27 June 2013 Warsaw, Poland. Platts 8 th Annual European Nuclear Power 2013 Procurement for New Nuclear Programs

Transcription

1 27 June 2013 Warsaw, Poland Platts 8 th Annual European Nuclear Power 2013 Procurement for New Nuclear Programs 1

2 Procurement for New Nuclear Programs Nuclear power programs risk and opportunity Supplier Selection it s not really about technology Scope not what the customer should worry about Cost not to be confused with price Funding a deal breaker or deal maker The need for a Commercial Strategy 2

3 Lightbridge Corporation New design for LWRs Nuclear Fuel Technology More power Less spent fuel Improved safety Versatile design options Full scale lead test assembly in PWR ~ 2018 Advisory Services Nuclear New Build Generation Services Regulatory Services Technical Commercial Regulatory Management Legal Political 3

4 Risk and Opportunity in Nuclear Power Programs IAEA Contract Date IAEA Conventional Conventional Innovative Innovative New Build Schedule Major opportunity in early phases Risk includes owner s responsibilities Turnkey NPP Supply Program Work Scope 4

5 Supplier Selection Detailed technology evaluations provide limited benefit Gen III/III+ designs on offer now will produce electricity with comparable reliability and will exceed generally accepted safety goals. Use reference plants Very limited design changes No single supplier can provide turnkey Suppliers must form teams Projects rarely fail because of technology or design Implementation is key Most important to focus selection on the team / your future partner Team strength and commitment is critical Intelligent Customer: know yourself Conduct a skills gap analysis 5

6 Scope what s important Owner s responsibilities Infrastructure Licensing and permits Training and manpower IAEA guidelines should be cross checked, improved, but not obeyed Owner s Responsibilities Program Requirements Supplier Responsibilities Interface Specification Acceptance Scheduling Configuration Control Regulations, Guidance & Obligations Reference Plant Requirements vs. Scope Requirements are customer focused Requirements spec enhances bid assessment and delivery verification 6

7 Requirements Specification Example Requirement Breakdown Structure Program Goal L1 Safety Quality Security Schedule Cost Regulation Localization Technology Training L2 examples Capability Capacity Commitment Licensed Advanced Proven Detailed Acceptance Requirement Test Detailed Acceptance Requirement Test Customer defines levels 1 down to 2 or 3; Supplier defines further down to detailed requirement with acceptance tests 7

8 Cost what customer s can impact Nuclear power is an oligopoly Price is determined more by market dynamics than by actual cost of the facility Market dynamics change rapidly from buyers to sellers markets Intelligent Customer can create favorable conditions Customer decisions impact program cost Scope based Requirements based Single source Multiple bid competitive Fixed Price Target Price, Incentives Turnkey Separate Suppliers Supplier Insurances Owner Insurance (OCIP) EPC only Equity Partnership Risk ultimately rests with the customer 8

9 Funding a deal breaker or deal maker Large capital expenditure (>20bnUSD) before revenues begin Few utility owners have such large resources available Project financing by investors alone does not work High risks Long duration / exposure Need government funding or debt guarantees Potential for supplier government support or equity participation 9

10 Commercial Strategy Focus on maximum long term value, not initial price Need up front thinking fuel, support services, training, commissioning operations, waste management, and decommissioning Manufacturing and construction Production costs (O&M plus fuel) Major refurbishment (e.g. steam generator replacement) Decommissioning Need an integrated commercial strategy procurement process evaluation criteria contract type harmonize incentives contract scope risk & opportunity assessment funding plan 10

11 Summary Know what you need and define success. Map your authorities and manage stakeholders and interfaces Manage risks & opportunities with long term view Integrate overall program together with top level, wholly inclusive risk and opportunities register Don t expect to save time, or recover time in construction, but there are many opportunities up front Study and understand successful programs: supplier teams and customers Know yourself conduct skills gaps analysis (no need to share the results!) 11

12 Questions? Ltbridge.com 12

13 Lightbridge Corporation Business Segments Advisory Services Business Metallic Fuel Technology Nuclear Generation Industry leading team from international technology & fuel suppliers, utilities, and government agencies Provide strategies with comprehensive plans for new or expanding nuclear programs Nuclear Regulation Leading regulatory team from international agencies Advisory services on design, development and management of nuclear energy programs according to highest standards Enhanced Safety Key Safety Improvements vs. existing fuels Accident tolerant fuel design Improved Economics 10-17% power uprate and longer fuel cycles in existing reactors 30% or greater power uprate in new build reactors Versatile Fuel Design Applicable to all water-cooled reactors Plutonium disposition from civil and legacy weapons sources 13

14 Service Offerings Comprehensive support throughout the nuclear power lifecycle Specialization in emerging civil nuclear programs 14