With increasing cost pressures and constraints on capital, management in operations, maintenance and IT all face the challenge of using technology to manage assets today and going forward.

For utilities, the major assets are generation plants, transmission and distribution networks, pipelines, water and sewage treatment plants, gas processing plants, and gas storage. Assets may include central station generation (fossil, nuclear, hydro, wind farms, solar farms) or distributed (utility scale electric storage, gas storage, gas or water pipelines, and transmission or distribution lines). The hierarchy of assets is comprised of capital assets (power plants, sewage treatment plants, gas processing plants), large complex assets (turbines, boilers) and finally, balance of plant (motors, compressors, switchgear, transformers, valves, cables, and pipelines).

Utilities have largely moved beyond a break-fix approach and are increasingly under pressure to become more strategic about how they manage their assets using a risk-sensitive approach to:

• Mitigate economic, health, safety, and environment risks associated with asset failure
• Ensure the reliability of assets related to market demand
• Deliver effective capital spending on high-volume/low-cost and high-cost/low-volume equipment
• Reduce the costs of maintenance, improve operational performance, and extend the life of each asset
• Eliminate unnecessary inventory and improve relationships with suppliers

A new approach - strategic asset management – helps utilities understand and execute the best strategy for designing, installing, operating, and maintaining assets, taking into account the context of market conditions and regulations. For example, if the market for generation is in flux due to intermittent or distributed resources and a merchant generation plant has an opportunity to provide ancillary services to the market at an optimal price, it may make sense to defer maintenance to a later date. Of course, this would only apply if there is no imminent danger in ramping the asset. In this setting, availability takes precedence over reliability.

Critical elements of strategic asset management include:

• Strategies for assets, workforce and supply chain
• Predictive, cognitive, and optimization analytics applied to financial and asset data
• Information and Communications Technology (ICT) and IoT deployed to collect and connect assets
• Modernized work order and planning applications for process execution
• Optimizing the organization to change how equipment is run, operated and maintained