Asset Management

Asset management philosophy

Endeavour Energy applies a lifecycle approach to managing its network and the assets that comprise it. The lifecycle approach involves two aspects:

• Considering individual assets and asset populations on a whole-of-life basis in order to achieve optimal outcomes across their entire lifecycle e.g. considering how the cost-benefit trade-off between asset management decisions made at the design and procurement stage may later impact the maintenance stage of the asset lifecycle; and
• Considering the network as a whole in all asset management decisions i.e. will the decision made in relation to any individual asset or asset population result in the best outcomes for the network as a whole.

We develop network and asset plans, proposed investment programs, develop asset standards and management policies, and strategically monitoring and manage network capability and performance

Asset management system

Endeavour Energy maintains an Asset Management System that provides a framework for effectively managing the network and its assets through the complete asset life cycle of planning, program development, design, construction, operation, maintenance, renewal and disposal in accordance with ISO 55001.

The Asset Management System defines the key documents used to coordinate asset management decision making and ensuring asset management activities are aligned to the organisational objectives.

Investment management & governance framework

Endeavour Energy’s Investment Management Framework has been revised to ensure best-in-class customer investment outcomes and business governance and to adopt our new digital transformation platforms. This includes risk-based approaches to economic benefits quantification and alternative options, risk and uncertainty management.

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An annual planning and investment cycle oversees key capital allocation from a management level for optimisation.

Investment strategy

Our investment strategy is based on four priority themes that balance affordability for customers with their long-term interests. The four themes are below:

Meeting core customer expectations for a safe, affordable and reliable electricity supply: We invest in the replacement and renewal of assets across our network to ensure they continue to meet our customers’ expectations for a network that is safe for our workers and the community, provides a reliable electricity supply to our customers and is affordable.

Supporting the sustainable growth of our communities: As the ongoing transformation of Western Sydney and our regions continues to drive growth across the Endeavour Energy network, we need to align our investments with other lead infrastructure provisions by facilitating grid technologies that will be adaptable to the evolving needs of businesses and communities.

Providing a resilient network for the community adapting to changing climate and external hazards: Endeavour Energy defines resilience as the ability to anticipate, withstand, quickly recover and learn from major disruptive events. As the effects of climate change become real, our infrastructure needs to meet our high levels of service in an increasingly challenging environment. Our organisation needs to be prepared, enabling our trained personnel to respond to incidents and provide support services to those in need.

Enabling customers’ future energy choices: As customers seek to connect more distributed energy resources and increasingly use sophisticated digital platforms, the network and its management must evolve. Our objective is to enable customers’ future energy choices for a sustainable future, moving use towards the future integrated and low carbon energy system.

Investment decision making

Our investments are implemented through our Investment Decision-Making (IDM) process which aligns with our Investment Management Framework (IMF) and is a key driver of our Asset Management Framework (AMF). Individual plans in the key network investment areas are developed and supported by detailed analysis that explicitly takes into account:

• externally imposed obligations and requirements including service standards, design standards, safety and environmental obligations, and specific asset performance targets
• information about the network system including loading, condition of assets, performance variability, current capacity, age and the criticality of key assets
• forecasts of demand growth and connections by location, and
• inputs obtained from stakeholder engagements.

Value framework

To optimise the mix of investments, we apply a consistent approach to quantify risk and benefits, and determine the timing for investments based on the need and the best overall value provided by the portfolio.

This is the basis of the value framework and is underpinned by:

• using a rational economic approach to allow the comparison of dissimilar investments
• using a consistent and repeatable approach to assess all the benefits, risks, and cost of the investment
• ensuring that both financial and non-financial benefits are included, where their contributions are aligned to a common scale, and
• measuring its alignment to the organisation’s corporate strategy & risk appetite.

Licence conditions

Our licence conditions have a material impact on our asset management framework and capex requirements. As the compliance regulator, IPART conducts frequent audits to demonstrate ongoing compliance with our obligations. These include:

• Distribution reliability and performance conditions: set overall reliability, individual feeder performance and customer service standards that we must comply.
• Critical infrastructure licence conditions: set out requirements regarding our management and operational presence in Australia and data security requirements including privacy of customer information.
• Management systems; our asset management system must be consistent with International Standard (ISO) 55001 and our environmental management system must be consistent with ISO 14001. Our safety management systems must also comply with Australian Standard (AS) 5577 in accordance with the NSW Electricity Supply (Safety and Network Management) Regulation 2014.

Safety

Continuing advances in workplace health and safety are driving a more integrated view of contributing factors to workplace safety and the business’s obligation to ensure a safe place of work. In this regard, safety considerations including safety in design are overtly considered in asset management strategies. Furthermore, Endeavour Energy has a specific strategic plan for Safety and Environment that considers the broader safety and environmental initiatives across the business.