UK Nuclear New Build. Challenges and Solutions for Chinese Supply Chain Companies. Courtesy of EDF Energy

Transcription

1 UK Nuclear New Build Challenges and Solutions for Chinese Supply Chain Companies Courtesy of EDF Energy

2 2 Challenges and Solutions 1. Background CGN has signed agreements with EDF and the UK Government for joint investment in the Hinkley Point C (HPC) and Sizewell C (SZC) new build Nuclear Power Plant (NPP) projects as well as Bradwell B NPP (BRB) in the South East of England. To secure a broader supply chain, ensure value for money and prepare for the construction of the UKHPR1000 jointly with EDF, CGN would like to involve the Chinese supply chain more closely with the UK nuclear sector. Hinkley Point C Courtesy of EDF Energy Courtesy of EDF Energy Sizewell C Courtesy of EDF Energy Courtesy of 3D Web Technologies

3 2. Challenges for Chinese Supply Chain There are differences between the UK and Chinese nuclear sectors, but experience with the UKEPR supply chain shows that Chinese suppliers may find it beneficial to team up with UK companies. The challenges for Chinese suppliers are based on UK context and more general challenges associated with nuclear projects. Experience shows that to be successful, it is vital to have a deeper understanding of both. 2.1 General challenges In broad terms, the general challenges for the Chinese Supply Chain to acquire knowledge and succeed in the UK nuclear new build projects can be categorised as follows: Forming appropriate commercial relationships and creating delivery teams in the UK; Developing a positive public profile and relationship with key stakeholders; Addressing UK Government expectations; Meeting export/import control and security requirements; Meeting requirements for engineering substantiation, qualification and certification for corporations and factory workshops, individuals and materials and equipment; Meeting UK Health, Safety, Security and Environment (HSSE) requirements and regulations; Addressing quality issues; Competition with the experienced Flamanville 3 (FA3) and HPC EPR Supply Chains; Experience in collaborating with the UK Supply Chain. 2.2 UK context challenges On all nuclear new build projects, a reasonable amount of localisation and customisation are always required by the member state. In the UK however, this happens to a greater extent than almost anywhere else. As a result, to participate in the UK new build projects, Chinese suppliers are required to have a certain level of local knowledge and capability across many processes see Figure 1 below. A deep understanding of the UK context is extremely important for Chinese suppliers to be successful. Without it, Chinese suppliers could find it very difficult to compete or deliver the tasks within the required HSSE, quality, time and budget constraints. At a minimum, compliance should include the following: Knowledge and implementation of nuclear safety culture principles ISO9001; Understanding and implementation of Health and Safety at Work etc Act 1974 and CDM Regulations 2015; Understand ONR s (Office for Nuclear Regulation) requirements of engineering substantiation, equipment qualification and material qualification during the construction and commissioning period; Understand ONR s expectation of safety classification schemes; Be able to help the UK Operator to implement and comply with the Nuclear Site Licence Conditions and other license conditions; Compliance with ONR Safety Assessment Principles (SAPs); Deeply understand intelligent customer and ONR Technical Assessment Guides (TAGs); Understand and meet Environment Agency expectations; Demonstrate good practice of the use of UK and international codes and standards; Understand the norms associated with the UK design and construction approach; In addition, Chinese suppliers also need to build economic competitiveness and comply with UK regulatory requirements to ensure that quality meets appropriate acceptance criteria. Full owner operator delivery requirements Owner operator preferences UK Context Examples Environmental Safety Security Coventional Safety Consents & Regulations Specific Technical Issues Commercial UK Supply Chain expectgations QA Nuclear Safety Normal business carried out under responsible designer s processes Commercial Figure 1: UK Context for the UK nuclear market

4 4 Challenges and Solutions 3. Solutions for Chinese Supply Chain For the Chinese nuclear supply chain to play a major role in the UK nuclear market, companies will need to overcome differences in regulatory approach, limited experience of the UK market and limited in-country delivery capability. Because of the unfamiliarity of the UK nuclear sector for new entrants and entry into the competition part way through the procurement cycle, Chinese suppliers may enter with a limited role in the HPC project. An example may be sub-contracting to supply non-nuclear safety related equipment or services. Involvement in the HPC project will help Chinese suppliers gain more experience and knowledge of working in the UK. It will also help Chinese suppliers successfully compete to provide high value and complex nuclear safety related plant and equipment for Sizewell C and Bradwell B. Typical Risk in Procurement Process Design and engineering capabilities approval and change management Contracting and subcontracting Manufacturing process engineering, approval, implementation and tracking Inspection and testing Personnel training and qualification Cause Different approach to relevant good practice around codes and standards Safety Classifications for UK are typically quite different from reference plant designs Differences in design and engineering practices and management, Construction norms may be different; UK expectations for the level of engineering substantiation requirements beyond code and standards Control of design change may be different UK contract law requires delivery of just what is in the contract so requires accuracy and adherence Different contracting models Differences in expectations on control of quality right through the supply chain Risk allocation from operator down to supply chain and impact on liabilities UK requirements differ from design code UK operator involvement in manufacturing process approval (design, factory acceptance and site acceptance), particularly special processes such as welding, heat treatment, NDE, casting, painting etc. Process records not complete, hence not able to track the process and products Different Inspection & Testing Plan (ITP) to deliver the evidence to support the UK safety case UK expectations around involvement of independent assessment Lack of regulatory specification in UK places additional responsibilities on operator and supply chain UK regulators expect to see evidence demonstrating that workers are Appropriately Trained and Experienced (ATE) Requirement for SQEP (Suitably Qualified and Experienced Personnel) competence under UK regulations Responding Actions Ensure experience in AFCEN RCC - design code suite for design, manufacture, inspection, install lifecycle and understand the UK differences UK partner to interpret UK expectations on technical, engineering, and commercial specification Ability to address UK competency at PQQ stage Early consideration for UK approach to modifications and handling non-conformances UK bid management support and or peer reviews by UK engineering contractors including support on NEC3 UK contract framework Specify in the contract and monitor the in-execution process, working with UK partners pre- and post-bid. Re-qualification of workshops, equipment and personnel for UK new build Client representatives verify the approval status and change management Client representatives must check the process records, identification and traceability of the products in the manufacturing process. Request supplier establish ITP, approved by clients, and follow up for implementation. Develop role descriptions and competency management systems working with UK partners. Accessibility in English Roll out UK training Work with partners to support Table 1: Typical risks for Chinese Suppliers and Wood s proposed solutions

5 4. How Wood can help We have 60 years of delivery experience for large projects on UK nuclear sites and 10 years of experience on the UK EPR. Crucially, we also understand the Chinese context. We have delivered the Husab uranium mining project in Namibia, working with CGN for a number of years, and we are supporting the UKHPR1000 Generic Design Assessment application. We are also working with thousands of Chinese suppliers for large procurement exercises for multiple global projects (altogether worth more than $6 billion). Strategy Development for Suppliers (regulatory advice, org development, integrated management system, commercial strategy, localization, procurement law, quality control etc.) Fit for Purpose Delivery (regulatory interpretation, CDM, specification, legal, training, collaborative working) Contract (risk management, QA, cost control, reporting, BoQ, Unions) Engineering and Technical Support Equipment Qualification Codes & Standards Project Delivery Figure 2: Possible support to the supply chain We believe it is important to develop awareness of UK context at the outset (pre-bid), followed by an appropriate strategy to develop business in the UK. We add value by providing: UK context awareness training to aid development of competency in UK context; Strategy development for the UK market to support development of winning bids; Fit-for-purpose delivery for the UK nuclear market, including regulatory interface, nuclear safety culture, CDM; Support to address the UK approach to Bid, Commercial and Contract including implementation of the British Standard BS11000 (Collaborative Business Relationship Standard); HSSSEQ, engineering and technical support integrated with the supplier team to address UK regulatory requirements and help implement the requirements of the safety case and environmental commitments; The UK s leading service for equipment and materials qualification; Application of the UK context in how codes and standards are implemented in technical specifications; Project delivery support.

6 6 Challenges and Solutions 5. Conclusion This paper discusses potential challenges for the Chinese supply chain entering the UK nuclear sector, including general challenges for major nuclear project delivery in the UK context. In order to improve the likelihood of pre-qualifying, bidding and winning work, Chinese suppliers would benefit from support across a number of areas from organisational set up and business operation to quality assurance and project delivery. Seeking a UK context partner is recommended as the key first step for the success of Chinese suppliers in the UK. In addition, an appropriate project delivery partner is equally important for successful delivery. In the UK new nuclear context, Wood brings experience of working extensively with all UK nuclear developers (including EDF, Horizon, NuGen and CGN) and in particular EDF and CGN. Wood played a key role at Sizewell B, the most recent completed new build in the UK, as well as working on the UKEPR project from its inception. As well as demonstrating its mastery of UK context, Wood can bring to bear extensive engineering, procurement construction and management (EPCm) capability from many sectors. Below are typical services for new nuclear programmes for which Wood can provide support. Technical Due Diligence UK Context Awareness Organisation Development HSSE & CDM Code & Standard UK Nuclear Safety Culture Development Technical Cost Optimisation Environment Supply Chain Strategy Procurement Strategy Plant Engineering EPCm & EPC Construction Owners Engineer Conventional Safety Nuclear Safety Independent Validation (NDT) Programme Delivery Operation & Maintenance Support Outage Support Lifetime Operation Support Lifetime Reactor Performance Improvement Plant Lifetime Extension Technical Advice & Consultancy Pre-Design Design Procurement Construction Commissioning Operation & Maintenance HPR1000 GDA Regulatorily Interface Licensing & Permitting Engineering & Technical Support Site Charaterisation Programme & Project Knowledge Technical Advisor Bid Quality Document Equipment & Materials Qualification Risk Contract Factory Acceptance Test Station Acceptance Test Site Pre-Operation Support Figure 3: Wood s offering to new nuclear programmes Through our proven track record of successful project delivery in the UK environment and our extensive experience in the UK, France and China, Wood is uniquely placed to provide the required support both with regard to UK context and also as a potential delivery partner.

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