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PDF generated on 31-Jul-2013DISCLAIMER : UNCONTROLLED WHEN PRINTED PLEASE CHECK THE STATUS OF THE DOCUMENT IN IDM
Abstract 21st Century Nuclear Lessons Learned , Presentation, K.
Aupperle 2007
21st Century Nuclear Lessons Learned , Presentation, K. Aupperle 2007
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EXTERNAL REFERENCE
PDF generated on 31-Jul-2013DISCLAIMER : UNCONTROLLED WHEN PRINTED PLEASE CHECK THE STATUS OF THE DOCUMENT IN IDM
ITER_D_JPET3N v1.0
High Bridge Associates
Industry Lessons Learned for 21st Century Nuclear Projects
Charles W. Hess, Burns and RoeKenneth J. Aupperle, High Bridge Associates
11/13/2007
Making the Renaissance Real
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Those who cannot remember the past are condemned to repeat it
George Santayana
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Those who cannot remember the past are condemned to repeat it
George Santayana
Its a form of insanity to repeat the same steps over and over and to
expect a different result.
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Approach Methodology
Industry data search/compilation of > 100 projects NRC, intervener, corporate, and personal files
Case study analysis of cancelled/completed projects Case study analysis of completed/successful projects Common causes for failure Common causes for success
Authors Nuclear Industry Experience > 70 Years
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Accomplishments of the Past
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Utilities During This Period
All regulated 50% operating companies; 50% construction
management companies Very familiar with large capital projects Favorable laws governing expansion of electrical
generation
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Historical US Construction Cost Experience75 (pre-TMI-2 plants operating in 1986; $2007)
5
14
7
12
26
11
No. of Units
269%$4633/kW$1725/kW1976-1977
381%$5098/kW$1336/kW1974-1975
334%$4305/kW$1291/kW1972-1973
348%$3057/kW$878/kW1970-1971
294%$2308/kW$784/kW1968-1969
209%$1354/kW$648/kW1966-1967
% OverActual OvernightEstimated OvernightConstruction Start
Mark Gielecki and James Hewlett, Commercial Nuclear Power in the United States: Problems and Prospects, US Energy Information Administration, August 1994.
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Project Management Expertise Timeline
1960 1970 1980 1990 2000 2010
?
?
Commercial Project Management
Nuclear RequirementsNuclear Requirements
Commercial Project Management
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Keys to Success
Planning, More Planning, & Risk Based Project Management
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1 0 0
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F E A S I B I L I T Y- P r o je c t F o r m u la t io n
- F e a s ib i l i t y S tu d ie s- S t r a t e g y D e s ig n
a n d A p p r o v a l
P r o j e c t" G O '
D e c i s i o n
M a j o rC o n t r a c t s
A w a r d e d & S t a r t C o n s t r u c t i o n
P L A N N I N G a n d D E S I G N
- B a s e D e s ig n- C o s t a n d S c h e d u le
- C o n t r a c t T e r m s a n d C o n d i t io n s
- D e ta i le d P la n n in g
S T A G E I I S T A G E I VS T A G E I I IS T A G E IP R O D U C T I O N
- M a n u f a c tu r in g- D e l iv e r y
- C o n s t r u c t io n- In s ta l la t io n
- T e s t in g
T U R N O V E Ra n d S T A R T U P
- F in a l T e s t in g- M a in te n a n c e
I n s t a l l a t i o nS u b s t a n t i a l l y
C o m p l e t e F u l lO p e r a t i o n
Abi
lity
to S
igni
fican
tly In
fluen
ce P
roje
ct
Cos
t/Sch
edul
e O
utco
me
Proj
ect P
erce
nt C
ompl
ete
A b i l i t y t o S ig n i f ic a n t l y In f lu e n c e P r o je c t C o s t /S c h e d u le O u t c o m e s o v e r t h e P r o je c t L i f e - C y c le
C h a r t a d a p t e d f r o m P M I P M B O K F ig u r e 2 - 3 . R e p r e s e n t a t iv e C o n s t r u c t io n P r o je c t L i f e C y c le
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Right Reasons for Project Failures
Economic recessions in the 70s reduced load growth
Inflation and high interest rates Regulatory changes forced rework Design changes during construction TMI-2 eroded public support
Necessary Parsing in a Hostile Litigious Environment
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Real Reasons for Project Failure
Insufficient utility leadership and ownership Lack of a nuclear mentality at all levels Lack of commitment to quality processes and
QA Contracting practices that stampeded
contractors into bad practices Inadequate training
Failure of Leadership and Lack of Project Focus
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Advanced designs Passive safety systems, reduced active systems, and fewer
components/quantities
Streamlined regulatory process, one step COL Federal incentive program, Energy Policy Act
Insurance, financing, and production tax credits
Modest inflation and financing rates Owners committed to standardized design approach
Todays Improved US Industrys Parameters
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Industry owners, OEMs, and EPC contractors are more organized for outreach
NuStart, NEI, INPO, EPRI
More sophisticated management processes/software Modularization approach/capabilities Integrated material management planning
techniques
Todays Improved US Industry Parameters
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First-of-a-Kind projects are not fully understood Technical, organizational, regulatory, and global dimensions
Degraded nuclear supply chain Engineered equipment and bulk material Craft labor and professional labor elements
Unproven ITAAC process Intense demand side competition/dynamics
US domestic, international, and nuclear/non-nuclear sectors Global supply chain logistics and risks
International supply chain and shippers
Todays New Challenges and Issues
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Operating plant paradigm of owners Small project paradigm of owners Problematic Risk Shedding approach for elements the
owner/licensee cannot shed State PUC cost recovery rate base issues
Inhibiting utility planning/procurement activities Affecting utility commitments
Stove-piped Organizations No Integrated Project Teams
Yesterdays Challenges/Issues Still Here
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Recommendations
Apply resources for early planning, planning, planning
Use risk-based project management approach Establish a strong integrated management team Provide a firm financial basis for project Select a technology that matches corporate goals
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Recommendations Provide appropriate contracting vehicles that allow
win-win solutions for owners and contractors Fixed price when basis exists Target cost/incentives/penalties Target milestones/incentives/penalties Cost plus/task based
Project management leadership Training, training, training Involve all stakeholders in process Develop active intervener mitigation plans
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High Bridge Associates
Lessons Learned for the 21st Century Failure is possible
We have not corrected the real reasons for project failure Skill in one aspect of nuclear power does not assure
success in new builds Knowing when to spend is as important as financial
strength Success depends on upfront planning and dedicated
project management follow-through You cannot shed risk on a mega project; you must
manage it
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The Prize!
Thank You!
A Project built within budgeted cost, schedule, scope & quality targets