Hydro Tasmania’s approach to managing risk

19 April 2016

Hydro Tasmania plans for a wide range of contingencies and the business was prepared for a potential outage of Basslink.

The Risk Management Committee is a sub-committee of the Hydro Tasmania Board, and its function is to test the rigour of Hydro Tasmania’s risk management practices.

The Committee meets regularly throughout each year. At its December 2015 meeting the Committee noted that a two-month outage of the Basslink cable was possible, and was advised that the business was able to cope with an outage of that duration.

“Despite initial advice from Basslink Pty Ltd to the market operator that the cable would be returned to service within 60 days, we are now at 20 April, four months after it went out of service,” said Steve Davy, Hydro Tasmania Chief Executive Officer.

“We have continued to respond as this situation has unfolded. This response included development of the Energy Supply Plan after the level of uncertainty about Basslink’s return to service became unacceptable.

“The Energy Supply Plan is designed to take us through to winter rains without Basslink being available. We are in close contact with the Australian Energy Market Operator, and they are satisfied that our plans are sufficient to meet Tasmania’s energy needs.”

Measures implemented under the Plan include installation of temporary diesel generation and return to service of additional gas capacity.

More than 100MW of temporary diesel generation has already been installed, and Hydro Tasmania is on track to have more than 200MW installed by the end of April.

The additional gas and diesel generation, combined with voluntary load reductions by major consumers, is reducing the draw on hydro storages.  

Hydro Tasmania continues to work positively with the Government, TasNetworks and suppliers to implement the Energy Supply Plan.

 

Risk Management

Hydro Tasmania’s risk management processes are aligned with ISO 31000, which is the international standard for risk management.

Business Risk Management processes aim to improve business outcomes by ensuring more informed decisions about planning, and designing processes to prevent or reduce risks the business wishes to avoid. Further, these processes help ensure that risks which the business wishes to assume (or cannot avoid) are prudently managed.

Business Risk management also provides a framework for minimising unanticipated disruptions and justifies prudent risk reduction and mitigation measures.

Through risk management processes, the business seeks to identify and where possible quantify the risks to which it is exposed, set limits to the amount of risk it is willing to tolerate, and implement strategies to ensure the business stays within those limits.

Ends

Released by Samantha Meyer (03) 6230 5746; Samantha.meyer@hydro.com.au

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