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Strategic asset management

Working with utility firms and blue-chip consultancies, Powersim has created a range of simulation solutions for asset-intensive utility companies.

Highly regulated asset businesses face increasingly complex and demanding challenges. The need to balance the often conflicting stakeholder demands of customer service levels, regulatory requirements, risk and financial return has made the development of strategic investment plans a challenging yet critical task.

These businesses operate within a dynamic environment, both regulatory and operationally. The relationships between investment, and the reliability and quality of the asset network and the financial performance of the business can best be understood with a dynamic simulation solution.

Ensuring "value for money" at an acceptable risk profile - in other words, "What investment decisions are required to ensure the delivery of maximum business value at acceptable business risk?" - is the key challenge facing the Asset Director. Our strategic asset management solution allows him to develop robust strategic plans by foreseeing the consequences of a range of scenarios through simulation, and to be able to justify them to regulatory bodies.

Powersim solutions are designed to enable asset managers to:

  • Represent complex dynamic business problems in an understandable and presentable way
  • Engage in what-if scenario analysis and in-depth analysis of results
  • Test the sensitivity of alternative investment scenarios
  • Drive out the indentification of business critical data

Based around the simulation of asset-ageing and its effects on fault rates, service quality and financial performance, Powersim's generic asset-portfolio management solution tracks the way in which the changing age profile of assets will drive the costs of repair and maintenance, and determines key business risks that must be statutorily controlled.

The solution illustrates the way in which the asset age profile changes over time given alternative asset-replacement and refurbishment policies. It relates the resulting cashflow stream to cash generation in other areas of the business to arrive at the future timepath of regulatory financial numbers, and shows the customer service quality that will follow from this changing asset performance.

By using the solution, client management can maximise its financial performance over many years, by making informed trade-offs between repair and replacement policies, seeing their effects on labour requirements and understanding their potential financial independence from the regulatory regime in other areas of the business.

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Asset Management Case Studies

Utility Company
Developing a five year asset management plan
Gas Wholesale Company
Balancing short term and long term requirements to deliver optimal solutions