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Dealing with Large Scale Power Emergencies Applying The Lessons Learnt From Global Case Studies In The South African Context Shamal Sivasanker AMEU Conference 2007

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2 Conservative Estimation of affected customers: 500 million people affected since turn of the century Demand growth: 18.5% growth in energy consumption since 2000 Source: EIA The world as viewed from above

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3 What has been driving this growing trend on a global basis? Growing industrial and residential demand China & India economic growth Pressures on primary energy fragility of supply lines Growing industrial and residential demand China & India economic growth Pressures on primary energy fragility of supply lines Impacts of natural weather e.g. Hurricanes, Tsunamis, effects of changing weather conditions Skilled labour is a shortage in the Global Industry leading to constraints in operating Ailing infrastructure across the globe Lack of investment in terms of refurbishment and replacement particularly in T & D infrastructure Ailing infrastructure across the globe Lack of investment in terms of refurbishment and replacement particularly in T & D infrastructure Demand Natural Phenomeno n Natural Phenomeno n Human induced outages Ageing Networks Managing these issues develops more complexity

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4 Throughout history, events have driven change...

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5 2003 was driven by three such events...

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6 Eastern US - August 2003 Situation Root Causes Poor forecasting Lack of awareness Poor vegetation management Poor real-time support Poor forecasting Lack of awareness Poor vegetation management Poor real-time support Hot Summer Equipment out for repairs System close to limit Lack of dynamic reserves Hot Summer Equipment out for repairs System close to limit Lack of dynamic reserves Recommendations Lessons Learnt Non-compliance Fragility of system Poor operation and communication processes Lack of stakeholder involvement Non-compliance Fragility of system Poor operation and communication processes Lack of stakeholder involvement Strengthen compliance through audits Evaluate vegetation management Clarify stakeholder role Improve staff training Enhance system tools Strengthen compliance through audits Evaluate vegetation management Clarify stakeholder role Improve staff training Enhance system tools

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7 London 2003 Situation Root Causes Misinterpretation of alarm Switching out of SGT3 left power supply to single circuit Circuit breakers at single circuit tripped Misinterpretation of alarm Switching out of SGT3 left power supply to single circuit Circuit breakers at single circuit tripped Reuse of equipment Installation of wrong equipment Faults and oil leaks caused maintenance rescheduling Planned outages Reuse of equipment Installation of wrong equipment Faults and oil leaks caused maintenance rescheduling Planned outages Recommendations Lessons Learnt Increased stakeholder involvement Investigation of equipment installation NGC review ops procedures Ofgem penalty for incidents Increased stakeholder involvement Investigation of equipment installation NGC review ops procedures Ofgem penalty for incidents Human error from relays increasing worldwide NGC & contractors made errors in scheme delivery NGC practices not rigidly enforced Human error from relays increasing worldwide NGC & contractors made errors in scheme delivery NGC practices not rigidly enforced

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8 Italy 2003 Situation Root Causes Poor vegetation management Inability to re-close line Lack of urgency Angle instability and voltage collapse Poor vegetation management Inability to re-close line Lack of urgency Angle instability and voltage collapse 15 highly heavily loaded lines on Italy North border Italys 6400MW import increased by 200 300 MW Swiss grid also under pressure 15 highly heavily loaded lines on Italy North border Italys 6400MW import increased by 200 300 MW Swiss grid also under pressure Recommendations Lessons Learnt Inter-TSO cooperation UCTE Operation handbook and DACF review Evaluation of tree trimming NGC to enforce min reqs. Investment in transmission Inter-TSO cooperation UCTE Operation handbook and DACF review Evaluation of tree trimming NGC to enforce min reqs. Investment in transmission System was close to limits Blackout triggered in Switzerland Human, technical and org factors prevented quick system restoration System was close to limits Blackout triggered in Switzerland Human, technical and org factors prevented quick system restoration

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9 So what where the common issues? Re-use of old equipment (resulting in fragile systems) Neglect of current equipment (resulting in fragile systems) Poor vegetation management Lack of real-time reporting equipment Re-use of old equipment (resulting in fragile systems) Neglect of current equipment (resulting in fragile systems) Poor vegetation management Lack of real-time reporting equipment Infrastructure and Investment Non-compliance with guidelines, regulations and standards Lack of agreed upon standards in some cases No collaboration between parties in pursuit of common purpose Poor role definition of stakeholders Non-compliance with guidelines, regulations and standards Lack of agreed upon standards in some cases No collaboration between parties in pursuit of common purpose Poor role definition of stakeholders Stakeholder Involvement Seasonal affect on demand of energy (causing record peaks) Causes damage and deteriorates equipment Seasonal affect on demand of energy (causing record peaks) Causes damage and deteriorates equipment Weather Affect Insufficient training (resulting in mistakes in operating equipment and misinterpretations of situations) Lack of skilled and experienced operators Insufficient training (resulting in mistakes in operating equipment and misinterpretations of situations) Lack of skilled and experienced operators Human Error Grids were operated at levels close to critical levels in every case Operational procedures in emergency situations inadequate Grids were operated at levels close to critical levels in every case Operational procedures in emergency situations inadequate Operations and Processes Laid out by Relevant Bodies

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10 So how did the Electricity Industry respond, and what were the lessons learnt? RiskManagement PreparednessRisk

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11 Agility Build Agility into the business to respond to an emergency

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12 Agility Building Agility in Utilities to ensure effective response Business Continuity Management Business Continuity Management Clearly Defined Governance Clearly Defined Governance Streamlined Emergency Management Processes Streamlined Emergency Management Processes The SA Context Closer integration and collaboration in the industry Processes that extend across boundaries Governance that is clearly defined in the case of emergencies Pre-defined protocols Building in organisation flexibility and adaptive capacity Practices

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13 Sense and Forewarn Having the ability to Sense and Forewarn

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14 Sensing and Forewarning Sensing and Forewarning Mechanisms help Focus & Prepare the Organisation Dynamic risk management attempts to improve the ability of organisations to predict unknown future risks that could impact on the business, its performance and stakeholders using concepts such as sensitivity analysis Source: Deloittes Risk Intelligent Enterprise Model

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15 Strategic and Operational Response Preparing for Strategic and Operational Response

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16 We believe that much of the strength and resilience evident in our organization is an outcome of continued investment in our infrastructure and our people, preparedness planning and ongoing efforts to manage risk. We also believe our pursuit of sustainable development over the past five years made us significantly stronger and more resilient. Source: Entergy Resilience & Renewal, Sustainable Development Report 2005

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17 Strategic and Operational Response Preparing for Strategic and Operational Response Scenario Planning Scenario Planning Preparedness Exercises & Indicators Preparedness Exercises & Indicators Standardised Emergency Response Plans Standardised Emergency Response Plans The SA Context Identification of strategic risks Integrated forums with key stakeholder groups to establish business continuity plans Integration with National Disaster Recovery Establishment of a command centre(s) Running preparedness simulation exercises to create awareness and help check level of readiness. Practices

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18 Strategic Management Strategic Management of Stakeholders

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19 Strategic Management Strategic Management of Stakeholders Be Visible Communicate Frequently Communicate Frequently Don't Hide The Bad News Don't Hide The Bad News The SA Context Different stakeholders need different approaches Deal with the facts Ongoing interaction with stakeholders on the Electricity issues Address your stakeholder concerns Win them over! Practices Address Perception Vs. Reality Address Perception Vs. Reality Be Empathetic Be Empathetic

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20 Emergencies such as these re-define the Political Landscape

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21 Organisational Resilience Building Organisational Resilience

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22 Toward Enterprise Resiliency: Develop a predictive model that will enable a company to preemptively recognize and successfully respond to a threat before it becomes a crisis Result: the company becomes a leading-edge resilient organization prepared for and adaptive to counter any eventuality by incorporating a robust threat detection and prioritization, and resource mobilization techniques. Infinite Events Finite Internal & External Impacts Effects People Process Technology Infrastructure Partners Market Economic Resiliency Planning Prioritized Ranking of Threats Review of Existing Plans Threat Reduction Controls Gap Analysis Development & Testing of Resiliency Plans Physical, Personnel, Information, Reputation, Participants, Economic, Public and Private Infrastructure Impacts

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23 Drive a collective accountability for the issues and ensure that we are psychologically prepared to operate in a tight environment... Source: Brian Lapin Psychological Security High Resilience Culture Scapegoating & Finger pointing Low Disasters waiting to happen Paralysis & Fear Accountability

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24 An integrated Emergency Management Model for the Electricity Industry to drive higher collective responsibility DPLGDPEDME ESKOMMUNICS National Disaster Recovery Collaboration on:- Scenario Planning and Macro risk factors World Cup 2010 Readiness Integration on load shedding Joint Emergency Preparedness Simulations Consistent and focussed approach to stakeholder management Local Government DRC ERCC RJCC Customers, Stakeholders

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25 Want of foresight, unwillingness to act when action would be simple and effective, lack of clear thinking, confusion of counsel until the emergency comes, until self-preservation strikes its jarring gong these are the features which constitute the endless repetition of history. Sir Winston Churchill Phezu Komkhono

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26 FutureWorld powered by Deloitte is the Strategy Consulting business of Deloitte SA. FWpbD is Africas largest Strategy Consulting Firm. The 150 Consultants that work for the business bring together Industry Insight and Strategic Competencies to add value to our clients. Our Energy Industry Focus is across Oil, Gas and Electricity and helps these clients focus on the issues of today and the business of tomorrow.