Part of a Special Section covering the Nuclear Construction Summit USA 2009, October 26-27 – Washington DC
The Nuclear Construction Summit, USA 2009 was attended by professionals who finance, plan and develop next nuclear projects. Professionals delivered information that will form blueprints for successful financing and construction risk assessment and management at every phase of the construction cycle. From government and regulatory bodies to operator insight and in-depth contractor experience.
- Presented by Arun Mani, Managing Director in Huron Consulting Group’s Utilities Consulting practice –
The attached pdf presentation from the NCS meeting details The Bellefonte Opportunity
Huron Consulting Group Overview
Formed in 2002 with approximately 200 professionals.
Today, over 2,100 professionals withmleading experts serving select industries and critical services
Huron’s utilities practice assist clients to define and implement business strategy, improve market share, and lower costs through:
– Decision Analysis and Business Strategy
– Regulatory and Litigation Support
– Operations and Logistics Advisory Utilities Consulting Practice
Headquartered in Chicago with offices in US, EU, Middle East, Singapore, and Japan.
Publicly traded since October 2004.
Conducted more than 2,500 client engagements.
Sourcing and Supply Chain
Compliance and Audit Preparation
Business Case Development
Cost and Schedule Risk Modeling
Plant Life Extension Assessment
Regional Economic Impact Analysis
Strategic Sourcing and Procurement
TVA Nuclear
Tennessee Valley Authority is an industry leader in nuclear generation development and operation.
Operational Phase Browns Ferry 1
Construction Phase Watts Bar 2
Analysis Phase Bellefonte
TVA’s nuclear generation plan fits in with the longer term strategic plan that calls for 50% of all power generated by clean energy sources
Strategic Context
The Bellefonte site is one of twenty one locations in the U.S. where thirty-one new nuclear reactors are currently being studied or are planned for development.
The Bellefonte Decision
Huron Consulting Group was retained in March 2008 to evaluate the risks and uncertainties surrounding cost and schedule estimates with regard to each decision option.
Option 1: Complete the partially built existing Babcox and Wilcox (B&W) reactors.
Option 2: Construct Westinghouse AP1000 units.
Roadmap to Commercial Nuclear Operation
Completing an unfinished plant or building a new nuclear plant is not a one step decision. It is a sequence of four successive decisions.
First Decision
Analyze and evaluate the business case for completing existing unit and/ or proceeding with new build.
Second Decision
Navigate the regulatory framework – License under Part 50 (under Reinstated Construction Permits) and/or Pursue COLA Under Part 52.
Third Decision
Arrange for procuring major long lead components and commodities.
Fourth Decision
Navigate the Proceed with construction.
Methodology – Decision Analysis Overview
Decision Analysis is the process of developing a “clean” analytical framework to describe a “complex” project. The end result is a value measure, in this case cash flow and schedule metric for a wide range of possible scenarios associated with each of the decision options.
Methodology - Stochastic Modeling
Stochastic techniques, such as Monte Carlo analysis, were used to aid in analyzing the effect of varying inputs on the output of the model and to understand the full range of results.
Methodology - Risk Modeling Philosophy
Risks were classified and categorized along various parameters in order to triage them and guide the approaches for risk mitigation.
Methodology - Risk Determination
Huron and TVA identified a comprehensive set of risks for each decision, regardless of their likelihood of occurrence, to ensure that all risks are considered.
Risk Prioritization Method
The unmitigated risks were prioritized based on impact and probabilities, with the focus of mitigation being on the high priority risks.
Risk Mitigation
Developed a risk management strategy to determine a risk-adjusted view of cost and schedule impacts for each decision.
Results
Huron developed an expected value for calculated costs and anticipated online schedule for each decision after considering the probability of occurrence and magnitude of impact for various risks and uncertainties.
Bellefonte Decision
The risk analysis that Huron is performing for TVA to evaluate the Bellefonte decision is one part of five deliverables that will be relied upon to make an informed decision.
Conclusion
So what is different today with decision making versus 30 years back during the time of the last major nuclear build across the country?
Deliberate
Intentional in making major decisions. Quantitative business case that takes a variety of inputs and analysis into consideration.
Documentation
Documenting major assumptions, off-ramps, decisions.
Communication
Improved and open communications internal to company, external with peer companies, with public and regulatory bodies
Click here for the complete The Bellefonte Opportunity in pdf