An Approach for Quantifying Risk of Asset Failure in a Power System Business

The electricity company is an asset-intensive business that relies on the performance of the assets. Understanding the risks of assets is therefore essential to support the decision-making process and ensure the achievement of the company's strategic goals. In an integrated electricity company, like in PLN Indonesia, having a standardized measure on asset risk is vital to align the varying views on risks within the organization. The alignment demands clear definitions and requirements from different stakeholders and the agreement on the definition and the estimation of the asset's likelihood of failure. This paper provides an approach for quantifying the risk of asset failure in a power system business. The approach fundamentally derives the stakeholders' requirements into quantified parameters and standardizes the definition of probability of failure. An example is provided with the implementation in the Jawa-Bali regional business of PLN.