Strategic Asset Management in Electricity Industry: A Report

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STRATEGIC ASSET MANAGEMENT
MNG92100-2019-1- ASSIGNMENT -3
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Table of Contents
Discussion Posts.........................................................................................................................3
1. Asset Management from Engineer’s context..................................................................3
2. Strategic asset management planning in electricity and other related industries............3
3. Power generation assets in Electricity industries............................................................3
4. The future of asset management in electricity, water and other associated sectors........4
5. Electricity distribution system asset management is universally similar for all the
countries.................................................................................................................................4
6. Reforms in Indian Power Industry..................................................................................4
7. Impact of low electricity supply on industries in India during outage............................5
8. India Power Outages in July 2012..................................................................................5
9. Cascading failures in power grids of India.....................................................................5
10. A new concept of sustainable asset integrity management.........................................5
Reference....................................................................................................................................7
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Discussion Posts
1. Asset Management from Engineer’s context
The lifecycle of engineered assets constitutes a vital part of an asset management system. The
asset management of engineered assets provides excellent assistance to organisational
success. The critical strategic asset management activities are asset management framework
development and managing the interconnectedness between the activities associated with the
engineered assets. These activities aid in the development of quality and manufacturing
improvement strategy. Insufficient establishment and performance of the asset management
activities lead to the severe results for the organisation (El-Akruti, Dwight, & Zhang, 2013).
It happens in the case where the technical support obtains after the project implementation.
Technical support requires an establishment for the analysis related to engineering design and
research.
2. Strategic asset management planning in electricity and other related industries
SAMP considers a vital part of the corporate plan where the focus is placed on major
significant industrial issues. It defines as the prediction process of consequences probability
of the current activities and actions for the anticipation of decision-making in future. It is
necessary for the industries to undertake strategic planning continuously for developing asset-
related objectives and strategies. Strategic planning in asset management requires
undertaking at the initial designing phase of asset or power plant installation from the
sustainability point of view (Kusumawardhani, & Kumar, 2017). Such action assists in
efficient operations and higher utilisation of resources and time for asset management.
3. Power generation assets in Electricity industries
Electricity industries have increased their attention towards the power generation assets
considering different concerns. These concerns are mainly in association with the increasing
environmental issues, high cost and inadequacy of the resources as well as rapidly changing
and risky geopolitical climate. The power generation assets constitute a significant part of
electricity asset management. These assets are comprised of electricity generation plants,
machinery such as boilers, steam turbines and gas turbines; and resources including fuel,
water, gas and oil and others (Coatalem et al., 2017). The adaptive model for power
generation assets possesses an optimisation issue mainly in Waste Heat Recovery system and
refinery case.
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4. The future of asset management in electricity, water and other related industries
Currently, the utilities of these industries have developed on the concept of asset-centric
where asset management is more significant. These utilities will transform into service-
centred by using different tactics of adaptation of improved analytical techniques,
performance data, as well as information management system. New asset management
standards and principles for such industries would fuel the better future of asset management.
The electricity industry has become a rapid adopter of smarter technologies that will drive the
adoption of a smarter integrated infrastructure for better asset management (Jones, Williams,
& Stillman, 2014). Apart from this, climatic changes widely impact the operations and
resources of the electricity industry. The assets will develop in a way that can conveniently
adapt to the climatic changes.
5. Electricity distribution system asset management is universally similar for all the
countries
The current advanced world considers the most significant infrastructure as the electricity
distribution system. It is believed that the management process of the electricity distribution
system has become highly complicated and complex due to substantial elements. These
elements comprise of performance evaluation, cost analysis, risk assessment and most crucial
the asset management. Management of electricity distribution system assets has become a
complex procedure for the industry due to the lifetime management of widely dispersed
distribution assets on a geographical basis (Yazdani, Shariati & Yazdani-Chamzini 2014).
Further, system failures or other outcomes due to one or more such assets failure may lead to
a negative impact on the environment or country’s reputation as well its economy.
6. Reforms in Indian Power Industry
The power sector of India is regulated under The Indian Electricity Act 1910 established for
ensuring the safety of the electricity industry. After the independence, implementation of the
Electricity (Supply) Act 1948 was undertaken to create integrated government-owned
agencies. Amendments in both the acts paved the way for the private investments after which
the Electricity Regulatory Commissions Act came into effect in 1998 (Khetrapal, 2018). This
act resulted in the formulation of the Central Electricity Regulatory Commission (CERC)
along with the other regulatory bodies at the state level. After this, the earlier regulations
were replaced by the Electricity Act 2003 (GOI, 2003) in July 2003.
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7. Impact of low electricity supply on industries in India during an outage
In an industry, electricity is considered as input, and shortage of electricity reduced the output
level during the outage times. At such times the power supply to the industries is undertaken
through the supply shifting to hydro-electric power generation. It is because no industry can
run without electricity since electricity is required for machines, lights, and motors and other
purposes. It has been reported that the average electricity scarcity leads to 5-10% of the
producer's surplus or plant's revenue (Collard-Wexler & O’Connell, 2016). However, there is
little loss of average productivity since the possibility of input storage during outages. The
industries store electricity during outages by using generators or other methods.
8. India Power Outages in July 2012
The severe incident of power outages in India occurred for consecutively two days. The first
power outage occurred on July 30, 2012, due to which the power supply for approximately 13
hours collapsed in one union territory and eight states located in North India. This outage led
to the power supply loss of 36,000MW, resulting in stoppage of trains, airports, hospitals and
miners and others (Kapur, & Kalia, 2013). Power restoration was attained within the same
day, but next day, grid disturbance again hit the power outage on July 31. It was the bigger
power outage that affected one union territory and twenty states located in North India.
9. Cascading failures in power grids of India
Two major power failures occurred in India in July 2012 when three regional power grids of
India faced power collapse. This grid disturbance left half of the country in the darkness that
disturbed the affected areas severely. This grid disturbance was the wake-up call regarding
the safety and security issues of Indian regional power grid systems (Zhang et al., 2013). As
per the reports, it has been investigated that the second 400kV high capacity power line of
Bina–Gwalior–Agra underwent collapsing on July 29, 2012. This power outage resulted in
the cascading failure of the power grids. It can be better explained through the complex
networks theory.
10. A new concept of sustainable asset integrity management
Considering the increasing environmental concerns, a new concept has established named
sustainable asset integrity management. This concept mainly focuses on the increased
development of generation plants for renewable energy. The asset integrity management
deals with specific challenges such as lower energy output level, increased repair operations,
growing downtime and expensive maintenance. However, these challenges can be reduced
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through the adoption of sustainable asset integrity management (Ossai, Boswell, & Davies,
2014). The programme of sustainable AIM involves the critical components of the mitigation
program, preventive program and regulatory oversight program. The framework phases of
sustainable AIM include conception, designing, testing, process planning, manufacturing,
commissioning, operations, maintenance, and decommissioning.
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Reference
 Alireza Yazdani, Shahram Shariati & Abdolreza Yazdani-Chamzini 2014, 'A risk
assessment model based on fuzzy logic for electricity distribution system asset
management', Decision Science Letters, vol. 3, no. 3, pp. 343–352, accessed
from http://www.growingscience.com/dsl/Vol3/dsl_2014_10.pdf
 Coatalem, Martin, Mazauric, Vincent, Le Pape-Gardeux, Claude & Maïzi, Nadia
2017, 'Optimising industries' power generation assets on the electricity markets',
Applied Energy, vol. 185, no. P2, pp. 1744–1756.
 Collard-Wexler, Allan & O'Connell, Stephen 2016, 'How Do Electricity Shortages
Affect Industry? Evidence from India', The American Economic Review, vol. 106, no.
3, pp. 587–624, accessed from
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 El-Akruti, Khaled, Dwight, Richard & Zhang, Tieling 2013, 'The strategic role of
Engineering Asset Management', International Journal of Production Economics, vol.
146, no. 1, pp. 227–239.
 Jones, Martin, Williams, Will & Stillman, Jeff, 2014, 'The evolution of asset
management in the water industry', Journal
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 Kapur, Amit & Kalia, Deepeika 2013, 'Grid Collapse of July 2012: Challenges of an
Evolving Indian National Grid', Journal of Energy & Natural Resources Law, vol. 31,
no. 1, pp. 65–80.
 Khetrapal, Pavan 2018, 'A transformed fixed effect stochastic frontier approach for
productivity evaluation in the Indian electricity sector', International Journal of
Productivity and Performance Management, vol. 67, no. 9, pp. 1657–1681, accessed
from https://www-emeraldinsight-com.ezproxy.scu.edu.au/doi/pdfplus/10.1108/
IJPPM-08-2017-0197
 Kusumawardhani, Mayang & Kumar, Rajesh 2017, 'Development of strategic asset
management planning in the petroleum industry', Journal of Quality in Maintenance
Engineering, vol. 23, no. 2, pp. 165–179.
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 Ossai, Chinedu I., Boswell, Brian & Davies, Ian J. 2014, 'Sustainable asset integrity
management: Strategic imperatives for economic renewable energy generation',
Renewable Energy, vol. 67, pp. 143–152.
 Zhang, G., Li, Z., Zhang, B. & Halang, W.A. 2013, 'Understanding the cascading
failures in Indian power grids with complex networks theory', Physica A: Statistical
Mechanics and its Applications, vol. 392, no. 15, pp. 3273–3280.
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