THE MITIGATION OF OPERATIONAL RISKS FOR THE …

1 THE JOURNAL OF THE INSTITUTION OF ENGINEERS MAURITIUS. THE MITIGATION OF OPERATIONAL RISKS . FOR THE ELECTRICITY UTILITY. IN MAURITIUS. Mohammad Shamshir MUKOON. Corporate Planning and Research Department, Central Electricity Board 1. Introduction The Central Electricity Board (CEB), as a vertically- The world is being subject to climate change and integrated organization, is involved in electricity Mauritius Island has experienced a flash flood in generation, transmission and distribution with the March 2013. OPERATIONAL RISKS for the electricity Independent Power Producers (IPPs) also involved sector due to equipment failure have traditionally in electricity generation. A reliable electricity supply been linked to loss of revenue for the country is a pre-requirement to support the economic growth as a result of the economic activities reliant on given that electricity is an input to various economic electricity being disrupted and loss of revenue for activities and to enhance the standard of living of the the utility as a result of the utility being unable to population.

2 As reliable and continuous electricity supply electricity to consumer willing to consume. supply during adverse meteorological conditions With increasing RISKS of natural catastrophes, it is such as flash floods can help to bring human life required to extend the analysis of OPERATIONAL RISKS to safety and to safeguard property, the CEB is to include the human safety and property safeguard entrusted with the responsibility to properly plan aspects during natural catastrophes. This paper aims the expansion, design, install, maintain, and operate to review the OPERATIONAL RISKS and risk MITIGATION electrical facilities to ensure reliability and security strategies put in place including those that may arise of electricity supply in Mauritius.

3 From adverse climatic conditions such as flash floods for the electricity sector in Mauritius. 3. Review of the RISKS faced by an Elec- tricity Utility such as the CEB. 2. An Overview of the Power System in Mauritius The setting up and operation of facilities for power generation, transmission and distribution is The electricity or power sector in Mauritius mainly capital-intensive, in particular for an insular island involves centralized power generation, power like Mauritius, which needs to import most of the transmission at high voltage from the power plants equipment and fuel requirements. As a result of to bulk supply points located close to the load centres the extensiveness of its operation in electricity and power distribution at medium voltage and low generation, transmission and distribution, the CEB.

4 Voltage. There are primarily five voltage levels in is subject to different RISKS as outlined below and Mauritius: or 11kV for power generation, illustrated in Figure 2: 66kV for power transmission, 22 kV or for medium-voltage distribution and 400V for low- Market risk: Risk of financial gain or loss due voltage distribution with voltage transformation to exposure to fluctuations in market prices. In taking place at the level of the bulk supply points particular, interest rate risk (change in interest and MV/LV distribution transformers as illustrated rate), currency risk (change in foreign exchange in Figure 1. rate) and commodity risk (change in commodity prices) affects the electricity utility.

5 21. iem journal sept 2013 Book 21 9/4/2013 1:43:24 PM. THE JOURNAL OF THE INSTITUTION OF ENGINEERS MAURITIUS. Bulk power generation High-voltage transmission Bulk supply point (HV/MV substation). Medium-voltage distribution Low-voltage distribution HV/MV power Electrical MV/LV distribution Generator Load transformer line transformer Figure 1: Overview of the power system in Mauritius OPERATIONAL Risk CEB as an electricity utility involved in Credit Risk generation, Business Risk transmission and distribution of electricity Market Risk 22. iem journal sept 2013 Book 22 9/4/2013 1:43:24 PM. THE JOURNAL OF THE INSTITUTION OF ENGINEERS MAURITIUS. Credit risk: Risk of loss due to a counterparty defaulting on a contract or due to uncertainty Electricity utilities worldwide adopt different about a counterparty's ability or willingness to contingency planning criterion across the generation, meet its obligations.

6 Transmission, medium-voltage distribution and OPERATIONAL risk: Actual or potential losses low-voltage distribution systems taking into resulting from events caused by inadequate or consideration the number of customers affected failed processes, people, equipment or systems, by an outage, associated loss of electricity sales or from external events. revenue and expected time to repair and restore the Business risk: Risk inherent to the electricity or system. As one moves from the generation through power industry such as uncertainty in demand the transmission through the medium-voltage and change to laws and regulations. distribution system to the low-voltage distribution system, the number of customers affected by an The next sections shall focus on the OPERATIONAL RISKS outage decreases and so does the effort required to faced by the CEB and the strategies put in place repair and restore the system.

7 It is emphasized that to mitigate these RISKS . OPERATIONAL RISKS mainly providing for spare equipment capacity to increase include 1) loss of revenue to the country due to reliability and security of electricity supply require disruption in electricity supply 2) the loss of revenue additional financial resources such that a trade-off to the CEB from the loss of sales due to the inability is required between higher reliability and associated of the CEB to supply electricity to customers that increase in investment cost. are willing to consume and 3) damage to electrical equipment due to adverse meteorological conditions 5. Managing OPERATIONAL RISKS in the and leading to disruption of electricity supply.

8 In the Electricity Sector through Planning and context of natural catastrophes such as flash floods, Design Standards maintaining continuous electricity supply to aid In this section, the planning and design standards in bringing human life to safety and safeguarding adopted for the generation, transmission and property is of prime importance. distribution systems as illustrated in Figure 3 are reviewed in relation to the ability of the power system 4. OPERATIONAL RISKS and the Need for to continue to operate following an equipment failure Trade-off between higher Reliability or during a natural catastrophe such as flash floods. and Increase in Investment Cost The electricity infrastructure (power system) is Generation system composed of physical assets (equipment) such The N-2 criterion is adopted for the generation as generator, transformer, transmission line, system, which requires that the CEB be still in a distribution line and switchgear that are subject to position to supply the maximum system demand even unavailability due to maintenance and following if the two largest generating units are not available fault from operation or damage due to exposure to due to maintenance or breakdown.

9 In addition, adverse climatic conditions. The adoption of the N-x power plants are designed to withstand the cyclonic contingency criterion provides for the electricity conditions prevalent in Mauritius and equipped utility to be still in a position to supply the total with proper drainage system for water evacuation in system demand with x equipment out of service due the event of flash floods. Therefore, it shall be still to maintenance, fault or damage. The adherence to possible to generate power to meet the prevailing the N-x contingency criterion requires investment load demand given that two generating units are not in spare generation, transmission and distribution available and under the adverse climatic conditions capacities, which spare capacities are utilized in the mentioned above.

10 Event of equipment maintenance, fault or damage. 23. iem journal sept 2013 Book 23 9/4/2013 1:43:24 PM. THE JOURNAL OF THE INSTITUTION OF ENGINEERS MAURITIUS. Bulk supply Bulk supply point (66/22 kV. point (66/22 kV. substation) A. substation) B. N/O. HV/MV power 66 kV line 22 kV line MV/LV distribution Generator Load transformer transformer Figure 3: Planning criterion for the expansion and design of the power system in Mauritius Transmission system damage to overhead lines due to accidental contact or collision. The N-1 criterion is adopted for the transmission system, which requires that the CEB be still in a Outage on a medium-voltage distribution feeder may position to transmit power to all bulk supply points affect up to several MWs of served load demand, and load centres even if one transmission line or which makes it important to provide alternative or power transformer at a bulk supply point is out of back-up supply at the medium-voltage level.