Network Outperformance Measure Risk Trading Methodology Stage 2

The purpose of the project is to provide a new methodology for delivering the requirements for Ofgem reporting. The collaborative working across the GDNs will provide a consistent benchmark for reporting a complex solution in a pragmatic way. DNV GL and ICS will be looking to determine pioneering research into failure modes, probability of failure and consequence analysis using both GDN supplied failure, investment data and industrially published data to facilitate the development of the following Event Tree models:

Offtake / PRS Regulator and Slamshut systems
Offtake / PRS Filters Systems
Offtake Odorisation Systems
Offtake Metering Systems
Risers

Ofgem’s ambition is that all asset groups should be modelled at an asset level. A key part of the design phase will be to determine the optimum level of detail required for each Asset Group benefit/cost analysis is based current GDN data holdings and the cost/time needed for implementation.

It is recognised that GDNs may hold data at different levels of detail, but a consistent level of detail required for each Event Tree will be agreed by the SRWG. In principle analysis will be built up from asset-level data, where available, but the detail of reporting and analysis may be at an aggregated or population level.

Benefits

Throughout the project there will be frequent meetings held by the SRWG and with the external company to update on project progress and keep within key milestones. Each stage will have its own deliverables and targets which the project will measure against the original scope. The project seeks to deliver:

Demonstrable models for deriving monitised risk for each of the 5 asset groups
Provide a solution that meets the needs of Ofgem namely
Assets Groups are modeled at an optimum level
Will enable risk trading and demonstrate this through multiple investment scenarios
Integration of the models into the businesses of the GDNs
Provide final project report detailing:
How the model have been developed and agreed including data sources and assumptions
Cost benefit of investment for each asset group through monitised risk analysis

Risk trading approach and the outputs of risk trading principles

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Network Outperformance Measure Risk Trading Methodology Stage 2

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