Utility Week

UTILITY Week 20th March 2015

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UTILITY WEEK | 20TH - 26TH MARCH 2015 | 15 S P E C I A L R E P O RT: PA RT 3 / M A RC H 2 0 1 5 I n the utilities and infrastructure sector, companies' ability to manage threats to critical infrastructure, such as extreme weather, may not be as strong as they need to be. Historically, these typically have been rare events, but recent trends suggest this may not be the case in the future and new ways of organising may be required to manage these increasing threats. Millions of people across the UK and the globe have been affected by such events because of their knock-on effects on criti- cal infrastructure, including power, water, sewerage and transport disruption. With instances such as the UK's series of storms in 2013 and the floods in 2014, or the massive storms like the US's Superstorm Sandy in 2013 and the 2012 Derecho in Washington DC, there is an increasing spotlight on whether infrastructure owners and operators are preparing appropriately. Currently, best practice consists of specific, prescriptive mitigation tactics. How- ever, these methods may not work across dif- Viewpoint "A robust resilience plan allows each organisation to develop unique responses that specifically respond to the given risks" ferent industries or regions. This approach leaves you unable to tell if your company's plan is more or less robust than another's if they have completely different assets and network structures. A different approach is required, one that is based on set criteria to measure how robust a resiliency plan is, regardless of industry. The three dimensions that should be considered when developing resilience plans are: • Prevent and predict: what you have done in advance to mitigate or constrain the impact and how you maximise use of the increasing information available to enhance prediction of events • React and resolve: what you do in response to rapidly, flexibly and success- fully manage the unfolding event • Manage perception: what you say to cus- tomers, the public and other interested parties to communicate progress and determination to resolve the situation. These dimensions must then be mapped against the typical lifecycle of an event. The benefits of such a framework are that the characteristics can be used across differ- ent geographies and industries. A standard set of characteristics that make up a robust resilience plan allows each organisation to develop unique responses that specifically respond to the risks given a unique set of assets and geographical footprint. For example, when we recently worked with Network Rail, we were confronted with the problem of comparing the resilience of regional routes. The very structure of Network Rail is to allow autonomy among route directors to prioritise and plan their own networks. Therefore, applying a single resilience plan was not the best solution because the individual rail networks need to align the infrastructure with individual train operators. Using this framework, however, enabled Network Rail to identify gaps across different plans, while still allowing routes to maintain specific actions that prevent, react and manage the perceptions in a way that made the most sense for them. In reality, extreme weather is only one type of threat; critical infrastructure is an obvious target for cyber, physical or environmental attack. A flexible, rather than prescriptive, approach enables companies across all industries to prepare, react and communicate how they are managing the assets the public puts in their trust. From Mark Fitch, energy expert, PA Consulting Group GLOBAL RISKS OF HIGHEST CONCERN – FOR THE NEXT 18 MONTHS AND 10 YEARS THE CHANGING GLOBAL RISKS LANDSCAPE 2014-15, SOCIETAL RISKS Geopolitical risks 18mth 10yr Interstate conflict State collapse or crisis Failure of national governance Terrorist attacks Weapons of mass destruction Environmental risks 18mth 10yr Extreme weather events Failure of climate-change adaptation Natural catastrophes Biodiversity loss and ecosystem collapse Man-made environmental catastrophes Societal risks 18mth 10yr Water crises Profound social instability Spread of infectious diseases Food crises Large-scale involuntary migration Failure of urban planning Technological risks 18mth 10yr Cyber attacks Data fraud or theft Misuse of technologies Critical information infrastructure breakdown Economic risks 18mth 10yr Unemployment or underemployment Fiscal crises Asset bubble Failure of financial mechanism or institution Energy price shock Deflation Failure of critical infrastructure Unmanageable inflation Source: Global Risks Perception Survey 2014, World Economic Forum. Area corresponds to % of respondents mentioning the risk to be of high concern in an 18-month time frame Area corresponds to % of respondents mentioning the risk to be of high concern in a 10-year time frame In association with: 2014 2015 Likelihood 5.0 4.0 Impact Failure of urban planning Food crises Spread of infectious diseases Water crises Profound social instability 7.0 7.0 1.0 Plotted area 4.0 5.0 47.2% 21.5% 40.3% 23.3% 23.3% 20.2% 20.1% 33.5% 33.1% 19.2%

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