Innovations in Operational Risk Management and Business Continuity Planning Methodologies of Transmission System Operators: Implications of the Operational Security Network Code

Abstract

The ongoing liberalisation of national electricity markets and legislations to further reform electricity markets raises important issues regarding the operations of the interconnected transmission systems. To ensure compliance with new regulations, operational risk management (ORM) and business continuity planning (BCP) methodologies need to be reviewed in European Transmission System Operators (TSOs).In our current paper, we address key trends in ORM and BCP within the energy sector. We analyse the implications of the operational security network code within the context of the relationship between innovation and organizational performance.By raising ORM and BCP to strategic level within European TSOs and focusing on innovation, which complies with the European regulatory environment, system operators could achieve a significantly higher level of operational security. They would also be more flexible to regulatory changes while improving organizational performance.To improve operational security, innovations need to make the transmission system more robust and more resilient. The improved robustness expresses the better ability to predict and prevent incidents, while the more resilient system returns from the incidents more efficiently. The optimal security performance can be based on the balance of both areas. Therefore, future research has to improve parallelly the robustness and resiliency. Innovations in this context include specific technological and organizational solutions, as well.

Keywords: operational risk management, business continuity planning, innovation, performance, TSO, operational security, European electricity market