Risk sensitivity of failure rate and maintenance expenditure

Analysis of risks is an inseparable part of asset management of power systems. The paper presents the reliable method for risk management of power system carried out for an urban 10 kV network located in Germany. The basis of the method is the operational risk calculation applied in financial and insurance industries. There the popular method for risk calculation is the loss distribution approach (LDA). The LDA is based on estimation of frequency and severity distribution of failure events over one year time horizon. Under LDA, the adequate capital hold against operational risk losses is defined as Value at Risk, which is the quantile of the distribution for the next year annual losses. Especially the proposed approach combines the probability and severity of risk contingencies based on reliability indices of the system assets. The risk indices are finally applied for sensitivity analysis of two particular risk factors, failure rate and maintenance expenditure. In course of asset management the proposed approach and the following sensitivity analysis of risk factors yield to comprehensible recommendations for maintenance activities.