PD40
High Impact Low Probability Event Mitigation
RCP2 Portfolio Overview Document
Portfolio:
Expenditure Class:
Expenditure Category:
As at date:
Expenditure Forecast Real
2012/13 NZ$ (m)
CAPEX
High Impact Low Probability Event
Mitigation
Base Capex
Grid – Enhancement & Development
15 November 2013
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
Total in RCP2
1.43
2.80
2.88
1.47
1.04
1.04
9.23
Need Identification
This portfolio aims to improve system security by implementing economic investments to reduce the extent of high impact, low probability (HILP)
events at key substations.
The HILP Mitigation portfolio will:
Describe the reason for proposing
a project ( i.e. need or trigger)

implement mitigation measures identified in the HILP event investigations , where appropriate . In many cases measures become economic
when combined with fleet asset replacements. This portfolio allows for the immediate implementation of simple, relatively low cost ‘quick fix’
economic mitigations not combined with other work; and

implement two HILP mitigations at Islington substation that were identified in the HILP event review for that site:
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2
o
low voltage supply upgrade: The LVAC system supports the operation of all substation equipment and control systems. The main LVAC
switchboard is a single point of failure; some of the equipment is old and a fire risk. Analysis shows that an upgrade of the LVAC system is
economic
o
fire protection upgrade: The fire detection and suppression system within the Islington Control and adjacent Condenser buildings is
inadequate for such a strategic site. A control building fire could interrupt supply to part of the upper South Island. An indicative economic
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We plan to undertake 15 HILP risk investigations at critical substations over the RCP2 period, as part of the Investigations programme.
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Refer Report on Islington Substation High Impact Low Probability (HILP) Event Study.
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analysis (based on the possible extent and duration of such an outage) has demonstrated that all of the fire mitigation measures identified
are economic to implement.
What is the timing of the need and
the confidence level that issue(s)
will eventuate
HILP investigations conducted to date lead us to believe that HILP studies at additional sites are highly likely to identify further risks that warrant
mitigation in the short term. While specific work requirements are not yet known, we estimate that expenditure of $1m per annum will be required
to undertake such works.
With regard to the works at Islington, we intend to start the projects in 2014/15 and complete the work by 2017/18. As such, we have a high level
of confidence that the work will be completed during RCP2.
Long list of options and high level assessment
Option Type
Transmission options
Option
Fit
Feasible
Practical
GEIP
Security
Cost
Short list
a) Special Protection Scheme (SPS) to enable maintenance or unusual operating
conditions
b) Shunt compensation by installing capacitors for voltage support
c) Install addition bus section circuit breaker and bus zone protection
d) Substation reconfiguration
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e) Grid reconfiguration
f) System Operator intervention/operational measures
Building options
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g) Improving Local service supply
h) Installation of firewalls and fire suppression systems
Fit for purpose – will meet the transmission need.
Technical feasibility – complexity of solution; reliability, availability and maintainability of the solution; future flexibility – Grid Development Strategy.
Practicality of implementation – Solution implementable by required date (probability of proceeding); property and environmental risks; implementation risks.
Good electricity industry practice (GEIP) – consistent with good international practice; ensure safety and environmental protection; accounts for relative size, duty, age and technological status.
System security (additional benefit resulting from an economic investment) – improved system security; system operator benefits (controllability); Dynamic benefits (modulation features and improved
system stability).
Indicative cost – whether an option will clearly be more expensive than another option with similar or greater benefits.
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Short list of options
Option 1 – Do Nothing /
operational measures
‘Do-nothing’ may result in widespread loss of supply, and reduced supply security for extended periods. The system operator manages the load and
re-dispatches generation to ensure asset loading and bus voltages are within limits post-contingency.
Economic HILP mitigation measures across the RCP2 period
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The types of remedial work that may be completed within this project include:
Option 2 – HILP mitigation
measures

installation of firewalls
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installation of fire suppression systems in control rooms
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re-arranging circuit and transformer connections for greater diversity across buses

mitigating risks around overcrossings of transmission circuits and buses
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improving local service supply; and
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special protection schemes to enable maintenance or unusual operating conditions.
High Impact Low Probability (HILP) mitigation measures at Islington
The specific HILP measures planned for the Islington site are:
a.
low voltage supply upgrade: shift the LVAC main switchboards and DC batteries and chargers from the cable basement to a location adjacent
to, or in the main building; and replace the existing LVAC local service transformers and install four 33 kV/415 V units to supply the Islington
site and Regional Control South; and
b.
Islington substation fire protection upgrade: a number of fire mitigation measures can be implemented to reduce fire risks at the Islington
substation buildings. We are carrying out analysis to determine our preferred approach to fire mitigation strategy at Islington.
P50 option costs
Brief description of the approach
used to estimate capex, and, if
applicable, opex
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In the case of the work to be undertaken at Islington, a desk-top assessment of a high level scope and ‘building block’ costs were used to estimate
the cost. The approach and key assumptions used to compile the cost estimates have included (to the extent feasible):

the likely location of new assets based on a desktop review of aerial photographs, site layout drawings, underground services drawings, and
available cable ducts

a likely scope assessment has been used to estimate materials and work quantities
Based on mitigation measures identified from HILP investigations of Bromley and Islington substations.
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
typical component costs for material and work quantities have been taken from TEES (cost estimation software)

typical material and plant costs have been determined with reference to period supply contracts currently in place and historic installation
costs respectively; and
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typical installation costs (such as fire protection work) were informed by similar historic projects and or current quotes from service providers
and applied based on the requirements of the site.
With regard to the economic mitigation measures that will be undertaken at sites following detailed HILP event investigations, a provision has
been made for the work based on mitigation measures for sites investigated to date.
Option 1 – Do
Nothing/operational measures
$0
Total forecast expenditure on this project during RCP2 is $9.2m, and comprises:
Option 2 – HILP mitigation
measures
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HILP event mitigation measures across the RCP2 period – $5.2m (our level of confidence in this estimate is low as ‘building block’ costs are
based on relatively few projects; and
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HILP event mitigation measures at Islington – $4.0m.
Net benefits and outputs
Option 1 – Do Nothing /
operational measures (reference
case)
No investment is undertaken under this option. This provides the reference case with which the benefits of other options can be compared.
Economic HILP event mitigation measures
Based on HILP event investigations to date, we believe the economic benefits of risk mitigations can range from $3-5m at each site. Not all
exposures warrant immediate, independent, action – at some sites it is more cost effective to undertake incremental work, on the back of fleet
asset replacements, to complete identified remedial measures. The site specific HILP event investigations will help us to understand the HILP
events each site may be exposed to, and quantify potential benefits, in order that relevant mitigation measures may be identified. The mitigating
measures enable us to protect our substations against catastrophic events.
Option 2 – HILP mitigation
measures
1.
HILP mitigation measures at Islington
a. Low voltage supply upgrade – undertaking this work will reduce the likelihood and consequence of HILP LVAC events and improve the flexibility,
operation and maintenance of the system; and
b. Fire protection upgrade – this work will reduce the likelihood and consequence of HILP fire events.
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Option risk assessment
Option 1 – Do Nothing/
operational measures
Some events have a low likelihood of occurrence. However, the consequences when they do occur is severe and may impair safe operations,
power system stability, personnel safety, and delay restoration of supply. These situations cannot be fully mitigated using operational measures.
Option 2 – HILP mitigation
measures
HILP event risks will be reduced by implementing the mitigation measures.
Preferred option(s)
What is the currently preferred
option / sequence of options / or
short-listed options?
Option 2. The work programme for the Islington site has already been determined; work to be undertaken at other sites will be determined
progressively during RCP2, as HILP reviews are completed.
Set out the reasons for choosing
the preferred option(s).
Mitigations have a positive net benefit.
Steps to completion
A HILP event investigation has been carried out for Islington substation, and mitigating measures identified. Further HILP event investigations are
being carried out at key substations to identify risks arising from HILP events and possible means of mitigation, following which preliminary
economic analysis will be carried out to determine whether the identified mitigation measures are likely to be economic.
What are the next step(s) in
choosing the solution
In accordance with our business case process (as described in section 3.6.1 of the AM03 - Planning Lifecycle Strategy) the next steps will be to:
 carry out a detailed investigation (BC2) to formally select the preferred options for works at Islington
 carry out detailed investigations (BC2) to confirm preferred options for other sites where HILP event risks have been identified which will not be
addressed under fleet management strategies and for which preliminary economic analyses show net benefit
 in each case, obtain internal approval to proceed with the project (BC3).
When did / will the steps in the
internal approval process occur /
take place and where were / will
they be documented and
described
We will follow the following process for preparing the investment proposal for the work at Islington:
 conduct BC2 investigation to confirm the preferred option
 complete the consultation with affected stakeholders
 submit the preferred solution for Board approval; and
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 complete the BC3 for project execution.
The work undertaken at each site, and hence the required services and assets, will be site specific.
Identify the key services and assets
that will need to be procured to
complete the preferred option
We expect to outsource the detailed design of the preferred solution.
In accordance with our Procurement Policy, we will ensure that a robust and auditable purchase decision-making process is followed. We will
complete a Procurement Plan to document the procurement process and for audit purposes. The plan helps us plan for the external procurement
of goods and services in a way that ensures we are making the most appropriate purchasing decision for our stakeholders and ourselves.
 Projects not properly scoped can lead to cost overruns and not meeting deadlines. During the planning process, we will ensure project scope is
adequately defined and it can be implemented within the required timeframe and cost.
 We will ensure the project is designed to its specification, the appropriate design reviews are completed and detailed factory inspections are
carried out to manage risks.
Identify the key delivery risks
 In the process of procurement, it is essential that we select a supplier that is able to consistently meet quality requirements. Quality must not
be compromised in favour of other factors because of the critical influence of quality on risk to safety and the network.
 If applicable, we will standardise specifications and procurement of primary equipment to limit diversity and increase inter-changeability. This
also allows procurement efficiencies to be attained.
 Safety is paramount, the design of all equipment installed must be safe to operate and maintain without compromising performance. Vendors
are selected with great care to ensure safe installation and commissioning work and full compliance with all our safety requirements and
expectations.
 All works required on-site will be carried out in full compliance with all of our safety requirements and expectations.
Supporting Documents and Models
List of all relevant documents
(including relevant policies and
consultant reports) taken into
account in estimating project costs
and describing anticipated
deliverability.
Report on Islington Substation High Impact Low Probability (HILP) Event Study
Report on Bunnythorpe Substation High Impact Low Probability (HILP) Event Study
Transmission Tomorrow (https://www.transpower.co.nz/resources/transmission-tomorrow).
SP03 - Site Strategy – Islington substation
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