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A significant challenge, a golden opportunity

Cooling towers at Chapelcross power station in Scotland are demolished as part of  the decommissioning programe by operator Magnox.<br>Credit: Magnox
Cooling towers at Chapelcross power station in Scotland are demolished as part of the decommissioning programe by operator Magnox.
Credit: Magnox

Innovation, strategic procurement and the right project management framework will ensure the UK sets the global pace for nuclear decommissioning, argues Paul Stapleton

The UK’s nuclear energy landscape is reaching a critical juncture as existing reactors are coming to the end of their operational life.

In ten years, just one of the UK’s original fleet of 26 nuclear power stations, Sizewell B in Suffolk, will be operational, and persistent delays to the start of work on the new generation of reactors are increasing the risk of an energy gap.

The shutdown of existing nuclear plants is a long-term process taking place over a significant time span. For instance, management and operations contractor, Magnox, has an intense programme for ten nuclear sites, which will run until at least 2028.

Accompanied by a diminishing workforce, the decommissioning of existing nuclear plants represents a sustained outsourcing opportunity, particularly for both consultants and specialist contractors with the right capabilities and the willingness to invest in the training, systems and processes needed to deliver safety-critical nuclear work.

The majority of progress in the UK is being made on the original fleet of commercial nuclear reactors at the Magnox sites, where defueling has already been completed on seven sites, enabling the pace of decommissioning to accelerate.

According to the 2012 Magnox Plan, expenditure on preparations for care and maintenance (C&M) of the sites between 2013 and 2020 will total à‚£3.2 billion ($5 billion), averaging à‚£400 million a year. Although relatively small compared with the new-build nuclear programme, valued at around à‚£100 billion a year, decommissioning provides a much more predictable and sustainable workload, and will create sizable opportunities for new market entrants.

The early stages of decommissioning are particularly crucial. Significant delays and cost overruns may occur as a result of over-ambitious schedules and inaccurate hazard categorisation. Although defueling removes about 95 per cent of radioactive inventory, a high degree of uncertainty around the characteristics of the inventory of residual, intermediate-level radioactive waste remains.

As only a small number of plants have been decommissioned worldwide, there is a potential challenge in the low level maturity of techniques being used. The extent of standardisation across the fleet also needs to be taken into account, as lessons from earlier sites may not be directly applicable to others because of variations in design and technology. Practical constraints, including capped annual funding and limits on how long staff can work in areas with different levels of contamination, may also hinder progress.

These risks and other challenges bring into sharp focus the need to effectively manage the delivery of decommissioning and new build programmes alongside one another.

So how should decommissioning be managed to ensure it is cost effective and socially and environmentally sound? Firstly, we must consider the overall objective, which is to deliver the decommissioning sites to a state of final site clearance, suitable for potential reuse.

Using the Magnox sites as an example, the overall programme to get to final site clearance is determined by a period of radioactive decay, while a site is in a C&M state. The original programme anticipated it would take over 20 years to progress from defueling to C&M but following the UK government’s Comprehensive Spending Review in 2010, the Nuclear Decommissioning Authority was challenged to reduce costs and programme durations.

Through the adoption of the Magnox Optimised Decommissioning Programme (MODP), the overall decommissioning cycle is being dramatically reduced so that, based on current plans, all Magnox sites will be placed into C&M by 2029. Thanks to recent innovation in procurement and programme delivery focused on C&M preparation and reducing the volume of material classified as intermediate and low-level waste, MODP is projected to reduce costs by more than à‚£1.3 billion and will shorten the programme by 34 decommissioning years.

Innovations that have enabled the acceleration of the programme include common processes for fuel element debris (FED) treatment or pond decommissioning across the fleet; a systematic assessment and sortation of low and intermediate-level waste aimed at reducing the risk of scope change and the volumes of waste storage; and allowing the unencapsulated storage of categorised waste in radiation-shielded containers. Adoption of the mini-stores concept has reduced cost and is well-aligned with other strategies to reduce waste volume.

Two sites – Bradwell in England and Trawsfynydd in Wales – are already benefiting from MODP and are setting the pace for more to follow. They have both been placed on accelerated programmes, with the aim of proving new decommissioning techniques and leading on best business practices across the wider Magnox programme.

Procurement strategy is also vital to the success of decommissioning. It has to balance safety and security management, full responsibility for social and environmental outcomes, and optimised lifecycle value for money.

The key clients, the site licence companies (SLCs), are organizations in transition, moving from their historic role as power generators to commissioning, outsourcing and managing very complex programmes of work. The procurement challenge associated with decommissioning is particularly difficult, requiring flexibility, while the scope of work is defined and then commercial rigour is implemented to bring projects to completion.

Clients’ commercial management is being delivered in part by the legacy workforce that is being transferred into new commercial management roles. The development of new skill sets in commercial programme management and project controls will be a key factor in delivering lifecycle value. These skills are particularly important because programmes are driven by a combination of scope risk, decommissioning milestones and annual expenditure ceilings.

Adoption of a more flexible approach to procurement, focused on achieving scope certainty first, then enforcing effective change control on the basis of a realistic baseline, will help to secure better outcomes. But uncertainty overbears procurement because decommissioning schemes are still in the prototyping stage. Until Magnox’s two sites, Bradwell and Trawsfynydd, reach C&M, a large number of unknowns remain and there are limited benchmarks against which performance and value can be judged. Once these forerunners are completed in 2016, both the supply chain and the client will have far more capability and knowledge to drive performance improvement, via a lead and learn process.

Another challenge lies with the supply chain which, given the technical content of the programme, is inevitably restricted. Strategic mergers involving the likes of Jacobs and Amec, and engineers and contractors being linked in multiple joint ventures, means the pool of competing suppliers is often quite small. There could be a solution though.

Through an effective procurement strategy, opportunities can be created that are both large enough to stimulate competition and sufficiently different in scope to require different team configurations. Procuring design and delivery capability on the basis of a relatively low level of design completion will also make better use of an integrated supply chain capability by agreeing a firm scope of the project.

Magnox’s approach to procurement is a good example of how the principles of programme management and collaborative working are being used to create a commercial position from which performance improvement can be driven. The focus for major capital investment has shifted from sites to large cross-fleet product line programmes such as cooling ponds, FED and asbestos removal. Other features of the strategy include long-term frameworks to minimise bidding costs, aggregation of workload, a collaborative commercial approach based on NEC3, and a commitment to continuous improvement, driven by benchmarking and key performance indicators.

Getting the right project management framework in place will further improve the performance of nuclear decommissioning projects. Take Sellafield, for example, which is an extreme case in terms of risk as it is the repository for all UK high-level radioactive inventories. However, improved performance around scope definition, design development, planning, estimating, and commercial and risk management is expected to provide opportunities to drive certainty of delivery and lifetime value. Given this, there are several key areas where performance can potentially be improved, including:

  • Rigorous testing of uncertainty in Lifetime Plans: They set key programme dates and budgets for each facility. Evidence from the National Audit Office’s Sellafield report suggests that Lifetime Plans need to be developed to greater detail and benefit from robust risk analysis, particularly around efficiency assumptions;
  • Better estimating and programming: There is growing evidence that better programme design, including details of the hazard inventory, risk identification, solution design and cost and time estimating, results in more effective on-site delivery;
  • More explicit consideration of programme risk: There is a tendency to underestimate the complexity, cost and duration of large programmes. This risk can be dealt explicitly with additional programme-wide contingencies, calculated using evidence from similar reference projects;
  • Forward-looking project controls: Allocation of work across a programme needs to account for prioritisation, progress and funding constraint. A huge volume of data is captured to report on progress. Reporting should ideally focus on the forward view – projecting annual spend, progress against the critical path for hazard reduction and so on;
  • Commercially effective risk transfer: Effective procurement enables a proportion of the scope to be identified, allowing risk to be passed to the supply chain. Clients typically aim to go to market with 60-80% design completion, but this is difficult to achieve given that design expertise resides in the supply chain. Flexible procurement that enables the scope of work to be better defined before cost and programme is fixed is likely to deliver greater certainty and value;
  • International knowledge exchange: Around the world, ten plants so far have been put into C&M, and over 90 commercial reactors have been taken out of operation. Lessons learned are critical to accelerating programmes while maintaining safety levels.

Given the level of unknowns still associated with decommissioning, effective management of risk and scope change will remain at the heart of the performance improvement challenge. Effective scope management and rigorous application of the pain and gain share provisions of contracts will help to ensure not only that the intended risk transfer remains in place but also that incentive mechanisms continue to be effective.

Decommissioning is at the forefront of the UK’s nuclear energy landscape and, while we are still at a low-maturity level in terms of the techniques being used, important lessons in innovation, procurement strategy and project management can and should be shared and learned from the Magnox sites and the MOPD specifically.

By putting the right strategies in place, reductions in cost and programme duration can be achieved and the UK can set the pace for nuclear decommissioning on a global scale.

<b>Paul Stapleton</b> is head of Energy and Manufacturing at EC Harris, a global built asset consultancy. For more information, visit: <a href= à‚  Paul Stapleton is head of Energy and Manufacturing at EC Harris, a global built asset consultancy. For more information, visit: www.echarris.com
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