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Automation projects are often implemented to reduce risks associated with different potential failures. Risk analysis provides an approach to quantifying risks to the utility and communicating how the project can reduce the utility’s risk exposure. A typical risk analysis considers the probability or frequency of expected failure, the consequence of that failure, and combines the two into an overall risk assessment. Figure 2.2 shows a high-level example of risk analysis.

TABLE 2.3 Calculation of present worth (P/F factor = P/F).

FIGURE 2.2 Risk analysis example.

Risk is defined as the probability of failure multiplied by the consequence of failure. In the example diagram in Figure 2.2, the darker shaded areas correspond to higher risks. An example project shows a corresponding reduction in risk. Risk analysis is a reasonably straightforward analysis and there are many references available on the subject.