Risk Management Assignment: Business Continuity Plan for Wind Farm Project

Question

Task: Overview
For this risk management assignment,you will produce three deliverables, with associated discussion:

1. A detail risk management plan

2. A Business Continuity Management (BCM) report
3. A presentation on your BCM report.
This work will be based on the same scenario provided for Assessment 1, but with a focus on planning, development and operation of Stage 1 of the Renewable Energy Power Station.
Your project level risk assessment will be based on one of the following component projects that you choose:

• Solar Farm
• Wind Farm
• Electric Thermal Energy Storage (ETES)
• Environmental approvals and management
Your program level risk assessment will be based on the combination of all component projects required to deliver Stage 1. Your business/ corporate level risk assessment will consider how Stage 1, as well as future stages, may impact the business. Operational risk can also be considered at this level.

What you will do?
The risk management plan and report will comprise:

A detailed description of the risk context (scope, context and criteria)
A detailed risk register incorporating – five (5) business/ corporate level risk events; five (5) program level risk events; and five (5) project level risk events
Quantitative risk analysis of five (5) risk events from the program and project level risk events
Risk response/ treatment plans for five (5) risk events. These plans should be for the highest- level risk events (use lower level risk events if there is insufficient information to develop plans for any of the high-level risk events), and include all the attributes of a detail treatment plan.
Discussion on how the deliverables were prepared and the sources used. This discussion shall also include suggestions (no more than one page) on how optimal decision making could be encouraged by the project leadership team.

The quantitative risk analysis will utilise tools and techniques available to you, but should include analysis of three values for likelihood and/ or consequence. There is no requirement to use Monte Carlo simulations but discussion on technique options is required. The use of a PERT approach would be satisfactory. Discussion on how the results of this analysis would be utilised, is also required.

The risk register is to include description of each risk event, its cause and consequence; ownership; existing controls; analysis before treatment, evaluation, analysis after treatment; treatment measures; responsibilities; and status.

Answer

1. Introduction
The RMRE has been established to create possibilities that would reduce the optimal amount of greenhouse gas emissions based on renewable sources of power generation. Its recent project would significantly help the firm to take care of a systematic approach accounting for a total budget of 4.6 billion dollars to focus on the production of mainly three major sources of power. These are a composite of the company's "GW Solar farm, wind farm, and electric thermal energy storage (ETES)”. This study would significantly focus on the entirety of the risk management and business continuity plan for the company's "Wind Farm". In doing so, this study will take into consideration of BMA's internal contexts along with essential risk assessment criteria and risk response treatment plan. This is further constitutive of a business continuity management report that would help in underlying appropriate mitigation activities required for the company to carry on its future operations sustainably.

2. Risk context
Wind energy is one of the most growing forms of renewable energy sources that are operated from a range of geographical locations. That is a further composite of its quality to attract viable economic opportunities with amplified realistic financial opportunities. According to the connection of the mentioned project, it can be further presented that the company's wind power project is estimated to account for 3 million solar panels. This is further associated with the adoption of installed capacity for the plant to include 400 W per panel with an overall requirement area of 25000 hectares of land. Considering this, the "initial financial structure" for the project is estimated to be around AUD 1.5 billion that is related to " a long-term power purchase agreement (PPA)". The Total "debt to equity" for the power plant is further contributed to be around 2:1. That is inclusive of all operations governing the functionality of " equipment, procurement and construction (EPC) based on a fixed-price contract". The dynamic of this project was thereby required for the availability for the reject to include an elaborate risk management plan with a greater focus on factors such as "non-traditional products such as wind derivatives", "Credit Delivery Guarantees (CDG)" and "certified emissions reduction (CER)" (Alfawzan, Alleman and Rehmann, 2020).

2.1 Internal Context of BMA: Cultures, Strategy, and organizational structure
A series of associative values and functions are integrated within the internal scope of a project. Especially, concerning the objectives of the wind farm of the company, it can be noticed that laments "values, mission, organizational culture as well as information system processes' ' need to be taken into account. One of the most significant factors that need to be taken into account in this regard is "culture" (Giuffridaet al.2018). Fostering an effective culture within the organisational operational scope would allow for the firm to establish value-added integrity and offer a greater amount of collaboration among employees at all levels. This would further be integrated with the overall strategy of the company to include a dimensionalised format of "best assets, commodities and capabilities to obtain maximum returns" for opting for sustainable outcomes with greater profitability margins. Additionally, this would also help in boosting performance criteria for improving capita commitment while also focusing upon the "strategic structuring" of the company. Associating with a varied means of structural compositions within a firm can confuse the organisational members. Considering this, it is important to highlight the subjectivity of the organisation with optimal profit level (Klainet al. 2018). The company is composed of a "chief executive office, operations manager, chief information officer as well as a chief financial officer". They are responsible to take care of maintenance purposes aligned with responsible planning and delivery of the communication objectives. This structure at varying levels also enables the company to create possibilities of successful implementation of "Quality Management System". The structural composition thereby has a non-dependent set of structural components that would help in the assessment of varied levels of activities with greater precision and collaboration.

2.2 External context of BMA
2.2.1 Political factors
Political factors associated with the functionality of the firm would significantly depend upon several political transformational change processes that are automated within the context of the project's supply chain. This is further integrated with the elements of "macroeconomic stability" as well as "import fasciitis", that the company will be subjected to within a stipulated period. It is a further response to the transactional denominations that would follow up based on supply chain restrictions imposed due to political changes in parts of the world, especially in the UK and European regions owing to recent developments of Brexit. Legal factors relevant to the project of wind energy production often require appropriate regulatory compliance of gaining land acquisition and automating environmental standards into the project's entire lifecycle. Compliance with "Environment Protection and Biodiversity Conservation Act 1999" has also made provisions for a sufficient amount of legislative architecture based on which the company can carry out its recent developments (Pelajoet al. 2018). Lastly, cultural factors associated with the project's entire dimension would also help the project to consider corporate social responsibility. These zloty-drive alternatives would be able to produce conditions for greater inclusivity for the interest groups and other indigenous people. Based on extending help to "local people" and providing them with a concessional amount after their land leasing process, the company can easily fulfil social responsibilities.

3. Risk Assessment criteria
3.1 Consequences criteria table
The consequence of risk would be significantly taken into consideration to formulate for identification of minor risks, moderate as well as major in nature. In song so, this section has several risks and uncertainty indexes relevant to "environmental elements' 'as well as financial elements. These are illustrated in the form of a table below.

Level of consequence	Schedule	Wildlife & flora/fauna	CER related concerns	Health of human beings	Environment
Minor	Minor delay of maintaining deadlines on project sprints which are less than a period of 30 days in total	Minor issues can signify the loss of wildlife flora and fauna or ecological constituencies by at least 0.3% which are further practically considered as a revival (Renet al. 2018).	Minor concerns might include lower cells of contractual risks that can be sleeve within 3 months of tenure	Minor pause due to sickness or injury of the employees or workers at the site can be considered for such uncertainties. That might cause a maximum delay of 1 to 2 days.	Environmental conditions that can be considered are in terms of air and water pollution
Moderate	Modern delay can happen in case of the deal; one is missed for more than 30 days and ranges up to 6 months	Moderate loss of economic diversity or habitat insufficiency could lead up to the range of 0.3% to almost 2% and will require greater contribution on the parts of local governments to retain or recover the situation	Moderate levels of uncertainties and consequences can be considered as a CER default due to major changes such as CAPEX increase that would require at least 7 to 8 months for resolving	Health and wellness relevant problems that include moderate disasters such as occupational hazards caused due to destabilisation of structural components of the building can be taken into consideration in this regard. This might require more than 1 month for the project to recover with proper effort on the organisation's part.	In case of moderate uncertainties, the reactions to the incidents can be composed of land degradation or water pollution which are mainly reversible with time.
Strong	Major delays might not be reversible in nature and would cause great loss for the wind project. These causes generally occurred based on supplier anomalies and in competencies of architectural or engineering processes.	Major consequences to wildlife constituencies could be more than 2% which is considered as irreversible loss for the ecological constituencies. This would further require greater impact assessment and application of certain prohibitions and penalties on actions	The major issues on SER might include “e turbine supply constraints' ' that can be significantly plausible for the project’ optimal growth rate. This might take more than 9 months and in some cases might also take more than a yard resolve due to economic instability (Rodrigues, Ramírez and Strbac, 2018)	Major uncertainties that can be taken into account include great desires caused due to natural calamities or human-made flaws. It could result in the permanent closure of the project in certain situations.	Major delays due to environmental degradation in terms of the entire ecosystem can be regressive with a lesser chance for the ecosystem to revive. This can also cause legislation in compliance with environmental standards.

Table 1: Consequence table
(Source: Researcher)

3.2 Likelihood criterion table

Level of consequence	CER bankability	Physical hazards	CER off-taker default	Operational risk
Rare	This significantly takes into consideration of "bankable revenue streams" that comes in an alienation of "debt service obligations". These risks are highly accountable of ways based on which significant financial impact can be portrayed	This is further regarding major physical hazards that would be considered due to physical hazards caused due to disasters such as "earthquakes", or any other natural calamities such as typhoons or floods (Rolik, 2017).	The rare risks might involve concerns relevant to electricity offtake defaults. On the other hand, while such risks are highly rare and accidental, these risks can significantly create a prominent financial loss for the wind farm project.	A possible risk might be catastrophic design failure due to architectural flaws. Generally, the design and architecture of a project as large as a wind power plant are composed of several monitoring guidelines before the project is initiated. Hence it is a rare uncertainty.
Possible	Possible CER risks might include uncertainties relevant to "CER delivery shortfall" (Tikkanenet al. 2018). That is where the entire future of delivery operations can be compromised within insufficient customization of investors relationship	Physical disasters are caused due to negligence of human resources within the company. Lack of protective measures taken by the company's organizational members can also lead to such disasters.	Withdrawal of offtake can be considered to take care of anomalies within equipment in competencies. On the other hand, associating this issue the factors of long term imbalance into security tariffs can be considered with the greatest focus on contractual obligations	Process interruptions due to lack of duster management can be considered as one possible risk. This can further be aligned with commissioning flaws which are normally considered very consistent for a significant project like wind power
Almost certain	Certain CER risks might create insufficiencies into the "climate policy frameworks" which would further include impacts on the CER revenue stream for the entire project	Almost certain risks that can be acclaimed to the project's circumstantial scopes are risks related to human actions as well as loss of property due to unemployment. Furthermore, most certain causes of such risks are due to immense level negligence on the parts of management and hierarchical positions of the company. That would also create a pronounced financial impact for the wind farm project.	Changes in the bidding process are most significant occurring within the context of such megaprojects. Wind farm projects are often considered complex projects with multi-dimensionality. Hence, risks related to contractor noncompliance in one of the parts of the project is considered as one of the salient features.	Problems faced due to wind volatility changes as well as process interruptions. Given the scope and scale of this project it should be essentially considered that based on minor mismanagement of project scheduler resource elicitation, wind projects are highly viable to problems or uncertainties within the operational scope. Such process interruptions can also be caused due to the emancipation of legal compliance into the operations procedures.

Table 2: Likelihood table
(Source: Researcher)

3.3 Combined risk level matrix

Likelihood table in risk management assignment

Table 3: Likelihood table
(Source: Researcher)

3.4 Risk evaluation and Risk Events
The evaluation of risk is done based on identifiers namely "high, low and moderate".Risk events can be constituted of favoured forms of events based on the applicability of the entire process which is based on issues about "construction design anomalies of the project. Risks can also occur regarding the legislative competence of the project (Uchidaet al. 2018). This can also include associations of several organisational operations that can be driven towards "program level risk management" of the wind power plant project.

4. Quantitative risk analysis
4.1 Decision Tree analysis
It is also considered to be one of the great 4s factors associated with the inclusion of effective technologies as well as the use of various interventions that would help the project to ensure graphical representation of the entire event. Furthermore, considering the operational endeavours associated with this project, it can be variably noted that based on such analysis, performance metrics can be significantly taken into consideration to outline inherent weaknesses and capabilities of the project.

4.2 PERT analysis
The PERT analysis signifies the ``weighted average" approach of the wind power plant project that further encompasses the estimation of probability percentages. The formula that is used here is "([1 x Max + 4 x ML + 1 x Min] /6)".

RiskNo.	Type	Name of riskevent	Phase	Description	Cause	Consequence	Cost of risk($)	Probabilitypercentage(%)			Riskallowance($)			Overallvalue([1 x Max + 4x ML + 1 xMin]/6)
RiskNo.	Type	Name of riskevent	Phase	Description	Cause	Consequence	Cost of risk($)	Min(Minimum)	ML (Mostlikely)	Max(Maximum)	Min(Minimum)	ML (Mostlikely)	Max(Maximum)	Overallvalue([1 x Max + 4x ML + 1 xMin]/6)
1	Type of program risk	Noise level	Operational risks	Noise level affecting community surrounding	Construction activities	Local communityunrest, possibilityof legal noticeissuance to theproject	$2,000,000	31%	46%	51%	$400,000	$550,000	$600,000	$533,333.34
2	Programtyperisk	Increaseddustlevel	Operational risks	Dust produced	Transportation of blades	Effect on wildlife and ecological balance	$5,000,000	30%	45%	55%	$2600000	$2300000	$2600000	$3,143,333.34
3	Programtyperisk	Healthissues	“Health &safetyrisk”	Healthproblems	Dust issues	Workforce/humanresource lossand loss of reputation	$300,000	45%	45%	55%	$240000	$190000	$210000	$177,696.67
4	Projecttyperisk	Cultural association	Heritagerisk	Damage toindigenous cultures	Demolition orremoval	Reputational loss	$400,000	40%	45%	55%	$250000	$250000	$350000	$210,000
														Estimatedtotalcost= $4,064,362

5. Risk Response treatment plans
The plan would be mainly based upon emancipation of the following elements:

Increase in greenhouse gas emission
Soil and dust pollution
Health issues

The optimization of solar power for wind energy power plants can significantly help in reducing carbon emission by atlas 33%. Apart from that to resolve problems of heat emission into the atmosphere, regular as well as periodic checks on "environmental engineering could be automated". This would require maintaining compliance with environmental as well as regulatory norms associated with optimisation of "air quality data '' (Van den Burget al. 2017). Factors of solid and dust pollution can be countered with the provision of the proper solid check before taking the land on lease for wind power plant development. On the other hand, the health and wellness of the contractors and workers on-site should also be taken into account based on appropriate dust protection norms. Compliance with the Workers Health and Safety Act can also be taken into consideration to obtain the greatest reliability at an internal level.

6. Preparation of deliverables used
This is significantly taken into consideration based on optimal analysis of annual reports and brainstorming innovation proposed to encounter risks. Preparation of the risk management plan would also be necessary to focus upon the reduced scope of project delivery delay as well as delay in documentation purposes. Investigation of appropriate "mining data '' can also be obtained through the studying of situational context represented by subject matter experts in the field (Verschooreand Adami, 2020). Apart from that, wide use of theoretical concepts aligned with practical applicability transitions can be obtained.

7. Optimal decision making
The scope for optimal decision-making process can be taken into consideration through the application of "collective brainstorming, identifying scope & requirement and narrowing various approaches". Apart from that, the application of evaluation models such as decision-tree and PERT analysis can help in undermining the extent of profitability achieved through the proposed format (Vieira,O’Dwyer and Schneider, 2017). This would revolve around the functionality of wind projects such as " processes, experience, risks, pre-requisites, requirements, stakeholder’s governance".

8. Business Continuity Management Report
8.1 Introduction
Business “continuity” management is a crucial aspect in the process of risk management, dealing with “disaster recovery” and “business continuity” strategies. The elemental responsibility of “business continuity” management is not letting the business from shutting down due to contingencies.

8.2 Background
The infrastructural project selected for the report is wind energy farm in Queensland, Australia. Several critical “business” functions for the infrastructural project also include “ICM” or “Instrumentation Control Room”, responsible for continuously recording and monitoring the power generation capability of the wind power generation (Alfawzan, Alleman. and Rehmann, 2020).

8.3 Initial analysis
The initial analysis ins necessary for defining the risk “events” which might be faced by the infrastructural project and the most vulnerable consequences getting picked for performing the “business impact” analysis.

8.3.1 Consequence criteria table

Likelihood table in risk management assignment

Table 8.3.1: Consequence criteria table
(Source: As per the Analyst)

8.3.2 Combined risk level matrix

Likelihood table in risk management assignment

Table 8.3.2: Combined risk level matrix
(Source: As per the Analyst)

9. Business Impact Analysis (BIA)
Business “impact” analysis helps in providing the businesses with a comprehensive understanding on the types of “critical business” functions which might be affected because of the “interfaces” present, and might further “MAO” or “Maximum Acceptable Outage”, “Recovery Time Objective” and “Recovery Point Objective”, which might be useful for determining whether the crucial business functions are vulnerable to the risks or probe, and the extent to which the business functions are vulnerable (Alfawzan, Alleman. and Rehmann, 2020).

10. Continuity Strategy
The “continuity strategy” gets produced on the event of the risk materialising, due to scoring the highest rank in regards to risk priorities. The continuity strategy ensures that the risks event despite materialising do no derail business operations.

11. Preparation of deliverables and sources used
Notes from the lectures, regular feedback and brainstorming sessions were the main sources of information used.

12. Conclusion
The business continuity plan is highly crucial for ensuring that the business continues to operate despite the materialisation of the risks.

References
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