Asset risk indices: commonality, diversity and usage – the history in UK electricity distribution

Against the background of a common methodology for calculating asset risk indices being agreed across distribution network operators in the UK, this study examines the history of how asset risk indices were developed within the electricity distribution sector over the two decades prior to the common methodology. Understanding the historical context helps with evaluating the strengths and also the limitations of moving to a common framework, thereby providing a good basis for evaluating where and how the framework is best applied while minimising any ‘modelling risk’ (the risk of the modelling itself overlooking certain risks) that commonality can introduce if it is not carefully managed.