NEW BUILD |
What makes nuclear power projects work
Nuclear power is increasingly being promoted as an important contributor to future energy supplies and reduction in greenhouse gases, but the industry has not seized on the opportunity and has been challenged by delays and cost over-runs. Ken Petrunik shares his view
NUCLEAR POWER CAN BE BUILT on time and on budget, as witnessed in Asia. There is no single answer on what makes nuclear projects work; there are a number of factors required to complete them on time and on budget. Some of the major factors are outlined here. Projects are governed by the contract, which is the road
map. The starting point, especially for engineer, procure, construct (EPC) contracts, is a partnership between owner and supplier that is incentive-based, rather than punitive. Risks should be allocated to who can best carry that risk. An example of risk-sharing, for a Nth of a kind project,
Ken Petrunik
Consultant in nuclear power and chair of Global First Power
is for the supplier to take fixed price for design and supply (given that the design exists and the supply chain is proven). Construction has more uncertainty and is best done on a ‘time and materials’ basis, with constructors working at cost and profit coming from defined performance objectives that are usually activity or schedule-based. Supplier project management can also be fixed price if that has been done in-country before. Supplier profit must come from performance in a win-win model and a culture of claims avoided.
In the EPC model the owner or utility is an ‘intelligent
customer’ with oversight of the supplier, who is the project manager. In some cases, especially for first of a kind (FOAK) projects with higher design and construction risks, the owner may elect to take on more risks, in exchange for more
involvement in project delivery. The owner becomes the de facto project manager, but must have the ability to take on this increased role. In the USA, both Vogtle and VC Summer started as EPC projects, but only Vogtle is being finished and that is under an owner-led model. A primary cause of delays and increased costs is starting
a project before the design is done. Complete error-free design, using state of the art computer modelling of all systems and components, should be ready before start of construction and the design frozen. ‘Nice to have’ changes arising from an operating culture should not be allowed. Owner oversight is vital. It allows the delivery team
to build without undue interference, as reflected in the contract. Alongside this, the supplier must allow open access to project information — especially schedules — to strengthen the delivery partnership. In FOAK projects an extended period for licensing must
be taken into consideration, as well as longer durations for design and technology. Power plant designs built and licensed in one country undergo changes, when built in a second country, that are often of minimal value. This adds uncertainties that affect costs and schedules. Since risks are much higher in FOAK projects, they must be openly and realistically factored into a project and its schedule. Changing regulations will induce uncertainty and add scope. Regulatory requirements must be rational, and fully defined
Right:
Birds eye view of the Hinkely Point C construction site from one of the 56
tower cranes on site Photo credit: EDF Energy
24 | January 2022 |
www.neimagazine.com
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