Managing strategic risks in the electricity and gas distribution sector—a conceptual model and its examples

Abstract

Most existing asset management models and standards recommend quantifying risks before handling them. In such a regime, the awareness of long-term stakeholder-oriented risks which are difficult to be quantified tends to be insufficient. In this paper, we will firstly identify six categories of such risks, called “strategic risks”, for asset management. Then, we model several real examples of “strategic risks” in the utility sector with our conceptual model, so that the necessity to deal with these “strategic risks” will be illustrated.