East Timor Solar project Risk Management Cycle

The assignment content discusses the East Timor Solar project Risk Management Cycle, a plan developed by ATA to manage risks associated with installing household solar systems in rural areas of East Timor. The cycle includes defining risk, identifying potential risks, developing mitigation strategies, and monitoring progress throughout the project life cycle.

East Timor Solar project Risk Management Cycle
EAST TIMOR SOLAR PROJECT
RISK MANAGEMENT CYCLE
[Name]
[Email address]

East Timor Solar project Risk Management Cycle
Table of Contents
Introduction..............................................................................................................................3
Risk management plan............................................................................................................3
Risk Identification................................................................................................................3
Risk Analysis.........................................................................................................................3
Risk Prioritization................................................................................................................4
Risk Planning........................................................................................................................4
Risk Mitigation.....................................................................................................................4
Monitoring Phase..................................................................................................................5
References.................................................................................................................................5
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East Timor Solar project Risk Management Cycle
Introduction
East Timor, one of the closest neighbour regions of Australia has people living in mountains
with poor infrastructure which makes it difficult to connect the houses with electricity grids.
An alternate option was to make the provision of electricity through cheap generation of
electricity from natural resources like solar energy. ATA has started a solar project in East
with an aim to install household solar systems to benefit 12,000 people living in rural areas.
Google agreed to fund this project, but needs a risk management plan to be developed. This
assignment would assess the case and would explore the process of risk management using
Risk Management cycle to suggest how such a plan can be created by ATA.
Risk management plan
As per the risk management cycle, a risk management process goes through the stages of
identification, analysis, prioritization, planning, mitigation and monitoring. For the
devleopmet of the risk management plan, the ATA would go through a cycle including the
following phases:
Risk Identification: In this step, ATA would identify various kinds of risks that can occur in
the solar project during its whole life cycle. These risks can be related to project scope,
design, technical, stakeholders, executive support, procurement, quality, authority, user
acceptance, commercial, project management or commercial. In East Timor Solar projects,
risks could be related to scope, design, technological, procurement, and quality. Some of the
risks that can be identified in the case of solar project include (APM Group Ltd, 2017):
 If the solar systems implemented are unable to generate sufficient electricity as
needed by the village, it would be a technological risk (Worren, 2012).
 Language barrier is another risk on the project as the people working on the project
may not speak the local language which could difficulties in communicating with
communities.
Risk Analysis: In this stage, the risks identified would be assessed with respect to the
probability of its occurrence and the impact on the solar project. In case of the high impact on
project, the risk is considered severe. Based on the level of severity identified here, decisions
can be taken on how to manage the risk. For instance, if the project cannot receive the
sufficient funds required for sourcing and implementing solar power solutions then it could
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East Timor Solar project Risk Management Cycle
have a moderate impact on the project as it would not be able to provide supplies to whole
village. The risk would then be calculated as likelihood of occurrence X impact = probability
of occurrence of risk X financial equivalent of the impact.
Risk Probability of Risk
Occurrence
Impact of Risk on
Project
Severity
Insufficiency of
funds
Moderate (2) High (3) 6
Inability to produce
sufficient electricity
for homes
High (3) Moderate (2) 6
Breakdown of
components or
equipments like
regulator, batteries,
microcontrollers,
etc.
Moderate (2) High (3) 6
Exchange rate
fluctuations
escalating sourcing
costs
Moderate (2) High (3) 6
Low standards of
electrical systems
High (3) Low(1) 3 (La Trobe
University, 2017)
Risk Prioritization: For risk prioritization, ATA needs to focus on risks that would affect the
financial position of sponsor and the risks that would affect the roles and responsibilities of
the people on the project as they would have higher severity and thus, can affect the project
significantly. The project is likely to face a risk of difficulties in implementation if they are
faced with rains. This is a risk that can be avoided and thus, the company could postpone the
work shifting it to the time after rains are over. This would help in development of a more
rigorous management plan (Rule Works, 2017).
Risk Planning: This would involve identification of the response to specific risks which can
be risk avoidance, risk transfer, risk retention or risk mitigation.
Risk Risk Risk Response
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East Timor Solar project Risk Management Cycle
Severity
Insufficiency of funds 6 Avoid risk by ensuring that budget is
approved considering contingencies
Inability to produce sufficient
electricity for homes
6 Avoid risk by extensive planning that
ensures accurate estimation of the voltage
and electricity requirement
Breakdown of components or
equipments like regulator,
batteries, microcontrollers, etc.
6 Avoid by using predictive maintenance
such that parts are repaired before
complete damage or mitigate by
procuring a new part when old part is
going to be damaged.
Exchange rate fluctuations
escalating sourcing costs
6 Mitigate by adjusting to price fluctuations
to ensure that the project does not exceed
approved budget.
Low standards of electrical
systems
3 The electricity requirements are not very
high and thus, low standards would not
affect the performance much but in case
of issues, mitigation measures can be
taken by replacement of specific parts or
components.
Risk Mitigation: Risks that cannot be avoided, transferred or retained such as inability to
produce enough electricity from the solar panels installed, the risk mitigation strategies have
to be put in place. Thus, at this stage, the mitigation strategies would be defined that would
reduce the severity of the impact of the risk on the project. A risk that could affect the solar
project was due to the difference in the government scheme and the practices of ATA. The
government scheme is not technologically robust and thus, a risk mitigation measure could be
taking a slightly different approach by convincing government of the benefits through close
coordination (NCSU, 2017).
Risks Mitigation Strategy
Differences between government and ATA
scheme of technology management
Government could be suggested for
improving their standards and processes to
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East Timor Solar project Risk Management Cycle
tailor to the current project
Exchange rate fluctuations escalating
sourcing costs
Keep a close control on the budget to ensure
that these fluctuations do not overshoot the
budget (La Trobe University, 2017)
Breakdown of parts or equipments As the project involves many parts taken
from different countries, the mitigation
would need an anticipation of the possibility
of breakdown such that the part or
component can either be repaired or ordered
in advance before it breaks down. Thus, a
predictive maintenance process would be
followed.
Monitoring Phase: The risks would be monitored throughout the project life cycle such that
in the case of occurrence of any risks, appropriate mitigation plan can be taken. This could be
done by establishing monitoring baselines by developing Key Performance Indicators,
controlling and monitoring processes.
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East Timor Solar project Risk Management Cycle
References
APM Group Ltd, 2017. DEFINING RISK: THE RISK MANAGEMENT CYCLE. [Online]
Available at: https://ppp-certification.com/ppp-certification-guide/52-defining-risk-risk-
management-cycle36
[Accessed 14 September 2017].
La Trobe University, 2017. Video 3: Stakeholder Engagement and Management. [Online]
Available at: https://lms.latrobe.edu.au/mod/book/view.php?id=2493632&chapterid=201713
[Accessed 14 September 2017].
La Trobe University, 2017. Video 4: Project Risks. [Online]
Available at: https://lms.latrobe.edu.au/mod/book/view.php?id=2493632&chapterid=201714
[Accessed 14 September 2017].
NCSU, 2017. Risk Management. [Online]
Available at: http://agile.csc.ncsu.edu/SEMaterials/RiskManagement.pdf
[Accessed 14 September 2017].
Rule Works, 2017. The risk management cycle. [Online]
Available at: The risk management cycle
[Accessed 14 September 2017].
Worren, J., 2012. Assessing the Risks in Solar Project Development. [Online]
Available at: http://www.renewableenergyworld.com/articles/2012/02/assessing-the-risks-in-
solar-project-development.html
[Accessed 14 Sepember 2017].
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