A world-wide survey of current practices in the management of risk within electrical supply projects

A survey is described which examines the current risk handling practices in evaluating capital development projects (transmission, generation and distribution) within the electricity supply industry world-wide. As risk perception is an important aspect of risk management, the attitudes towards and the barriers created by management to risk management plus the benefits perceived are examined and compared with the results of previous surveys. The survey will assist also in determining the need and feasibility of applying a risk management process to capital budgets in investments such as transmission construction works and other appropriate applications. The survey has demonstrated that a formal risk management process is more likely to apply to large, complex projects with potential of cost overrun. However, the criteria for application are likely to depend more on overcoming managers concerns about time involvement, human/organizational resistance and understanding of quantitative techniques, such as assessing probability distributions, determining and interpreting expected values, variances, and risk management output results, so as to appreciate the benefits and enable effective decisions to be made. The world-wide survey confirms that there is a drive towards a more thorough assessment of risks than previously recorded, with a formal risk management process that will meet the expectations of business growth and project sponsors and ensure that all risks are actively managed throughout the life cycle of a project.