Can the High Reliability Organization concepts of risk and failure management, be applied to the energy transition?

I recently wrote a recent article on the concepts that High-Reliability Organizations (HRO) deploy in practice and how these principles could be applied to the forthcoming energy transition in the electricity sector. I received a lot of feedback on this article, in particular, that I did not provide enough information on each of the five HRO concepts and how they could relate to the energy transition. Therefore over the coming weeks, I will write five separate articles on each of the HRO concepts. Today I will expand on why having a preoccupation or an obsession with risk and failure is essential for the energy transition to be successful.

The energy transition, much like the operations of a HRO, is a complex system fraught with potential risks and failures. HRO's recognize the presence of uncertainty and unpredictability within their business model and these values have the potential to destabilize the operations. They also understand that risks are everywhere and there is known knowns, known unknowns and unknown unknowns risks that could potentially hurt the business at any time. Hence, these organizations have to be consistently aware of risks, how to manage any potential failure in the operational process and that ultimately allows them to make more informed decisions.

So can policy-makers apply HRO risk and failure concepts to make better energy transition decisions?

The energy transition demands that we understand the complex relationship between policy-making and public engagement and the consequences could be catastrophic if the overall objectives are not aligned. For example, a policy decision favoring a transmission, solar, wind or storage project in one region might have repercussions for grid stability or curtailment of the new assets, it could affect the economic status of the region or and other wider environmental or agricultural impacts, etc, etc. We have seen recent examples of flawed energy transition strategies in Australia and the United States in 2023, where the local communities have not supported energy transition projects in their areas.

As we know, the energy transition is challenging and we must continue to be mindful to actively engage all stakeholders from policy-makers through to the public, throughout the design and approval phase of a project. The application of HRO risk management concepts will support policy-makers to make better, more informed decisions throughout this phase of a project. As policy-makers would have a more transparent identification process for risks, they would experience continuous learning from their mistakes, this would also ensure a better understanding of the proposed technologies to be installed (especially the limitations of the technology) and this would ultimately improve the public opinion process, which can be instrumental in ensuring the success of the energy transition.

So how can an obsession with risk and failure ensure a successful energy transition for the grid operators?

To be honest, several grid operators around the world are reviewing the associated risks that are present during the energy transition and they have developed integrated system plans and long-term reliability assessments in an attempt to manage a smooth transition. Here are a few examples of plans and assessments from some grid operators; the Australian Energy Market Operator (AEMO), Electric Reliability Council of Texas (ERCOT), Midcontinent Independent System Operator (MISO), National Grid ESO and the North American Electric Reliability Corporation (NERC).

The majority of grid operators are proactively applying HRO concepts to their operating procedures. As an example, they are identifying system operating incidents by reporting, investigating, and then implementing recommendations to address the root causes of the various incidents. You can find some fantastic examples of these reports on the AEMO website.

What does the future look like for the energy transition?

As we undertake the energy transition, the principles of HRO's can guide us to avoid potential catastrophic failures. However, we must be disciplined and apply these risk and failure concepts in a structured manner from policy-making, to public engagement, through the construction phase and then ultimately into the world of operations.

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