Risk Management in Hydro Power
Risk Management In Hydro Power Plants –
18th African Hydro Symposium
October 2006
By Joshua Chirikutsi –
Zimbabwe Power Company-
Kariba South Power station
Abstract
Hydro power plants like any other business encounter risks in all areas of its operations, but especially in the areas of producing and marketing electricity. As the Electricity supply industry reforms unfold the resultant deregulation brings in several market regulatory and trade related risks. The paper will discuss the general risks affecting Power utilities and will place particular emphasis on hydropower plant operations by analysing the effect of maintenance and operations quality in power plant risk management.
1.Introduction
Electric power companies and their insurers/insurance advisors are required to understand and manage risk. Risk management is commonly seen as considering security, insurance and safety issues only. It is however a broad management methodology that includes all areas and aspect of the organisation. There are many elements that contribute to risk management –behaviours, management systems and practices, processes and cultures.
A comprehensive risk management framework and structure is necessary to ensure that all participants in the organisation’s business think, live and breathe risk management. The most important contributor are employees ‘s understanding of how all the elements of the system fit together, i.e. how work practices, their knowledge, skills, and attitudes make the whole risk management system work.
Organisations develop Risk Management Policies and Procedures to define risk strategies, demarcate and delegate responsibilities, and find ways to interweave procedures for determining and managing risks.
2. Definition of Risk.
A business risk is the threat that an event or action will adversely affect the business unit’s ability to maximize stakeholder value and to achieve its business objectives. Alternatively risk is the chance of something
18th African Hydro Symposium
October 2006
By Joshua Chirikutsi –
Zimbabwe Power Company-
Kariba South Power station
Abstract
Hydro power plants like any other business encounter risks in all areas of its operations, but especially in the areas of producing and marketing electricity. As the Electricity supply industry reforms unfold the resultant deregulation brings in several market regulatory and trade related risks. The paper will discuss the general risks affecting Power utilities and will place particular emphasis on hydropower plant operations by analysing the effect of maintenance and operations quality in power plant risk management.
1.Introduction
Electric power companies and their insurers/insurance advisors are required to understand and manage risk. Risk management is commonly seen as considering security, insurance and safety issues only. It is however a broad management methodology that includes all areas and aspect of the organisation. There are many elements that contribute to risk management –behaviours, management systems and practices, processes and cultures.
A comprehensive risk management framework and structure is necessary to ensure that all participants in the organisation’s business think, live and breathe risk management. The most important contributor are employees ‘s understanding of how all the elements of the system fit together, i.e. how work practices, their knowledge, skills, and attitudes make the whole risk management system work.
Organisations develop Risk Management Policies and Procedures to define risk strategies, demarcate and delegate responsibilities, and find ways to interweave procedures for determining and managing risks.
2. Definition of Risk.
A business risk is the threat that an event or action will adversely affect the business unit’s ability to maximize stakeholder value and to achieve its business objectives. Alternatively risk is the chance of something