Performance of Generating Plant - World Energy Council

14Performance of Generating Plant: Managing the Changes Executive Summary World Energy Council 2007Figure 6 Spectrum of integrated risk managementSpectrum of Integrated Risk M anagem entEmergencyresponse planRoadm ap toRecovery TMRiskI.D .ReportRiskMngt.RiskEval.Stage 1Stage 2Crisis m anagem ent/communication planStage 3Businessrecovery planTimeRisk Identification& ManagementIncident M anagem entBusiness Continuity M anagem entThe thrust is therefore towards a pro-activeapproach to sustaining and enhancing businessperformance, rather than fire fighting anddefence in preventing corporate failures. Thisapproach focuses on a positive contribution.Therefore, corporate governance, and as suchalso enterprise or integrated risk management,includes opportunity management.Risk management is not an ‘add on’ activity,but an integral part of business managementwith the ultimate objective of minimising thevariability and unpredictability of expectedperformance outcomes.Risk Identification, Evaluation and Managementare therefore a process directed at decreasingthe likelihood of an unpredictable outcome, andalso the relative impact of an unpredictableevent, should it occur. Despite our best effortsthough, some events can be either beyond ourcontrol (floods or earth quakes) or cannot befully managed (fire).Such events require some form of predeterminedemergency processes and businessrecovery strategies, with the ultimate objective ofre-establishing business capability within theshortest possible time and with minimum humancasualty, financial and sustainability impact onthe organisation and the environment. It istherefore advisable to clarify risk managementstrategy up front to ensure that the riskassessment and management process coverboth prevention / reduction of exposure andrecovery processes post an event. This is thepoint at which risk assessment and riskmanagement strategy can be brought togetherin the risk assessment model.When undertaking risk assessment, it is criticalto have a good understanding of the business aswell as the environment within which it operates.Some important lessons have been learnt fromoperational experience:• Most non-operational risks emanate fromthat interface and if not timely identifiedand managed, like during contractingphase, could result in significant exposureat a later stage when changes in theenvironment occur.• Operational risks are often seen as easyto manage, thus the amount of time spenton understanding the full systems impactof either the risk or the solution are oftentoo little, resulting in unintendedoutcomes.• Risk management is integral to any job. Itcannot be done by someone else.With the above in mind it is useful to identify socalled ‘flash points’ or ‘hot spots’ (areas ofinterface in the supply chain) from where it islikely that key risks may arise. Some examplesof such flash points are:• Regulatory Interface• Suppliers• Fuel Delivery• Trading