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The framework for the generation of flexibility can be transferred to urban drainage systems.

Nevertheless the general approaches have to be customized for urban drainage systems. First, the key terms required flexibility and flexibility options have to be defined for urban drainage

systems. Second, the procedure of the planning of flexibility has to be included in the common planning procedure for the development of urban drainage systems. To develop a consistent framework for the generation of flexibility in this dissertation the different theoretical foundations are combined and consistent theory is presented.

Key Terms for the Generation and Management of Flexibility: The framework for the generation of flexibility is deduced from the definition of flexibility as ' the ability of urban drainage systems to use their active capacity to act, to respond to relevant alterations during operation, in a performance-efficient, timely and cost-effective way.' Based on the first part of the definition 'the capacity to act' the parameter 'flexibility option' is developed. The second part of the definition 'response on relevant changes' results in the parameter 'required flexibility'. Task of flexibility generation is to balance the flexibility options with the required flexibility of a system. Before the process of flexibility generation is described in detail the central terms required flexibility and the flexibility options are defined.

The term required flexibility (synonymously flexibility demand) arises from the future uncertainties of the system. The definition should include the origin of uncertainties as system external or internal and illustrates the consequences of the uncertainties as chances or risks. Based on Hocke & Heinzl (2006) the term required flexibility is defined as:

The required flexibility for urban drainage systems is presented in Chapter 2. As result it is illustrated, for which future drivers a flexibility of the urban drainage system is required.

The term flexibility option (synonymously potential flexibility) is defined by several authors. In the style of financial term 'option' flexibility options are described as 'the right, but not the obligation to modify a system in operations to adapt it to this changing environment.' (de Neufville & Cardin 2008). The options should minimize the damage of future uncertainties as well as make use of

Required flexibility is: 'The performance relevant system internal and environmental initiated future alterations, which imply opportunities as well as risks'

the opportunities of future developments (de Neufville 2004). Based on these sources the consideration of risks and opportunities as well as the applicability for planning are considered in the following definition.

Referring to de Neufville (2004) and de Neufville & Cardin (2008) it is distinguished between options 'in' systems and options 'on' systems. Flexibility options 'on' systems are considered as flexibility options involved in the planning and management process but not in the physical system itself. Referring to this description, and the definition of flexibility options used in this dissertation, options 'on' systems are defined as follows:

There are no, or only marginal, differences between options 'on' systems for different types of technical systems (de Neufville & Cardin 2008). Hence it is possible to apply the general principles for options 'on' systems to urban drainage systems. A multistage decision process is required to make use of the improvement of information during the timeframe of the planning and management of the system (Corsten & Gössinger 2005). During the planning and management period additional information will be available thereby improving the quality of information and reducing the uncertainties connected with future states. A summary of possible options ‘on’

systems is provided by Giere (2007) and Trigeorgis (1996).

Based on the general definition of flexibility options, the term flexibility options ‘in’ systems can be substantiated. These options 'in' systems are characterized by the fact that the capability for change is generated by physical components of the system. The design of the technical system is changed to achieve a flexibility option. Flexibility options 'in' system should contribute significantly to the performance of the system and should be manipulated with low effort. De Neufville &

Cardin (2008) provide the following definition: 'Flexibility 'in' systems exploit technical aspects of Flexibility options are: 'the ability to modify an urban drainage system in operation to adapt it to future demands by either avoid risks or exploit opportunities'

Flexibility options 'on' urban drainage systems are: 'the ability to modify a planning process of urban drainage systems with management decisions.'

the design to make the system adaptable to its environment'. This definition is combined with the definition of flexibility options developed above.

To substantiate the flexibility options 'in' systems the specifics of the system have to be considered. For the development of options 'in' systems, a detailed technical knowledge of the specific system--in these cases urban drainage systems--is required. According to Shah et al.

(n.y.) a significant challenge for the implementation of real options in technical systems is the identification of the sources of flexibility 'in' systems. Also, Engel & Browning (2006) emphasize that the lack of technical understanding of systems by the present users of real option analysis is one of the main reasons why as yet there have been only a few implementations of real options in technical systems. The approach of real options should be made accessible for the designers and operators of technical systems (Engel & Browning 2006). This dissertation aims to bridge this research gap in the field of urban drainage systems--the flexibility options 'in' urban drainage systems should be identified.

Framework for the Management of Flexibility: The implementation of flexibility options takes place within the framework of the planning and operation process of the systems. Flexibility options are characterized by the fact that the change process is actively initiated from outside the system.

Therefore the benefit of flexibility could only be achieved when the flexibility options can be influenced during the planning and operation of the system. Flexibility management involves balancing the flexibility options with the required flexibility of a system. A total inflexibility is suitable for the theoretical case of a static system and environment. In contrast, excessive flexibility is problematic because flexibility options could foster negative consequences like additional costs or disturbances of system performance. The optimal level of flexibility is described by the principle 'as rigid as possible and (only) as flexible as necessary' (Eversheim et al. 1980). In order to manage flexibility a method to measure flexibility is required. The required

Flexibility options 'in' urban drainage systems are: 'the ability to modify an urban drainage system based on the system design.'

flexibility caused by future uncertainties has to be described; additionally, the flexibility offered by flexibility options has to be measured.

The implementation of flexibility options takes place within the operational life span of the urban drainage system including the stages of planning, implementation, utilization, conversion and de-construction. Referring to the generic life cycle framework of urban infrastructure systems (FGSV 2001), a framework for the management of flexibility for urban drainage systems can be developed (Figure 21).

 Problem Analysis: As a basis for problem analysis, the specific urban drainage system and the objectives of the urban drainage system need to be defined. Then the uncertain future drivers are ascertained and a range of possible future developments for the period under review is described. As a result, the required flexibility of the urban drainage system is identified.

 Alternative Analysis: The flexibility options in urban drainage systems are determined based

on the required flexibility. The different flexibility options are considered as alternative solutions, then the performance and the effort involved in these alternatives for different future states are modeled. It is necessary, if a change to the system is required, to react to future alterations. Based on the modeling results, the flexibility of the different alternatives is measured.

 Decision: Based on the modeling of the effects, a decision must be made regarding which alternative of the system (and associated flexibility option) can be realized in the first implementation step. The chosen alternative needs to offer the best equalization between the required flexibility and the potential flexibility.

 Implementation: In the first implementation phase the urban drainage system is realized and the flexibility options are constructed. A capacity for change is developed. Subsequently, the development of the urban drainage system and the system environment are monitored, and the consequences for system performance are evaluated. An assessment is made regarding whether a change of the urban drainage system is required to cope with altering basic

conditions. Based on the monitoring, a decision about the utilization of the flexibility options is made. In the second implementation step the established flexibility options are realized and the capacity for change is used. The monitoring process is continued for the whole life span of the urban drainage system.

Figure 21. Framework for the management of flexibility within the planning process

3.3.3 Method for the Measurement of Flexibility for Urban Drainage Systems