-Find the risk associated in each area
-Find the likelihood of each risk
-The impact of the risk financially and on the schedule
Subject Biomass Conversion Project Briefing
Date 6 December 2012 Job No/Ref BCP01
M:MSC PMFRPMFR 2012-13EPM946EPM946 CW.DOCX
Page 1 of 3 © Arup | F0.13 | 14 February 2011
1 Introduction
This briefing outlines the risk assessment coursework exercise which will focus on a risk assessment of a proposed Biomass Conversion Project in Northern England.
The project is currently in the feasibility stage so relatively little scope definition is possible. This exercise is intended to identify the major risks facing the project in order to ascertain its viability and inform early development scope.
2 Background
The site in question is currently a highly performing 2000 MW power station. It runs exclusively on coal. It is a key asset for EE in the UK in terms of production, and is set to remain so for the next 15-20 years. As such, the project must ensure that production interruptions are kept to a minimum throughout.
The motivation for the conversion project is to take advantage of significant government incentives for energy companies to use renewable fuels. These take the form of Renewable Obligation Certificates (ROCs), which are paid proportionally according to how much of the fuel burnt is from renewable sources. Recently the government has reduced the value of ROCs, but it is still thought that the project could be worthwhile.
Biomass fuel has lower energy density than coal, so a much larger amount of it is required in order to produce the same level of electricity. It is, however, much more combustible, requiring far less energy to ignite. Although there are other stations using biomass for production around the world, it remains a relatively new and unproven technology.
3 Scope
It is intended that the risk coursework will identify and assess a list of project risks that would apply to the
? planning,
? design,
? construction,
? testing/commissioning and
? operation of a converted biomass-fuelled power station.
Subject Biomass Conversion Project Briefing
Date 6 December 2012 Job No/Ref BCP01
M:MSC PMFRPMFR 2012-13EPM946EPM946 CW.DOCX
Page 2 of 3 © Arup | F0.13 | 14 February 2011
4 Methodology
4.1 Risk Identification
The teams will consider risks to completing the project within the currently agreed Capital Expenditure and to the proposed Project Completion Date.
Risk exposure will NOT be assessed at this point. Consequently, teams will be discouraged from questioning and pre-empting conclusions as to the significance of each contribution.
Typical risk areas for consideration are:
? Environmental impacts
? Social concerns (local stakeholders etc)
? Safety at all parts of the lifecycle
? Procurement & Contractors
? Commercial issues
? Maintaining on-going operations of the existing plant
? Construction
The following objectives for the project are identified:
? Hitting budget targets for capital expenditure
? Delivering the conversion within programme
? Meeting quality requirements
? An enhanced reputation with stakeholders (including environmental bodies)
? Station output maximised during all phases
4.2 Inherent (pre-mitigation) Risk Assessment
Table 3.2 (below) contains indicative risk severity bands. This will allow identified risks to be semi-quantified in terms of their likelihood and consequences in order to estimate their associated risk exposure. LIKELIHOOD
IMPACT Scale Range
Value Scale Capex range Programme range
Very rare
< 5%
1
Insignificant
< £100k
< 2 days
Low
6 – 20%
2
Minor
£100k – £500k
3-7 days
Medium
20 – 50%
3
Moderate
£500k – £3m
7-14 days
High
50 – 80%
4
Major
£3m – £15m
14-30 days
Almost certain
> 80%
5
Catastrophic
> £15m
> 30 days
Subject Biomass Conversion Project Briefing
Date 6 December 2012 Job No/Ref BCP01
M:MSC PMFRPMFR 2012-13EPM946EPM946 CW.DOCX
Page 3 of 3 © Arup | F0.13 | 14 February 2011
4.3 Risk Response Planning
After assessing all risks begin to consider and record response plans. Start with the highest risk and work down until you have considered as many risks as possible within the time provided. This activity includes choosing one of the four Ts (terminate, treat, transfer, tolerate) and assigning at least one specific risk control action (RCA) to a member of the workshop team.
4.4 Residual Risk Assessment
Once your team has agreed a way forward on a particular risk, it is important to assess the residual risk exposure and record that in the register. This ensures that your team agrees as to the effectiveness of the risk response plan. Assess residual risk in the same manner as you did inherent risk exposure. Note that this may be somewhat less certain, but it is a helpful benchmark nonetheless.
5 The presentation and Short Report No Activity
1.
Introduction & briefing
2.
Risk Identification
3.
Inherent Risk Assessment
4.
Agree Risk Responses & assess residual risk exposure
5.
Detail on the top 3 risks
6 Team Appointments
Team members should be assigned to the following roles:
? Risk Manager/facilitator
? Project Manager
? CDM Co-ordinator
? Client ( 1 or 2 people)
? Design Engineers (1 or 2 people)
? Contractor (1 or 2 people)
? Architect
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