East Timor Solar Project Risk Management †Myassignmenthelp.Com

Question: Discuss About The East Timor Solar Project Risk Management Cycle? Answer: Introduction East Timor, one of the closest neighbour regions of Australia has people living in mountains with poor infrastructure which makes it difficult to connect the houses with electricity grids. An alternate option was to make the provision of electricity through cheap generation of electricity from natural resources like solar energy. ATA has started a solar project in East with an aim to install household solar systems to benefit 12,000 people living in rural areas. Google agreed to fund this project, but needs a risk management plan to be developed. This assignment would assess the case and would explore the process of risk management using Risk Management cycle to suggest how such a plan can be created by ATA. Risk management plan As per the risk management cycle, a risk management process goes through the stages of identification, analysis, prioritization, planning, mitigation and monitoring. For the devleopmet of the risk management plan, the ATA would go through a cycle including the following phases: Risk Identification: In this step, ATA would identify various kinds of risks that can occur in the solar project during its whole life cycle. These risks can be related to project scope, design, technical, stakeholders, executive support, procurement, quality, authority, user acceptance, commercial, project management or commercial. In East Timor Solar projects, risks could be related to scope, design, technological, procurement, and quality. Some of the risks that can be identified in the case of solar project include(APM Group Ltd, 2017): If the solar systems implemented are unable to generate sufficient electricity as needed by the village, it would be a technological risk(Worren, 2012). Language barrier is another risk on the project as the people working on the project may not speak the local language which could difficulties in communicating with communities. Risk Analysis: In this stage, the risks identified would be assessed with respect to the probability of its occurrence and the impact on the solar project. In case of the high impact on project, the risk is considered severe. Based on the level of severity identified here, decisions can be taken on how to manage the risk. For instance, if the project cannot receive the sufficient funds required for sourcing and implementing solar power solutions then it could have a moderate impact on the project as it would not be able to provide supplies to whole village. The risk would then be calculated as likelihood of occurrence X impact = probability of occurrence of risk X financial equivalent of the impact. Risk Probability of Risk Occurrence Impact of Risk on Project Severity Insufficiency of funds Moderate (2) High (3) 6 Inability to produce sufficient electricity for homes High (3) Moderate (2) 6 Breakdown of components or equipments like regulator, batteries, microcontrollers, etc. Moderate (2) High (3) 6 Exchange rate fluctuations escalating sourcing costs Moderate (2) High (3) 6 Low standards of electrical systems High (3) Low(1) 3(La Trobe University, 2017) Risk Prioritization: For risk prioritization, ATA needs to focus on risks that would affect the financial position of sponsor and the risks that would affect the roles and responsibilities of the people on the project as they would have higher severity and thus, can affect the project significantly. The project is likely to face a risk of difficulties in implementation if they are faced with rains. This is a risk that can be avoided and thus, the company could postpone the work shifting it to the time after rains are over. This would help in development of a more rigorous management plan(Rule Works, 2017). Risk Planning: This would involve identification of the response to specific risks which can be risk avoidance, risk transfer, risk retention or risk mitigation. Risk Risk Severity Risk Response Insufficiency of funds 6 Avoid risk by ensuring that budget is approved considering contingencies Inability to produce sufficient electricity for homes 6 Avoid risk by extensive planning that ensures accurate estimation of the voltage and electricity requirement Breakdown of components or equipments like regulator, batteries, microcontrollers, etc. 6 Avoid by using predictive maintenance such that parts are repaired before complete damage or mitigate by procuring a new part when old part is going to be damaged. Exchange rate fluctuations escalating sourcing costs 6 Mitigate by adjusting to price fluctuations to ensure that the project does not exceed approved budget. Low standards of electrical systems 3 The electricity requirements are not very high and thus, low standards would not affect the performance much but in case of issues, mitigation measures can be taken by replacement of specific parts or components. Risk Mitigation: Risks that cannot be avoided, transferred or retained such as inability to produce enough electricity from the solar panels installed, the risk mitigation strategies have to be put in place. Thus, at this stage, the mitigation strategies would be defined that would reduce the severity of the impact of the risk on the project. A risk that could affect the solar project was due to the difference in the government scheme and the practices of ATA. The government scheme is not technologically robust and thus, a risk mitigation measure could be taking a slightly different approach by convincing government of the benefits through close coordination(NCSU, 2017). Risks Mitigation Strategy Differences between government and ATA scheme of technology management Government could be suggested for improving their standards and processes to tailor to the current project Exchange rate fluctuations escalating sourcing costs Keep a close control on the budget to ensure that these fluctuations do not overshoot the budget(La Trobe University, 2017) Breakdown of parts or equipments As the project involves many parts taken from different countries, the mitigation would need an anticipation of the possibility of breakdown such that the part or component can either be repaired or ordered in advance before it breaks down. Thus, a predictive maintenance process would be followed. Monitoring Phase: The risks would be monitored throughout the project life cycle such that in the case of occurrence of any risks, appropriate mitigation plan can be taken. This could be done by establishing monitoring baselines by developing Key Performance Indicators, controlling and monitoring processes. References APM Group Ltd, 2017. DEFINING RISK: THE RISK MANAGEMENT CYCLE. [Online] Available at: https://ppp-certification.com/ppp-certification-guide/52-defining-risk-risk-management-cycle36 [Accessed 14 September 2017]. La Trobe University, 2017. Video 3: Stakeholder Engagement and Management. [Online] Available at: https://lms.latrobe.edu.au/mod/book/view.php?id=2493632chapterid=201713 [Accessed 14 September 2017]. La Trobe University, 2017. Video 4: Project Risks. [Online] Available at: https://lms.latrobe.edu.au/mod/book/view.php?id=2493632chapterid=201714 [Accessed 14 September 2017]. NCSU, 2017. Risk Management. [Online] Available at: https://agile.csc.ncsu.edu/SEMaterials/RiskManagement.pdf [Accessed 14 September 2017]. Rule Works, 2017. The risk management cycle. [Online] Available at: The risk management cycle [Accessed 14 September 2017]. Worren, J., 2012. Assessing the Risks in Solar Project Development. [Online] Available at: https://www.renewableenergyworld.com/articles/2012/02/assessing-the-risks-in-solar-project-development.html [Accessed 14 Sepember 2017]