Abstract
Power plants are very important for continuous electricity energy supply and have been affected by many disruptions. Furthermore, the power grid is a critical item for both economy and society. Accordingly, the aim of this paper is to adopt a risk assessment tool combining an improved Failure Mode and Effect Analysis (FMEA), Analytical Hierarchy Process (AHP) and enhanced Risk Balance Score Card (RBSC) to model nine risk categories in the energy sector. The outputs of the improved FMEA methodology will be utilised as the inputs for the BSC-AHP framework. The improved FMEA methodology combines the exponential and weighted geometric mean to overcome some drawbacks of the conventional FMEA. The approach helps the top management in prioritising 84 risk indicators particularly, in power plants. The results of this model elucidate that the highest priority (most risky perspective) is for the supply chain perspective with 24.2% of the influence, followed by the internal and operational business process perspective with 18.4%. In this perspective, the technical risk is the key risk with 10.4% followed by the disruption risk with 9.4% while the lowest priority risk in this perspective is the project neglect risk with 2.5%. The sustainability perspective coming as the third priority perspective with 17.7%, where the environmental and safety health category covers about 41.7%, followed by the technological pillar with 35.5% and the social pillar with 22.8%. At the fourth level, the customer/demand perspective is coming with 14%, where the load forecasting risk has the highest priority in this perspective with 49%. The learning and growth perspective stay at the fifth level with 13% where the human resources risks category has more influence than the management risks category. The lowest risk perspective priority is the economic perspective with 12.7%. These results will help the top management in taking a holistic view of various non-technical risks at the strategic level and the priority for each one then, the suitable decision can be taken. The significance of this research is in presenting a novel improved for the traditional FMEA and combining it with the BSC-AHP methods to improve the risk assessment process of 84 risks of six perspectives of BSC in power plants at the strategic level.
Highlights
The energy sector has been facing risks associated with economic, social, environmental, technological and a wide group of risks through the supply chain
This paper aims to establish a framework that combines the BSC-Analytical Hierarchy Process (AHP) tools with an improved Failure Mode and Effect Analysis (FMEA) to develop a framework to prioritise the risks in power plants
The developed models were applied for various 84 risks to determine the level of these risks either in the high, medium or low-level area afterwards, the Key risk indicators (KRI’s) which have been located in the high and medium level area will be selected and the low-level risk will be discarded
Summary
The energy sector has been facing risks associated with economic, social, environmental, technological and a wide group of risks through the supply chain. Afgan et al [2], a fluctuation in the oil price has a major influence of sourcing and distribution strategy decisions, where the fuel accounts for around (1/4) to (1/3) of transport operating costs, any variation in the oil price has a direct impact on the supply costs of shippers. The energy market players have encountered the increasing risk level, ; the movements of the market will consider the keystone for the market player’s decision-making process for managing controllable risks (market risk, credit risk, and operational risk) or for uncontrollable risks like the weather; which affect production and demand. Powerful operational and planning decisions appropriate risk management strategies should be adopted and taken by the energy market players.
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