can we spread better understanding of asset management, and its drivers and benefits
among our staff?

29|
Chapter 3: Asset Management Framework

Like a building is supported on a framework of columns and slabs, asset management system is also
supported on a framework of certain key elements. These elements join together to provide a stable
structure, functionality and sustainability to an asset management programme. This chapter focuses on
the overall framework of an asset management system. Specifically, this chapter:
Explains the relationship between high-level organisational plan and asset management system;
Introduces the overall framework of an asset management system
Explains the four key foundational elements of an asset management system framework
1 Overall framework of asset management

The discussion about an asset management framework should start with a utilitys strategic business
plan because, as highlighted in the previous chapter, asset management system in itself is not
the end; it is means to a bigger goal: achievement of an organisations strategic business plan7. A
strategic business plan is a high-level roadmap, which essentially sets out the long-term direction of
an organisation, and it comprises the following key elements:
Vision (Where does an organisation sees itself in the long-term future?)

Mission (Why does an organisation exists? What specific contributions it strives to make in the
society?)
Values (What does an organisation stands for? Which key principles guide its decisions and
actions?)
Objectives (What are the specific long-term goals that it plans to achieve?)
Strategy (How will it achieve its objectives?)
As an example of the first two items in the list above, here are the vision and mission of Hochiminh
City Power Corporation (EVN HCMC).
Vision: Become the top enterprise in power supply sector with high prestige and quality in Vietnam
and in the region.
Mission: Fully respond to customers demand for electricity with high quality and perfect services.
Taking the direction and inputs from organisational strategic plan, asset management systems
policy, strategy, objectives and plan are prepared. Together these four elementspolicy, strategy,
objectives and planform the foundation of an asset management system. Everything else down
the line flows from these four elements.
7
Definition of organisational strategic plan (PAS 55-1:2008): Overall long-term plan for the organisation that is derived from,
and embodies, its vision, mission, values, business policies, stakeholder requirements, objectives and the management of its
risks.

| 30
Organisational Strategic Plan
Asset Management - Policy, Strategy,

Covered in this chapter
Objectives and Plan
Asset Management Enablers Covered in Chapter 4
Implementation Covered in Chapter 5
Review and Continuous Improvement Covered in Chapter 6
Fig. 3.1: Overall Framework of Asset Management System
Once the foundation is in place, the next element of the framework is enablers, which are supportive
systems, procedures, processes and resources that enable an organisation to implement an asset
management system. PAS 55-1:2008 specifies the following six enablers:
Organisational structure to support asset management system;

Training;
Communication system;
Documentation system;
Information management system;
Risk management system; and
Change management system.
With enablers in place, an organisation is ready to implement its asset management system, which is
the next element of the framework. Under implementation, all types of assets are managed through
practices covering the entire life cycle of assets.
Finally, to ensure the system remains on track and it improves over time, the last element in the
framework is review and continuous improvement.

31|
As shown in Fig. 3.1, this chapter covers the details of the foundational elementspolicy, strategy,
objectives and planand subsequent chapters cover the rest of the elements of the asset
management framework.
Typically, many utilities have some form of asset management going on in the form of inspection
and maintenance activities, practices to follow standard technical specifications for equipment or
carrying out failure investigations, but few have the whole asset management framework in place.
This framework, however, is the key to deriving the full benefits of an asset management programme.
2 Foundation of framework: Policy, strategy, objectives and plan

The effectiveness of a utilitys asset management system and consequently the health of its business
depend on the following four key elements that form the foundation of its asset management
framework:
Asset management policy

Strategy
Objectives
Plan
The following sections describe each of the above elements in detail.
2.1 Asset management policy

An asset management policy is a means for the top management to publicly state its
commitment for an asset management system. It is similar to how an organisation underlines
its commitment to safety or environment through a safety or environmental policy statement.
Directed at managers, employees and stakeholders, asset management policy is a high

level statement of an organisations principles, approach and expectations related to asset
management.
Here is an example of generic asset management policy from PAS 55-1 2008:
We are committed to maximising the return on our shareholders investments through providing
high value services to our customers in a legally and environmentally compliant and sustainable
manner, without compromising the health and safety of our employees, customers or the public.
We shall achieve this by ...
The asset management policy should be drafted in a way that it is consistent with the
organisations overall approach to risk management.
2.1.1 What should a policy cover?

PAS 55-1: 2008 recommends that an asset management policy should cover or align
with or ensure the following:
Organisational strategic plan: Policy should essentially flow from an organisations

strategic business plan (vision, mission and business objectives).

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Mandatory regulations (safety, health, environmental, legal, etc.): Policy

should align with all applicable mandatory regulations and existing policies. Usually,
organisations include a compliance statement in their asset management policy.
Risk: The policy should be consistent with organisations overall risk and any existing
risk management framework.
Clear framework: Policy should be clear and specific enough to lead to asset
management strategy, objectives and plans.
Continual improvement: Since an asset management programme is a never-ending

journey, the policy should include a commitment to continuous improvement.
Functional policies: Asset management policy should also align with other functional
policies, such as capital investment, operation, maintenance or contracting policies.
An organisation has the flexibility to define the boundaries of its asset management
system according to its needs. It may choose to implement PAS 55-1 for the entire
organisation or only to some parts of it. But the scope of the asset management system
should cover the full portfolio of assets that are required for the successful delivery of
the organisational strategic objectives.
2.1.2 Industry examples

Powerco Limited (http://www.powerco.co.nz/) owns and operates extensive urban and
rural electricity distribution network in New Zealand. Its asset management policy8
statement states:
To ensure Powercos asset management practices achieve an optimal approach to the

management of assets (i.e. maintenance and operation, renewal, development and
disposal) in order to deliver a safe network at the required level of service in a manner
that effectively controls and balances whole of life costs and risks.
Western Power Distribution is a UK based electricity distribution network operator and

it serves over 7.8 million customers. Its network comprises 221,000 kms of overhead
and underground cables and 185,000 substations. Its policy statement can be read on
the following link:
http://www.westernpower.co.uk/About-us/Our-Business/Our-network/Asset-
management.aspx
2.1.3 Tips for drafting an effective asset management policy

Clear, concise statement: Write the policy using simple, short and specific words, and
short sentences. A simple, concise and clear policy statement is easy to understand for
all stakeholdersand so is inherently impactful. A vague, complicated policy statement,
though may appear impressive, fails to connect with the audience and make an impact.
8
Powerco Asset Management Plan 2013.

33|
Involvement of stakeholders: Discuss the draft policy with the relevant managers,
employees and other stakeholders, and amend according to their valid inputs to achieve
an appropriate level of consensusand commitment.
Communicate: Once ready, communicate the policy to all relevant stakeholders,

including contracted service providers. Awareness of policy is the key to enabling
people appreciate an organisations commitment to its asset management system.
2.2 Asset management strategy

An asset management strategy outlines how the asset management policy will be achieved. In
a way, it is a strategically-chosen path that will take the organisation towards the direction set
out in the policy and enable it achieve the objectives (for details, see item 2.3 later). It clearly
states the approach that will be used to manage the assets.
For example, a utility with a policy decision to increase competitiveness and reliability may
choose to focus on some of the following strategies to ensure fulfilment of the stated policy:
Reduce T&D losses

Create up-to-date asset registry with details of all assets
Focus more on condition based and reliability based maintenance
Establish processes for lifecycle based costing of assets
Basically, the policy is about the broad intent (or direction) whereas strategy is about the right
path to fulfil that intent.
2.2.1 Guidelines for forming an effective strategy

While specific strategies would differ from utility to utility, here are some common
guidelines for strategy formation:
Specific, clear and detailed: The strategy should provide sufficient information
and direction to enable preparation of specific asset management objectives and
plans.
Alignment with other strategies: An asset management strategy should be

consistent with the asset management policy, organisational strategic plan and
other strategies. PAS 55-1:2008 provides the following example to show the
alignment between asset management and business strategies of an organisation:
Business strategy: To improve the current profit before tax by 15% within a period of
3 years through expanding capacity to meet the predicted 10% increased customer
demand, funded through private finance, which will be repaid through future profits.
Corresponding asset management strategy: To upgrade the core infrastructure,

to meet the increased demand, by efficiently investing up to $ xx investment over
the next 5 years, and development and implementation of optimal operating and
maintenance strategies.

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Key contents: Strategy should include the desired outcomes / targets, broad plans,
resources, timelines and responsibilities.
Life cycle management: The strategy should consider life cycle management
requirements of the assets.
Risk: Strategy should also take into account the risk associated with a power
distribution companys assets, services, customers, employees, etc.

Powerco of New Zealand has declared the following set of strategies9 in its Asset
Management Plan (AMP) to comply with its asset management policy and objectives:
Safety
Safety through design: Design asset installations and choose network equipment
to minimise safety risks.
Contractor approval system: Contractors selected based on their commitment to
Powercos safety and other requirements.
Reliability
Focus on worst-performing feeders: Target spending for renewal and refurbishment
work on the worst performing feeders.
Focused use of network automation: Increase focus on automatic isolation of
faults, particularly for feeders serving large numbers of customers.
Increased rates of conductor replacement: Increase in conductor replacement
because such failures have the potential to not only impact reliability, but also
increase the risk to public safety.
Asset stewardship
Enhance renewal planning approach: Enhance the core processes for the
expenditure on renewal of assets. Asset maintenance and renewal forms around 36%
of current expenditure and is set to increase to around 48% within 10 years.
Adopt health and criticality indices: Progressive shift from age-based decision-
making to health and criticality indicators to provide indication of the remaining
useful life of assets.
Network Performance Model: Adopt more automated processes (based on
historical information) for targeting new investment on poor-performing areas of
network instead of currently used manual processes.
Cost efficiency
Enhance procurement arrangements: Leverage companys considerable buying
power to derive greater benefits in procurement of equipment.
Standardisation of network equipment: Continue implementing progressive
standardisation of equipment on networks, which brings benefits in both procurement
and field operation costs.
9
Source: Publicly available Asset Management Plan (AMP) of Powerco Limited, a power distribution company in New Zealand.
The strategies described above are the edited version of the full range of strategies that are listed in the AMP

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Transformer monitoring: Move towards greater online monitoring of transformers

to avoid manual logging and reduce fault response costs.
2.3 Asset management objectives

The effectiveness of an asset management programme rests on defining a set of clear, practical
objectives or targets that are supposed to be achievedand against which the performance of
the programme can be measured.
Objectives may vary from broad to narrow to very specific depending on whether these are
applicable to the whole asset management system or asset management activities or the
performance or condition of specific assets.
For example, a utility may decide to set the following objectives:
Return on Assets: 6-7%

SAIDI: <50 min
T&D losses: Less than 5%
If the asset management policy is an overall intent and the strategy a chosen path to fulfil that
intent, objectives are clear milestones to be achieved along the chosen path.
2.3.1 Guidelines for setting objectives

PAS 55-1:2008 provides the following guidelines for setting asset management
objectives:
SMART: Asset management objectives should be SMART: Specific, Measurable,

Achievable, Realistic, Time-based.
Not only SMART objectives would inspire action throughout the organisation, these
would also infuse accountability to the whole asset management programme. Without
a specific destination in sight, people can very quickly lose commitment to initiatives
like asset or quality or safety management programmes.
Aligned and consistent: Objectives should be consistent with the asset management
strategy and over business objectives.
Compliant: While setting objectives, one should consider legal, regulatory, statutory
and other similar statutory requirements.

Powerco of New Zealand has declared the following set of objectives10 in its Asset
Management Plan (AMP):
Safety: Keep the public, our staff and our contractors from harm.
Reliability: Deliver reliable network that meets the needs of our customers.
Asset stewardship: Enhance asset management capability to the benefit of our
customers.
Cost efficiency: Continuously seek out and deliver cost efficiencies.

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The above broad objectives lead to further specific targets and goals:
Safety
Injuries to public (target: 0)
Lost-time injuries (target: 0)
Reliability
SAIDI: (target: 210 minutes)
Asset stewardship
AMMAT 11 score: 2.9 by 2018
Cost efficiency
Capacity and asset utilisation measured by dividing peak zone substation demand
by aggregate transformer capacity (target: 50%)
2.4 Asset management plan

Asset management plans convert asset management strategy and objectives into specific
actionable tasks to be executed. Essentially, asset management plans define the following
four elements:
Activities/tasks: The specific activities required to implement the asset management

strategy and achieve the objectives.
Responsibilities: The responsibilities, roles and authorities of different people who would
be executing the plans.
Timeline: The timelines for various actions.
Resources: All the necessary resources for the implementation of the plans, e.g., financial,
human, equipment, instruments, logistics, etc.
2.4.1 Key features of asset management plan

Life cycle: The plans should cover the complete life cycle of the assets, i.e., creation,
operation, maintenance and disposal of assets.
Consistency: All plans should be consistent with the asset management strategy
and objectives.
Hierarchical scope: At a very high level, asset management plans cover entire fleet
of assets (whole MV networks comprising substations; overhead and underground
cables; and transformers). Drilling further down in each area these plans specific
activities to be performed on individual assets and asset systems.
Communication: The asset management plans should be communicated to all
relevant stakeholders with an appropriate level of details.
Periodic review: The asset management plans should be reviewed periodically to
ensure that they remain updated and effective.
2.4.2 Contingency plan

According to PAS 55-1:2008, asset management plans should also include contingency
10
Source: Publicly available Asset Management Plan of Powerco Limited, a power distribution company in New Zealand
11
AMMAT: Asset Management Maturity Assessment Tool (Prescribed by regulatory authority in New Zealand)

37|
plans. These plans establish processes for identifying and responding to incidents and
emergency situations, and maintaining the continuity of critical asset management
activities. Contingency plans should include:
Contact information: Details of essential personnel, emergency services and

external agencies, including relevant contact details.
Communications: Procedures for sending out internal and external communications
in case of emergency situation.
Emergency response: Details of specific steps an organisation will take to maintain
or restore its critical asset management activities in the event of a disruption and
the process to bring the situation back to normal. The plan should also describe
the resources required, and operations and maintenance of affected/alternative
equipment, facilities or services that could be required during disruptions, incidents
or emergency situations. In addition, the plan should also describe the process.
Records: Procedures for recording essential information relating to the emergency.
These plans should be periodically reviewed, tested and revised as necessary to keep
ensure optimum emergency preparedness.
3 Alignment with other management systems: Plan-do-check-act

The framework of asset management system specified in PAS 55-1:2008 is based on PDCA (Plan-Do-
Check-Act) framework, which is the basis of many other international standards. Thus, following PAS
55 enables an organisation to align its asset management system with other management systems
(e.g., ISO 9000 for quality, ISO 14000 for environment, BS OHSAS 18001 for occupation health).
Fig. 3.2: PDCA Framework of PAS 5512
12
Source: P xiii of PAS 55-1

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In brief, PDCA framework in PAS 55 includes:
Plan: Establish the asset management policy, strategy, objectives and plans.
Do: Establish the enablers for asset management (e.g., asset information management system)
and implement the asset management plans.
Check: Monitor and measure results against asset management objectives and report the
results.
Act: Take actions to ensure that asset management objectives are achieved and to continually
improve the asset management system.

What is our vision? What is our mission? What are our values? What are our key strategic
business objectives? What is our strategy to achieve the objectives? Why all these elements
matter for asset management?
Do we possess all the four foundational elements of an asset management framework?
How can we formulate/fine-tune an asset management policy, strategy, objectives and plan?
Are our asset management objectives/goals measurable?
What is our emergency response plan?
How can we raise the awareness of our asset management plan among all stakeholders?

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Chapter 4: Key Enablers of Asset Management

Programme
The previous chapter introduces the overall framework of an asset management system and describes
the four key foundational elements of the framework: Asset management policy, strategy, objectives and
plan. This chapter focuses on the next important element of the framework: enablers. These enablers are
basically the support infrastructure an organisation should have before it can successfully implement an
asset management system.
Specifically, this chapter:
Explains the following eight enablers: organisational structure, outsourcing, training, communication,
documentation, information management, risk management, legal and other requirements, change
management.
1 Key enablers of asset management programme

Asset management policy, objectives, strategy and plancovered in the previous chapter--together
are like a blueprint of an asset management system. But a blueprint is not a building. For successful
implementation of an asset management system, an organisation needs to put in place certain
systems, processes and structures, known as enablers in the PAS 55-1:2008 terminology. Without
these enablers, the whole asset management programme could be derailed due to lack of resources,
conflicting priorities, lack of communications, exposure to unmitigated risks, etc.
To ensure smooth, effective and efficient implementation of an asset management system, PAS 55-
1:2008 recommends the following enablers:
Organisational structure
Outsourcing of asset management activities
Training, awareness and competence
Communication, participation and consultation
Documentation
Information management
Risk management
Legal and other requirements
Management of change
As shown in Fig. 4.1, with the support of these enablers, an asset management system moves from the
concept stage into actual implementation mode. The following sections describe each the nine enablers.

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Asset Management Blueprint: Policy,
Functioning Asset Management

UNDER IMPLEMENTATION
Objectives, Strategy & Plan
System
Management of change
Outsourcing activities
Training awareness
Risk management
Communication
Documentation
Org. structure
Compliance
Fig. 4.1: Key Enablers of Asset Management Programme
1.1 Suitable organisational structure for asset management programme

Successful asset management programme requires a team of dedicated personnel with clearly
defined roles, responsibilities and authorities to cover each element of the journeyfrom
policy, strategy and plans to implementation, review and improvement. Creating a suitable
organisational structure to support an asset management system is the very first enabler an
organisation needs to put in place.
PAS 55-1:2008 specifically mentions that an organisation need not develop a separate
organisational structure if its existing structure can support the asset management programme
in totality. However, the specification provides the following recommendations:
1.1.1 Top managements commitment

Typically, in big organisations, the top managements focus is on high-level strategic
issues (major investments, strategy, etc.) and asset management itself is not seen
as a real strategic issue. Instead, it may be seen as more of a functional level issue,
more related to operations and maintenance of equipment. PAS 55-1:2008, however,
specifically stresses the crucial role of top managements commitment to asset
management programme for the following three reasons:
Stakeholders interests
At the level of only top management, it is possible to understand the interests of all
stakeholders (consumers, investors, retailers, generation and transmission partners,
regulators, employees) and ensure that asset management programme is suitably
aligned with the expectations of all stakeholders.

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Synergy across organisation

Asset management policy, strategy, objectives and plan can adversely affect the
plans of other parts of organisation and vice-versa. With top managements active
involvement, such areas of conflicting priorities can be identified and smoothened out.
Availability of resources
Asset management programme directly affects both CAPEX and OPEX plans for short,
medium and long term, an area where top managements involvement is essential.
1.1.2 Clear responsibilities

Top management should assign clear responsibilities for the various functions
required, such as asset strategy formation, planning, design, procurements, operations,
maintenance, network monitoring, customers relations, financial analysis, etc. In terms
of hierarchy, the structure should cover the roles and responsibilities of people from
top management to middle management to operational personnel to field staff to
contractors personnel.
1.1.3 Documented and communicated

The final structure should be documented and communicated to all relevant personnel.
1.1.4 Three-part organisational model

Considering the complexity involved in managing a wide range of assets in a sustainable
way, many utilities are moving away from one huge pyramidal organisation structure
to a three-part structure. The three-part structure comprises three sub-organisations:
Asset owner
Asset manager
Asset service provider
Asset owner focuses on overall corporate strategy and takes care of financial, technical
and risk criteria. Asset manager translates these criteria into multi-year asset plans and
budgets. Asset service provider executes the plans and provides feedback on costs and
performance.
Fig. 4.2 shows conceptual model of the three-part structure. This model is a departure
from the traditional top-down model in which the power resides at the top and the
responsibility of the three key functionssetting overall direction, planning and
executionis often mixed and diluted.

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Asset
Asset
Service
Owner
Provider
Asset
Manager
Key Responsibilities
Asset Owner Asset Manager Asset Service Provider
Setting direction: Corporate Planning: Planning (operations Execution: Procurement,
policy, strategy, objectives, and maintenance), risk construction, operations,
stakeholder interface management, life cycle maintenance, outage
costing, project evaluation management, performance
monitoring, reporting
(feedback to Asset Manager
and Asset Owner)
Fig. 4.2: Three-Part Asset Management Organisational Model
1.2 Outsourcing of asset management activities

Many activities that affect the condition, age and performance of assets, such as maintenance,
operations or inspections, are often outsourced by power distribution companies. While
outsourcing may be a business need, it should not adversely impact the overall management
of assets. PAS 55-1:2008 recommends:
In case an organisation chooses to outsource certain activities related to asset management

programme, it should determine and document how these activities will be controlled and
integrated into the overall asset management system.
Specifically, the organisation should identify and document:
Scope, boundaries and interfaces (with organisations own processes) of outsourced

activities.
Responsibilities within the organisation for managing the outsourced processes and
activities.
Processes for the sharing asset management knowledge and information between the
organisation and the contracted service providers.

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1.3 Training, awareness and competence

Once the asset management team is organised, the next important step is to equip the
people with necessary knowledge and skills. The organisation should ensure that all personnel
undertaking asset management related activities, including the contract service providers,
have an appropriate level of competence.
Broadly, an asset management organisation requires three categories of competencies:

management, engineering and information.
Management Engineering Information Management

Business strategy Planning Information systems (GIS,
Regulatory strategy Design EAM, SCADA, etc.)
Organisational design Construction System design and
Process design Operations integration
Resource planning Maintenance Business intelligence
Financial risk Inspection and testing Asset registry
Data analysis Knowledge management
Reliability
Technical risk
Table 4.1: Areas of Competency for Asset Management
Typically, utilities would be strong in the engineering skills, but would need to develop greater
strength in the other two areas (i.e., management and information management).
In addition, PAS 55-1:2008 recommends competence in the following areas:

Roles of and responsibilities of various team members.
Importance of complying with the asset management programme requirements and
potential consequences of non-compliance with specified asset management processes.
Asset management related risks, especially the risks associated with their work activities.
Workplace safety and health practices.
Ensuring competence means first identifying the specific competency requirements (some
of these listed in Table 4.1) for the asset management team, doing a gap assessment across
the team (finding who lacks which specific pieces of knowledge and skills) and providing the
necessary training to fill the gaps.
1.4 Communication and consultation

A functioning asset management system involves different layers of management and
operating personnel, and multiple stakeholders (regulators, customers, retailers, contracted
service providers, etc.). With information being continuously generated in different pockets
of the organisation (e.g., inspection reports generated at a particular substation in the field,
maintenance plans prepared in the planning department, new regulations issued by the
regulator), communication to and consultation with all relevant stakeholders becomes an
important enabler of asset management system.
PAS 55-1:2008 recommends that an organisation should ensure smooth communication of

asset management information among all members of asset management team (including
contacted service providers).

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Beyond communication, asset management team should consult with relevant stakeholders for the:
Development of the asset management strategy, objectives and plans;

Development of functional policies, engineering standards, processes;
Risk assessments and determination of controls;
Incident investigation; and
Continual improvement of the asset management system.
1.5 Documentation
The success of an asset management system also depends on how uniformly and consistently
its policies, procedures, results, etc. are communicated, understood, followed and available
for future reference. A well-structured documentation system is also an important enabler.
PAS 55-1:2008 recommends that an organisation should establish a proper documentation

system, which should include the description of asset management policy, strategy, objectives,
procedures, records and other key elements of the asset management system. The organisation
should document all such procedures and operating criteria whose absence in the written
form could jeopardise the effectiveness of the asset management system.
The documents should be kept updated (including version control) through periodic review and revision.
The documentation system, however, should not become an end itself: The extent of
documentation should be proportional to the level of complexity and risks being managed.
It should be kept to the minimum required for effectiveness and efficiency of the asset
management programme.
1.6 Information management

Today, in the era of smart grid, every aspect of power distribution business is supported
by information systems. These systems provide control and monitoring of network, load
management, transformer condition assessment, workforce planning, maintenance scheduling,
reliability analysis, performance tracking, outage management and other functionalities. Most
important, information management helps utilities make data-driven decisions. The quality of
asset management-related decisions and plans depends on the quality and robustness of the
information systems.
Some of the common information systems employed by distribution utilities include:
Customer Information System (CIS)

Distribution Management System (DMS)
Enterprise Asset Management (EAM)
Geographical Information System (GIS)
Outage Management System (OMS)
Supervisory Control and Data Acquisition (SCADA)
Work Management System (WMS)
At the foundation of information management is an asset registry, which is a repository of key

network assets and their important details (e.g., rating, make, age, etc.). Many utilities often
dont have an updated asset registry. Other challenges include legacy hardware, internally

45|
developed applications, a large number of separate databases, and a large amount of data that
is not in electronic format.
1.6.1 PAS 55-1: 2008 recommendations

PAS 55-1:2008 recommends that an organisation should establish a robust information
system covering all phases of the asset life cycle. And the system should include the
following features:
Uniform availability: All employees and stakeholders, including contracted

service providers, should have access to the latest and relevant information.
Consistency: Where multiple asset management information systems (for
different aspects of the programme) exist, the information provided by these
systems should be consistent.
Validity: Through periodic review and revision (including version control), the
quality and validity of information should be maintained at all times. The system
should ensure that obsolete information is promptly removed from the system.
Responsibilities: Clear allocation of appropriate roles, responsibilities and authorities
regarding the origination, generation, capture, maintenance, assurance, transmission,
rights of access, retention, archiving and disposal of items of information.
Archiving: Specific information that is required for legal or other purposes should
be identified and archived.
Security: Information security should be ensured (e.g., electronic information
should be backed up regularly and recoverable)
1.6.2 Status of information systems in LMS utilities (a snapshot)

In a survey (more details in Chapter 7) of Assessment Management Maturity among
LMS utilities in 2012, the following question was asked to nine LMS utilities:
Do you have a computerised asset data and maintenance management system?
In response, seven out of nine utilities informed that they didnt have computerised
system and relied on manual records.
1.7 Risk management

Almost every activity in the power distribution business involves some kind of risk. Even
though it may be possible to identify risks and mitigate risk, it is not possible to completely
eliminate risks.
Traditionally, the focus of risk management in power distribution companies has been on reliability.
Reliabilitythe ability to provide power without interruptions and restore power in case of faults
is surely the most important performance requirement for an electricity distribution utility. But
gradually, many distribution companies are now showing concern for other kinds of risks, such as
economic performance, environment impact, occupational safety, etc.
Risk management is the process of identifying, analysing, evaluating and controlling the risks
that can prevent an organisation from achieving its core business and asset management
objectives. The performance of an asset management programme is tightly linked to how an
organisation establishes, implements, monitors and improves its risk management system.

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1.7.1 Types of risks in distribution business

The business of power distribution involves several inherent risks, such as:
Public safety: Incidents of fatality or harm to member of public due to

unauthorised access to and contact with network assets, asset failure, etc.
Workplace safety: Incidents of fatality or harm to staff or contractor due to
asset failure, inappropriate work methods or inadequate training.
Natural Disasters: Damage to assets caused by natural disasters like cyclones,
tsunami, earthquakes, floods, etc.
Network Asset Failure: Failure of network assets (switchgear, transformers,
cables) as a result of inadequate planning, design and construction, maintenance
or operations.
Lack of ownership: Ownership and control of assets is not properly defined.
Legislative Non-compliance: Non-compliance with statutory or regulatory
requirements due to lack of oversight.
Information system related risks: Security breaches, failure of IT or SCADA
systems or data loss, resulting in reliability, financial and safety issues.
Upstream risks: Loss of power from generation companies or transmission side failures.
Terrorists, malicious acts: Acts of breach of network security and harm due to
terrorist-related or malicious attacks.
Each organisation has to assess its risks in the all-round context of its geographical
location, security situation, age of assets, competence of manpower, robustness of
information systems, overall systems, processes and practices, etc.
1.7.2 Risk management process

The risk management capability of an organisation is built upon its risk management
process, which systematically identifies, analyses, evaluates and highlights required risk
mitigation or risk treatment measures (Fig. 4.3).
Establishing the context

Communication and consulation
Risk assessment
Monitoring and review
Risk identification
Risk analysis
Risk evaluation
Establishing the context
Fig. 4.3: Risk Management Process13
13
Source: ISO 31000

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Establishing context
This step is about setting the parameters or boundaries around an organisations
risk appetite and risk management activities. It requires consideration of both
external and internal risk-related factors. External factors include social, cultural,
political and economic issues, while internal factors involve strategy, resources
and capabilities.
Risk identification and analysis

Risks can be identified through periodic reviews (say, every quarter), and in
response to specific events, fault reports and condition assessments. Some of the
tools and technologies used by distribution companies for early detection of risks
include:
Transient Earth Voltage (TEV): Detect partial discharge

Ultrasound detector
Oscillating Wave Test System: Partial discharge in cables
Thermal camera: Detects hot spots
SF6 gas detector: Detects gas leakage
Polarisation Index/Dielectric Absorption Rate (PI/DAR): Detects cable (paper/
XLPE) insulation condition
Switchgear: Profile test, vacuum test, contact resistance, insulation, etc.
Transformer: Oil test (dielectric, moisture, acidity, colour, Dissolve Gas Analysis
(DGA), Furan contents (paper condition), winding resistance, ratio test,
insulation resistance, etc.
Following identification, the next step is to understand both the nature of a risk
and its level. Typically, analysis involves quantitative assessment of risks in terms
of key parameters: likelihood of occurrence, consequence (or severity of impact)
and frequency. Based on these parameters and weighted formula, risk scores are
calculated and accordingly risks are prioritised.
Risks can range from relatively high frequency but low impact occurrences, such as
tree interference, to low probability but high impact events, such as the total loss
of a zone substation for an extended period.
Risk evaluation
Based on the risks analysis, specific risks are evaluated to ascertain the level of
response (what to do, who will approve, when should be the next review). The
evaluation also takes into account any controls in place. A control is any policy,
practice or device that is supposed to modify (i.e., reduce or eliminate) a risk.
Risk treatment and prioritisation

An organisation can use both long- and short-term treatments to manage risks.
If the risk is not acceptable, mitigation measures are identified, which include
asset-based response (e.g., greater monitoring, earlier renewal, replacement
of certain parts, etc.), provision of additional back-up equipment or system,
revision to standards/processes/practices, additional insurance coverage, etc.
Mitigation measures also include compliance with public safety and workplace

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safety standards, vegetation management, training of personnel, compliance

with international design, construction, operations and maintenance guidelines,
seismic design features, data security and quality studies, disaster recovery plans,
emergency response plans, etc.
Some utilities categorise the risks as high, medium and low and accordingly
respond. See an example of this kind of risk-based planning in Table 4.2 below.
Degree of Risk Response

High risk Immediately take out of service
Perform offline diagnostics and invasive tests
Load adjustment / relocation /replacement /
refurbishment
Medium risk Condition-based maintenance
Both on-line condition monitoring and off-line
diagnostics
Adjustment to monitoring frequency based on health
index of the equipment
Low risk Calendar-based maintenance
Table 4.2: Categories of Risk and Response
Risk monitoring and review

The effectiveness of risk management system lies in its continuous monitoring and
review. Risk compliance reports are submitted to the top management for review
and approval of any decisions required. The periodic reviews help to ensure that
risks have been assessed correctly and that actions to reduce risks are identified,
reviewed, and where necessary implemented.
Communication and documentation with risk registers

The information on types of risks, associated consequences, and the current and
future mitigation measures should all be communicated to all internal and external
stakeholders, and documented as part of the risk management process.
Risk registers record the identified risks, risk classification and controls at different
levels of detail. And these registers are routinely reviewed and reported on.
1.7.3 PAS 55-1:2008 guidelines

PAS 55-1:2008 recommends that an organisation should follow a documented, well-
defined framework for the identification, assessment and control of risks over the entire
life cycle of its assets.

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Coverage of risks
As a minimum, the following risks should be considered over the entire life cycle of
assets:
Physical risks (functional failure, damage)

Malicious damage or terrorist action
Operational risks
Natural environmental events (storm, floods, etc.)
Risks associated with factors beyond organisations control (externally supplied
materials and services)
Stakeholder risks (failure to meet regulatory performance requirements or risks to
the reputation of the organisation)
Risk management methodolog

PAS 55-1:2008 recommends that an effective risk management methodology should:
Provide proportionate response to the level and extent of risks under

consideration;
Mitigate risks in a proactive rather than reactive way;
Respond to changes in risks over time;
Provide for the classification of risks to be avoided, eliminated or controlled by risk
management;
Include monitoring of required risk management actions to ensure both the
effectiveness and the timeliness of their implementation.
Quantification of risks
Where possible, significant risks, mitigation measures and consequences need to be
quantified in financial terms to enable objective analysis.
Use and maintenance of asset risk information

The information on identification of risks, risk assessments and controls should be
documented and kept up-to-date, where not doing so could affect the delivery of the
asset management objectives.
1.8 Legal and other requirements

PAS 55-1:2008 specifies that as part of its asset management programme, an organisation
should establish and follow processes for compliance with legal, regulatory, statutory and
other applicable asset management requirements.
All applicable legal and other external obligations or requirements should be identified and
incorporated into the corresponding elements of an asset management system. All related
information should be kept up-to-date and communicated to the relevant stakeholders.

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1.9 Management of change

All changes (e.g., introduction of new information systems or revised standards of maintenance
or replacement of overhead lines with underground lines or new contractors) that can impact
asset management activities should be managed in such a way that they dont add any
unnecessary risk and their implementation is not disruptive to the other asset management
activities.
PAS 55-1:2008 recommends that all risks associated with a change should be assessed before
its implementation. In particular, the impact on the following elements of an asset management
programme should be reviewed:
Organisational structure, roles or responsibilities

Asset management policy, strategy, objectives or plans
Processes for asset management activities

Out of the nine enablers, which ones do we have? Which ones do we need to create?
How different is our organisational structure from the model suggested in this chapter?
Do we have formal processes for communication and consultation?
How robust is our information system? Does it provide real-time information on the
performance and condition of all critical assets?
Is the required information easily accessible by all relevant people?
What are the key risks in our particular business that matter most and can cause significant
damage if not managed?
What is our current risk management process and how can we strengthen this process?
Do our current risk mitigation measures take into account an objective evaluation of risk?
Moving forward with asset management programme involves significant changes to our
traditional way of doing things. How should we prepare our staff to embrace the change for
the better?
Over the short-term, what specific actions can we take to strengthen at least three enablers in
our operations?

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Chapter 5: Implementation, Review, Continual

Improvement, Transformer, Cable and MV
Switchgear Asset Management Programme
Chapter 3 introduced the overall framework of an asset management system and described the four key
foundational elements of the framework: Asset management policy, strategy, objectives and plan. The
previous chapter focused on the next important element of the framework: enablers. The enablers are
basically the support infrastructure an organisation should build before it can successfully implement an
asset management system.
Moving beyond the enablers, this chapter focuses on the last two elements of the framework:
Implementation and performance review. Specifically, this chapter explains:
Three requirements during implementation.

Life cycle management, which is the core strategy of an asset management system.
The four main maintenance strategies used by utilities (corrective maintenance, time based
maintenance, condition based maintenance and reliability centred maintenance).
Requirement of tools and equipment.
Performance assessment and continual review.
Transformer asset management practices.
1 Implementation
Asset management plans define the activities and deliverables to be achieved, people responsible
for implementation, schedules, resources required, and monitoring and control mechanisms. While
implementing these plans, utilities should take into consideration the following three key factors that
affect the efficiency of implementation and mitigation of risks:
Constraints: The execution of plans should take into consideration the various technical,
operational, accessibility and financial constraints. For example, many asset-related maintenance
and upgrading activities often take place during the late night hours or during weekends to avoid
disrupting the power supply to the customers.
Monitoring and control: Monitoring of progress, variations, projections for the future and
necessary revisions to the plans should be an ongoing affair. Where necessary, the asset
management team should re-prioritise the work or change allocation of resources in order to
optimise the plan delivery when encountering unanticipated events.
Up-to-date information: As the plans are executed, asset information (condition, expenditures,
parameters, failures, etc.) should be updated and recorded on continuous basis.
2 Life cycle based management

If there is one strategy that is at the heart of a successful asset management system, it is life cycle
based management of assets. The following definition of asset management in PAS 55-1:2008
underlines the focus on life cycle of assets:
Systematic and coordinated activities and practices through which an organisation optimally and
sustainably manages its assets and asset systems, their associated performance, risks and expenditures

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over their life cycles for the purpose of achieving its organisational strategic plan.
PAS 55 defines life cycle as:
time interval that commences with the identification of the need for an asset and terminates with the
decommissioning of the asset or any associated liabilities
Over their complete life span, which can be 20-50 years, key assets of a distribution utility
(transformers, cables, etc.) go through the following four distinct phases:
Creation
Operation
Maintenance
Disposal
Create
Dispose Operate
Maintain
Fig. 5.1 Asset Life Cycle
The asset life cycle begins at the moment when the need for an asset is identified (say, new network
for additional consumers) and extends through planning and design, procurement, installation and
commissioning, operations and maintenance--and ends with retirement and safe disposal of the an
asset.
Often due to the way organisational processes are designed and lack of knowledge about the life
cycle management, utilities end up managing assets not in seamless, but in compartmentalised way.
For example, assets are bought not based on what they would cost over their total life span, but
based on their first cost. Similarly, maintenance activities are planned based on pre-determined time
intervals instead of the condition and criticality of an asset.
The shift towards life cycle based management requires an organisation to make asset life cycle a key
consideration for all its decisions, plans and activities.
2.1 Life cycle management: The big picture

Fig. 5.5 shows how the strategies and plans for the key phases of asset life cyclecreate,
operate, maintain and disposeflow from to asset management framework, which in turn, is
guided by the corporate strategic objectives.

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Corporate Strategic Objectives
Asset Management Framework:

Policy, Objectives, Strategy
Network Assets
Transformers, Cables, Switchgear & Others
(SCADA, etc)
Lifecycle Strategies and Plans

Create Operate Maintain Dispose
Fig. 5.2: Alignment from Corporate Objectives Down to Life Cycle Strategies of
Network Equipment
2.2 Create / acquire new assets

Creation of new assets is a critical, capital-intensive activity with long-term consequences.
This first phase in asset life cycle results from one or more of the following situations:
Building new power distribution network due to increase in demand

Upgrading existing assets due to increase in demand
Replacing existing assets that have reached this useful life
Acquiring new assets from another company
It not only includes initial planning and design, but also construction and commissioning
phases.
2.2.1 Planning Stage

The asset planning stage focuses on integrating the strategic objectives of the power
utilitys strategic plan and its annual business plan with the annual asset management
plan.
Capital investment planning should focus on optimising life-cycle cost and capital
projects prioritised to meet targeted network performance levels, power quality as
well as service requirements of customers. Capital investment planning also takes into
consideration the development of network capacity, network availability and reliability,
asset refurbishment, retirement, replacement and disposal.

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One of the main objectives is to ensure that the expansion of the power system is
optimally done to sustain current demand and to meet future demand. Other objectives
include compliance with statutory, regulatory and licensing requirements, transmission
and distribution grid codes, engineering specifications, and safety and environmental
standards.
All plans should be communicated to and shared with other key departments to ensure
all proposals are integrated with departmental/division annual business plans, ensuring
a common line of sight in fulfilling the utilitys strategic objectives.
2.2.2 Design Stage

At design stage, one of the key objectives is to select a design that is technically sound,
meets the utilities performance and risk management needs, and has the lowest life
cycle cost. This stage involves researching for new technologies, equipment designs,
specifications, standards and application guides that will allow for the selection of the
best-fit-for-purpose solution.
This stage should also take into consideration the available resources, especially
financial, as well as the need to upgrade personnel competency skills and knowledge,
and updating of processes in adopting new technologies and equipment design.
2.2.3 Procurement
Following the design stage, the procurement stage involves development of equipment
specifications for the procurement of new assets; pre-qualifying vendors; inviting bids
and carrying out technical and commercial evaluations.
The procurement specifications should cover quality assurance, type tests, factory
acceptance tests (FAT), warranty period, reference list, packing, handling and shipping
to site, application of bio-degradable or recyclable material, waste handling procedures,
and management procedures during disposal of equipment at end-of-life.
The final decision on which equipment (and technology) to procure should be based on
the best-fit-for-purpose and optimised total cost of ownership (TCO) for the duration of
an assets service life, and not solely based on the lowest first cost.
The procurement process should adhere to existing commercial, procurement and legal
policies.
2.2.4 Installation
This stage of the life cycle involves actual acquisition of assets and installation by
contractors. The installation contracts can be based on engineering-procurement-
construction (EPC) or engineering-procurement-construction-commissioning (EPCC)
works. The right choice depends on the complexity of project, available expertise and
funding.
Strong project management and contract management skills are important during
this stage to ensure that the projects are executed on time, within budget and to the
required quality.

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The international standard IEC 61936-1 ed. 2.0 Power installations exceeding 1 kV a.c.
- Part 1: Common rules, is a good guide to observe. Some key points extracted from
this document are:
Stresses and environmental conditions: Installations and equipment shall

be capable of withstanding electrical, mechanical, climatic and environmental
influences anticipated on site.
Electrical stresses: Installations shall be designed, constructed and erected
to safely withstand the mechanical and thermal effects resulting from short-
circuit currents.
Mechanical stresses: Equipment and supporting structures, including their
foundations, shall withstand the anticipated mechanical stresses.
Environmental conditions: Installations, including all devices and auxiliary
equipment, which form an integral part of them, shall be designed for operation
under the climatic and environmental conditions.
Safety: Equipment shall be selected and installed to satisfy the following

requirements:
Safe construction when properly assembled, installed and connected to supply.
Safe and proper performance taking into account the external influences that
can be expected at the intended location.
Safe and proper performance during normal operation and in the event of
reasonably expected conditions of overload, abnormal operation and fault,
without resulting in damage that would render the equipment unsafe.
Protection of personnel during use and maintenance of the equipment.
Safety guidelines and tools: Particular attention shall be given to the safety of
personnel during the installation, operation and maintenance of equipment. This
may include:
Manuals and instructions for transport, storage, installation, operation and
maintenance;
Special tools required for operation, maintenance and testing;
Safe working procedures developed for specific locations.
Documentation: Where applicable, documentation shall be provided with each

installation to allow erection, commissioning, operation, maintenance and
environmental protection.
Hazards: Installations themselves shall be protected against fire hazard, flooding

and contamination.
Labelling: Identification and labelling are required to avoid operating errors and
accidents. All important parts of the installation, for example, bus-bar systems,
switchgear, bays, conductors, shall be clearly, legibly and durably labelled.

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2.2.5 Commissioning
Before the equipment or section of the network can be commissioned and put into
service, it has to be inspected and tested to show compliance with the utilitys
specifications and ensure that it is safe to operate.
Commissioning tests, also known as Site Acceptance Tests (SAT), are tests and physical
inspections that are performed on new equipment, usually after installation and prior to
energisation. These tests are performed to determine whether a piece of equipment is
in compliance with the specifications and design, and also to establish test benchmarks
that can be used as a reference during future tests.
Site Acceptance Tests are also valuable for ensuring that the equipment has not been
subjected to damage during shipment, handling and installation. These tests typically
include visual, physical, mechanical and electrical tests.
During commissioning tests, it is advisable to constantly make reference to the

manufacturers manual and recommendations.
Many tests on electrical equipment involve the use of high voltages and currents
that are dangerous both to the people and equipment (equipment can be damaged
or destroyed by unacceptable voltages and currents). Adequate safety rules should be
instituted and practiced to prevent injury to all personnel who might be exposed to the
hazard. The test procedures used should also be designed to ensure that the testing
would not cause any damage to equipment.
Prior to commissioning the electrical equipment or section of network and putting

it into service, all data (equipment data, as-built drawings, test data, etc.) should be
captured and documented.
During the create phase, one of the goals should be to hand over assets in good
operational condition and maintainability. This would require training and knowledge
transfer on design, operations and maintenance of assets from the designers and
builders to the operational and maintenance personnel. Also, testing and commissioning
should be done based on well-defined procedures and all the results should be recorded
diligently and handed over, along with all other asset data, to the operational and
maintenance team.
2.3 Operate / utilise assets

The operations phase, longest phase in the asset life cycle, has a significant impact on life cycle
cost, risk management, asset life, operation and maintenance costs, safety and performance
outcomes.
The British Standard BS EN 50110-1 Operation of Electrical Installation defines operation as:
all activities including work activities necessary to permit the electrical installation to function.
These activities include such matters as switching, controlling, monitoring and maintenance as
well as both electrical and non-electrical work

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The key objective of this phase is to operate the assets to deliver the required performance
(quality and reliability of power supply) while ensuring safety. Assets considered as critical to
the network performance, availability and reliability should be made to remotely monitor and
control via SCADA.
The operating criteria (parameters to be monitored, frequency and type of monitoring, alarm
limits, etc.) and compliance requirements (legal, company guidelines, industry standards)
should be carefully defined, documented and communicated.
Where maintenance strategies are linked to operations, such strategies should be updated
when there is a change in the operating criteria. For example, if a decision is taken to increase
the loading on a transformer from 50% to 60%, its impact on maintenance and assets lifespan
should be captured before implementing such a change.
Regular communication and exchange of information between network operators and

maintenance managers, on equipment condition and reliability will assist in optimising asset
maintenance and life cycle cost.
2.4 Maintain assets

Due to the deceptively dormant state and the non-graphic workings of power T&D networks, it
is not easy to notice their deterioration due to age, poor maintenance, and frequent exposure
to transient faults and development of incipient faults. And if the network assets are left
unattended or not maintained well, the risk of failures, poor reliability, low performance and
safety hazards goes up.
Power T&D utilities, therefore, need to put into practice a structured maintenance system to
ensure that network assets remain in good condition to safely deliver the required performance,
avoid unplanned outages, extend asset life and contain maintenance costs.
The standard BS 6626:2010 Maintenance of electrical switchgear and control gear for voltages
above 1 kV and up to and including 36 kV Code of practice defines maintenance as:
combination of actions carried out to retain an item in, or restore it to, an acceptable condition
This phase runs in parallel to the operate phase in asset life cycle and likewise has significant
impact on asset life cycle cost, risk management, asset life, operation and maintenance costs,
safety and performance outcomes.
2.4.1 Common maintenance challenges

Common maintenance problems encountered by electric power distribution networks
include:
Non-existent reasons for maintenance actions.

Time based preventive maintenance is often performed unnecessarily.
Maintenance is performed towards technical goals without economical and
reliability considerations.
Failures are often not analysed to the extent that similar failures can be prevented
in the future.

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Maintenance activities continue to be implemented without any well-defined

structure and alignment with organisational objectives.
Maintenance itself induces failures.
Manufacturers recommendations are followed without adaptation for specific
circumstances, constraints and objectives.
One of the challenges during this phase is to arrive at an optimum combination of the
following different types of maintenance strategies:
Corrective Maintenance (CM)

Preventive Maintenance / Time Based Maintenance (TBM)
Condition Based Maintenance (CBM)
Reliability Centred Maintenance (RCM)
The above maintenance strategies can be classified based on two key parameters:
condition of the equipment and its importance. Fig. 5.3 shows the mapping of various
strategies against these two parameters.
CBM RCM
Condition Based Reliability Centred
Maintenance Maintenance
Considered
Continuous or Priority list

occasional monitoring Effect of condition and
Maintenance based on failure considered
condition Risk management
Condition
TBM
CM
Not considered
Time Based Maintenance

Corrective Maintenance
Fixed intervals for
No maintenance until
inspections and
breakdown
maintenance
Not considered Considered
Important
Fig. 5.3 Maintenance Strategies Based on Asset Condition and Importance
Both the condition and the importance of components can be defined in many ways,
depending on the desired level of detail and the availability of appropriate data. For
example, the definition of importance may be pegged to features like the number of
feeders of a substation, or to more sophisticated indices, like the share of the energy
not supplied in time caused by failure of each respective component.

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2.4.2 Corrective Maintenance (CM)

This is the simplest maintenance strategy, which neither considers the condition nor
the importance of an asset. Equipment is operated until it fails and then only it receives
maintenance (i.e., repaired or replaced). In general, CM is not the lowest total cost
option, as the damages/liabilities caused by the failures of the network components
may prove to be more costly in the end than other maintenance strategies. In addition,
this strategy significantly reduces supply reliability, which may cause additional
economic consequences for the network operator.
It is, however, suitable for non-critical equipment. For example, it may be used for MV-
XLPE cables, where no preventive maintenance measures are available.
Considering the limitations of CM, preventive maintenance is necessary to prevent

failures and significant damage (cost, reputation, etc.)
2.4.3 Time Based Maintenance (TBM)

Under this strategy, which is very popular in many organisations, maintenance and
inspections are carried out at fixed, pre-determined intervals of time. These intervals
can be either based on manufacturers recommendations or network operators own
assessment.
Although this strategy works well as a preventive measure, the time intervals are often
too conservative, resulting in unnecessary maintenance or inspections. TBM is more
appropriate for situations where an abrasive, erosive or corrosive wear out takes place
and /or material properties change due to fatigue, etc.
This strategy is widely used in maintenance of distribution networks and offers an

acceptable level of network availability with relatively high maintenance costs.
2.4.5 Condition Based Maintenance (CBM)

Under this strategy, condition of the equipment is the trigger for maintenance--and
not the time or failure unlike the TBM or CM respectively. Based on both continuous
and occasional equipment monitoring and derivation of certain equipment health
indices, when the condition of equipment crosses a threshold, maintenance action
is triggered. Determining the equipment health can be a complex affair with many
different methods in practice.
CBM offers high network availability with moderate maintenance costs and is widely
used within EHV and HV grids. Nowadays a lot of utilities are adopting this approach
for the MV networks.
Fig. 5.4 shows how two different categories of inspections and tests to assess the condition
of equipment can be used to short list assets for refurbishment or relocation or replacement.
Health index
The concept of health index is based on a holistic approach to assessing a transformers
need for maintenance (Fig. 5.5). Health index takes into account the following four
parameters to calculate one unique number that reflects:

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External physical condition

Functional condition: Oil analysis, DGA, Furan analysis, electrical analysis
Maintenance history
Age
All assets
Tier 1 techniques
Visual inspection
Oil sampling
Thermo & ultrasonic scanning
Tier 2 techniques
Partial discharge (PD)
Turns-ratio test
Winding resistance test
Insulation resistance
Tan delta test
Selected assets
Excitation current test
Frequency response analysis
Frequency dielectric spectroscopy
Refurbishment Relocation
Replacement
Fig. 5.4 Two-Tier Condition Based Maintenance Programme
Functional condition:
Oil analysis, DGA, Maintenance
Furan analysis, history
electrical analysis
External physical
Age
condition
Transformers
Health Index
Fig. 5.5 Transformer Health Index

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2.4.5 Reliability Centred Maintenance (RCM)

Going a step beyond CBM, Reliability Centred Maintenance (RCM) not only considers
the condition of the network components, but also takes into account the likely impact
of the changes in performance or failure of the key network components. Basically,
it considers both the condition and criticality or importance of equipment before a
maintenance response is triggered.
RCM is used not only for evaluating the priorities for maintenance actions but also for
the ranking replacement and refurbishment activities.
2.4.6 Maintenance strategies used by LMS utilities

In 2012, an assessment was conducted (details in Chapter 7) among nine LMS utilities
to assess their asset management maturity level. Below were their responses on the
subject of maintenance:
Table 5.1: Status of Maintenance Strategies in LMS utilities
Questions Summary of responses

Does your organisation practise All nine agreed that need for maintenance
maintenance planning for its planning was understood and they had already
network assets? initiated steps in that direction.
Which maintenance strategies Run to failure: Yes (by all nine utilities)
do you use? Time based: Yes (by all nine utilities)
Preventive: No (by two) / Yes (by seven)
Condition based: Yes (by all nine utilities)
Mix of time and condition based: No (by one)
/ Yes (by eight)
2.5 Dispose assets

The dispose phase presents a unique challenge to decision makers: Ideally, an asset should be
replaced before it fails, but premature asset replacement is not only costly, but it also means
loss of the remaining service potential of the replaced asset. Hence, the cost of premature
replacement needs to be weighed against the risks of asset failure if it is allowed to fail in
service as well as against the costs of maintaining it. For some asset types, it may be more cost
effective with minimal impact on safety and service levels to allow them to run to failure and
replace on expiry of service. But for other asset types, the cost of early replacement may be
much less compared to the risks of failure and maintenance costs.
Disposal criteria
To ensure disposing of assets is not disruptive and decisions are objective, a clear set of criteria,
like the one below, needs to be developed by each utility within its own context:
Criterion 1: Replace an asset if its condition has deteriorated to the extent that there is a
high risk that it will fail and repair or refurbishment is not practical or economical.
Criterion 2: Asset technology is obsolete and spare parts are no longer available, which
poses a risk of failure without remedy.
Criterion 3: In its present state, an asset presents an unacceptable risk to the environment
or safety of public or staff.

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Criterion 4: The remaining life cycle cost of an asset is estimated to be higher than the life
cycle cost of a new asset.
Criteria 5: Failure of an asset poses a large risk to customer service or network reliability
or business reputation.
PAS 55-1:2008 recommendations
Key recommendations from PAS 55-1:2008 include:
Decommissioning and disposal of assets should be in compliance with appropriate safety,

environmental and other policies.
Disposal should ensure that equipment is safely removed as planned, and that remaining
in-service equipment is left in the required operational condition. And any relevant signs
and notices are updated.
This phase should also include consideration of long-term management of similar assets,
and retention of spares, if required.
Also, it is a good practice to include review and revision of all applicable records in the
decommissioning procedures.
Guidelines for disposal

To manage the retirement, replacement and disposal of assets, the following procedure can be
observed as a guide to develop an asset replacement plan:
Identify the assets that fall within the criterion for disposal/replacement.
List assets that are considered critical to system operation and reliability.
Plan and prioritise replacement of these assets based on network criticality.
Request for a special annual budget allocation outside of the normal capital expenditure.
Cannibalise parts as critical spares from assets that are first to be replaced to keep other
similar asset in good service condition while awaiting replacement.
Select replacement assets (i.e., new assets) that offer higher efficiency, superior
performance, better reliability, lower risks, lower maintenance requirements and facilities
to add on-line condition monitoring.
Set-up a special unit to monitor and control the engineering design, project, contract
management and progress of all asset replacement projects.
Select contractors with proven track record, competency to undertake the replacement
works, including competence in safety and handling toxic waste material.
Liaise with local authorities and environmental management agency on the proper disposal
of assets that pose environmental risks.
Ensure that the asset database and system schematics are updated on commissioning of
the new replacement assets
2.6 Key life cycle management processes

To manage life cycle based asset management, utilities need processes (procedures,
specification and standards) at least in the following areas:
Procedure for assessment and approval of new design

Pre-qualification of contractors and periodic review of their performance
Approval of method statements

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Review, approval and control of contracts

Safe design, operation, maintenance and disposal
Permit-to-work
Operation and monitoring of equipment
Repair, maintenance and inspection activities
Calibration and maintenance of tools and test equipment
Maintenance of spares
Isolation of equipment
2.7 Status of life cycle management activities in LMS utilities

In 2012, nine LMS utilities were asked the following question as part of an assessment
conducted (details in Chapter 7) to assess their asset management maturity level:
Does your organisation follow life cycle management of key or critical assets?
Seven out of nine utilities replied no while two informed that the need for life cycle
management was understood within their organisations and they had initiated some steps
towards adopting this methodology.
3 Tools, facilities, equipment

For safe and efficient operation, monitoring and maintenance, many assets need to be supported
with various tools, facilities and equipment. PAS 55-1:2008 recommends that all such tools, facilities
and equipment should be maintained and kept calibrated, where necessary.
The organisation should establish processes for the maintenance or calibration or testing of such
tools, facilities and equipment. These processes could in turn affect the asset performance and
condition, thereby having indirect impact on the overall asset management programme.
4 Performance assessment and continual improvement

Even if launched successfully, to remain effective and sustainable, an asset management programme
needs periodic monitoring and review. The performance assessment includes the following key
elements:
Performance and condition monitoring

Investigation of asset-related failures
Evaluation of compliance to legal and other requirements
Audits
Improvement actions
Records
4.1 Performance and condition monitoring

An effective asset management programme requires performance assessment at two different
levels:
Level 1: Performance assessment of the programme itself

Level 2: Performance and condition monitoring of assets
Level 1 means monitoring whether the asset management strategy, plans and procedures are

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being implemented as required and their effectiveness. Level 2 means monitoring whether the
assets are performing as expected.
4.1.1 Key areas of performance monitoring

Some of the key areas where monitoring is useful to keep the whole asset management
programme on track are:
Asset management system elements: Policy, strategy, objectives, plans, procedures

Risk-related controls and procedures
Asset condition and performance (including failures, incidents, etc.)
Training and awareness
Communication and consultation programmes
4.1.2 Types of monitoring and indicators

Performance monitoring can be of two types:
Reactive monitoring
Reactive in nature, this type of monitoring involves monitoring past or existing non-
conformities or deterioration in assets condition or performance or asset failure.
Proactive monitoring
The purpose of this kind of monitoring is to proactively monitorthrough routine or
periodic checkswhether asset management plans and objectives are being achieved,
and whether the assets condition and performance is on track.
Based on the data collect through monitoring, performance assessment could be done
by creating, monitoring and benchmarking different types of indicators. These indicators
can be leading (provide forward looking indications/warnings on performance) or
lagging (provide measurement of past performance).
Overall, an organisation should develop a set of Key Performance Indicators or KPIs

(combination of leading and lagging) to keep a constant tap on the performance of
asset management system and assets.
LMS utilities usage of KPIs for performance monitoring

Are Key Performance Indicators (KPIs) used to measure the performance of network
assets?
All nine utilities replied no.
4.1.3 KPIs
Key performance indicators (KPIs) are metrics that measure accomplishments or results
in specific areas, such as financial performance, reliability, safety, etc., and help in
assessing the performance. KPIs can be useful for a utility if these are properly chosen.

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Effective KPIs:
Focus on results rather than activities

Utilize readily available metrics
Provide meaningful indication of performance
Point towards corrective action and improvement
Allow benchmarking (comparison with similar utilities/own past performance)
Communicate progress
Here are some examples of KPIs in key performance areas:
Financial
ROA (Return On Assets)
Total costs/MWh
Operating Revenue/Total Asset
Capital investments/Capacity installed ($/MW)
Capital cost/customer
Maintenance expense/kW ($/kW)
Cost of maintenance
By equipment group
By substation
By equipment model / manufacturer
By area / region
By types of maintenance (CM, PM, CBM & RCM)
O&M cost/MWh supplied
O&M cost/MWh installed
O&M cost/customer
PM (preventive maintenance)/CM (corrective maintenance) cost ratio
Network performance / system reliability

SAIFI (System Average Interruption Frequency Index)
SAIDI (System Average Interruption Duration Index)
CAIFI (Customer Average Interruption Frequency Index)
CAIDI (Customer Average Interruption Duration Index)
Power loss rate (%)
Frequency fluctuation
Voltage fluctuation
Number of customers impacted by outage
Vegetation interruptions per 100 km
Work processes and equipment

Substation output (kW)/Number of employees
Transmission line length/Number of employees
Average restoration time
Average equipment age
Average equipment utilisation factor

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Environmental and safety

Number of human error events/month
Man-hours without injury
Number of employee injuries/year
Recovery rate of SF6 gas
4.2 Investigations of asset-related failures, incidents and non-conformities

Investigation of failuresof both assets and asset systemsand taking preventive actions is the
key to keeping the asset performance and condition on track. Processes for the investigation
of failures, incidents and non-conformities associated with assets and asset systems should be
established and followed.
Specifically, these processes should define the responsibility, procedures and authority to:
Investigate failures, incidents and nonconformities and determine root causes;

Determine appropriate preventive actions;
Take necessary preventive actions to prevent/mitigate future failures; and
Record and report information on the nature of failures, results of investigations and
preventive actions to all relevant stakeholders.
4.3 Evaluation of compliance

An important requirement in todays business environment is compliance with legal and other
statutory regulations. The assessment of asset management programme should specifically
include processes for evaluation of compliance with legal and other regulations.
4.4 Audit
Periodic audits by independent (internal or external) auditors enable an organisation to review
the effectiveness of its asset management system. An audit should include evaluation of:
Compliance with pas 55-1: 2008 or ISO 55000;

Compliance with the documented asset management systems and procedures;
Effectiveness of the asset management system in terms of achievements against the stated
objectives;
Any corrective actions required.
4.5 Improvement actions

An asset management programme is a never-ending journey that requires continuous
corrections and improvements.
4.5.1 Corrective and preventive action

An organisation should establish processes for both corrective and preventive actions.
Corrective actions attack the existing problems (failures, non-performance, non-
conformities) by addressing the underlying causes and bringing the situation back to
normal.
Preventive actions, on the other hand, focus on the causes of potential problems and
effectively prevent failures, incidents, etc. from materialising.

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Processes for identification of problems, evaluation of root causes, and implementation

and monitoring of required corrective or preventive actions should be established and
followed.
4.5.2 Continual improvement

Processes for ensuring continual improvement in the asset management should be
established. These improvements could come in the form of new and more effective
technologies, practices, tools and processes.
Status of continual improvement in LMS utilities

Does your organisation have procedures to review and ensure continual improvement in
the performance and reliability of assets?
Five out of nine LMS utilities replied no while the rest of four informed carrying out
review of performance and reliability on ad-hoc basis.
4.6 Records
Well-maintained records of asset management activities itself is a valuable asset. Records
effectively provide a reliable source of information on variety of important asset management
elementsasset registers, condition of assets, preventive actions, etc. Records also demonstrate
smooth functioning of an asset management system and conformance with the requirements
of applicable specifications, standards and in-house procedures.
Records should be legible, readily identifiable, traceable, retrievableand always updated.
Some of the key records include:
Measurements of condition and performance of assets

Information on failures, incidents, etc.
Training
Maintenance activities
Inspection, maintenance and calibration data
Compliance with legal or other requirements
results of audits
Details of corrective and preventive actions
Customer complaints
Risks assessment
5 Management review
Asset management programme may be implemented at the lower levels of management, but its
effectiveness depends on the active involvement of the top management. PAS 55-1:2008 recommends
that top management should periodically (say, annually) review the asset management programme
to ensure its effectiveness and continual improvement, and make top-level decisions required for
changes/improvements.

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5.1 Focus of managements review

PAS 55-1:2008 recommends that management review should include the following:
Reports on the asset management performance of the organisation

Results of internal audits
Evaluations of compliance with applicable legal and other requirements
Feedback from employees, and internal and external stakeholders (including complaints)
Performance against asset management programmes objectives
Incidents, investigations,
corrective actions and preventive actions
Follow-up actions from previous management reviews
New developments in asset management field (new regulations, technologies, processes, etc.)
5.2 Outputs: Whats the outcome of review?

The purpose of management review is to keep the journey of asset management on a path of
continual improvement. The review should lead to specific decisions on changes/improvements,
if required, to the key elements of asset management system: policy, strategy, objectives,
processes, organisational structure, resources, etc. Outputs from management review that
affect the organisations strategic plan should also be considered by the top management.
6 Asset management practices for distribution transformers

Distribution transformers form the most critical asset in a power distribution network. These
equipment are spread over geographically vast areas and are usually in thousands (e.g., EDL: over
15,000 units, EVN HCMC: nearly22,000 units, PEA: over 254,000 units).
6.1 Typical gaps in transformer management

Due to a range of constraints, such as inadequate information systems, processes or financial
resources, transformer management often suffers from the following gaps:
Inadequate information on existing transformers (age profile, condition, history,

performance, etc.)
Lack of detailed failure cause analysis
No criticality analysis
Lack of condition monitoring
6.1.1 Detailed age profile of transformers

Here is an excerpt from the asset management plan 2013 of Powerco Limited14
(http://www.powerco.co.nz/), a company that owns and operates extensive urban and
rural electricity distribution network in New Zealand.
In Powercos electricity networks areas there are 26,040 overhead pole-mounted

distribution transformers and 6,680 ground-mounted distribution transformers a total
of 32,720 units. Based on an economic life of 55 years, those presently aged 50 years and
older would require replacement over the next five years. This amounts to 1,445 units,
equating to 4.4% of the total.
14
http://www.powerco.co.nz

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Inspections and condition-assessment has been completed of 32,720 transformers. Those

assessed as having less than five years remaining life amounted to 814. Extrapolating
this to the total population of transformers indicates that 1,287 or 3.9% will require
replacement over the next five years.
This kind of detailed information is essential for building an effective transformer

management plan.
6.1.2 Failure mode/cause analysis

The predominant failure modes in transformers include:
Degradation of insulation on windings;

Degradation of insulation or integrity of bushings;
Moisture and contaminant concentrations in insulating oil;
Thermal failure (if overloaded);
Mechanical loosening of internal components, including winding and core; and
External tank damage and corrosion.
Meticulous failure analysis by Metropolitan Electricity Authority (MEA), Thailand

MEA, which is one of the partners in the LMS Harmonisation Programme, keeps detailed account
of the rate of transformer failures (Table 5.2) as well as the causes of failures (Table 5.3), both of
which serve as a good example of recommended transformer asset management practice.
Table 5.2: MEAs percentage of transformer failure rate15

Year Transformer Failure Ratee
2002 1.6%
2003 1.06%
2004 1.42%
2005 1.05%
2006 0.64%
Table 5.3: MEAs failure cause assessment
Cause of Percentage
Remarks
failure occurrence
Assembly 49% Winding termination
Busbar assembly
Tap changer assembly
Raw 34% Insulation paper
material Poor copper wire insulated coating
Copper foils sharp edges
Cleanliness 11% Fragments of copper wiring, busbars & coil welding
Need more 6% Less space
analysis Fixing bolt: Too long
Poor wiring arrangement
Weak housing
Wrong handling
15
Source: Presentation titled, Aging Transformers, Increasing Load: A Regional Approach to Managing Transformer Assets in
LMS. Presented in June 2012 by Mr. Surapon Soponkanaporn.

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6.1.3 Transformer maintenance strategies

The LMS Power and Distribution Handbooks cover in detail the typical failures modes of
transformers and recommended maintenance practices:
Chapter 6 (Maintenance and Asset Management) of Distribution Transformer

Handbook
Chapter 6 (Maintenance and Asset Management) of Power Transformer Handbook
6.1.4 Transformer criticality assessment

Transformer criticality assessment is critical to deciding maintenance strategies and
new investments. As shown in Fig. 5.6, criticality assessment involves figuring out the
following two parameters for each transformer in the fleet:
Likelihood of failure
Consequences of failure
Medium Criticality High Criticality High Criticality

High
Consequences of failure
Medium
Low Criticality Medium Criticality High Criticality
Low Criticality Low Criticality Medium Criticality

Low
Low Medium High
Likelihood of failure
Fig. 5.6: Transformer Criticality Assessment
6.1.5 Condition monitoring / Transformer Load Management (TLM)

Knowledge of transformers operating performance is a critical input for system reliability
assessment, equipment condition assessment and planning maintenance activities. In
the past, the performance was monitored manually by sending technicians to the field,
which is time consuming, difficult, unsafe and costly considering challenges like wide
16
Source: LMS Distribution Transformer Handbook

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geographical spread of transformers, difficult-to-access locations of some transformers,

lack of availability of trained manpower and sheer volume of work. In addition, it can
take considerable time to get one full set of performance data for all transformers and
information is never current.
Overcoming all the above deficiencies and constraints, utilities can now employ
Transformer Load Monitoring (TLM) system, which is like a SCADA system designed to
obtain key performance data from transformers in real time. With TLM, operators sitting
in a central location can get full view the following critical parameters for all transformers:
Use factor: The relationship between the peak demand on a transformer and the
rating of that transformer.
Demand factor: The relative portion of load on a circuit compared to the load on a
particular transformer.
Coincidence factor: The relationship between the system peak and the individual
peaks of the transformers.
Load factor: The variation in demand.
Voltage profile: A look at voltage drop on a feeder.
Other parameters: Current profile, etc.
Fig. 5.7 shows the architecture of a TLM system, which comprises three main components:
(1) Wireless Communication
TLM RTU Transformer
(1) Wireless Communication

Router (2) Fiber Optic
Communication TLM RTU Transformer
TLM Server at
on district
TLM RTU Transformer
TLM RTU Transformer
Historical Server
Fig. 5.7: Architecture of Transformer Load Management (TLM)
Remote terminal Units (RTU): RTU is an instrument installed near or at each transformer
to gather and deliver transformer data as well as alters in case of malfunctioning to the
Master Station through wireless communication or fibre optic network.
Master Station: The Master Station, located in utilitys office, receives transformer data
collected in the field by RTUs, and enables operators to view and evaluate it. This station
comprises of a database server (for collecting data from RTUs), an HMI (for displaying
data in user-friendly format, comparison and reporting) and a historical server (for storing
historic data). Operators can see in real time transformer loading, voltage, power factor,
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etc., and also study various trends.
Communication network: The communication network is either a fibre optic network or

a wireless network that facilitates the transfer of data from RTUs to the Master Station.
Equipped with TLM system, operator can make use of real-time transformer data for
preventive maintenance, transformer replacement, electrical system planning and outage
management.
7 Asset management for cables

Utility power cable fleets consist of many thousands of kilometres of overhead and underground
cables, some of which were installed decades back. On these aged cables, mostly installed in
difficult-to-access locations and subjected to mechanical, electrical and thermal stresses, depends
the reliability of the whole network. Life cycle management of these lifelines of a network is a crucial
component for any utility.
7.1 Key elements of cable life cycle management

Essentially, cable life cycle management means taking a long-term view of cables as vital assets,
and instituting processes and policies that cover each phase of cable life cycle, from design to
procurement to installation to operations to maintenance to disposal. The objective of all these
policies and processes should be to balance the three key parameters of an asset management
programme: cost, performance and risks.
The sub-sections below describe some of the key elements of cable asset management
programme.
7.1.1 Cableasset registry

The first step in a cable asset management programme is to create a comprehensive
database of cables, which should include the ratings, age, make, location, condition,
loading, failure history, etc. The age profile, should clearly distinguish cable into the
following categories:
Category 1: End of life, immediate replacement required

Category 2: Deteriorated, replacement required in medium term (3-5 years)
Category 3: Serviceable, some deterioration
Category 4: Good or as-new condition
7.1.2 Technical design specifications

Compliance with sound technical specifications for the procurement of new cables
has far-reaching implications on the complete life cycle of cables for years to come.
Inadequate or weak specifications can lead to serious reliability problems and unexpected
capital expenditure.
As part of their asset management programme, LMS utilities should thoroughly review
their technical design specifications for both overhead and underground cables. These
specifications should at least cover the following items:

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Reference standards (IEC and local standards)

Cable ratings: Voltage level, frequency, conductor size and material, insulation
material and thickness, sheath, etc.)
Installation method (overhead, underground)
Site and service conditions (ambient temperatures, humidity, water ingress,
mechanical stresses, etc.)
Tests and inspections (type tests, routine tests, Factor Acceptance Tests, Site
Acceptance Tests)
Documentation requirements (drawings, technical data sheets, test procedures, reports, etc.)
Investment of man-hours in preparing thorough technical specifications is a prudent

investment in the asset management of cables.
7.1.3 Procurement: Bidding and evaluation

Following sound technical specifications, bidding and evaluation processes play a crucial
role in ensuring that a utility procures good quality cables within reasonable cost and
time. The important elements here are:
Bidding and evaluation process: All bids should be evaluated by an evaluation

committee comprising professionals with complete range of expertise (design,
installation, documentations, contracts, commercial) following a systematic process
of review of bids, seeking clarifications, comparing with specifications, etc. The
criteria of selection should be clear and credible with right weightage for design,
installation, safety, past projects, etc.
Instructions to suppliers: The instructions should guide suppliers to follow technical

specifications, highlight any deviations and submit all the required technical
documents with necessary details. These documents could include:
Proposed technical data

Deviations
Drawings
Type test reports
References of similar installations
Life cycle based cost analysis: Instead of focusing squarely on the first cost, utilities
should deliberately take the whole-life view of the proposed cable systems, which means
not only considering the first cost (material, installation, testing and commissioning),
but also the cost of operations and maintenance and disposal at the end of life.
7.1.4 Factory Acceptance Tests (FAT), Installation, Site Acceptable Tests (SAT)
After the procurement contract for underground cables is signed, the next goal should
be to ensure that cables are manufactured and installed as per the agreed specifications.
This is a critical step because unless there is a diligent oversight of the manufacturing
and installation processes by the utility personnel, the risk of non-compliance with
the specifications increases dramatically. Many times, cable contractors may agree to
the more stringent specifications to secure the contracts and revert to their own less
stringent specifications, which unless detected at the right time, can lead to project
delays and reliability problems in the long run.
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The important elements during this phase include:
Inspection team: An inspection team, comprising in-house experts from various

divisions (quality control, operations, maintenance, design) should be formed to take
responsibility for all inspections and oversight.
Test protocols: Protocols defining the various tests and inspections (in-manufacturing
inspections, Factory Acceptance Tests, in-installation inspections, Site Acceptance
Tests) should be prepared and approved before beginning of the inspection process.
These protocols should clearly define the tests, acceptance criteria, and approving
authority.
Availability of approved and latest technical data sheets and drawings: The
Inspection Team should have access to the latest drawings and technical data all
through the inspection process.
Cable installation method statements: Contractors should get the cable laying
method statements (e.g., cable pulling method, pulling tension, radius, etc.) approved
before starting the installation works. These methods should focus on safety,
preventing mechanical damages to cables and compliance with approved cable-laying
practices.
Technical competence: Technical competence of the installation crew should be
evaluated before installation process begins.
7.1.5 Operations and maintenance

During operation, cables are subjected to the following four types of stresses:
Electrical stress
Thermal stress
Mechanical stress
Radiation environmental stress
These stresses should be controlled within design limits, allowing cables to age (sometimes,
50 years) naturally. The life of a cable can be optimised by preventing or reducing the
abnormal ageing processes of cable insulation. This is possible with proper cable loading,
periodic health monitoring, and appropriate testing and maintenance methodologies.
Operations
The goal during operations should be to ensure reliability of network while keeping the
stresses on cables within acceptable limits. To achieve these objectives, the Network
Manager or Control Engineer should have valid data on the ampacity of cables in the
network.
The load capacity or ampacity of power cables is governed by the temperature rise within
the cable and its surroundings. Ambient temperature, cable design and construction,
conditions of installation (e.g., in-ducts, direct burial, overhead) and effect of surrounding
cables directly affect the ampacity of cables. IEC standards specify methods to calculate
the ampacity of cables.
Based on the ampacity rating, the Network Manager or Control Engineer is able to
monitor the maximum load current and ensure that it does not exceed the maximum

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ampacity rating of the cable. This action helps to improve the reliability and extend the
service life of the cables.
Maintenance
Preventive Maintenance (PM): PM is carried out at predetermined intervals
(6-monthly, 1 yearly to 5-yearly) and involves routine diagnostic tests, and repair or
part replacement of cables, terminations and splices when faults are detected. The
following tests form part of PM:
Visual inspection of cable joints and physical checks on ground connections

Cleaning termination joints
Contact resistance tests
Infra-red thermographic scanning of all electrical joints
Corrective Maintenance (CM): This is done after a fault has occurred and involves
diagnostic tests to detect type of fault and its location, repairs to cables, terminations
and splices, and re-commissioning tests.
Condition Based Maintenance (CBM): Under CBM, type of follow-up maintenance

and duration of it, is defined based on the condition of the cables, which is checked
using the following methods:
Partial Discharge (PD) testing

Tan Delta test or Dissipation Factor (DF)
Very Low Frequency (VLF) Tests
Cable renewal strategy

Cable system failures are often caused by small, isolated length of cable within a big
network segment. The key to avoiding cable faults, therefore, is to accurately find these
bad segments/sectors and proactively replace them before they degrade the overall
system reliability.
A utility should clearly define its renewal strategy for different types of cables. For
example, for LV cables, the renewal strategy could be run to failure whereas for MV
cables, it could be condition-based renewal.
7.1.6 LMS Power Cable Handbooks Volume 1 & 2

LMS Power Cable Handbooks, Volume 1 and 2 provide detailed explanation on each of the
life cycle management steps, from initial design to procurement to operations to testing
and maintenance.
8 Asset Management for MV switchgear

Besides transformers and cables, MV switchgear forms the third major area of focus of asset
management activities in a distribution network. MV switchgear:
Controls routine switching of circuits.

Protects other primary equipment and components from abnormal conditions.

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May remain idle in either open or closed positions for long periods of time.
Has direct impact on the safety and reliability of the overall network.
Involves high investment costs.
Potential downtime during replacement activities.
Conventionally, network operators tend to follow periodic Time Based Maintenance schedule and
replace these equipment at the end of their useful life, which can be 30 to 35 years. But with the
focus on deriving maximum value over an assets lifetime, the maintenance approach is shifting
toward Condition Based Maintenance (CBM).
8.1 Conditioned Based Maintenance of MV switchgear

Condition Based Maintenance (CBM) relies on knowing the condition of the switchgear through
continuous or periodic monitoring of the vital parameters of the switchgear. Following the
information gathered with thorough data analysis, CBM leads to knowledgeable maintenance
decisions. CBM helps to direct maintenance resources toward equipment that really needs
attention and the duration of maintenance interventions is optimised (often extended than
usual). Overall, CBM efforts should lead to higher reliability, safety and equipment availability
while keeping the costs down.
The key to CBM, however, is switchgear condition monitoring techniques. There are a myriad of
assessment tools available to provide condition data on MV switchgear. It is, however, important
that appropriate tools are employed and the collected data is used to optimise maintenance
programmeme.
The starting point in developing a condition assessment programmeme for MV switchgear must
be the analysis of historical fault and failure information for similar types of equipment.
8.2 MV switchgear faults

Spending 80% of a condition assessment budget to tackle a failure mode that contributes to
5% of failures is not only costly, but potentially compromising to the reliability and safety of a
network. Therefore, network operators should first identify and create a database of the main
causes of faults in MV switchgear.
According to one study, the top five causes of faults for MV vacuum switchgear installed in
electricity distribution networks within the UK included:
Mechanical problems: 30%

Partial discharge activity: 26%
Vacuum: 11%
Voltage transformer: 9%
Maloperation: 8%
This data on defects included observation during operation or maintenance as well as disruptive
failure of the switchgear. The data shows detection of mechanical problems and partial
discharge activity should be the two key target areas in the effective condition assessment of
this type of MV switchgear.

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Since the construction of SF6 switchgear is comparable with vacuum switchgear, the same fault
profile would be applicable for SF6 switchgear as well.
For oil-filled switchgear, however, the fault characteristics change. Research shows that the
condition of oil is the key indicator of the overall health of oil-filled switchgear.
In conclusion, to obtain sound condition assessment, the focus should be on mechanical

operation and partial discharge activity for vacuum and SF6 switchgears, and on the condition
of oil for the oil-filled switchgears. In addition, visual examination of the switchgear should also
factor into the overall condition assessment.
Overall, MV switchgear monitoring includes:
Mechanical monitoring
Partial Discharge (PD) testing
Transient Earth Voltage (TEV) measurement
Ultrasonic detection
Switchgear oil analysis
Thermal imaging
8.3 Mechanical monitoring of circuit breakers

The objective of mechanical condition monitoring is to detect deteriorating conditions within a
circuit breakers operating mechanism--prior to any malfunction or failure.
The diagnostic equipment for the assessment of the mechanical condition of a circuit breaker
should preferably be used with the switchgear in the service position. This approach offers two
advantages: first, effort, time and cost saving due to the avoidance of downtime, and second,
the first trip can be monitored.
Several methods, tests and instruments can be used for this kind of assessment. The simplest
test includes monitoring the opening and close times of circuit breakers.
The monitoring systems capture and store the data from each circuit breaker operation for
comparison with the previous data from the same unit and also for comparison against other
circuit breakers of the same design. The effectiveness of these types of mechanical monitoring
systems is therefore dependent on a good historic database with which measurements can be
compared. Provided this database is available, valuable information on the condition of the
mechanical mechanism can be quickly and easily obtained.
For example, suppose instrumentation tracks three consecutive trip operations on a circuit
breaker and the trace reveals that the operating time for the first trip is significantly longer than
for the subsequent two trips (which are within the acceptable times). This knowledge will allow
the network operator to conclude that the problem was associated with stiction in the slug or
plunger. This analysis also shows why it is important to capture the first trip because thats the
way the circuit breaker would have operated in the situation of a genuine fault in the network.

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There is now established circuit breaker monitoring equipment in the market for mechanical
assessment. In general, this equipment operates by temporarily (or sometimes permanently)
installing sensors on the control circuitry of the circuit breakers to be monitored. And
parameters that are monitored include the current profile in the DC trip coil, the current on the
secondary side of the ammeter to provide main contact opening time and the battery voltage.
8.4 Partial discharge testing

Partial discharge (PD) is a discharge or spark across localised area of the insulation between
two conducting electrodes, and this can occur at any location where the electric field strength
exceeds the breakdown strength of the insulating material.
PD often starts in aged, defective or poor quality insulation, and propagates and develops
until the insulation is unable to withstand the electrical stress, finally leading to flashover and
failure. PD releases energy in three ways: electromagnetic (radio, light, heat), acoustic (audio,
ultrasonic) and gases (ozone, nitrous oxides)and this phenomenon of energy release helps in
its detection.
The two non-intrusive methods of detecting PD activity are Transient Earth Voltage (TEV) and
ultrasonic detection, and these techniques are complementary, enabling a comprehensive
assessment of the condition of insulation on MV switchgear.
8.4.1 Transient Earth Voltage (TEV) measurement

Transient Earth Voltage (TEV) measurement technique is the most commonly used method
for the detection of electromagnetic emissions from PD activity on MV switchgear.
As discharge occurs in the phase to earth insulation of a metal clad switchboard or a

cable termination, a small quantity of electrical charge is transferred capacitively from
the medium voltage conductor system to the earthed metal-cladding. But due to the
skin effect, the transient voltages on the inside of the metal casing cannot be directly
detected outside the switchgear. However, at an opening in the metal cladding, such as
at a gasketed joint, the electromagnetic waves propagate out into free space. The wave
front impinges on the outside of the metal cladding, generating a transient earth voltage
(TEV) on the surface. The TEV can be measured with a capacitive probe placed on the
earthed metalwork of the switchgear. The technique can be applied to gas insulated
chambers, as well as oil, bitumen and air insulated chambers.
8.4.2 Ultrasonic detection

Where there is a good acoustic path available, ultrasonic detectors can detect the sound
produced by partial discharge. This technique is an important tool for the detection of
surface discharge within air insulated switchgear, e.g., on a dry termination in a vented
cable box. It is, however, not effective on gas insulated switchgear or on oil or bitumen
filled chambers.
The limitation of this technique is that the strength of the ultrasonic signal depends
heavily on the characteristics of the transducer and instrument, and also on the
discharge activity and the attenuation of the transmission path. Therefore, quantifying
and analysing the seriousness of detected ultrasonic signals can be difficult. Often
ultrasonic activity detection leads to further investigation irrespective of the signal level.

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8.4.3 Instruments for TEV and ultrasonic detection

Using a combination of TEV and ultrasonic detection is an effective way to carry out
comprehensive and non-intrusive assessment of the condition of MV insulation with no
disruption to the network.
Ultrasonic detectors first identify discharge activity on the surface of insulation and will
help to identify switchgear components that need to be visually examined under outage.
The TEV technique detects potential failure sites that would never have been captured
during any visual examination of equipment.
The type of instrumentation available for TEV varies from small, simple hand-held devices
to large permanent monitoring installations. In case of critical switchboards, the cost of
permanent monitoring can be justified, but it may not be a practical, cost-effective
option for other situations. Ultrasonic detection primarily involves the use of hand-held
instruments although monitoring systems are also available.
For most cases, relatively low-cost handheld instruments are available that can detect
both ultrasonic and TEV activity. Using this type of instrumentation as part of routine
sub-station inspection can significantly enhance the condition assessment of the
switchgear.
8.5 Switchgear oil analysis

For oil filled switchgear, the condition of oil is the critical factor in determining the need
for maintenance. Routine assessment includes the measurements of moisture, acidity and
breakdown strength. In addition, filtration of the oil sample and assessment of the nature and
quantity of solid material recovered provides an indication of the interaction between the oil
and materials within the switchgear. In UK, live tank oil sampling has been used successfully
and the assessments of oil condition have been used by electricity companies to extend the
switchgear maintenance intervals.
8.6 Thermal imaging

Thermal imaging, which measures the surface temperature of components, is not a viable
technique for diagnosing internal faults in metal clad switchgear because infrared radiation
cannot directly penetrate metalwork. Moreover, detection of faults using infrared techniques
also requires line of sight, which further limits its application because it would require extensive
use of viewing windows to identify defects in all compartments of a switchgear.
These constraints, coupled with the relatively smaller number of faults attributable to
overheating, means limited usefulness of thermal imaging on MV metal-clad switchgear.
However, in case of open bus bar equipment and low voltage equipment where contacts are
safely exposed, thermal imaging techniques do have a useful role to play in asset condition
assessment.
8.7 Health index of switchgear

The diagnostic techniques provide useful information on the condition of MV switchgear. In
certain instances, information from a single diagnostic tool will indicate that immediate action
is required. For example, severe levels of partial discharge activity within switchgear or poor
condition of the oil would require immediate remedial action.
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In addition, however, by combining all the available information, such as diagnostic test results,
visual inspection data, maintenance experience, causes of previous failures etc., maintenance
teams can derive an overall health index for MV switchgear.
The health index is computed by numerically coding the available information and applying
weightings to the factors based on their effect on the probability of failure (POF) of the
equipment. The objective is to obtain a one overall value on a scale of 0-10 that indicates the
overall health of the asset in the context of POF.
The health index value represents the extent of degradation. For example, low values in the
range 0-3.5 represent some observable or detectable deterioration at an early stage, which
might be considered normal ageing. In such situations, POF remains low, and the condition and
POF would not be expected to change significantly for some time.
Medium values of health index, in the range 3.5 - 6.5, represent significant deterioration.
These values imply that degradation processes have moved beyond normal aging, potentially
threatening failure.
High values of health index, >6.5, represent serious deterioration with degradation processes
reaching the point of failure.
Creating numeric representation of condition in the form of Health Index (HI) and linking HI
to POF provides a powerful basis for modelling future performance, maintenance and renewal
requirements.

Do we have seamless management of assets over their life cycle? If not, why are different
phases disconnected?
What specific steps we can take to strengthen our processes in the four key phases of asset life
cycle: create, operate, maintain and dispose?
What specific KPIs (item 4.1.3) can we use to track the performance of asset management
programme?
Do we have a detailed age profile of all transformers?
Do we know the relative criticality of all our transformers?
What are the top three causes of transformer failures?
What is the cost of different types of maintenance: Corrective maintenance, preventive/time
based maintenance and condition based maintenance?
Do we have a detailed registry of cables (age, manufacturer, condition, rating, loading, etc.)?
What is our cable renewal strategy?
What new processes can we institute to ensure management review of asset management
programme?
What are the relative proportions of Time Based Maintenance and Condition Based Maintenance
of MV switchgear in our network?
What are the key causes of faults of MV switchgear in our network?
Are we using TEV and ultrasonic detectors to detect PD activity?
What kind of Health Index can be used to reflect the overall condition of critical MV
switchgear?

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Chapter 6: Case Studies

The first five chapters of this guidebook help readers to get a grip over the overall framework of asset
management and its key strategies like risk management, life cycle management, etc. This chapter moves
the readers from theoretical perspective of asset management to its application in the power distribution
industry. Specifically, this chapter describes:
How Hong Kong based CLP Power embarked upon a 10-year long journey of achieving excellence in
asset management?
How Japan based Chugoku Electric Power Company manages the maintenance of assets and reduces
its future investments?
How SP AusNet, an Australian power distribution company, puts together the key elements of its
asset management system: Vision, mission, objectives and key strategies?
How Eskom, a South African power distribution company, manages its transformers through
condition monitoring?
1 Case study: CLP Power, Hong Kong17

Hong Kong based CLP Power holds the distinction of being the first Asian electric utility company to
achieve PAS 55 certification.
More than a decade ago, CLPs Power Systems Business Group (PSBG) embarked upon the journey of
implementing a structured asset management programme. The impact of this programme has been
impressive. Over a period of 10 years, PSBG achieved more than 90% reduction in Customer Minutes
Lost (CMLs) while simultaneously responding to a 20% load growth. It also expanded the assets,
maintained tariff competitiveness and achieved high supply reliability.
1.1 Snapshot of CLP Power

Type of business: Vertically integrated electricity generation, transmission and distribution
Age of the company: More than a century
Geographical spread: Primarily Hong Kong
Customer base: Supplies power to over 5.7 million people
Key assets: Network contains about 13,000 kilometres of overhead, underground and
submarine cables that feed electricity into more than 13,000 substations
1.2 Key driver behind adopting asset management: Market reforms

Essentially, CLP Powers adoption of asset management was driven by the anticipation of
electricity market reforms. The company had been operating under a Scheme of Control
Agreement with the Hong Kong Government since 1964. Under the agreement, CLP Power
enjoyed a stable return for its investments. But in 2002, the company envisaged reforms in
the Hong Kong electricity market--similar to the reforms in North America and Europe--and
decided to make asset management a strategic priority.
1.3 Asset management journey: Key steps

CLP Power took the following steps towards implementing asset management, achieving
certification and staying on the path of continuous improvement.
17
Source: A Decade of Fruitful Network Asset Management in CLP Power by Chris Cheung & Chi-Pui, CLP Power Hong Hong

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1.3.1 First step: Restructuring of organisation

Before 1998, CLPs electricity supply business was organised around the following three
core business groups:
Generation Business Group (responsible for generating facilities)

Transmission Group (responsible for transmission network)
Distribution and Customer Services Group (responsible for distribution network and
retail business)
CLP restructured its organisation in 1998. The Power Systems Business Group (PSBG) was
established by merging the transmission and distribution functions, and incorporating a
central Asset Management Department (AMD).
1.3.2 Strategic Asset Management (SAM) model

In 2002 CLP decided to develop a Strategic Asset Management (SAM) model, leading to
the following changes:
Clarity in roles: The roles of key stakeholders like Asset Owner, Asset Manager and
Service Managers were clearly defined. In addition, partnership agreements between
Asset and Service Managers were established to eliminate clash of priorities. These
agreements defined the responsibilities and expectations of all parties involved.
Centralised decision-making: A centralised investment planning function was
implemented, consolidating dispersed asset investment decision-making process.
Consolidation eliminated regional disparity of methods, priorities and duplication of
efforts.
Life cycle based planning: CLP established a full life cycle asset planning process,
avoiding the false economies of chasing short-term cost savings at the cost of long-
term interests.
Risk management: A risk management framework was established to provide a
consistent basis for investments and resource prioritisation.
1.3.3 PAS 55 certification

In 2006 PSBG reviewed its asset management model and practices against PAS 55,
and in 2007, CLP Power became the first Asian electric utility to receive the PAS 55
compliance certificate.
1.3.4 Continuous improvements

Post PAS 55 certification, PSBG embarked upon a programme of improvement and
identified five strategic initiatives:
Enhance knowledge and competency

Refine capital investment process
Develop innovative supplier relations
Optimise maintenance strategy,
Achieve greater engagement of frontline

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These programmes were all implemented successfully, and in 2010 PSBG was again
assessed and accredited under the revised and extended PAS 55:2008 standard (see
Fig. 6.1).
2007 Assessment Results 2010 Assessment Results
Fig. 6.1: Mapping of CLPs PAS 55 Assessments
1.4 Benefits of asset management programme

Over 10-year period, CLP achieved more than 90% reduction in Customer Minutes Lost (CMLs)
while achieving 20% load growth, expanding its assets and maintaining tariff competitive
(see Fig. 6.2).
7,000
Local 6,500
Rising demand
Demand 6,000
(MW) 5,500
5,000
90,000
Fixed 80,000
Growing asset base
Asset 70,000
(HKSM) 60,000
50,000
40
Customer
30 Improving supply
Minutes 20 reliability
Lost 10
90
85
Avg Tariff 80 Providing value
(HK Cents
75 to customers
per kWh)
70
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 6.2: Impact of Asset Management Programme on CLP Powers Performance
1.5 Lessons on asset management from CLP Powers experience

Following are the key lessons that LMS utilities can learn from CLP Powers impressive
achievements in asset management.

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1.5.1 Sustained organisational commitment

For more than a decade, PSBG adopted and focused on asset management as a strategic
business initiative. Throughout the years, PSBG continued to strengthen its asset
management capabilities through regular reviews, benchmarking, incorporating good
practices, knowledge acquisition and continuous improvements. Sustained commitment
of the whole organisation was the key to CLPs strides in asset management.
1.5.2 Alignment of policy, plans and actions

The creation of Asset Management Department (AMD) provided the necessary
alignment of overall direction among disparate functions like network planning, asset
strategy formulation, investment planning, performance management, procurement and
information management. All these core asset management activities were efficiently
designed, implemented, managed and monitored by AMD.
1.5.3 Change management

Asset management ushered in variety of changes to CLPs business practices, e.g., changes
in standards, procedures, technical skills, business processes, IT systems and organisation
structures. To manage changes, the company adopted a change management framework
that provided a mechanism to effectively manage different types and sizes of changes,
especially the impact on safety, health, environment, security, regulatory compliance,
plant integrity and reliability.
The key steps of change management framework included:
Identification of changes and risk assessment;

Control measures to mitigate the risks to an acceptable level;
Documentation of all changes;
Communication to affected people and departments;
Training;
Monitoring of impact during change implementation.
1.5.4 Special communication mechanisms

To foster close collaboration between Asset Managers, Service Managers and
other officials, effective communication mechanisms were established for all asset
management activities. These mechanisms helped to keep everyone on the same page
and stay focused on the common goalof achieving excellence in asset management.
For example, one of the mechanisms required Asset Manager to develop the asset
management plans in the following three stages:
Preliminary plan: Used for consultation with Service Managers to collect their feedback
Draft plan: A refined plan for further discussion and consultation
Final plan: Communicated to the rank and file staff to solicit their support for
implementation
1.5.5 Robust information system

Recognising the importance of asset information, CLP employed a number of asset
information systems to make informed decisions, manage asset maintenance, track
performance and optimise costs.

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CLP implemented Enterprise Work Management System (EWMS), which supported

the construction, operation and maintenance activities. EWMS also served as the
master asset register, and captured cost and maintenance data. In addition, it provided
actionable management reports. For example, EWMS could easily provide the average
annual labour cost incurred in routine maintenance of a specific make of 11 kV switchgear
during any specified period.
In addition, CLP used Automated Mapping / Facilities Management (AM/FM), and

Trouble Call and Outage Management System (TCOM). AM/FM, which is a Geographical
Information System (GIS), maintained the master records of power line assets. Further, it
also supported additional functions like network analysis, trench work management and
outage display. TCOM was used to track customers trouble calls, dispatch emergency
crews and record outage information. TCOM stored and analysed detailed information
of all outages, such as outage classification, duration and number of affected customers.
2 Case Study: The Chugoku Electric Power Company, Inc. Japan18

The following case study on The Chugoku Electric Power Company of Japan is illustrative of how this
company, which was established in 1951, maintains its extensive assets, organises asset information
and manages to contain the demand for new investments against aging assets.
2.1 Overview of Chugoku19

Established: 1951
Pain-in capital: JPY 186 billion
Service area: 32,278 sq. km
Number of employees: 9,830
Number of customers: 5,263,000
Electricity sales (2010): 60,070 million kWh
Maximum demand: 12,285 MW
2.2 Assets
Generation facilities
Thermal: 12 plants (7,801 MW)
Hydro: 97 plants (2,906 MW)
Nuclear: 1 (1,280 MW)
Total: 110 plants (11,987 MW)
Transmission facilities
Line length: 547 km (underground) and 7,819 km (overhead)
Number of grid substations: 400 units (50,386 MVA)
Distribution facilities
Line length: 2,918 km (underground) and 79,410 km (overhead)
Number of substations: 22/6.6 KV: 70 nos. and 6.6/0.2 KV: 820 nos.
18
Source: Presentation titled, Policies and Best Practices for Utility on Distribution Asset Management in Japan. Presented
in June 2012 at Thailand.
19
2011 figures.

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2.3 Maintenance processes

Chugoku has identified the following factors that pose risk to the reliability of its supply and
public safety:
Widely distributed facilities

Variety of equipment (transformers, cables, supports, etc.)
Environmental risks (lightning, typhoons, etc.)
Wild animals
Other setbacks like interference by trees, new construction, etc.
Aging equipment
Chugokus overall maintenance cycle for existing assets comprises four steps:
On-site inspections, patrols, measurement tests (voltage measurement, ground resistance

measurement, acoustic emission diagnosis, etc.)
Judgment of necessity and urgency of modification
Designing modifications required
Construction
On-site inspection,
patrol & tests
Judgement of
Construction
Necessity and urgency
Design of
modification
Fig. 6.3: Chugokus Maintenance Cycle for Existing Assets
On-site inspections
Chugoku uses three types of on-site inspections:
Periodic inspections (checking surrounding environment, reviewing visual condition for
aging and damage, etc.);
Temporary patrols (needed in case of faults, disasters, information gathering);
Specific patrols (equipment requiring additional inspections).
Criteria for replacement

Chugoku follows the following criteria for making judgment on replacement of existing assets:

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Table 6.1: Criteria for Replacement

Classification of Situation Response
Emergency: Risk of death by electrocution, electrical fire or outage Repair/replace
if current situation continues immediately
Urgent: Potential problems due to proximity of equipment and other Must be resolved
objects (building, trees, etc.), other problems related to equipment. within one month
Normal: Potential problems due to proximity of equipment and other Must be resolved
objects (building, trees, etc.), other problems related to equipment. within one year
Besides the above general guidelines, Chugoku have also developed specific guidelines for the
replacement of electrical poles, switches and transformers.
2.4 Asset facility and historic information management

The following table shows the information collected and stored for individual assets.
Table 6.2: Asset Registry
Facility Information Historic Information

Manufacturing year
Installation year
Manufacturer
Modification
Installation
Retirement
Inspection
Lot No.
Model
Transformer
Switch
Voltage

regulator
Lightening

arrester
Pole
High, low
voltage
cable

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2.5 Countermeasures for aging assets

Chugoku follows a well-designed strategy to contain the demand for new investments against
aging assets. As shown in Fig. 6.4, the strategy comprises the following four countermeasures:
Advance: Construct new facilities in advance

Postpone: Postpone new construction by appropriate maintenance
Reduce: Reduce cost of new construction by efficient designing and value engineering
Operate: Step-up maintenance capability for addition operating foundation
Fig. 6.4: Chugokus Countermeasures for Aging Assets
To implement the above countermeasures, Chugoku have identified specific strategies, such
as:
Development of life expectancy estimation measures

Development of measures for long life
Management of the condition of aging facilities
Prioritisation of construction of aging facilities
Efficient designing and construction using limited resources
Rationalisation of distribution network structure
Outsourcing of operational activities
3 Case study: Asset Management Plan of SP AusNet20

SP AusNet is an Australian transmission and distribution company based in Melbourne, Victoria, that
is certified to ISO 55001. This case study sheds light on the key elements of its asset management
plan and offers insights into several strategies that could enable LMS utilities to advance their asset
management capabilities.
3.1 About SP AusNet

SP AusNet distributes electricity to more than 580,000 customers (residential and commercial)
across 80,000 square kilometres in the eastern half of Victoria. Its network comprises:
20
Source: 20-year Asset Management Strategy of SP AusNet Electricity Distribution Network issued in 2006.

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61 sub-transmission substations and switching stations;

54,000 distribution substations;
360,000 poles; and
44,000 kilometres of overhead lines and underground cables.
3.2 Key drivers

SP AusNet recognises the following challenges that drive the need for asset management
system:
Aging assets
High plant utilisation levels
Zone substation Plant Utilisation Factor (PUF) is 72% (considered above industry
benchmark)
30% feeders exceed 100% PUF
Changing customer demand patterns
Peak demand increased by 3.3% compared to forecast of 2.6% per annum
Changing regulatory environment
Financial incentives anticipated for quality of supply, distribution losses, demand
management, customer complaints, planned interruptions
Technological changes
Application of digital technology devices, software platforms and in-built intelligence
in components
Requirement to improve network reliability
Need to maximise long-term return on investment
Enhancing network supply quality and safety
Resource shortage
3.3 Vision, mission and objectives

The companys strategic planvision, mission and objectivesis as follows:
3.3.1 Vision
To be a recognised leader and an innovator in the management of electricity distribution
assets.
3.3.2 Mission
SP AusNets mission includes:
Maintaining strong relationships with customers, communities, government and

regulators;
Ensuring customers expectations are met;
Ensuring long-term asset sustainability, reliability, quality and safety;
Developing and maintaining a skilled and motivated work force;
Complying with relevant distribution regulatory obligations.
3.3.3 Objectives
Manage network risks through adoption of common risk management processes
Increase network capacity to meet new and existing customer supply capacity
requirements

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Achieve sustainable development and augmentation of the network in accordance

with regulatory guidelines.
Enhance network supply reliability in accordance with the principles of the economic
incentive mechanisms.
Enhance network supply quality in accordance with regulatory incentive regime.
Enhance network safety to minimise risk to the public and employees.
Comply with industry Regulations, Codes and Guidelines.
Create shareholder value through growth and development of a sustainable and
profitable network business.
3.3.4 Network performance KPIs

SP AusNets monitors its performance through the following parameters and KPIs:
Profitability: Return on assets

Plant Utilisation Factor (PUF)
Reliability and quality of supply
USAIDI (Unplanned average minutes off supply per customer)
PSAIDI (Unplanned average minutes off supply per customer)
Quality of supply complaints
Customer service: GSLs (Guaranteed Service Levels)
Distribution losses
3.4 Key asset management strategies
3.4.1 Risk management

Standard: Operate a corporate Risk Management Framework based on the
principles of AS4360 (risk management standard) to manage the following risks:
Financial
Regulatory
Safety
Environmental
Corporate Image
Standardisation: Maintain standardised asset design, installation, operation and

maintenance procedures.
Risk assessment: Capital Allocation Process (CAP) Model to assess project benefits
and risks
ALAP: Manage risks based on As Low as Practicable (ALAP) concept
Culture: Build risk-management into the culture of organisation
Risk assessment processes: Continuous development and implementation of risk
management systems and processes
3.4.2 Condition monitoring

SP AusNet already has a range of processes and systems to monitor and analyse the
condition of its assets and accurately forecast the future replacement/relocation/
refurbishment requirements. For example, its Line Inspection Manual provides a
programme for the inspection and assessment of overhead network components

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(poles, cables, pole top assemblies). The other such systems include Thermal Imaging
Plan, Meter Asset Management Plan and Electrical Network Development Procedure.
In addition, the Asset Management Plan includes the following strategies:
Consolidated condition monitoring policy (T&D)

Consolidation and integration of information management systems
Automated management and analysis of data
Implementation of plant monitoring systems associated with new assets
Automated field data capture and update
Electronic data capture and provision to field based personnel
Develop and implement HV cable test and analysis programme
Leverage transmission knowledge and experience
Develop expanded application of RF and Infra-Red technologies
As evident from above strategies, SP AusNets overall strategy is to leverage the

existing systems, develop new systems and move towards greater automation.
3.4.3 Asset maintenance

Pursuing optimum asset inspection and maintenance cycles, cost-effective maintenance
and reliable supply, SP AusNets maintenance strategies include:
Condition-based maintenance
Continually monitor and adjust inspection and maintenance cycles to suit the
performance and condition of network assets.
Selectively increase the use of condition monitoring and diagnostic testing
methods.
Maintenance-intensive assets: Based on technical and economic evaluations,
selectively refurbish or replace maintenance-intensive assets.
Live maintenance: Progressively increase the safe use of live maintenance work
on the distribution network if effective in meeting business and customer service
targets.
Criticality analysis: Establish criticality of assets in prioritising the maintenance
effort.
Automation
Where practicable, new assets to have built-in condition monitoring and self-
testing facilities.
Deploy electronic hand-held devices for asset inspection,
operation, maintenance and replacement activities.
Implement automated uploading and downloading of information to electronic
hand held devices.
Adopt automated analysis of network condition and performance data.
Competence: Use appropriately skilled and experienced personnel to perform all
maintenance activities.
Benchmarking: Benchmark asset performance data to identify opportunities for
enhanced asset maintenance and management practices.
Spares: Ensure appropriate stocks of spare parts and equipment at strategic
locations.

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3.4.4 Information management

The objectives of SP AusNets information system strategy include reducing resources
required, collect and analyse data; adopting automated reporting and analysis; and
enhancing relevancy and accuracy of data. The strategies to achieve these objectives
include:
Consolidation of all information systems (including SCADA) and processes

Phasing out of paper-based data gathering and reporting
Integration of network SCADA and customer fault management system
Ensure adequate data security and recovery plans
User-friendly reporting and query facilities
Preference for Web browser architecture to allow portability and remote access
Web access for customers and other stakeholders to access information
Ramp up the use of electronic hand-held devices for data collection and establish
direct link between these devices and asset management system
3.4.5 Operations management

SP AusNets operational objectives are to ensure performance targets are achieved;
integrity of assets is not compromised; and safety and environmental standards are
met. One of its overriding principle is to ensure that operational systems should provide
the staff with relevant information in a format that assists them to make timely and
accurate decisions.
Some of its operational management strategies are as follows:
Real-time network monitoring, assessment, management and optimisation (e.g.,

highly loaded network components and lines can be predicted and suitable remedial
actions can be taken)
Equipping field personnel with PDAs
Integration of Outage Management System (OMS) with asset management system
and GIS
Outage Management System to have the capability to serve 30% of customer base
during network emergency events
Regular review of all operational procedures
SCADA improvements
Selective and automatic load shedding
Load management
Distribution feeder automation
3.5 Benefits from PAS 55 certification

SP AusNet has reported the following benefits from alignment with PAS 55:
Business benefits / reputation

Enhancement of SP AusNets reputation as an Asset Infrastructure Manager
Alignment of Asset Management Strategies to Corporate Objectives
Corporate business objectives are now clear and cascaded down the organisation
Credible marketing advantage for future business acquisitions and integrations

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Improvement in overall asset management function

Improved line of sight of the asset management system and improvement plans
Asset Management Policy introduced
Consistency of approach on Asset management Strategies and Plans across the three
networks
Asset owner concept introduced
Asset Management Objectives are better aligned throughout the company for the three
networks
Improved focus on risk management within asset management
Communication of asset management strategies and plans improved
Training / competence / outsourcing

Improvement in identifying technical competencies for field employees and entry into DRIVE
Introduction of annual reviews for all field employees
Introducing personal development plans for field employees
Improved training of contracts on site of the SP AusNet Way
Improved drawing management, especially field updates
Better management of contractors
Tools / equipment
Introduction of a tools and equipment calibration register and subsequent testing
Systematic optimisation of inventory of spares
Audits / corrective action / continuous improvement

Better auditing of field outcomes, especially contractor works
Improved use of the corrective action system to manage change
Significant incident investigation reports that contain follow up actions are now time-
bounded and monitored for completion
Provides a substantial tool for continuous improvement against a best practice
4 Transformer life cycle management by Eskom Distribution,

South Africa 21
This case study shows how Eskom Distribution of South Africa used condition monitoring as one of
its core strategies to manage the life of its transformersand reduce the risks of expected failures.
4.1 Eskom Distribution22

Eskom generates approximately 95% of the electricity used in South Africa. The company
generates, transmits and distributes electricity. Its key statistics include:
100% state-owned electricity utility

46, 624 employees 23
5.1 million customers
Net generating capacity: 42.0 GW
Approximately 354,000 km of cables and power lines
21
Paper titled, Power Transformer Life Management by L.M. Geldenhuis (18th International Conference on Electricity Distribution)
22
Eskon Web site: www.eskon.co.za
23
All figures as at 30 September 2013

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4.2 Eskoms transformer fleet

Eskom Distribution Western Regions distribution transformer population include 350 units
with capacity ranging between 1 MVA and 160 MVA, and primary voltage between 33 kV to
132 kV. All these units are free breathing type and the total installed capacity is about 7,500
MVA.
The area covered by the distribution network is large and characterized by intense diverse
atmospheric conditions (humidity, temperature) and customer profiles. These conditions
expose the transformer fleet to a broad spectrum of failure modes and risks.
The age profile of the fleet is as follows:
0-9 years age: 18%

10-19 years age: 14%
Considering the large proportion of aged transformers, asset management is crucial for
Eskom Distribution.
4.3 Eskoms transformer life management process

Eskom Distribution Western Regions transformer life management process comprises the
following steps:
General assessment: All transformers are first evaluated using a general assessment.
Focused assessment: Based on the results of general assessment, a more focused
assessment is carried out of the select transformers
Risk identification: Based on the results of both general and focused assessments,
condition monitoring data is interpreted and diagnosed to define the probability of
failure or network risks.
Suitable maintenance strategies: Identified risks lead to adaption of suitable
maintenance strategies.
Capital allocation: Depending on the overall assessment of the condition of
transformers, inputs are given to the capital investments committee.
4.3.1 General assessment

During the general assessment, transformers are evaluated in terms of set reference
parameters for the particular unit. This assessment is important because to set up
aging profiles it is critical to know what the starting point is. The reference parameters
should be well defined and align with the condition monitoring techniques that would
be applied during the life cycle of the transformer. The typical condition monitoring
techniques used are as follows:
Frequency Response Analysis

Acoustic Response Analysis
Dissolved Gas Analysis
Moisture assessment of solid insulation

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Moisture assessment of liquid insulation

Degree of Polymerization
Oxidation levels
Dielectric strength of oil
Tan Delta assessment of bushings
In addition to the initial condition assessment, the transformers are ranked according
to a set criterion (e.g., network criticality, customer profiles, equipment failure history
and network redundancy).
4.3.2 Focused assessment

Focused assessment is applicable only to the units that exceed certain pre-defined
benchmarks. The criteria used for condition assessment include:
Degree of polymerisation (using furans)

Dissolved Gas Analysis (DGA)
Dielectric strength
Moisture content
Acidity
Depending on the margin of deviation from the benchmark and other factors like
prevailing operating conditions and network criticality, the status of each transformer
is escalated to certain risk level. For example, Fig. 6.5 shows the escalation process
for excessive moisture content. Similar processes are used for other assessment
parameters.
Moisture =
2.0%
5MVA<Rating =
Rating = 5MVA Rating>20MVA
20MVA
Consider online
Sampling Sampling Sampling Sampling moisture
temp. > 40C temp. < 40C temp. > 50C temp. < 50C assessment
if below 2.2%, Dry out or if below 2.2%, do Action depending

Consider dry out do nothing else online moisture nothing else dry on confidence
dry out assessment out or assessment level
Fig. 6.5: Escalation Process for Excessive Moisture in Transformers

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4.3.3 Conclusion
Condition monitoring activities do not re-instate the lost life of equipment. These
activities assist network operators to understand the aging process and detect
possible failures in advance. Condition monitoring is the pillar of power transformer
life management, which is an ongoing process. By understanding the individual aging
profiles and dominant failure modes, the life of transformers can be extend.

CLP Power case study shows that asset management is a long-term initiative. Whats our own
time horizon for adopting a full-fledged asset management programme?
CLP Power started by reorganising its organisational structure. What kind of organisation
structure will suit our asset management priorities?
Can we adapt some of the countermeasures used by Chugoku to suppress future CAPEX
expenditures against for aging assets?
How can we create or improve our asset registry system?
What can we learn from SP AusNets case study in the following areas: setting asset
management objectives and detailing the key strategies (e.g., risk management, information
management, maintenance, operations, etc.)?
What specific KPIs should we have for monitoring the performance of asset management
programme?
Do we have detailed age profile of all our transformers like Eskom Distribution?
Eskom follows a systematic process of condition assessment of its transformers, followed by
suitable maintenance strategies. How is our own transformer condition assessment process?

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Chapter 7: Status of Asset Management

Readiness for LMS Utilities
The first five chapters of this guidebook were dedicated to achieving an understanding of the overall
framework of an asset management system. The previous chapter, no. 6, provides an opportunity to learn
from other distribution utilities that have already achieved high level of maturity in asset management.
This chapter enables readers to step back and look at the current status of asset management readiness
in LMS utilities.
Specifically, this chapter captures:
Results of an assessment carried out in 2012 among LMS utilities to assess their asset management
maturity.
Individual profiles of each of the LMS utilities. These profiles include information on four key aspects:
power supply, assets, performance and asset management activities.
1 LMS utilities: Assessment of Asset Management Activities

In 2012 an Assessment of Asset Management Activities was undertaken among the following nine
LMS utilities: EDC, EDL, EVN Hanoi, EVN HCMC, EVC NPC, EVN CPC, EVN SPC, PEA and MEA. The
objective of the assessment was to establish the LMS utilities maturity level in asset management
against the following scale.
The maturity scale has six maturity states as follows:

The organisation is starting to learn about the importance of Asset
1 Innocent
Management activities
The organisation is aware of the important of the Asset Management
2 Aware
Activities and had started to apply this knowledge
The organisation is developing its Asset Management Activities and
3 Developing
embedding them
The organisations Asset Management Activities are developed, embedded
4 Competent
and are becoming effective
The organisations Asset Management Activities are fully effective and are
5 Effective
being integrated throughout the business
The organisations Asset Management Activities are fully integrated and are
6 Excellent
being continuously improved to deliver optimal whole life value
Fig. 7.1: Asset Management Maturity Scale24
1.1 Assets in focus

To ensure consistency among the respondents, the scope of assets to be included in this
assessment was defined as below:
24
Source: AMCL

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MV Distribution Transformers
Primary (e.g. 33/11kV)
Secondary (e.g. 11/0.4kV)
MV Underground Cable
MV Switchgear (indoor type)
1.2 Key assessment questions

The assessment included 20 questions covering the following key elements of an assessment
programme:
Assessment management framework, policy, strategy

Life cycle management of assets
Risk management practices
Maintenance practices
Organisational structure, training
Asset information system
Processes for review and continual improvement
The complete questionnaire along with responses is covered under item 1.4.
1.3 Summary of assessment results

Based on the responses provided, the following conclusions can be drawn:
1.3.1 Overall asset management maturity level

Based on the maturity scale shown on the previous page, LMS utilities have crossed
the Innocent stage, and they are somewhere around the next two stages: Aware and
Developing. Several conferences on asset management, where subject matter experts
from the ASEAN region and around the world have shared their knowledge, have
contributed towards enabling LMS utilities cross over the innocent stage.
All utilities are aware of the importance of asset management and are already using
some of knowledge (Stage 2: Aware). Some utilities are further developing their asset
management practices and trying to embed the knowledge into actual practices (Stage
3: Developing).
1.3.2 Potential for significant improvements and benefits

Since LMS utilities are less than halfway through the complete journey of asset
management, they stand to gain significant benefits (efficiency, losses, cost and
customer satisfaction) if various gaps identified in the assessment are filled and further
steps of improvement are taken.
1.3.3 Key gaps and areas of improvement

Each utility is unique in terms of the complexity and size of its operations, geographical
spread, types of assets, etc., and therefore, has its own specific gaps and areas of
improvement. In general, however, the assessment shows gaps in asset management
readiness lie in the following key areas:

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Asset management framework policy, strategy, managements commitment,

alignment with overall business strategy
Life cycle management
Asset information management (e.g., asset registry and IT infrastructure)
Asset management system performance review and continual improvement
In contrast to above gaps, all utilities follow matured practices in the areas of asset
maintenance.

The following pages show the questionnaire and responses of LMS utilities.

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1.4 Assessment of asset management activities: Questionnaire and

responses by LMS utilities
# Choose only one response to each question. Place (X) in the column next to you selected response.
Question
Question Response 1# Response 2# Remarks
No.
1 Has the No action taken 1 Some 8
organisation to develop a components are
establish a framework or in place but no
framework or system for asset framework pr
system for asset management. structure linking
management? them.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA x
MEA X *Discussion
the meaning
of Framework
whether we
have the same
understand.
2 Has an Asset Do not have a 3 As Asset 6
Management documented Management
Policy been Asset Policy exists but
documented, Management not authorised by
authorised and Policy top management.
communicated?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
ECN CPC X
ENV SPC X
PEA X
MEA X
Ask EVN to give
more information
on the AM Policy

101 |
3 Is the Asset No 3 Started process 6

Management to align Asset
Policy aligned Management
with strategic Policy to strategic
business plan? business plan.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
4 Does your No 2 Some 7
organisation components are
have Asset in place but no
Management framework or
Strategy structure linking
them.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X Ask for more
information from
other utilities.
5 Is your Asset Do not have 4 The existing Asset 5
Management an Asset Management
Strategy Management Strategy is
consistent Strategy not consistent
with the Asset with Asset
Management Management
Policy and Policy and
Strategic Business Strategic
Plan? Business Plan.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X

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EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
6 Does your No 7 The need for 2
organisation Life Cycle
practises Management
Life Cycle of key or
Management of critical assets is
its key or critical understood and
assets? the organisation
has initiated steps
to introduce such
methodology
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X Ask for more
information from
EDC & EDL
7 Does your No 3 The need for risk 6
organisation have management
risk management of assets and
policy or network is
procudures understood. The
to deal with organisation has
asset-related initiated steps to
risks or network identify assets
criticalities? and parts of
networks that are
critical to its
EDC
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X

103 |
8 Does your No 0 The need for

organisation maintenance
practice planning of
Maintenance network assets
Planning for its is understood.
network assets? The organisation
has initiated
steps to towards
implementing
such
methodology
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
9 What is
your current
maintenance
practice of your
network assets:
(a) Run to failure No Yes
(b) Time-based? No Yes
(c) Preventive? No Yes
(d) Condition- No Yes
based?
(e) A mix of No Yes
time-based and
condition-based?
(a) Run to failure? No 0 Yes 9
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X

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(b) Time-based? No 0 Yes 9

EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X Ask EVN to
clarify what
time-based
means to them
(c) Preventive? No 2 Yes 7
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X Wonder why EDC
doesnt have
preventive?
(d) Condition- No 0 Yes 9
based?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X

105 |
(e) A mix of No 1 Yes 8

time-based &
condition-based
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
10 If your
organisation
practices
Condition-based
Maintenance, is
it applied to the
following selected
assets:
(a) MV No Yes
transformers?
(b) MV UG cables? No Yes
(c) MV No Yes
switchgears?
(a) MV No 0 Yes 9
transformers
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
(b) MV UG cables No 2 Yes 7
EDC X
EDL X
EVN Hanoi X
EVN HCMC X

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EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
(c) MV No 0 Yes 9
switchgears
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
11 Do you measure No Yes
the performance
of your network
assets?
Are Key No Yes
Performance
Indicators (KPI)
used to measure
the performance
of network
assets?
Do you measure No 4 Yes 5
the performance
of your network
assets?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X

107 |
Are Key No 9 Yes 0

Performance
Indicators (KPI)
used to measure
the performance
of network
assets?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
12 Do you have a No 8 Yes 1
review process
for your Asset
Management
activities?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X Recheck this with
EDL

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13 Is your Top Management 0 Top Management 9

Maintenance has not understands
Department considered the need to
organised and the need to re-organise and
structured to re-organise and re-structure the
ensure that re-structure the Maintenance
network assets Maintenance Department to
deliver the desired Department to ensure network
reliability and ensure network assets deliver the
performance? assets deliver the desired reliability
desired reliability and performance
and performance. but has taken no
action.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
14 Where The organisation 1 The organisation 8
construction and has not monitors and
maintenance considered the controls its
activities are need to put outsourced
outsourced to monitoring and activities on an
contractors, controls in place ad-hoc basis. Not
do you have for outsourced all outsourced
appropriate activities. activities are
monitoring monitoring and
and controls in documented.
place to ensure
compliance
to your work
standards?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X

109 |
15 How does the The organisation 0 The organisation 9

organisation does not have understands the
identify the any means in need to identify
training and place to identify training and
competency competency competency
requirements requirements. requirements
and arranges for and has plans
the necessary to provide
training to the necessary
achieve these training to
competencies? achieve these
competencies.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
16 Does the No 7 The oganisation is 2
organisation have aware of the need
a computerised Asset data id for computerised
asset data and kept as manual asset data and
maintenance records. maintenance
management management
system> system, and is in
the process of
deciding how to
do this.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA

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17 Is the asset data The organisation 1 The organisation 8

updated and has not understands the
maintained on a considered this need to update
regular basis to need an asset asset data and
ensure it remains data is updated has initiated
current? on an ad-hoc steps to ensure
basis. this is done.
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
18 Does the The organisation 1 Procedures are 8
organisation has not available but used
carry out failure considered the in an inconsistent
investigation need to carry manner or on an
into equipment out investigation ad-hoc basis.
failures and non- into equipment
conformance to failures and non-
specifications? compliance
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X Recheck this with
EDL.

111 |
19 Are Capital The organisation 0 The organisation 9

Expenditure has not is aware of the
(CAPEX) and considered this need to prioritise
Operational need. CAPEX and CAPEX and OPEX
Expenditure OPEX spend is not spend and to link
(OPEX) prioritised and it to network
optimised where linked to network performance, and
expenditure is performance is in the process
prioritised to of deciding how
ensure targeted to do this.
service levels
and reliability is
achieved?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X
20 Doesthe No 5 The organisation 4
organisation reviews the
have procedures performance and
in place to reliability of its
review and assets on and
ensure continual ad-hoc basis.
improvement in
the performance
and reliability of
its assets?
EDC X
EDL X
EVN Hanoi X
EVN HCMC X
EVN NPC X
EVN CPC X
ENV SPC X
PEA X
MEA X

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2 Brief Profiles of LMS utilities

2.1 Electricite Du Cambodge (EDC)25
Power supply (2011 figures)
Installed capacity: 550.75 MW
Energy generation: 2,541.36 GWh
Sales: 2,343.63 GWh
Growth rate in energy sold from 2010 to 2011: 15.19%
Number of consumers: 418,066
Assets (2011 figures)

Cables (HV-230 kV & 115 kV): 819.64 km
Cables (MV-22 kV): 2,300 km
HV substations: 13 nos. (1,353 MVA)
MV distribution transformers: 1,146.25 MVA
Performance
Total System Loss
Year Loss (%)
2006 10.69
2007 10.37
2008 10.03
2009 9.76
2010 9.51
2011 7.16
Key asset management activities

Periodic inspection and maintenance
Patrol, inspection and repair of facilities
Outage prevention, restoration of fault and accidents
Tree cutting and removal kite, etc. from power lines
Testing of relay protection at each grid substation
Overhauling of transmission systems
Training /competence building
Data management
Arrangement of testing equipment
Primary Injection CPC100 and Tan Delta (TD1)
Moisture content tester (DIRANA)
Primary Injection (T3000)
Secondary Injection (DRTS 64)
SF6 breaker analyser
25
Source: Presentation titled, Asset Management in EDC Cambodia. Presented by EDC in June 2012 at Thailand.

113 |
Transformer resistance meter

SF6 gas detector
Mega ohm meter
2.2 Electricite Du Laos (EDL)26

Power supply (2011 figures)
Installed capacity: 384.74 MW
Domestic sales: 2,399.36 GWh
Growth rate from 2010 to 2011: 7.14%
Number of consumers: 863,528
Assets
Cables (HV transmission line): 3,343 km
Cables (MV-35 kV, 25 kV, 22 kV, 12.7 kV): 17,750 km
Cables (LV- 0.4 and 0.22 kV): 13,873 km
Substations (115/22 kV): 33 nos. [1,035 MVA]
Distribution transformers: 15,043 units [2,467 MVA]
Performance
Energy Loss
Year Loss (%)
2005 19.32
2006 17.86
2007 15.30
2008 13.70
2009 11.98
2010 10.78
2011 10.14

Loss reduction activities
Additional transformer at long MV feeder
Change smaller conductors to bigger
Replace over-leaded transformers with new ones
Automatic metering for large customers
Replace faulty meters
Energy efficiency
Automatic voltage regulator, capacitor in MV network
Capacitor bank for large consumers (ensuring power factor of not less than 0.85 for
large consumers)
Capacitor bank at 22/0.4 kV transformer station
Demand side management
26
Source: Presentation titled, Asset Management in EDL Lao PDR. Presented by EDL in June 2012 at Thailand.

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Maintenance
Guidance from Transformer Handbook (2009)
Scheduled maintenance on daily/monthly/yearly basis
Condition monitoring by checking oil and winding temperatures, colour of silica gel, oil
level, main tank, Overload Tap Changer (OLTC), protection relay, bushing, etc.
Overhaul: Once in 10 years or after failure
Better storage facility to protect electrical equipment from humidity and heat
Risk management identified risks
Lack of asset information
Old network
Lack of expertise for operations and maintenance
No automation for switching on/off
No local electrical standards (follow IEC)
Bid evaluation: Constraint in ensuring good quality at reasonable price in terms of
compliance with governments procurement regulation
2.3 EVN Hanoi Power Network27 (EVN Hanoi)

Power supply
Customers: 1.97 million
Output in 2011: 9,514.4 million kWh
Maximum load: 2,028 MW
Growth rate: 13-15%
Assets
Cables (110 kV line)
Overhead: 622 km
Underground: 17.42 km
Cables (MV line)
Overhead: 5,052 km
Underground: 2,002 km
Cables (LV line): 23,244 km
Substations
110 kV substations: 30 nos.
Distribution substations: 12,685 nos.
Performance
Acceptable Fault Ratio
Assets Ratio Inner City Suburbs
110 kV line Case/100km, year 0.84 0.84
MV line Case/100km, year 12 15
110 kV substation Case/feeder bay, year 0.05 0.05
Distribution substation Case/100 transformers, year 1.8 2.25
T&D loss rate: 7.5%, which must be gradually reduced.
27
Source: Presentation titled, Process to operate and manage Hanoi power network. Presented by EDL in June 2012 at Thailand.

115 |

Routine maintenance
Management of performance (fault ratios and loss reduction)
Maintenance and testing
Network expansion planning (based on forecast of load growth)
New investments
Risk management
Monitoring working temperatures of equipment
Measures to prevent high humidity situations
Close monitoring when construction works can affect power lines
2.4 EVN Hochiminh City Power Corporation28 (EVN HCMC)

Power supply
Output: 14,567 million kWh
Growth rate: 80,000 new customers every year
Assets
Cables (110 kV line)
Overhead: 517 km
Underground: 18.07 km
Cables (MV line): 5,107 km [underground: 1,301 km]
Cables (LV line): 9,895 km
Substations
110 kV substations: 42 [3,496 MVA]
Distribution substations: 21,946 [8,178 MVA]
Turnover: USD 932 million
Performance
NA (information not available)

Risk management identification of key risks
Unfavourable natural environment
Physical failure of assets
Inappropriate design, specifications, procurement, construction, operations and
maintenance
Ownership/control of assets not properly defined and implemented
Malicious activities
Risk mitigation
New transformer considered if remedial actions are not applicable
Procurement: Implemented a step-by-step bidding procedure according to laws of
procurement of Vietnam
Inventory management: Reduced inventory by using material and equipment effectively
28
Source: Presentation titled, 6th Lower Mekong Sub Region Harmonisation Forum. Presented by EVNHCMC in June 2012
at Thailand.

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Information management: All fixed assets managed through a Financial Management

Information System (FMIS) combined with specialised software for on-network materials
and equipment management
Transformer management application (stock-in/stock-out)
Access to and update of database of EVN HCMC as well as its subsidiaries
Monitoring of specifications, quantity changes, history, operational status
Statistics and reporting
Operations, maintenance and replacement
Effective utilisation of transformers capacity; optimum allocation of number of
transformers
Periodic tests and monitoring
Periodic maintenance
Inspections before and after special events
Inspections for fault analysis
2.5 EVN Northern Power Corporation, Vietnam (EVNNPC)29

Power supply
Power sales (2010): 23,884.62 million kWh
Number of customers: 6,204147
Assets
NA (Information not available)
Performance
Asset management activities

Distribution transformer management
Technical specifications: Frequency, creepage distance, voltage rating, insulation levels,
grounding resistance, type (oil immersed, hermetically sealed), cooling method, tapping
method, materials, losses, etc.
Monitoring and inspection
Load, temperatures, insulation condition, cooling systems, fire prevention
Visual checks, insulation resistance measurement, oil characteristics test, DC
resistance test
Maintenance
Cleaning, fixing small defects
Repairing faults
Replacement
Failed or overloaded transformers replaced within one day (normal conditions)
29
Source: Presentation titled, EVN-NPC. Presented by EDL in June 2012 at Thailand.

117 |
2.6 EVN Central Power Corporation (EVNCPC)30

Power supply
Output up to 2011: 9.062 billion kWh
Maximum load: 1,700 MW [up to early 2012]
Growth rate: 15%
Assets
Cables (110 kV line): 2,312.32 km
Cables (22 kV - underground): 237.37 km
Cables (0.4 kV - underground): 158.61 km
110 kV substations: 83
Transformers: 117
Distribution substations: 18,426
Transformers: 18,693
Performance
Energy Loss
Year Loss (%)
2007 7.76
2008 7.26
2009 7.82
2010 7.38
2011 7.30
Life cycle management (distribution transformers)

Checking before putting in service
Requirements on technical documents (manufacturers documents, test reports,
acceptance reports, etc.)
Inspection and testing to ensure matching of parameters in technical specifications
Testing of control and protection relays
External visual inspection (external surface of insulators, integrity of tank, oil colour
and oil level, safety valves, explosion prevention tube glass, etc.)once a year
Checking during service

Day time periodic checks: Substations loaded more than 80% or 250 kVA and above
(once a month) and others (once every two months)
Typical checks: Noise, insulator, tank, oil level in oil supplement tank, heating on
connections, earth systems, colour of moisture absorbent
Recording of transformer operating parameters
Night time periodic checks: once every three months during peak hours
29
Source: Presentation titled, Viet Nam Electricity-Central Power Corporation. Presented by EVNCPC in June 2012 at Thailand.

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Accidental checks: In case of significant changes in ambient temperature, sudden

rain or storm
Maintenance and periodic tests
Transformer periodic maintenance (once a year): External transformer cleaning,
cleaning of insulators, cleaning and tightening cable terminals, testing parts in doubt
and treatment, adding insulating oil, checking earth connections
After an overhaul: External visual examination, no-load tests, measurement
of insulation resistance on windings (once in three years), measurement of DC
resistances of all windings at all taps (once in three years), checks on connection
groups, short-circuit tests, insulation oil tests (once a year), insulator tests
Underground cable management

Tests during procurement: Routine, sample type and water penetration tests (IEC
standards)
Installation: Installed in PVC tubes dumped in ground
Tests before putting into service
External visual examination
Measurement of insulation resistance
Testing power frequency and voltage
Identifying phase sequence
During operations
Day time tests (once a month)
Night time tests (once every three months)
Recoding of on-load parameters every hour
Service should not exceed more than 15% compared to rated voltage
In case of cable fault, use of cable testing and diagnostic equipment to determine
fault location
Investment in SCADA and DMS systems
Installation of 3-phase and one-phase electronic metres
Risk management
Identification of key risks to cables
Damage by other parties (installation companies, plumbing, telecommunication, etc.)
Low competence of personnel attending faults
Severe weather conditions (storms, floods, high humidity, overheating, etc.)
Physical failure of assets
2.7 EVN Southern Power Corporation (EVNSPC)31

Power supply
Energy supplied: 32,281 GWh
31
Source: Presentation titled, Presentation-EVN-SPC-MEA Bangkok. Presented in Dec 2012 at Bangkok.

119 |
Assets
110 kV line: 4,000 km
110 kV Substations: 145 nos. (7,600 MVA)
22/12.7 kV line: 54,000 km
220/380 V line: 69,500 km
Substations: 110,000 nos. (17,000 MVA)
22 kV underground cable: 650 km
Performance
Power loss: 5.75%

2.8 Metropolitan Electricity Authority (MEA), Thailand (2011 figures)32

Power supply
Energy sale: 44,197 million kWh
Number of customers: 3,115, 695
Assets
Total assets: THB 138,641 million
Performance
Load factor: 66.89%
SAIFI (times/customer/year): 2.79
SAIDI (minutes/customer/year): 62.07
System energy loss: 3.44%

Energy loss reduction programme
Engineering standards, non-technical measures, capacitor installation, 12 kV primary to
24 kV primary conversion, 69 kV primary to 115 kV primary conversion
Reliability improvement measures sub-transmission lines

Planning
Additional line
Conversion from overhead to underground
Design
Open loop tap-tied configuration
Install Load Break Switches
Maintenance
Tree pruning
Line patrolling with thermal scanner and binoculars
Partial Discharge (PD) detection using ultrasonic tester or corona camera
Cleaning of live line with pressurised water
Availability of outage restoration crew
32
Source: Presentation titled, Asset Management in Metropolitan Electricity Authority, Thailand. Presented in June 2012 at Thailand.

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Reliability improvement measures sub-stations

Planning
Build new sub-stations
Replace metal-clad air insulation switchgears with SF6 gas insulators
Employ automation technology
Design
Double bus for 69 kV and 115 kV Gas Insulated Switchgear (GIS), and single bus tie
for 12 kV and 24 kV GIS
Overload Tap Changer (OLTC) with oil filter
Partition power transformer bank and install fire extinguishing system
Maintenance
Periodic testing of protection relays and alarm system
Power transformer oil filtration
Clean OLTC contacts
Measure contact resistance and operating time of circuit breaker
Reliability improvement measures distribution lines

Planning
Replace bare conductor or partially insulated cable with aerial spaced cable
Overhead to underground conversion
Distribution Automation System (DAS)
Design
Multi-dividing, multi-connecting configuration
Reduce length of lines
Replace pin type insulator with pin-post type
Maintenance
Tree pruning
Line patrolling with thermal scanner and binoculars
Partial Discharge (PD) detection using ultrasonic tester or corona camera
Online monitoring of transformer load current
Prevent interruptions to live parts by animals
Availability of outage restoration crew
Transformer management
Inspection and testing at manufacturers works
Thorough checking of installation
Compliance with recommended commissioning procedures and tests
Dissolved Gas Analysis (DGA)
Vacuum drying
Cleaning of fins
Periodic testing of oil
Test and calibrate relays
Install surge arresters
Checking harmonics and install harmonic filters

121 |
Checking insulation resistance of core

Online monitoring
Staff training
2.9 Provincial Electricity Authority (PEA), Thailand (2010 figures), 33,34

Power supply
Energy sale: 100,749 million kWh
Service area: 519,999 Sq.m.
Assets
115 transmission line: 10,228 cct-km
33 kV distribution line: 35,351 cct-km
22 kV distribution line: 232,613 cct-km
Distribution transformers: 254,466 units
MV load break switch: 33,772 units
Pole-mounted CB (ACR): 2,679 units
Net assets: USD 8,874 million
Performance
Energy losses: 4.91%
SAIFI (times/customer/year): 8.85
SAIDI (minutes/customer/year): 350.06 minutes
Income: USD 9,801 million
CAPEX: USD 520.49 million
OPEX: USD 1,249.25 million
Asset life cycle activities

Planning, engineering, procurement, erection, operation, maintenance, analysis
Maintenance
Corrective (planned and unplanned)
Preventive (time-based and condition based)
Cables: Off-line partial discharge mapping, Tan Delta measurement
Distribution transformers: Insulation resistance/PI measurement, oil dielectric test, Tan
Delta measurement
Tests/test equipment for condition monitoring activities
Infrared camera (losses of connection, overload)
Ultrasound (partial discharge, arching, tracking)
Corona viewer (corona discharge, partial discharge)
33
Source: Presentation titled, Asset Management in Provincial Electricity Authority, Thailand.
34
Source: Presentation titled, PEAs Asset Management dated Dec 2012.

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Partial Discharge testing

Concrete testing (for poles)
Battery monitoring (for areas of high importance)
Routine patrolling
Other activities
Tacking of equipment age
Replacement plans for Automatic Circuit Recloser, MV Load Break Switches
Areas for improvement/challenges/potential risks
Equipment replacement / rotation plan
Performance-based procurement
Greater focus on condition- and reliability-based maintenance

Where do we stand on the asset management maturity scale (item 1)?
Whats our broad plan to move from where we are to the next level and ultimately to the level
6 (excellent)?
Based on the 2012 assessment and understanding of asset management derived from this
guidebook, what are our key gaps?
What three specific actions we can take over short-term to plug, even partially, the identified
gaps?

123 |
Chapter 8: Moving Forward Next Steps for

LMS Utilities
The first five chapters of this guidebook were focused on the overall framework of an asset management
system. Chapter 6 covered three case studies of how asset management is already delivering benefits in
the power distribution sector. The previous chapter describes the current status of asset management
readiness in LMS utilities. This chapter, which is the final chapter, provides ideas for enabling LMS utilities
to move forward in their respective asset management programmes.
Specifically, this chapter captures:
Challenges faced by utilities on their way to higher levels of maturity in asset management
Three-phase roadmap for asset management journey
Several tactical and strategic steps that can be implemented in the short and medium term
Key characteristics of an asset management programme
1 Asset Management: Challenges for LMS utilities

Power distribution utilities aspiring to achieve higher levels of maturity in asset management usually
face the following challenges on the way:
Strategic misalignment: Their business strategy and KPIs may not be aligned with the current
asset management practices.
Organisational structure: Many utilities are organised as top down, command-control

organisations, which is not conducive to smooth functioning of an asset management system.
Knowledge and competencies: Asset management is still a new field of knowledge for many
employees and managers, and required knowledge about the key asset management principles,
processes, tools, risk management practices needs to be imparted throughout the organisation.
Culture, change, mindset: Typically, utilities adopt a culture of stable operations where the
focus is more on somehow keeping the costs below the revenues and avoiding risks at all costs.
Normally, customer focus is not a priority. Executing change of this kind of culture is a major
a challenge.
Processes and methodologies: Asset management requires strong risk and life cycle based
processes, which is not the case for many utilities.
Data management and IT: Owing to lack of investment in IT infrastructure, utilities often
operate with non-integrated systems, insufficient data gathering and analysis, and inadequate
reporting systems.

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2 Four-phase roadmap
Recognising that adopting asset management on a bigger scale would involve a number of changes
all across the organisation, which can be unmanageable and disruptive, LMS utilities can adopt a
four-phase roadmap as described below:
Phase 1
The focus of the first phase is to make a strategic alignment with the asset management framework
and principles by adopting the following changes:
Grow competencies: Promote awareness of asset management through structured learning and
training on asset management all across the organisation.
Change: Top management should make a case for change towards new asset management
practices.
Modify organisational structure: Review the existing organisation structure and modify to
align with the three-part structure comprising Asset Owner, Asset Manager and Asset Service
Provider (as described in Chapter 4).
Realign KPIs: Move away from over emphasis on one particular parameter (say, reliability or
cost) and adjust KPIs to balance the focus on all three key parameters: Cost, performance and
risks.
Phase 2
Create asset registry: Availability of accurate asset informationage, performance, condition,
etc.is the key to effective asset management.
Develop risk management processes: Develop tools, processes and systems for risk management
across the complete life cycle of assets.
Develop life cycle management practices: Develop and adopt tools and processes for life cycle
management of all assets.
Performance management: Develop performance management processes to measure outcomes
(e.g., safety performance, reliability, return on assets, etc.)
Phase 3
In phase 3, the utility should be ready for a complete gap assessment.
Gap assessment: Complete gap assessment and benchmarking by expert.

AMP: Preparation of asset management plan (AMP)
Certification against PAS 55 or ISO 55000
Phase 4
Review and continual improvement
3 Short- and medium-term steps

3.1 Renewed strategic commitment of top management
The success of an asset management programme depends, first and foremost, on the
commitment of the top management of an organisation. LMS utilities can pick up greater
momentum in their respective journeys of asset management with a renewed commitment of
the top management to ultimately implement asset management in its entirety.

125 |
As mentioned in Chapter 2, although the primary objective of an asset management system is

to achieve a balance between cost, performance and risk, its ultimate goal is to enable power
distribution utilities to achieve their strategic business objectives. The understanding of this
direct connection between an asset management system and strategic business objectives is
the key to securing the commitment of top management.
3.2 Raising awareness across wider organisation

It is likely that LMS utilities dont necessarily lack the knowledge about the principles and
benefits of asset management, but this awareness is limited only to the handful of peopleand
the wider organisation, possibly including the top management, remains unaware about what
is asset management and why it matters.
Raising all round awareness about the necessity, benefits and principles of asset management
should be the top priority.
Making this guidebook widely available within the organisation (and if required,
translating it in the local language)
Sending employees to seminars and conferences on asset management
Holding internal presentations and discussions on asset management
Translating PAS 55 and ISO 55000 into familiar languages and making it easily accessible
Encouraging employees to get certified by the Institute of Asset Management (IAM)
Creating an asset management knowledge centre to store all the related articles, case
studies, specifications, etc. at one place
Inviting professionals from other utilities where an asset management programme is
already functioning successfully to share their experiences
Inviting consultants who advise on asset management to share their expertise
3.3 Create an asset registry

At the foundation of an effective and sustainable asset management system is an updated and
accurate asset registry, which answers the following key questions:
What do we own?
Where are our assets?
What are their key details?
Whats the condition of assets?
Whats the remaining life of assets?
Whats the value of assets?
3.3.1 Inventory of assets (what do we own?)

The question What do we own? seems straightforward, but answering this question
may not be easy for the following reasons:
Many of the assets are underground and cant be seen.

Assets have been added to the system over a long period of time in several
instalments.
The available records may be outdated, incomplete, inaccurate or missing.
Usual staff turnover in organisation may limit the availability of historical
knowledge.

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Considering above challenges it may not be possible to build the most complete,
accurate and updated inventory of assets in the first attempt, but it is important to
start this process and follow up with improvements over time.
3.3.2 Location (Where are our assets?)

With power distribution assets usually spread over large areas, the question Where
are our assets? is the next critical information of the asset registry. This component
involves both the mapping of assets (i.e., identification of location on a map) and
precise location (physical address). These maps can be hand-marked hardcopies or
more complex, as is the case with a Geographical Information System (GIS). Once the
locations and addresses are in place, this information can also be used to group assets
based on location.
3.3.3 Parameters (What are their key details?)

Asset registry should also include the following key details:
Manufacturer
Lot number
Year of installation and commissioning
Rating
Type
3.3.4 Health (What is the condition of assets?)

The condition (physical, operational) of assets has direct bearing on their remaining
life, reliability of network, maintenance costs, replacement costs, etc.
The condition depends not only on the age of assets, but also on how these are
operated and maintained. The assessment of assets condition can be done using
historical records, empirical data, visual inspections, tests, etc.
3.3.5 What is the remaining life of assets?

All assets eventually reach the end of their useful life either through amount of usage
(circuit breakers) or through length of service (electricity poles) or a combination of the
two (transformers). But there are also additional factors that impact life of an asset:
quality of design, quality of installation, level of maintenance, loading, environment
in which asset is kept (e.g., corrosive or normal environment). As such, an assets
remaining life should be assessed in its own localised context and uniform application
of default values should be avoided.
3.3.6 What is the financial value of assets?

Generally, organisations attach a value to their assets by taking their initial cost and
depreciating it over an assets life. Along with this book value, utility should also
know: What will it cost to replace it? Assess the value of assets by estimating the
cost of their replacement using the current technology and prices can be valuable for
optimising maintenance and operational strategies, and future investments.
The tools available for creating an asset registry vary from handwritten records to
standard spread sheet software to commercially available asset management software.

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An online asset registry that is accessible to all concerned personnel is a huge step
forward in the journey of asset management.
3.4 Optimum performance levels, KPIs and benchmarking

As mentioned in Chapter 2, the core objective of an asset management system is to enable a
utility to balance its performance, risk and cost. And therefore, utilities should define target
performance levels carefully by asking the following questions:
What level of service customers expect?

What are regulatory requirements?
What do our shareholders expect us to deliver?
What are new anticipated performance levels in the future?
Defining precise target performance levels would help to focus efforts in the right areas. In
addition, KPIs should be selected to measure, monitor and control the performance. These
KPIs could include, indices like SAIFI, SAIDI and ROA.
Finally, utilities can benchmark their current performance levels against the targets as well as
against the other utilities in the ASEAN region and Asia.
3.5 Create a risk management framework

As emphasised in Chapter 4, risk management is one of the core strategies or enablers of
an asset management system. Chapter 4 also describes the types of risks faced by power
distribution utilities, risk assessment process and PAS 55 guidelines.
Utilities lacking an established risk assessment framework, can use the following process for
creating a suitable framework (See Fig. 8.1)
Mandate and commitment
Design risk
management
framework
Continual
Implement
Improvement
Monitor
Fig. 8.1: Process for Establishing Risk Management Framework
Mandate and commitment: The very first step is to secure mandate from the top
management. To be sustainable, it should be mandated from the Board (or equivalent),

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implemented by senior management and supported by all levels of management and risk
owners.
Design of framework for managing risk: Risk management processes must be well
designed to support effective implementation.
Implementing risk management: Implementation is about following the agreed
processes in daily operations. Necessary training should be given to all staff before
implementation.
Monitoring and review: An important step, risk management practices should be
subjected to periodic monitoring and review to confirm compliance with agreed
framework.
Continual improvement: Continuing to tweak and enhance key elements of the
risk management framework to progress towards a more mature risk management
framework.
3.6 Criticality analysis of assets

All assets have the potential to fail, but not all assets fail the same way and pose the same
level of risk to performance. Some assets are indeed more critical than others. As part of asset
management initiative, utilities should assess the criticality of their assets and rank them
accordingly. Key questions to ask include:
How can assets fail?

For each asset, whats the likelihood of failure and what are the consequences of failure?
Whats cost to repair or replace the asset?
What are the other costs (social, environmental, etc.)?
The best practices for criticality analysis include conducting failure mode analysis, determining
probability of failure and consequences and listing assets according degree of criticality.
3.7 Gap analysis and certification

Many utilities are already using some elements of asset management framework, such as
inspection and maintenance programmes, condition monitoring, computerised record
keeping, Failure Mode Effect and Criticality Analysis (FEMICA), etc. Though all of these
elements are beneficial for the organisation, they themselves dont constitute an asset
management programme. Asset management is much broader framework involving several
management, financial and technical elements of an organisation (organisational strategy,
change management, information system, lie cycle based cost planning, etc.)
Gas analysis
An organisation seeking to implement the full framework of asset management system and
derive its maximum benefits should ultimate aim for a certification against PAS 55. The
process of certification, however, starts with a proper gap analysis against each of the specific
requirements of PAS 55. The review would provide a clear picture (see Fig. 8.2) of the gaps
in the existing asset management system. These gaps then become the basis of further work
(e.g., new processes, more comprehensive information system, etc.) before attempting full
certification.

129 |
Fig. 8.2: Map of GAP Analysis (PAS 55)
Preparing for certification

The gaps against PAS / ISO should be anticipated and planned for in terms of resources (time,
effort, manpower, cost).
Seeking PAS / ISO certification is a big project that would require establishing clear objectives,
plans and responsibilities. Putting in place an appropriate project structure is important to
ensure that peoples day-to-day activities align with the overall goal of certification and
effective asset management.
Its important to remember that compliance against PAS 55-1 represents not the end of the
journey of an asset management programme; its a significant milestone in a journey that
should continue further on the path of continual improvement.
4 Asset management: A perspective worth remembering

Journey with no short cuts
Adopting an asset management programme is a journey that usually takes a few years, sometimes
close to a decade. And it takes a series of systematic stepsstrategizing, planning, implementation,
reviews and continuous improvementto successfully establish an asset management system. Short
cuts dont work.
Top-driven
Asset Management is a top-driven initiative but it involves almost every employee within an
organisation. The top leader of the organisation (CEO) should champion the cause or rationale for
asset management.
Balancing long-and short-term gains

Asset management is a long-term investment, but long-term gains have to be balanced with short-
term, quick wins or else people can lose focus. The asset management team should ensure some
quick wins while working hard to achieve the medium-and long-term goals.

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Standards are the starting point

Compliance with PAS 55 or ISO 55000 is a startnot the end. For achieving best practices, utilities
need to be on the path of continual improvement and aim to perform beyond the standards.
5 Short-, medium- and long-term asset management in power

distribution utilities
Osman Bulent Tor and Mohammad Shahidehpour in their paper35 propose three distinct time frames of
asset management activities for power distribution utilities: Short-term, medium-term and long-term.
5.1 Short-term asset management

In the short-term, asset management involves monitoring, operating and controlling the
distribution network to ensure the reliability of power supply.
The reliability of supply is the ability of the distribution company to meet customers demand
for power without an interruption. In addition, it also implies the ability to restore power
quickly via alternative supply options in case an interruption does happen. The two common
measurements of the reliability are SAIDI (System Average Interruption Duration Index) and
SAIFI (System Average Interruption Frequency Index).
To ensure reliability, system operators monitor and control the power network in real-time
through a Supervisory Control and Data Acquisition (SCADA) system. SCADA collects real-
time system data from Remote Terminal Units (RTUs), which are installed throughout the
power system. The system data are stored in the Distribution Management System (DMS),
which enables operators to track and manages loads, maintain voltage profiles and maximise
the efficiency of the distribution system. Large-scale distribution networks also use
Geographic Information System (GIS), which stores spatial information about a utilitys assets
(locational information for switches, relays, transformers, poles, cables, etc.). In addition,
utilities maintain customer information database that includes information on demand
type, outage information and customer complaints, which all help in making optimum asset
management decisions.
5.2 Medium-term asset management

While the focus of short-term asset management is on operating the assets, the focus of
mid-term asset management is on maintaining assets. The objective here is to ensure that the
condition and performance of distribution assets continue to meet the needs of customers
and applicable regulatory requirements in the most cost-effective way.
Power distribution utilities employ a combination of the following three types of maintenance
strategies:
Emergency (or corrective)

Preventive
Predictive
35
Paper titled Electric Power Distribution Asset Management by Osman Bulent Tor and Mohammad Shahidehpour

131 |
While emergency or corrective maintenance occurs in direct response to a fault, preventive

and predictive maintenances aim to keep the assets in optimum working conditions, avoiding
failures.
Preventive maintenance can further be divided in two categories: Time-based Maintenance

(TBM) and Condition-based Maintenance (CBM). TBM is performed at regular and scheduled
intervals, such as biannual oil inspection of transformers. CBM involves monitoring the
condition of assets through online feedback and periodic tests, and providing maintenance
to the equipment when its condition falls below an acceptable threshold. For example, the
maintenance of circuit breakers is generally based on number of trips since last service.
To further optimise the cost of maintenance (and also cost of interruptions), distribution
utilities are moving beyond preventive maintenances, which fails to explicitly consider the
probability and consequences of a failure. For example, under CBM strategy, two identical
circuit breakers with the same physical and operational condition may receive the same
level of maintenance, even though one serves customers without an alternate supply, while
the other serves customers with an alternative source of supply. Predictive maintenance (or
Reliability-centred Maintenance, RCM) considers both the probability of equipment failure
and the system impact should a failure occur. The objective of RCM is to integrate all other
maintenance strategies and directs resources precisely to the critical points taking into
account the functional importance of the assets as well as their condition.
5.3 Long-term asset management

Over the long term, asset management in distribution utilities involves planning for network
growth and asset enhancement. The core objectives here are to be prepared to meet the
future growth in load; and respond to aging equipment, new regulations, new technologies,
changes in the market, etc. The long-term asset management is the key to sustainable
operations because distribution assets are expensive, and take long time to procure, construct
and commission.

From various challenges described in item 1, which ones apply to us?
Lets brainstorm on the four-phase roadmap described in item 2.
Is our top management fully committed to the asset management programme? Do the people
in the top management know the benefits of adopting an asset management programme?
What kind of training sessions can we organise to raise the awareness of asset management
across the cross section of all departments?
What the gaps in our current asset registry and how can we improve it? Should we look at
the applicable software programmes?
Are we comfortable with our risk management practices and processes? If not, what are the
key gaps?
Do we know the relative criticality of all our assets?

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References
Presentations [Title, presented by, date, location]
Process to Operate and Manage Hanoi Power Network, Ho Viet Thong, 27-28 June 2012, Thailand
Guidelines on Implementing Asset Management in Power Distribution Systems in ASEAN, Dr. Abu
Hanifah, 27-28 June 2012, Thailand
Hochiminh City Power Corporation, EVNHCMC, 27-28 June 2012, Thailand
Northern Power Corporation 6th LMS Harmonisation Forum, EVNNPC, 27-28 June 2012, Thailand
Managing T&D Assets to Enhance Business Performance 6th LMS Harmonisation Forum, EVNCPC,
27-28 June 2012, Thailand
Aging Transformers, Increasing Load: A Regional Approach to Managing Transformer Assets in LMS,
Mr. Surapon Soponkanaporn, 27 June 2012, Thailand
Policies and Best Practices for Utility on Distribution Asset Management in Japan, Kazuhiko Koeda,
27 June 2012, Thailand
Managing the Assets of Metropolitan Electricity Authority, Thailand, Dr. Asawin Rajakrom, 28 June
2012, Thailand
PEAs Asset Management, Mr. Somachai Songsiri, 27-28 June 2012, Thailand
Asset and Transmission System Operation and Maintenance Asset Management in EDC Cambodia,
Mr. Mak Thorn, 27-28 June 2012, Thailand
Asset Management in EDL Lao PDR, Mr. Vilakone Sengdara, 27-28 June 2012, Thailand
Implementing Risk-based Asset Strategy for Critical Network Assets, Hardanjit Singh Gosal,
September 2012, HCMC
Asset Management Transformation for ASEAN Utilities A Pragmatic Approach, Halim Osman,
September 2012, Ho Chi Minh City
Introducing Asset Management Best Practices to Power Distribution Utilities in Lower Mekong Sub-
region: A Case Study, Hardanjit Singh Gosal, 2013, Bali
PEA Asset Management, Kitti Leangkrua, Dec 2012, Thailand
Causes and Failure Rate of MEAs Distribution Transformer, Sompong Sitthichaiyanan, NA, Thailand
Asset Management Best Practices for LMS Utilities (EVN SPC), Tran Cong Dien, Dec 2012, Bangkok
LMS Harmonisation Phase 2 Study, MEA, Sept. 2013, Hanoi
MV Switchgear Maintenance, Hardanjit S. Gosal, ARSEPE 2008 Malaysia
Successful implementation of PAS 55 in SP AusNet, Richard Edwards (AMCL) and John Allen (SP
AusNet)
Case studies, papers, thesis, guides, books [Title, author, publication/publisher]

Electric Power Distribution Asset Management, Osman Bulent Tor & Mohammad Shahidehpour, NA
A Decade of Fruitful Network Asset Management in CLP Power, Chris Cheung & Chi-Pui Ng, The
Woodhouse Partnership
Experiences Using Quantitative Risk Assessment in Distribution System Asset Management, Dag
Eirik Nordgard & Geir Solum, CIRED
Power Transformer Life Management, L.M.Geldenhuis, CIRED
Asset Management Techniques; Joachim Schneider & et al., 15th PSCC
Asset Management Techniques for Transformers, Ahmed E.B. Abu-Elanien & M.M.A. Salama,
Electric Power Systems Research
Maintenance Optimisation for Power Distribution Systems, Patrick Hilber, Royal Institute of
Technology

133 |
Asset Management for Transmission and Distribution, Richard E. Brown & Bruce G. Humphrey, IEEE
Power & Energy Magazine
Asset Management: A Guide for Water and Wastewater Systems, New Mexico Environmental
Finance Centre
Asset Management: A Best Practices Guide, Environmental Protection Agency (EPA)
Leveraging Network Utility Asset Management Practices for Regulatory Purposes, KEMA
Assessment of Asset Management Activities, LMS TWG # 4
Business Essentials for Utility Engineers, Richard E. Brown, CRC Press
Note on ISO 55000, John Woodhouse, The Woodhouse Partnership, 2013
Guidelines for Power Delivery Asset Management, EPRI, 2005
Notes from Underground Cable Fleet Management, Matthew Olearczyk et al., IEEE Power &
Energy Magazine, 2010
Asset Management Medium Voltage Switchgear, Amol S. Patharkar, CEEAMA publication
Effective Condition Assessment of Medium Voltage Switchgear, Maintenance and Asset
Management, Vol 27, no. 4
Asset Management Plans (AMP) [Utility/company, title, year]

Centralines Limited, Asset Management Plan, 2005/2015
SP AusNet Electricity Distribution Network, 20-year Asset Management Strategy, 2006
Centralines AMP, 2013
Powerco, Asset Management Plan 2013
Asset Management Specifications / Standards [No., Title, publisher, year]

PAS 55-1:2008, Asset Management (Part 1: Specification for the optimised management of
physical assets), BSI, 2008
PAS 55-2:2008, Asset Management (Part 2: Guidelines for the application of PAS 55-1), BSI, 2008
LMS publications
Distribution Transformer Handbook, 2009 Edition
Power Transformer Handbook, 2009 Edition
Power Cable Handbook, 2011 Edition
Power Cable Handbook Vol. 2, 2012 Edition

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Introduction to Network Asset Management Guidebook

LMS Harmonisation Programme

Growing demand and expectations from customers;

Acknowledgement LMS TWG #4

Suraphol Wiboonwipa Kitti Leangkrua

International Copper Association Southeast Asia (ICASEA):

Acknowledgement LMS Utilities

Electricit du Cambodge (EDC), Cambodia: Central Power Corporation (EVNCPC), Vietnam:

1 LMS harmonisation programme and asset management

5.1 PAS 55 specification

2.2.2 Design Stage

8.42 Ultrasonic Detection

Chapter 7: Status of Asset Management Readiness for LMS Utilities 98

Increased knowledge of existing assets, and their criticality and condition

1 LMS harmonisation programme and asset management

1.1 Asset management: Part of strategic road map

LMS TWG #1: Power & Distribution Transformers

Promote common understanding of asset management fundamentals and best practices

Step 1: Creating awareness

Step 2: Developing framework

Step 4: Coaching and Mentoring

2 Challenges for LMS utilities

3 Asset management guidebook

What is asset management and why it matters?

2.1 Depth and breadth of contents: Foundational

Asset management in nutshell

2.2 Focus on physical assets (distribution network)

2.3 Structured around PAS-55

Chapter 1: Introduction to the guidebook

3.1 Four-step journey

Step 1: Acquire foundational understanding of asset management

What is asset management in a nutshell?

What it takes to implement an asset management system (including for transformers

Step 2: Learn from other utilitiesCase Studies

Step 4: Next Steps for LMS Utilities

Fig. 1.1: Structure of Guidebook

Step 3: Status of asset management in LMS utilities

Step 4: Next steps

4 How to use this guidebook?

Chapter 2: Assets, Asset Management,

Defines assets in the context of power distribution utilities;

1 Assets: Definition, types and hierarchy

Vital context: business objectives, policies,

Important interface: reputation,

Important interface: condition, performance,

Fig. 2.1: Five Types of Assets1

High Medium Household

Source: USA National Energy Development Project (public domain)

Fig. 2.2: Focus of Guidebook Medium Voltage Power Distribution Assets

Fig. 2.3: Hierarch of Assets

2 Asset management: Concept, definition and

2.1 Concept: Balance between cost, performance and risk

Risk of not meeting Life cycle costs:

Reliability, power quality,

2.2 Definitions in PAS and ISO

ISO 55000:2014 defines asset management as:

Coordinated activity of an organisation to realise value from assets.

The definition in ISO 55000:2014 is more generic compared to PAS 55-1:2008.

2.3 Grounds-up understanding (answers to key questions)