Asset Management in Power Systems – Part 1
June 7, 2023

Sean McConnon & Abraham Alvarez-Bustos

Effective AM can result in significant benefits, such as increased power system reliability, availability, and safety, as well as reduced costs and better utilization of resources. It helps utilities make informed decisions about the management of assets, such as when to repair or replace equipment, how to optimize maintenance schedules, and how to balance the trade-offs between costs, performance, and risk.

The increasing demand for electricity, integration of renewable energy sources and the aging of infrastructure have made asset management (AM) activities a critical task for utilities and other power system operators. Power system operations and AM activities are not always strongly linked but decisions made in both environments interact with each other and can directly influence the value a company can derive from its asset base. Operational decisions are mostly based on grid parameters such as voltages, currents, and power flows in the operational time horizon, whereas AM decisions condition supply reliability over a broader time horizon. AM as its name indicates, involves the efficient and effective management of physical assets, such as generators, transmission lines, transformers and other electrical equipment. AM decisions support tools and methodologies aid transmission and distribution grid operators to integrate the condition of their assets into their optimization process to reduce capital and operational costs. It is a complex task that involves planning, implementation, and control of various activities throughout the assets’ lifecycle, including acquisition, identification, operation, maintenance and disposal. The output of this process is always to ensure that each penny spent on an organization’s assets delivers the most value for that organization’s stakeholders.

AM types

There are several types of AM in power systems, which include:

Strategic AM: Strategic AM involves developing long-term plans and strategies for managing assets across the entire power system. This involves considering factors such as asset lifecycle, risk, performance and financial considerations.

Operational AM: Operational AM involves the day-to-day management of assets to ensure they operate safely, reliably and efficiently. This includes activities such as asset monitoring, inspection, maintenance, repair and replacement.

Financial AM: Financial AM involves managing the financial aspects of assets, such as procurement, financing and cost analysis. This includes determining the optimal level of investment in assets based on the expected returns and balancing the costs and benefits of maintenance and replacement strategies.

Information AM: Information AM involves managing the data and information associated with assets. This includes tracking asset performance, maintenance records and condition monitoring data to improve AM decision-making.

Customer AM: Customer AM involves managing the assets that are owned and managed by the customers, such as Distributed Energy Resources (DERs). This includes managing the integration of DERs into the power system.

AM activities

As mentioned in the introduction, AM involves different activities with different time sensitivities. Broadly speaking, AM activities can be divided into identification, operational status, risk analysis, maintenance and disposal.

Asset identification involves identifying and cataloging all electrical equipment within a power system. This includes inventorying all assets, including their specifications, location and age.

Once the assets have been identified, the next step is to assess the asset condition. This involves regularly monitoring the equipment to identify potential issues or defects that may lead to failure or downtime. Regular condition assessments also help to identify opportunities for improvement and can inform maintenance and replacement strategies.

Risk analysis relates to evaluating the risks associated with equipment failure and determining the appropriate level of investment required to mitigate those risks. This involves balancing the cost of maintenance and replacement against the likelihood of equipment failure and the potential consequences of failure, such as outages, safety hazards and environmental impacts.

Maintenance planning involves developing a maintenance schedule for all assets based on their condition and risk profile. Maintenance activities may include routine inspections, cleaning, lubrication and repair or replacement of components as necessary.

Finally, the disposal of the asset at the end of its useful life is crucial to ensure that environmental and safety regulations are met and that any hazardous materials are disposed of correctly.

How PSC can help

Effective AM in power systems requires a holistic approach that considers the long-term strategic objectives of the organization, as well as the day-to-day management of assets depending on their specific requirements. PSC can help support power industry asset management solution optimization with data cleansing and analysis, assessment of financial metrics such as net book value of assets, through policy advice and development of AM schemes suitable for specific projects or entire asset inventories.

Find out more about our strategic advisory services and contact us to discuss how we can help you power a more sustainable world.

The authors expand on this article in Asset Management in Power Systems – Part 2 to help illuminate the importance of asset management methods specific to planned outage maintenance and cybersecurity in keeping power systems safe, reliable and affordable.




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