SEMA7081: Risk Assessment and Mitigation in Sustainable Energy Systems

This report delves into the intricate realm of risk management within sustainable energy projects, providing a comprehensive overview of the subject. It begins by exploring the complexities of energy management and the inherent risks associated with it, especially in the context of sustainable energy. The report then conducts a literature review of various risk assessment models, highlighting their merits and demerits, and subsequently outlines a systematic framework for risk management. It examines the issues connected with creating a risk management framework in different geographical locations, specifically London, Doha, and Lagos, and proposes potential risk mitigation solutions. The report underscores the importance of understanding both economic and non-economic risk factors, offering insights into how these factors can impact sustainable energy projects. It concludes by emphasizing the need for proactive risk assessment and mitigation strategies to ensure the successful implementation of sustainable energy systems.

RISK MANAGEMENT
SUSTAINABLE ENERGY MANAGEMENT

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Contents
Introduction................................................................................................................................1
Literature Review of the Risk Assessment Models...................................................................2
Merits and demerits of the Risk assessment model-..................................................................7
Merits.....................................................................................................................................7
Demerits.................................................................................................................................8
Systematic framework for risk management..............................................................................8
Issues in connection with the creation of the risk management framework for sustainable
energy management...................................................................................................................9
London- UK...........................................................................................................................9
Doha- Qatar..........................................................................................................................10
Lagos- Nigeria......................................................................................................................10
Risk mitigation solutions-........................................................................................................10
Loss control visits................................................................................................................11
Risk reports..........................................................................................................................11
Plan review services-............................................................................................................11
Conclusion................................................................................................................................11
References................................................................................................................................13

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Introduction
Energy management is a complex process, which is long lasting and is limited to certain
conditions or factors. Energy management refers to the process of increased risk and requires
due care while planning and implementing the system. Sustainable energy management is
layered process of energy management as the risk assessment factor is accompanied by the
system (Tregidga, Milne, and Kearns, 2018). The risk refers to the probability of a certain
event, it is considered as a complex phenomenon, which can be studied and analysed from
various aspects. The possibilities of fluctuation in the global energy market is high as it is
linked to the energy development problems and events which are which are considerably
troublesome to manage. The assessment and concept of risk management is an integral part
of the sustainable energy management, the risk assessment of sustainable energy management
should assess and analyse the internal and external factors affecting the supply chain
management. There are numerous economic and non-economic factors affecting the
sustainable energy management, the risk is associated with the management of the energy
resources associated with the sustainable development (Sinakou, et al, 2018). The sustainable
energy management focuses on the conservation of the costs and the damages caused by the
depletion in the environmental resources, which has led to an intolerable state. It basically,
requires sustainable energy systems implanted across the globe but the implementation of the
same is associated with a certain amount of risk and accurate observation of the risk
associated is significant for the effective management of the sustainable energy systems
(Marchese, et al, 2018).

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Literature Review of the Risk Assessment Models
Source- (Atari, et al, 2018)
The mentioned risk model describes the risk assessment in three stages risk identification,
risk analysis, and the activities required to be undertaken to avoid the negative effects of the
risk on the energy projects acquired by London, Doha, Lagos for the development of the
sustainable energy management.
Another model of risk assessment related to the financial requirements to be considered for
the risk management by the countries to promote the sustainable development.

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Source- (New Climate Economy, 2016)
This risk assessment model provides guidelines for financial requirements of the sustainable
projects. The London, Doha, Lagos also consider the financial risk model for the proper
allocation of financial resources to avoid any kind of losses.
Source- (Sasb, 2019)

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The above risk assessment model provides the guidelines for human resources, social capital,
business models, environment conservation, and ethical values related to the sustainability
projects.
Source- Olaniyi, 2008
The risk assessment model mentioned above provides the methods for the environment
investment which contributes to the development of the sustainability management leading to
the conservation of the environmental resources.

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Source- (Fiksel, 2015)
The risk model helps to decide the course of actions initiating from setting up of the
objectives which helps to avoid and overcome the risks associated with the sustainability
projects.
Some of the economic factors which affect the sustainable energy system include the-
 Supply market- the supply market in terms of the sustainable energy management in
London involves the estimation of the supply sources, purchase price, distribution channels,
quality, analysis of the energy supply, capacity analysis, Energy, from domestic resources.
 Sales market- it refers to making its place in the market amongst all the other
competitive firms working as active player in the market. Nigeria requires a
 Competition- taking into account, the strength and the quality of the competition in
the market, its geographic distribution across the international borders, CSR, market
coverage, usage of energy by the clients.
 Legislation- the legislation refers to the legal requirements for the usage of the non-
renewable energy resources and the legislation supports the sustainable energy management.

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 Quality product regulations- The quality parameters and the energy characteristics are
important factors determining the quality of the product in London, Qatar, and Nigeria
(Connor, et al, 2019).
There are sequences of factors that consists both positive negative effects on the
implementation of the sustainable energy resources namely the non-economic factors,
following are some of them mentioned-
o Availability of the natural resources- the distribution of the energy resources across
the globe, which mandates several countries to import the energy from other countries while
the exporting country, has to manage the resources for their own consumption. As UK-
London does not have all the availability of the resources.
o Natural disaster occurrence- the energy resources of the countries are vulnerable to
the possibilities of the natural disaster due to certain environmental forces.
o Occurrence of disaster due to human activities- the energy facilitation as well as the
objects and means of distribution are a bit complex which eventually can lead to a minor or
major industrial disaster.
o Political factors- all the political changes must be considered and attention should be
given to political predictions in order to minimise the risk, which is likely to be caused by
their occurrence. Political factors of Qatar can affect the sustainable development of the
countries due to the political interference of the government.
The model mentioned above helps to identify and analyse the risk factors mentioned above
and take corrective measures in order to minimise the risk and avoid the chance or the
probabilities of failure. The corrective measures are taken in accordance with the
identification and analysis of the risk issues related to the sustainable energy management
(Hopkin, 2018).

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Merits and demerits of the Risk assessment model-
Merits
The merits of the risk assessment model includes the following points-
 It helps in the identification of the major issues that can possibly affect the growth of
the sustainable energy management.
 Proper analysis of the factors leading to increment in the risk associated with the
sustainable energy management.
 The sustainable energy management team proceeds with the corrective measures of
the risk assessment.
 With the help of the risk assessment models the amount of risk associated with the
systems can be anticipated future actions can be modified according to the same (Bahr,
2018).
Demerits
The demerits associated with the model of risk assessment include the following points-
 The model of risk assessment is very time consuming.
 The model seems to be excessively cost increasing for the small organisation, as it
requires high-end expertise for the issue of risk management.
 The decisions taken are based on anticipation and not the actual current situation of
the business organisation (McCollum, et al, 2018).
 The risk management assessment is not affordable by all the business firms as it is
very costly consuming because it requires various experts.

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Systematic framework for risk management
Source- (Aviva, 2019)
A systematic risk management framework, which provides for the sustainable energy
development for the London, Doha and Lagos involves the identification, measurement,
management, monitoring, and reporting with the framework process the sustainable energy
management can be implemented and managed. The framework helps to eradicate the
probability of risk, which has a high possibility of leading to the failure of the management.
Continuous and rigorous risk management is the primary objective of the risk management
framework as the framework is formulated for the better risk management (Aiello, et al,
2018). The framework is proposed in order to cover every possible which can lead to the
failure of systematic sustainable energy systems management. The factors leading to risk
procurement are categorised in two categories internal, external risks. Internal risks are those
risks which arise from within the organisation and can be controlled with the adequate
measures and policies formulated within the organisation. The external factors are
unavoidable because they are not under the control of the management or senior level
executives, they have huge impact on the business organisation as these prevail outside the

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business and function according to the market forces of the external environment (Schroeder,
Anggraeni and Weber, 2019).
Issues in connection with the creation of the risk management framework for
sustainable energy management
The issues in connection with creating the risk management framework in regard with the
three countries include the following issues-
London- UK
 Exposure- the exposure to uncontrollable factors that affect the risk assessment
because they are derived from the market forces of the external environment. Consultants
assist regarding these kinds of issues.
 Timelines- it is significant to examine a trend might become more or less favourable
for the energy projects and can stimulate the effects of the same on the energy projects.
Doha- Qatar
 Volatility- it is necessary to estimate the probability of the anticipated results as in
case all the uncontrollable risk factors act together due to instability in the global energy
market and this may affect the displayed energy projects of the market.
 Safety- regardless of all the uncontrollable risk factors playing an active role in the
environment it is important to avoid those risk factors affect the energy projects and this is
possible with the transfer of risk (Epstein, 2018).

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Lagos- Nigeria
 Persistence- as the energy projects are usually long so it is important to estimate as to
how long the uncontrollable factors can influence the success of the energy projects (Silvius,
2018).
 Flexibility- the energy projects require flexibility and acceptability by the people of
the country for their successful and better implementation.
Risk mitigation solutions-
These involve the solution to overcome the risk mitigation issues in the concerned countries
UK, Nigeria, Qatar it involves the following points-
Loss control visits
The loss control visits refers to the control over the losses, which have already occurred in the
past. Through lost control visits the losses already faced can be avoided in the future projects
and with the help of this risk is avoided to the maximum level possible.
Risk reports
Following the loss control visits the company consultant can provide you the risk report and
based on that the future actions can be controlled to avoid the loss and risk of failure in the
future projects.
Plan review services-
As the business grows, it is important to consider the up gradation and renovation of the
technologies used in the energy projects, and while involving in the same the risk arriving is
unavoidable and uncontrollable. Through the plan review services provided by the experts,