ALARP in the energy transition (Part 2) – How to demonstrate ALARP effectively

As the energy transition accelerates, sectors must navigate evolving safety and risk management challenges. Ensuring that clean energy assets are not only reliable but also safe requires a structured approach to decision-making. ALARP (as low as reasonably practicable) provides the legal and practical framework for making these critical decisions, ensuring that risks are managed proportionally and effectively. However, complying with ALARP is not always straightforward. Fortunately, decision-making frameworks and methodologies are available to help organisations demonstrate ALARP in a meaningful and structured way.

This is the second article of a three-part series exploring the application of ALARP in the energy transition sector.

Introduction

In part 1 of this series (Ref. 1), we introduced the concept of ALARP and explored its origins, basic principles, and regulatory expectations. This second article delves into how ALARP can be effectively demonstrated, learning from the experiences of other high hazard industries. It provides a high-level overview of a practical approach to demonstrating ALARP, focusing on three proven frameworks that can be applied to the energy transition.

Framework 1 – Tolerability of Risk

A critical component of ALARP decision-making is establishing risk tolerability criteria. Organisations must establish clear risk appetite thresholds to ensure that their risk tolerability criteria align with regulatory requirements, societal expectations, and corporate objectives. Defining what level of risk is acceptable requires a structured approach, based upon guidelines such as those of the Center for Chemical Process Safety (CCPS, Ref. 2) and frameworks outlined by the safety regulator.

The tolerability of risk framework was first formalised by the UK Health & Safety Executive (HSE) in 1992 to calm public anxiety about nuclear safety, after high-profile accidents such as Three Mile Island (1979) and later Chernobyl (1986), while avoiding excessive regulation that could stifle the industry (Ref. 3). In 2001 the regulator broadened the framework beyond the nuclear sector to all high-hazard industries and refined the key concepts (Ref. 4).

The framework establishes clear thresholds for determining whether risks are unacceptable, tolerable if ALARP, or broadly acceptable:

1. Unacceptable risk: These risks are so high that they are unacceptable under all but extraordinary circumstances. They must be reduced regardless of cost or effort. The threshold for unacceptable risk was originally benchmarked against the dangerous lives of coal miners and deep-sea fishermen – some of the riskiest jobs in Britain at the time. As such, few, if any, modern clean energy assets with proactive risk reduction strategies will have risk levels approaching this threshold. This tends to be recognised in company risk tolerability standards, where benchmark design targets for new assets are often set much lower.
2. Tolerable if ALARP: These risks are neither negligible nor extreme. They may be tolerated only if further reduction is not reasonably practicable, meaning that reducing them further would be grossly disproportionate to the benefit gained. In practice, most clean energy assets will have risk levels in this region and therefore require a comprehensive ALARP assessment.
3. Broadly acceptable risk: These risks are so low that they do not require further action beyond maintaining standard controls. This level of risk is very low, roughly the same as the chance each year of dying in a house fire in the UK. It is the kind of background risk society generally accepts without demanding major intervention, provided reasonable precautions (like smoke alarms) are in place. Aggregate risk levels at industrial facilities are rarely this low.

This framework is visualised in the famous “carrot diagram” (see Figure 1) – albeit a not very appetising carrot as no one wants to be in the top (unacceptable) portion. It illustrates the need for more rigorous justification as risks become more severe. Most risks fall into the middle tolerable if ALARP region, requiring proportionate justification to demonstrate that all reasonably practicable measures have been taken.

Figure 1 – The tolerability of risk framework

A common method for setting risk tolerability criteria is for an organisation to apply a “risk assessment matrix” displaying likelihood against consequences. The three regions of risk level – unacceptable, tolerable if ALARP, and broadly acceptable – are suitably coloured in the matrix. The challenge for organisations is ensuring that their risk matrices are calibrated appropriately – overly conservative matrices may impose excessive operational burdens, while lax matrices risk regulatory non-compliance.

Many organisations refine their approach by using quantitative values for the axes, for instance, “Occurs between 1 in 100 years and 1 in 1,000 years”, or qualitative historical statements like “Has occurred once a year in our industry”, as well as drawing upon industry benchmarks and regulatory guidance. This approach helps to set meaningful thresholds and shading of the regions, ensuring a defensible position.

Framework 2 – Risk-related decision-making

A structured risk-related decision-making framework, originally developed in 1999 by the UK offshore oil sector and revised in 2014 (Ref. 5), offers a useful approach to aligning ALARP assessment techniques with different decision contexts, as illustrated in Figure 2.

In the 1990s, there was a growing frustration that risk assessments were becoming overly complex, with engineers often accused of “gold-plating” safety solutions – adding excessive safeguards to avoid regulatory scrutiny. The framework was intended to help organisations avoid unnecessary analysis for low-risk situations while ensuring detailed scrutiny for high-risk, high-uncertainty cases. The framework also aimed to counter the danger of blindly following quantitative methods without common sense, for example using cost-benefit analyses to suggest that offshore workers should wear three lifejackets at once because the incremental benefit outweighed the discomfort.

Figure 2 – Risk-related decision-making framework (Ref. 5)

To use the framework, firstly establish the context of the decision in terms of the novelty of the activity, the degree of uncertainty and the interests of stakeholders. The context may range from A (nothing unusual with well understood risks) to C (very novel and uncertain with significant stakeholder interest).

Next, read down to the chevrons displaying the associated assessment techniques for the context. These guide the selection of methods, or combinations of methods, likely to provide the most appropriate basis for decision-making.

The framework aligns with the requirement to ensure that the extent of the ALARP assessment is proportionate to the associated risk. Whilst there are no hard boundaries, the decision context helps to determine the appropriate assessment techniques:

• Context A: Where risks are well understood and recognised good practice exists, then compliance with codes and standards is typically sufficient to demonstrate ALARP – there is consensus on risk mitigation strategies that have proven effective over time. Where good practice is not sufficiently well-defined, then an element of engineering risk assessment may help to guide the decision.
• Context B: Where there is greater uncertainty or complexity, then good practice will still have to be met but engineering risk assessment will also be required to ensure risks are ALARP. This may involve methods such as engineering analysis, consequence modelling, risk assessment, reliability analysis and cost-benefit analysis.
• Context C: Where risks involve significant stakeholder views, complexity, and uncertainties, relevant good practice must still be followed (where it exists) and detailed engineering risk assessment should support the decision. However, a precautionary approach is also recommended – conservative assumptions should be applied to err on the side of safety, even if this leads to a more restrictive outcome. For example, some areas of emerging sectors like hydrogen and battery energy storage may require such an approach due to limited historical experience. Whilst proportionate, the precautionary approach may lead to decisions with significant economic implications, which must be carefully managed. As operational experience grows and technologies mature, similar decisions may, in future, fall under context B or even context A, requiring less caution and analysis.

Framework 3 – ALARP assessment process

A five-step ALARP assessment process is summarised in Table 1, derived from UK regulatory guidance (Ref. 6). Steps 1 to 4 focus on the actions required to reduce risk to ALARP levels, but as the National Coal Board learned in 1949, the key to demonstrating ALARP lies in Step 5. It is essential to document not only the decisions where risk reduction measures were implemented but also those where measures were not pursued, along with clear justifications for why further action was deemed unnecessary.

This structured approach ensures that risks are systematically assessed, reduced where practicable, and reviewed regularly to maintain safety.

Table 1 – ALARP assessment process

Documenting ALARP decisions is arguably the most hated step by engineers, as it involves detailed justifications that auditors demand. But ironically, the lack of documentation is the number one reason companies fail safety inspections. Proper documentation is required to ensure transparency, regulatory compliance, and accountability in risk management. The use of a project key decision log for energy transition projects is a common approach to achieve this. It serves as a centralised repository of information, capturing the rationale, considerations, and outcomes of design choices – encompassing the implemented risk reduction measures as well as those discounted. It is a valuable tool for project teams, stakeholders, and future reference.

Step 5 also highlights that demonstrating ALARP is not a one-time exercise – it requires continuous oversight throughout the life of the asset. This is where the organisation’s structured safety management system (SMS) comes into play, following the Plan–Do–Check–Act (PDCA) cycle. The system provides the governance for conducting periodic reviews of risk controls, auditing the effectiveness of safety measures, and ensuring that ALARP justifications remain current. As operational knowledge, technology, regulatory expectations, and societal perceptions evolve, so too does the balance of what is reasonably practicable. It is the asset owner’s responsibility to actively manage this balance and update ALARP assessments accordingly.

Conclusion

The legal requirement to reduce risks to ALARP levels is clear, but complying with this requirement is not always straightforward. What is needed is a structured, evidence-based process for ALARP decision-making. It requires:

• Applying the tolerability of risk framework to ensure that the extent of ALARP assessment is proportionate to the level of risk.
• A risk-related decision-making framework that aligns the assessment methods with the novelty, uncertainty, and stakeholder sensitivity of the decision context.
• A structured ALARP assessment process for conducting the analysis, documenting the decision, and ensuring regular review and update.

All three frameworks originated from crises, legal battles, and industry frustration. Today, as the energy transition progresses, organisations can leverage these principles to ensure that safety decisions are structured, justified, and proportionate, and enable the necessary innovation to meet net-zero goals while keeping people safe.

The third article of this series will present case studies that demonstrate the application of ALARP. It will offer insights into how ALARP is successfully applied in practice within the evolving energy transition.

References 

1. Cairn Risk, ALARP in the energy transition (Part 1) – The gift that keeps on giving.
2. Center for Chemical Process Safety (CCPS) 2009. Guidelines for Developing Quantitative Safety Risk Criteria.
3. HSE 1992. The Tolerability of Risk from Nuclear Power Stations.
4. HSE 2001. Reducing risks, protecting people, HSE’s decision-making process.
5. Oil & Gas UK 2014, Guidelines on Risk Related Decision Making – Issue 2.
6. HSE. Managing risks and risk assessment at work. Accessed 2025.