2014.01.10 - NAEC Seminar_Fostering long-term investment (Presentation 2)
Long term investment planning
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Transcript of Long term investment planning
International workshop to discuss the science of asset management, 9 th December 2011
Long term investment planning Developing practical strategic investment planning
tools
Paul Sayers (Sayers and Partners)
Ian Meadowcroft and Adam Baylis (Environment Agency)
Jaap Flikweert (Haskoning)
Petra Neve and Rob Deakin (Halcrow)
A CH2M HILL company
International workshop to discuss the science of asset management, 9 th December 2011
Outline Looking beyond the UK Floods sector Why a long term investment strategy Providing evidence to support policy
Present day national scale risks Exploring future investment priorities
Next generation supporting tools and data
International workshop to discuss the science of asset management, 9 th December 2011
Looking beyond the UK floods sector Increasing interest in large scale, long term investment
planning tools. By countries By sector
International workshop to discuss the science of asset management, 9 th December 2011
For example, different countries…..
Uni of South Carolina - Total Place Vulnerability Index Model Uni of Dortmund - Integrated Risk Assessment of Multi
Hazards Model Dutch Ministry of Public Works - Planning Kit Decision Support
System (Water Manager) IHE-UNESCO – Gaming Simulation Tools for River and
Floodplain Management California – FloodSAFE And many others…
International workshop to discuss the science of asset management, 9 th December 2011
And sectors…..
Water companies - Tools for Asset Management Plans Insurance sectors – e.g. Munich Re Model - ‘probability of
maximum losses’ (PML). Floods – Gaming simulation, Flood Ranger (through Foresight)
International workshop to discuss the science of asset management, 9 th December 2011
A range of spatial and temporal scales of interest
Why a long term investment strategy?
Perform under load or on demand?
Improve or deteriorate with/without
action?
How will an asset…
Perform now and in the
future?Which assets
contribute most to risk?
How will the system...
Hot spots?Investment
need?How might
these change ?
What are the national…
International workshop to discuss the science of asset management, 9 th December 2011
..and forms part of the cycle of asset management…
International workshop to discuss the science of asset management, 9 th December 2011
National Assessment of Flood Risk (NaFRA)
Present day flood risks
Based on RASP methods (Hall et al, 2002, Sayers et al, 2005, Gouldby et al 2008)
Takes into account: Location, type and
condition of defences Overtopping and breach
Results in Depth probability
relationship Various risk metrics (incl.
EAD)
International workshop to discuss the science of asset management, 9 th December 2011
2.4m Properties at risk of river and sea flooding in England Excludes surface water risk, and the risk to static caravans
Some results….
International workshop to discuss the science of asset management, 9 th December 2011
How exposed to flood is our essential transport and utilities infrastructure ?
Some results….
International workshop to discuss the science of asset management, 9 th December 2011
Who benefits from flood defence assets?
Some results….
International workshop to discuss the science of asset management, 9 th December 2011
Flood and coastal risk expenditure: £800m in 2010/11
But who spends what?
Some results….
International workshop to discuss the science of asset management, 9 th December 2011
But what for the future? How will the risks and investment needs change? Climate change
• Impacts of climate change using data from the UK climate projections, UKCP09.
• We expect sea levels to rise – increasing overtopping and the chance of breach significantly
• The frequency and severity of rainstorms will increase - increasing in river flows
International workshop to discuss the science of asset management, 9 th December 2011
But what for the future? How will the risks and investment needs change? Changing performance of the assets
• If we do nothing - Deterioration in the absence or a reduced maintenance
• If we do something - Improvement in condition or raising of crest level through investment
International workshop to discuss the science of asset management, 9 th December 2011
The analysis framework FaCET - Flood and Coastal Erosion Tool Analysis (upto 2011)
Risk forecast tool
Expenditure forecast tool
Policy analysis tool
Outputs
Current asset information
NFCDDMEICANCERM
- LTIS feasibility study
- Unit cost database- Asset deterioration
database- UKCP09
- NaFRA’08 - NCERM- UKCP09
LTIS analysis tool
- Investment profile - Residual risk parameters - Outcome measures
25 year min horizon
Dataset
Set outs 8 national policy options (static in time) and the rules for implementing them as asset interventions
International workshop to discuss the science of asset management, 9 th December 2011
The analysis framework FaCET - Flood and Coastal Erosion Tool Analysis (upto 2011)
Risk forecast tool
Expenditure forecast tool
Policy analysis tool
Outputs
Current asset information
NFCDDMEICANCERM
- LTIS feasibility study
- Unit cost database- Asset deterioration
database- UKCP09
- NaFRA’08 - NCERM- UKCP09
LTIS analysis tool
- Investment profile - Residual risk parameters - Outcome measures
25 year min horizon
Dataset
Includes a whole life analysis of costs associated with given policies options
International workshop to discuss the science of asset management, 9 th December 2011
The analysis framework FaCET - Flood and Coastal Erosion Tool Analysis (upto 2011)
Risk forecast tool
Expenditure forecast tool
Policy analysis tool
Outputs
Current asset information
NFCDDMEICANCERM
- LTIS feasibility study
- Unit cost database- Asset deterioration
database- UKCP09
- NaFRA’08 - NCERM- UKCP09
LTIS analysis tool
- Investment profile - Residual risk parameters - Outcome measures
25 year min horizon
Dataset
Based NaFRA/RASP includes a NPV analysis of changes in risk based likely changes associated with a give policy option (deterioration, raising, climate change)
International workshop to discuss the science of asset management, 9 th December 2011
Future investment needs
Given• Climate change data from the UKCP09.
h Sea levels are expected to riseh Rivers are set to increase
h Without investmenth Increased risks – about 500,000 additional properties
would be at ‘Significant’ risk of flooding by 2035h 50% of this increase attributable to climate changeh 50% to asset deterioration
International workshop to discuss the science of asset management, 9 th December 2011
Future investment needs
So how much should be spent nationally?
Cumulative spend on assets: 2011 to 2035
Developed range of scenarios
Increasing returns up to Scenario 4
Scenario 5 decreased risks but at much higher cost
International workshop to discuss the science of asset management, 9 th December 2011
What next….
LTIS has made a significant step forward A national scale investment strategy tool
But… Decision makers now what to: Know more both the spatial and temporal variation in
risks Have greater flexibility to explore policy options that
change over time Include a more comprehensive range of asset
intervention activities (pumps, channel maintenance etc) Make robust choices, minimising regret Understand the potential for wide spread flooding Incorporate all sources of flooding
International workshop to discuss the science of asset management, 9 th December 2011
Scoping the next generation of FaCET tools
A route map for the development of the FACET tools is currently being set out: Version 1 (2011/12)
updates based on latest climate and cost information Version 2 - Step change (application in 2013)
Static policy options replaced with Policy Sequences Estimate of the potential third party funding contribution
Spatially coherent events represented.
International workshop to discuss the science of asset management, 9 th December 2011
Scoping the next generation of FaCET tools
Version 3 – Step change (2014/15) Recast as an “on the fly” process, where alternatives to
the pre-set policy sequences can be provided by the user and analysed directly.
Provision of national scale automated optimization techniques
Version 4 - Step change (beyond 2014/15) A move to a continuous simulation type approach
enabling the impact of specific interventions to be more reliably represented
International workshop to discuss the science of asset management, 9 th December 2011
Conclusions Providing quantified national scale investment strategies
has had a significant impact Supporting better targeting of resources Promoting the need for better data Underlying the need for better decisions, and making
robust choices A progressive programme of development is currently
being scoped
International workshop to discuss the science of asset management, 9 th December 2011
Supporting funders
24
Joint programme – Modelling and Risk TAGFunding and investment team
ContactPaul Sayers [email protected] Meadowcroft [email protected]