Preliminary Analysis of Smart Grid Risk Index System and Evaluation Methods

doi:10.4236/epe.2013.54B155

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Energy and Power Engineering, 2013, 5, 807-810

doi:10.4236/epe.2013.54B155 Published Online July 2013 (http://www.scirp.org/journal/epe)

Preliminary Analysis of Smart Grid Risk Index System

and Evaluation Methods

Ruihua Liu

Sichuan Electric Vocational and Technical College, Sichuan Chengdu, China

Email: [email protected]

Received February, 2013

ABSTRACT

Combined the purpose and requirements of security and stability economic operations of the smart grid, a more com-

prehensive, risk indicator system of smart grid is established from five aspects of the smart grid strategic risk, external

risk, financial risk, compliance risk, operational risks. On this basis, it is conducted smart grid risk assessments by inte-

grated of the use of Borda sequence value method of the original risk matrix and AHP (hierarchical analysis method), in

order to assess risk facing the smart grid and enterprise development more comprehensively, objectively and systemati-

cally and conveniently, and prompt companies continue to reduce risk, improve economic efficiency, continuously im-

prove the targeted improvement measures and continue to improve the level of grid development.

Keywords: Smart Grid; Information; the Borda Sequence Value Method; the Analytic Hierarchy Process

1. Introduction

In recent years, China's power grid construction has

made great strides, basically meet the needs of economic

and social development of the demand for electricity.

Based on independent innovation, China speeds up the

construction of UHV backbone frame for a strong smart

grid [1 -4] with characteristics of information, digitization,

and automation, interactive. But in the situation of fre-

quent natural disasters, the current complex economic

and changing environment, electricity sales growth is

slowing down; the risk of power grid is increasingly

complex and diverse. It is necessary scientifically to as-

sess the risks facing the grid development and enterprise

development, determine the impact of the main risks in

order to propose effective measures to reduce risk and

promote the power grid development scientifically,

healthy and sustainably.

Due to th e complexit y of the power system, the p ower

grid risk is not likely to be characterized by a single in-

dicator, it is necessary to use multiple risk indicators in

order to more fully reflect the overall level of relation-

ship from many different angles at the same time.

Therefore, how to establish a scientific risk index system

and taking targeted measures are crucial.

Based on the existing power grid risk assessment re-

search [5-9], this p aper put forward a more co mplete risk

assessment index system for the smart grid, initially

identified summarized, including strategic risk, external

risk, financial risk, compliance risk, running risk about

19 indicators in five aspects. On this basis, describe the

Borda sequence value method and AHP (Analytic Hier-

archy Process) based on the original risk matrix, and fuse

the two methods in the process of power grid enterprise

risk assessment in order to play a certain role in guiding

the development of smart grid.

2. Smart Grid Risk Index System

The construction and development of the smart grid is a

complex system engineering with multi-objective, multi-

dimensional and the whole process, accordingly, the risk

assessment index system is also a multi-level index sys-

tem. According to the role and requirements of the de-

velopment of the smart grid, the risk index system is built

from five aspects, grid enterprise strategic risks, external

risk, financial risk, compliance risk, and op erational risks,

every aspect contains a number of subordinate ind icators,

in order to quantify from different angles. The five as-

pects constitute a whole system, which can fully and ef-

fectively reflected the risk facing the grid development

and enterprise development, in order to reduce the major

risk, improve the development of smart grid.

According to the correlation of risk and value chain

management of power grid enterprise, initially identified

and summarizes, the major risks include strategic risk,

external risk, financial risk, compliance risk, and opera-

tional risks , the four aspects by analyzing the power grid

enterprise within the external environment, internal in-

terviews and expert assessment, and the architecture is

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808

shown in Table 1.

The risk indicators set is more targeted, can help pow-

er grid find main reason which affects grid development

and enterprise development to grasp the direction of grid

development, and targets research to propose risk reduc-

tion measures.

3. Smart Grid Risk Assessment Methods

3.1. Original Risk Matrix Method

Original risk matrix method primarily examine from the

needs of the project and technology, based on the two

aspects, analyze and identify whether there will be a risk,

and take in some way.

Table 1. The architecture of power grid risk index system.

Risk matrix method takes into account the risk impact

and risk probability factors, and can conduct the most

direct assessment of the risk factors that impact on the

project. This method does not directly derived from ex-

pert opinion judgment matrix, but grading, through a

more intuitive experience, judge by experts to quantify

the level of risk impact and risk probability, determine

prior impact on risk and risk probability, and then apply

the Borda sort by analysis of the importance of various

risk factors to assess the risk of the project. This method

is feasible in specification decision-making process and

can better integrate of the views of the groups, and there-

fore more and more widely appreciated. The concrete

used in the risk assessment of the enterprise information

project, we must first identify the potential risks of the

project, identify, further analyze: assess risk potential

impact on power grid, assess risk probability of occur-

rence to identify the risks in the risk matrix location , and

then set the appropriate preventive measures or contin-

gency plans. The likelihood of risk is shown in Table 2.

3.2. Borda Order Value Method

Borda order value method introduces risk matrix to de-

termine the level of risk, by sorting the risk of risk matrix.

This method quantifies the level of risk and makes the

final produce results at the same level of risk signifi-

cantly less than the original risk matrix, which is condu-

cive to the identification of key risk and more scientific

for powe r g rid.

On the other hand, the superiority of Borda order value

method is that it can rate in roses-category based on mul-

tiple evaluation criteria of the importance of risk sort,

which works as follow.

Assuming there is a total of N risk, assuming a risk is i,

k is the one of the criteria (specifically applicable to the

original matrix, two risk criteria: risk impact criteria and

probabilistic risk criteria), and the level of the i risk in

the criteria k expresses as risk, so the Borda number of

the risk i is:

1()

bNr





k

A risk Borda sequence value is the risk level, and the

risk Borda sequence value is he number of the Borda

large number of risk than the risk, so the Borda is much

bigger and the risk level is much lower.

3.3. Analytic Hierarchy Process

Analytic Hierarchy Process (AHP, the Analytic Hierar-

chy Process) is a multi-objective decision-making method

combined qualitative and quantitative evaluation. The

basic idea of the method is a complex issue first decom-

posed into a certain level and a certain composition part,

comparison and calculation of each component part of

the piece, in order to obtain the weight of the different

components, so as to focus on which integral part will be

Table 2. The architecture of power grid risk index system.

Risk levelThe likelihood of risk

(probability of occurring within one year)

Lowest 0.01 below

Lower 0.01-0.3

low 0.3-0.7

Higher 0.7-0.9

Highest 0.9 above

R. H. LIU 809

the basis of providing decision-making. Mathematics of

the decision-making process to achieve a combination of

qualitative and quantitative will be more intuitive. The

main steps of the analytic hierarchy process are as fol-

lows:

 Modeling

Analyzing by AHP, in order to make the problem

more conditioning, to build a hierarchical model is

needed. The model can be clearly demonstrated the com-

plex part of the problem. The level of the model can be

divided into three categories:

One is the highest level, only one element, the ultimate

goal of the plunge classification, in risk assessment, this

element is the ultimate risk of information technology.

Second but the middle layer, criteria layer in the hier-

archy, the middle layer are composed of several levels.

The third category is the lowest level, and also meas-

ures layer, the layer is used to implement measures and

programs to achieve their goals. The most senior of the

analytic hierarchy model established in the risk assess-

ment of power grid enterprise are risk weights, the mid-

dle layer and the bottom is the index system of risk as-

sessment information technology.

 Building a judgment matrix

Modeling the analytic hierarchy process, need to de-

termine the importance of each factor to determine the

importance of secondary and tertiary indicators, and can

be drawn on the relative importance of the level, that is

the weight, and then come to the overall risk weight of

the index weights. With Arabic numerals 1-9 will deter-

mine quantifiable results form a judgment matrix, quan-

titative criteria such as Table 3:

Judgment matrix of the structure is as follows:

Table 3. The importance of quantitative criteria.

Judging

system two indexes evaluation rules

1 Equally important

3 A slightly important th an another

5 Another obvious

7 A strongly than the other

9 Extremely important one than another

2,4,6,8 Between the two adjacent judgments

Reciprocal The index i and j comparison deter-

mines

The matrix A is formed by pairwise comparison of the

n number of risk factors, and the matrix elements of the

quantized values is the importance of the element i and j.

After building the judgment matrix based on expert

scoring data, need for expert judgment matrix consis-

tency test, if not meet the consistenc y test, need to adjust

the matrix, last need to average expert data in accordance

with the authority of experts level.

 Single-stage sort of risk factors and the consis-

tency

Through various risk factors, determine the degree of

importance of the various factors on levels of risk, and

sort. The specific method is based on the matrix theory,

the first judgment matrix is obtained feature vector W,

and then proceed to the normalization process, obtaining

the weight.

Eigenvectors:



*** *

, ,...,T

Wwww,

and,

=, 1,2,...,

nij

jij

wij





，n

Normalizing a treatment:



, ,...,,

ii i

Www w

ww w





After calculating the eigenvectors of the judgment ma-

trix, use eigenvectors to represent the impact of risk fac-

tors on the upper risk pairs. Check the consistency to

judgment matrix, in order to ensure the reasonableness of

the conclusions of the Analytic Hierarchy Process. Con-

sistency of judgment matrix test method is as follows:

Firstly, obtain matrix eigenvalue max



Secondly, seeking the consistency index

max

(- )/(1

Cnn



)



,

it indicates that the judgment matrix has complete con-

sistency, test end;

If 0



, calculate the random consistency ratio

, CCR

R value judgments average random con-

sistency index of the matrix .

At last, by calculating, if , then the consis-

tency of judgment matrix and risk factors sort results can

be accepted, and if not, the consistency of the judgment

matrix and risk factors Sort results can not be unaccept-

able and need to make the appropriate changes to the

ju d gment ma trix .

0.1

C

 Sort of total risk factors

Total risk factors sort is calculating a combination of

weight relative to the total final goal the results for each

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focus all the elements by using results of the risk factors

mentioned above, i.e. the risk factor for all levels on an

element of risk importance weights weight. This step is

carried out from the top down, can eventually obtain the

combination weight of the overall corporate risk at the

lowest level of power grid enterprise risk.

Considering that both of Borda value method and AHP

have lack, integrate the two methods, we can make risk

assessment more practical and more reasonable, and thus

provide a more scientific basis for the next step to control

risk. The specific method is:

Considering the likelihood of risk size and risk impact,

first score risk and likelihood of occurrence probability

for scoring and decided the risk level by risk matrix me-

thod, and then sort the importance of risk factors order by

Borda sequence value method and inform the results to

experts, after experts understanding of the relative im-

portance of the risk situation, then pairwise comparison

and get judgment matrix, comprehensively assess power

grid risk by the traditional method of AHP-level analyze.

4. Summary

With the construction of the strong and smart grid in our

country, information technology has been deepening and

more sophisticated, this means a greater risk of conse-

quential, and to assess various risk correctly will be able

to make the decision-making to make quick and accurate

decisions for the development of power grid enterprises

by reducing the risk of occurrence or reduce the risk of

occurrence which will bring negative effects and enable

enterprises to more successful information technology.

The smart grid information risk index system covers

five aspects of the grid enterprise: strategy risk, external

risk, financial risk, compliance risk, operational risks.

The assessment index system is relatively comprehensive

and can fully reflect the grid risk in practical applica-

tions.

At the same time, assess risk of smart grid by the inte-

gration of the Borda sequence value method and on AHP

(hierarchical analyze method), in order to be comprehen-

sive, objective and systematic to assess, convenience for

the grid enterprise early to detect the major risks facing

the grid development, enable companies to continue to

reduce risk, improve economic efficiency, continuing

enhance the level of power grid development.

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