Sustainable Asset Investment Planning at Endeavour Energy

Endeavour Energy (Endeavour) is an electric distribution company that builds, maintains, and operates a $6.7 billion (AUD) network servicing Australia. Endeavour has a clear objective of providing safe, reliable, and affordable power to over a million customers, while reducing emissions and asset-related risks to minimise environmental impact.

Like many organizations managing critical infrastructure, Endeavour faces constrained budgets, unstable commodity prices, and increasing pressure from stakeholders to demonstrate how capital decisions impact Environmental, Social, and Governance (ESG) and sustainability factors. Endeavour recognized the need to transition from a spreadsheet-based process to a centralised, enterprise-wide Asset Investment Planning (AIP) software solution to optimize planning.

The Solution In 2020, Endeavour adopted IFS Copperleaf’s software suite to create a sustainable AIP framework. IFS Copperleaf AIP includes applications that support and enhance investment planning, portfolio optimization, asset risk modelling, and predictive analytics at Endeavour.

IFS Copperleaf was one of two AIP solution providers Endeavour shortlisted. For six months, Endeavour evaluated the performance of both solutions by testing them on a subset of its asset base. What differentiated IFS Copperleaf were better product development and support tools, as well as more innovative product features that could address Endeavour’s needs.

The Benefits1 • �Gained additional budget headroom by

improving investment effectiveness • �Reduced risk by quantifying reliability,

environmental, social, and safety impacts • �Enhanced sustainability strategy by

incorporating ESG factors • �Saved thousands of hours by analyzing asset

risk profiles at a portfolio level • �Demonstrated continuous improvement and

economic benefits to regulators and customers

1 �Verdantix, Endeavour Energy Employs IFS Copperleaf’s Analytics to Architect a Sustainable Asset Investment Planning Framework, November 2021

endeavourenergy.com.au

Key Drivers for Change

Endeavour manages a large fleet of distributed physical assets. Every month, the company makes investment decisions that can significantly impact long-term network performance outcomes as well as revenues and expenses. The goal was to formalise investment decisions and processes related to physical assets across the business, and provide greater transparency to internal and external stakeholders.

Key business drivers included:

Need for consolidated framework to support decision making Endeavour identified a need for a single, quantifiable framework to manage the large volume of asset-related investments, and illustrate the rationale behind capital expenditure (CapEx) decisions to the board and management.

Pressure for greater transparency and accountability on asset investments With a new board, new investors, and a new CEO, came a fresh desire for greater clarity on Endeavor’s asset investment decisions. Planners needed the ability to quickly create multiple investment scenarios to respond to questions and build consensus on the best path forward. This need reinforced the decision to move away from spreadsheet-based planning to a more robust, data-driven approach.

Need to quantify how investments impact ESG and sustainability One of the challenges in running a utility business is being able to quantify the impact of operations on the environment and customers. Whereas purely financial objectives are relatively easy to quantify and measure, goals related to net zero, community development, and climate resilience are more challenging to express in tangible terms everyone can agree on. Endeavour needed a consistent way to evaluate the impact of investments on ESG and track progress against targets—to achieve its aggressive 2040 carbon neutral commitment and other goals outlined in its sustainability strategy.

Opportunity to secure funding for AIP solution at beginning of new budget cycle The cyclical nature of a utility’s investment planning and approvals requires advanced budget planning. 2019 marked the end of a five-year budget cycle for Endeavour, making it the ideal time to build a business case—and get funding approved—for a commercial AIP solution.

Bringing people across the organization together to agree on a single framework by which we can steer and make these decisions has been an enormous benefit.” ENDEAVOUR ENERGY

TOTAL SPAN

25,000 KM2

CUSTOMERS

1+ Million

NETWORK VALUE

$6.7 Billion

POWER POLES AND STREETLIGHT COLUMNS

430,000

MAJOR SUBSTATIONS

190

DISTRIBUTION SUBSTATIONS

34,200

Benefits and Improvements Realized

Implementing the IFS Copperleaf suite helped Endeavour reduce asset risk and increase efficiency across several areas:

Gained additional budget headroom by improving investment effectiveness

As a regulated business, it was critical for Endeavour to measure and demonstrate the return on investment in IFS Copperleaf’s solutions. Using IFS Copperleaf Portfolio on a subset of investments, Endeavour was able to improve budget efficiency (i.e., achieve the same or better outcomes with reduced costs) by 5%-10%. These cost savings can be allocated to other areas of the business—delivering additional benefits and value to the organization and customers. “We use IFS Copperleaf's tools to ensure every dollar we spend provides the greatest value.”

Reduced risk by quantifying environmental, social, and safety impacts

IFS Copperleaf’s solutions have enabled Endeavour to establish a quantifiable framework for decision making across the organization, and ensure investment plans are aligned with short- and long-term strategy. Planners are able to compare the value of dissimilar investments by assessing tangible and intangible risks, such as environmental impacts of asset failures, outage impacts on communities, safety incidents, and property damage from natural disasters—allowing for better conversations that are based on a single source of data.

We assessed and incorporated factors that were not on our radar before, and translated these into value for our customers. IFS Copperleaf has helped us understand and quantify the impact of our operations on the environment, as well as the impact of downtime on our customers.” ENDEAVOUR ENERGY

IFS Copperleaf AIP has enabled Endeavour to revamp its asset management and investment strategy. With the full IFS Copperleaf product suite—IFS Copperleaf Asset™, IFS Copperleaf Portfolio™, and IFS Copperleaf Value™—Endeavour has accelerated its decision-making processes, reduced risk, and boosted investment efficiency.

Optimization and what-if scenarios enhance the transparency and effectiveness of asset investment plans

IFS Copperleaf Portfolio allows Endeavour to create investment plans that deliver the highest value, while respecting funding, resource, and timing constraints. The optimization is based on an enterprise-wide value framework that assesses the benefits of all investments on equal footing, such as increased revenue, customer interruptions, productivity, safety, environmental risk, and cost. Endeavour is able to create multiple ‘what-if’ scenarios to explore different investment strategies over a one- to five-year time horizon and compare the impacts of funding and resource constraints. These capabilities are enabling Endeavour to make more strategic asset investment decisions and build a robust, defensible plan.

Predictive analytics determines asset end-of-life and feasibility of intervention options

Being able to predict how assets will degrade over time and their maintenance needs, helps asset owners develop optimal, long-term investment strategies. Endeavour is using IFS Copperleaf Asset to quantify the risks of assets degrading over time and analyze intervention options across its entire fleet. Doing so provides confidence that the company is adopting a proactive approach to sustaining its assets over the next 10-50 years—and delivering on its objective of providing safe, reliable service.

Detailed models assess risk across all assets

Endeavour also uses IFS Copperleaf Asset to develop granular models that capture the unique risk factors of each asset. These models are based on the asset’s operation, location, and surroundings, and include safety risks related to environmental (bushfires) and social (public safety) factors. Critical asset classes like high-voltage switches, distribution poles, transformers, and circuit breakers can all be analyzed—allowing Endeavour to make data-driven investment decisions and ensure the company is committing resources in the right place, at the right time.

Benefits and Improvements Realized cont.

Enhanced sustainability strategy by incorporating ESG factors

A key benefit of the IFS Copperleaf Value Framework is its ability to incorporate ESG and sustainability factors into decision making to drive strategy and mitigate risk. Endeavour has gained a better understanding of the economic, environmental, and social impacts of investment decisions and how they affect customers and the community. Planners can assess and demonstrate how investments contribute to ESG and risk targets at a granular per-asset level. The ability to create an optimized plan and measure progress against key goals has strengthened Endeavor’s sustainability strategy, and provided stakeholders with greater transparency in terms of how the organization is tracking towards longer-term objectives, such as becoming carbon neutral by 2040.

Saved thousands of hours by analyzing asset risk profiles at a portfolio level

What used to take several months is now done in a matter of days. Previously, a specific asset would be inspected onsite, and it would take several months to gather and analyze the data and come up with a recommendation. Using IFS Copperleaf Asset, Endeavour can examine all assets of the same type at once, in a more streamlined and efficient way. Doing so allows planners to gain insights on risk and probability of failure for thousands of assets at a time—and create risk-informed investment strategies across the entire asset base. "Prior to implementing IFS Copperleaf, each team member was looking at a dozen of assets a year; now we are analyzing thousands, if not tens of thousands of assets."

Demonstrated continuous improvement and economic benefits to regulators and customers

Continuous improvement requires high levels of accountability. Endeavour received ISO 55001 certification in 2019, and is using the IFS Copperleaf solution to illustrate the ongoing process improvements being made across the organization in a tangible, measurable way. The company is now able to quantify the economic net present value (NPV) and benefits that investments will contribute to the organization and its customers. IFS Copperleaf’s insightful reports and dashboards make it easy to communicate the highest-value plans to stakeholders and customers—leading to greater transparency and trust.

IFS Copperleaf's product is a lovely, clean way to illustrate how our organizational strategies and values are used in everyday decision making."

Find out more For more information, contact us

or visit our website at copperleaf.com

ENDEAVOUR ENERGY

Australian Energy Regulator and Consumers Recognise Endeavour Energy for High-Quality Proposal

Endeavour saw a clear difference between the non-acceptance of its FY20-24 initial and revised proposals, and the decisive initial-stage acceptance of its FY25-29 proposal—which was submitted after the company transformed its AIP process using IFS Copperleaf.

The submission not only satisfied regulators, but also helped Endeavour win the Consumer Engagement Award for 2023 from Energy Consumers Australia and Energy Networks Australia.

“�Endeavour has lodged a high-quality proposal…. There is a significant improvement in Endeavour's material in support of its expenditure, compared to the previous review. There is evidence of an overall good standard in needs analysis, cost benefit approach, option analysis, and transparency in documentation.”

Australian Energy Regulator

Source: Endeavour Energy Electricity distribution determination 1 July 2024 to 30 June 2029

https://www.copperleaf.com/