Integrated Asset Investment Planning at National Gas Transmission

National Gas Transmission (NGT) owns and operates the high-pressure gas transmission network in Great Britain, including 7,600 km network of high-pressure pipelines, connecting upstream gas to large industry, gas storage facilities, power stations, and the Gas Distribution Networks that serve millions of consumers. These assets are long-lived, expensive to maintain and repair, and widely distributed geographically.

In preparation for the next regulatory period, National Gas Transmission embarked on a journey to improve its Asset Investment Planning (AIP) and Project Portfolio Management (PPM) capabilities—to deliver the highest value to its customers, today and into the future.

NGT’s vision was to transform its business by integrating asset strategy, portfolio planning, investment governance, and investment delivery, within an end-to-end AIP process.

nationalgas.com

The Solution The implementation of the IFS Copperleaf® AIP Solution, including IFS Copperleaf Portfolio™ and IFS Copperleaf Asset™, has enabled NGT to carry out investment optimization across its entire project portfolio.

The Results The implementation of the IFS Copperleaf solution will help NGT deliver its business plan as cost-effectively as possible, contributing to a 4% efficiency on capital expenditure, saving £11 million per year.

Benefits include: • Improved asset risk management • Employee productivity improvements • Enhanced portfolio planning • System rationalization • Improved agility

ASSET VALUE

£6 Billion

HIGH-PRESSURE GAS PIPELINE

4,760 miles (7,660 kilometers)

COMPRESSOR STATIONS

24

ABOVE-GROUND INSTALLATIONS

618

PLANNED CAPITAL INVESTMENT

PER ANNUM 2021–2025

£350 Million

GROUP ASSET GROWTH TARGET

5-7%

Key Drivers for Change

As a regulated business, NGT is required to justify its investments to Ofgem, the government regulator in Great Britain. Under the RIIO (Revenue=Incentives+Innovation+Outputs) regulatory framework, Ofgem challenges network operators to ensure investment plans are innovative, cost-effective, and ultimately, drive the highest benefits for customers.

Organizations are being tasked to provide more detail than ever before and NGT recognized an opportunity to rethink its approach to asset investment planning to position the company for the next RIIO-2 period and beyond.

Historically, NGT developed investment plans using a modeled view of asset risk and intervention strategies, and there was often a disconnect between the plan and the projects that were actually delivered. With 70% of assets at 40+ years old, the focus was shifting toward refurbishing and replacing end-of-life assets as opposed to maintaining existing assets and extending the network to connect new customers.

NGT needed to transform its asset management approach to justify an increasing level of investment to customers, stakeholders, and Ofgem. Having the ability to create an optimized investment plan that aligns modeled asset risk with real-world financial, performance, and operational delivery constraints—and track investments through to execution and benefits realization—were critical to the company’s ongoing success.

The biggest benefit is that we now have an end-to-end solution. We can start off with a rough idea of the projects we need to undertake to achieve our strategy and then track that investment all the way through to delivery and benefits realization.” Asset Modeling Manager

Project Portfolio Management

TOP DOWN

Asset Risk Modeling

Dynamic Integrated Plan

Optimized for Delivery Constraints

Outcome Performance Management

BOTTOM UP

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Asset Investment Planning & Management at NGT: An Integrated End-to-End Process

Solution Overview

IFS Copperleaf and NGT partnered together to develop an end-to-end AIPM process that connects bottom-up asset strategies with top-down project portfolios, and align with ISO 55000 best practices. The IFS Copperleaf solution integrates seamlessly within the NGT IT environment, exchanging asset, investment, and outage data with other enterprise systems. All investment proposals are created directly in IFS Copperleaf Portfolio and the benefits are assessed using the IFS Copperleaf Value Framework.

IFS Copperleaf Portfolio provides the ability to explore multiple scenarios and identify the optimal combination of asset investments that deliver the most value to customers in terms of cost and risk. This brings rigor, discipline, and transparency to the decision-making process. This approach will support optimized outcomes through delivery of the RIIO-T2 regulatory period and position NGT to develop the RIIO-T3 plan.

Asset Risk Modeling

To address new regulatory reporting requirements required by Ofgem, IFS Copperleaf worked with NGT to replace its existing Asset Investment Management system and configure Network Asset Risk Measures (NARMs) risk models within the IFS Copperleaf Value Framework. Monetized baseline risks were developed across multiple failure modes and risk types using IFS Copperleaf Asset, allowing NGT to model the monetized risk benefit of multiple interventions per asset, perform what-if analyses to explore different asset strategies, and determine the highest-value asset lifecycle plans.

Transitioning from a tactical risk modeling tool to an end-to-end strategic solution has enabled NGT to understand the optimal combination of asset investments that delivers increased value for customers in terms of cost, risk, and service outcomes.

Project Portfolio Management

Prior to implementing the IFS Copperleaf solution, NGT relied on a number of standalone systems and spreadsheets that were used within silos. Decisions were made per investment without assessing their impact on the portfolio. IFS Copperleaf Portfolio has replaced these disconnected tools, providing employees with access to a “single source of the truth” for Investment Management, Portfolio Planning and Investment Governance. NGT can now run alternate scenarios and see the impact of decisions across its entire portfolio of work. Workflows were also configured to ensure all investments receive the appropriate level of scrutiny, and to track variances to an approved baseline through project delivery.

Through integration with downstream project execution and outage management systems, the IFS Copperleaf solution helps NGT develop and maintain a deliverable plan that maximizes portfolio value while respecting financial, resource, outage, and other operational constraints. This enables NGT to demonstrate that the investment plan delivers the required outputs within the agreed budget.

We needed a system that would integrate all our disjointed data. Now that we have IFS Copperleaf, we have synergies between our data and our departments. The work is driven by the software and this has brought about a fundamental change in the way we operate.” Jowita Uler Portfolio Planning Manager

The IFS Copperleaf Experience

Benefits and Improvements Realized

The IFS Copperleaf solution will contribute to a 4% reduction on NGT’s capital expenditure, saving £11 million per year—a significant return on investment. These benefits are derived from the new capability to make value-based decisions on the future of the network—across the entire asset lifecycle and centered around the organization’s strategic objectives.

The implementation of a value framework gives NGT the ability to respond quickly to changes in strategic objectives that reflect the social, political, and economic trends of the future. For example, carbon output limits can be used to ensure carbon reduction targets are considered during the planning of an investment portfolio to drive sustainability performance.

“The benefits do not just lie with the tool but also in the new way of working we reached through the implementation. It’s about strategy change, whereby the asset owner understands the strategy, the asset manager understands where we want to go with the whole asset management process, and the asset stewards own the health of the assets and can provide information on the criticality and risks in our system,” stated the Head of Gas Transmission Transformation Program.

�• �Improved asset risk management: The IFS Copperleaf solution provides NGT with an improved ability to anticipate and manage risk and direct resources more effectively. NGT is able to develop asset investment strategies and compare multiple what-if scenarios that consider risk, intervention costs, and customer outcomes.

• � Productivity improvements: IFS Copperleaf's robust system brings together live data, systems, and people capabilities, so that teams can focus their time and effort on higher-level work. By eliminating manual and complex spreadsheets, NGT has recognized significant time savings as well as improved data quality and transparency.

• �Improved project portfolio management: With a single view of the portfolio, the Portfolio Planning Team can optimize plans with a long-term view. The integrated optimization capabilities allow the team to optimize and prioritize work based on outages and other constraints such as future spending or resource requirements.

• �System rationalization: The project transitioned investment management into a single enterprise solution, allowing NGT to decommission two end-of-life systems and several spreadsheets.

• �Improved agility: With IFS Copperleaf Portfolio, NGT can re-optimize the plan based on performance against targets and incentives in real time, to adapt to changes as they arise and provide greater confidence in achieving legislative compliance.

Our team had a clear idea of what we wanted to achieve and IFS Copperleaf was very responsive to that. They took time to understand our specific requirements and had an implementation team on site, working alongside us. It wasn’t just about delivering a product; it was about helping us achieve our vision.”

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Asset Modeling Manager

https://www.copperleaf.com/