What Makes Nuclear Power Projects Work


Nuclear power is increasingly touted as an important contributor to future energy supplies and greenhouse gas reductions, but the industry has missed the opportunity and been challenged by delays and cost overruns. Ken Petrunik shares his point of view

Nuclear power can be built on time and on budget, as Asia demonstrates. There is no single answer to what makes nuclear projects work; a number of factors are needed to complete them on time and within budget. Some of the main factors are described here.

Projects are governed by the contract, which is the roadmap. The starting point, especially for engineering, procurement and construction (EPC) contracts, is a partnership between owner and supplier that is incentive rather than punitive. Risks must be assigned to who can best bear that risk.

An example of risk sharing, for an Nth of its kind project, is for the supplier to accept a fixed price for the design and supply (given that the design exists and the supply chain is proven). Construction is more uncertain and is best done on a ‘time and materials’ basis, with builders working to cost and profit from set performance targets that are usually activity or schedule based. Supplier project management can also be fixed price if it has already been done in country. Supplier profit must come from performance in a win-win model and a culture of complaints avoidance.

In the EPC model, the owner or utility is an “intelligent customer” under the supervision of the supplier, who is the project manager. In some cases, especially for first-order (FOAK) projects with higher design and construction risks, the owner may choose to take on more risk, in exchange for greater involvement in the delivery of the project. The owner becomes the de facto project manager, but must have the ability to take on this increased role. In the US, Vogtle and VC Summer started as EPC projects, but only Vogtle is nearing completion and that’s under an owner-led model.

Design and license for FOAK projects

One of the biggest causes of delays and increased costs is starting a project before the design is complete. A complete error-free design, using state-of-the-art computer modeling of all systems and components, should be ready before construction begins and the design is frozen. “Nice to have” changes resulting from an exploitative culture should not be allowed.

Owner supervision is essential. It allows the delivery team to build without undue interference as stated in the contract. At the same time, the supplier should allow open access to project information – especially schedules – to strengthen the delivery partnership.

In FOAK projects, an extended license period must be taken into account, as well as longer durations for design and technology. Power plant designs built and licensed in one country undergo modifications, when built in a second country, that are often of minimal value. This adds uncertainties that affect costs and deadlines. Since the risks are much higher in FOAK projects, they need to be factored openly and realistically into a project and its timeline. Changing regulations will introduce uncertainty and add scope. Regulatory requirements should be rational and fully defined and frozen before a project contract is signed. The US experience of using 10CFR52 for a combined build and operate license should be compared to the use of 10 CFR50 for separate build and operate licenses. A separate construction license allows easier and faster construction.

Project culture

Projects must be conducted and built in a project culture. A strong project delivery culture is different and distinct from an owning or operating culture. In a project culture, the organizational structure should be lean, simple and decisive, and only exist during the project phase and its delivery. An operating and or corporate culture is permanent, more complex and slower in decision-making, which has an effect on timing. Governance that is balanced between the corporate culture and the culture of carrying out projects is required by stakeholders and shareholders. Failure to achieve this balance complicates decision-making, limits the effectiveness of project execution management, and puts the project at risk.

Managing hundreds of thousands of project planning activities is difficult, and history shows that the array of tools used has generally not yielded good results. Simple and experienced project management (integrated systems and people) and the right schedule have proven themselves. Project critical paths should be managed in real time with single point decision making minimizing “board management”.

The old adage “Get it right the first time” deserves attention in several ways. The tendency to increase the number of observers increases costs and does not help performance and productivity. “Twice as many people” does not move the overall work forward twice as fast, so prioritizing training, especially in the construction workforce, has better results than increasing the number of workers. Rework can be drastically reduced, schedules improved by prefabrication and by modules (when the design is complete) by teams of engineers and builders who create buildable building designs.

What about small modular reactors?

There has been an international movement to promote small and medium-sized grid-connected power reactors of up to 300 MWe (SMR) capacity using simpler passive technologies with modular designs that are fabricated off-site to reduce site construction costs (a third of the cost of large new plants). This can compensate for the reduced economy of scale, if it combines an “Nth of its kind” approach using factory assembly of modules with serial construction. Simpler designs and advances in technology mean that multiple supply and waste heat removal systems are not required. This supports the economy of the plant and must be recognized by the regulator.

There are two FOAK aspects for SMRs. The first is the technological risk of bringing new technology to reliable economic operation. The second is the risk of delivering the FOAK project – even when current technology is reduced. The on-time and on-budget factors still apply to SMRs.

Learn from what has worked

Although each project is different, the industry must learn from what has worked and what has not worked internationally. Success in Asia—on time and on budget—has been achieved through an ongoing program using first-of-its-kind technology. He separated the construction phase—project delivery culture—from the operations culture to lead and manage the critical paths of a schedule of approximately 8,000 activities for two units.

Freezing the design with the contract is essential, as are experienced suppliers for design, equipment and construction. Qinshan III in China has two 725 MWe CANDU units built by Atomic Energy of Canada under an EPC contract. They met the above criteria and were ahead of schedule (54 months from construction to commissioning) and under budget. The main contractors (including Hitachi/Bechtel for engineering and procurement of the turbine generator island and the rest of the plant) worked according to their own practices and quality programs under the role of prime contractor of AECL. This improved accountability and economy.

About the Author

Dr. Ken Petrunik has 45 years of international experience in the field of new construction nuclear power, with a focus on leadership and project management. He has worked as a salesman and owner of nuclear power plants and understands both sides. He is currently a nuclear energy consultant to various international clients and President of Global First Power, which is developing a 5 MWe off-grid micro-reactor located in Chalk River Canada. He was a board member of the Horizon Wylfa project in the UK for three years. His career at Atomic Energy of Canada (AECL) spanned 35 years, where he was President of the CANDU Reactor Division, responsible for AECL’s CANDU business operations, including the marketing and delivery of new reactors and services to power plants in operation. After that, he served for six years in the United Arab Emirates as Program Manager for Emirates Nuclear Energy Corporation in their four-unit APR1400 Barakah project.

Aerial view of the Hinkely Point C construction site from one of the 56 tower cranes on the site Photo credit: EDF Energy

Reactor 1 is taking shape at Hinkley Point C in the UK, as work continues around the clock Photo credit: EDF Energy

Water on three sides made Qinshan III an even more difficult project

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