I guess the most basic answer would be something along the lines of "When the rating of all or part of the system is likely to be exceeded under normal operating cnditions."
I know, I know. That's a bit of a vague "cop-out" answer, and the definitions of "likely" and "normal" are open to argument.
Don't know if you've found it yet, but go here
http://www.tlc-direct.co.uk/Book/6.2.3.htm for the standard diversity allowances in the U.K. As the regs. point out though, these are just starting suggestions and it's really up to the designer to estimate, ask about, or anticipate the likely loading. Maybe clairvoyance would be a handy attribute?!
