Overcoming the Challenges of Large Capital Programs/Projects
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The report discusses the challenges faced by electric utilities in managing large capital projects, particularly focusing on extended power uprates (EPUs). It outlines key challenges such as scope creep, schedule delays, and workforce management, while offering lessons learned and strategies for success derived from EPU experiences. The report emphasizes the importance of effective planning, vendor alignment, and workforce collaboration to ensure the successful delivery of capital programs/projects.
Overcoming the Challenges of Large Capital Programs/Projects
- 1. Copyright © 2015 ScottMadden, Inc. All rights reserved. Report _2015 Overcoming the Challenges of Large Capital Programs/Projects Applying Lessons Learned from Extended Power Uprates June 2015
- 2. Copyright © 2015 by ScottMadden, Inc. All rights reserved. Introduction ￭ Effective capital program/project delivery is a critical competency for any electric utility to achieve high performance ￭ However, project scope creep, schedule delays, and cost increases have become the rule rather than the exception ￭ Over the past 10 years, the electric utility industry has seen large demands on its projects and construction management organizations to ensure compliance with a number of concerns, including: • Plant retrofits and conversions • Ash pond closures • Fukushima modifications • Security upgrade requirements • Extended power uprates (EPUs) ￭ Large capital programs/projects come with a variety of complicated planning, implementation, and workforce/vendor management challenges ￭ Using EPU projects as an example, we will provide you with ways to overcome these challenges for any large capital program/project 1 Lessons learned from extended power uprates can be applied to any large capital program/project.
- 3. Copyright © 2015 by ScottMadden, Inc. All rights reserved. Overview of Power Uprates ￭ Power uprates allow utilities to generate more electricity from their existing nuclear plants ￭ Since the 1970s, the NRC has approved 154 uprates, which have collectively added generating capacity equivalent to about seven new reactors ￭ Three types of uprates are available to a nuclear plant operator: measurement uncertainty recapture, stretch, and extended ￭ As shown in the table above, implementing EPUs presents the biggest project challenges, given the need to significantly modify major pieces of plant equipment 2 Power Uprate Type Increase to Licensed Power Levels Plant and System Impacts Measurement uncertainty recapture < 2% Implementing improved techniques for calculating reactor power, e.g., utilizing state-of-the-art devices to more precisely measure feedwater flow Stretch 2 to 7% Changing instrumentation settings without major plant modifications Extended 7 to 20% Significantly modifying to major pieces of non-nuclear equipment, e.g., high-pressure turbines, condensate pumps and motors, main generators, and transformers Source: www.nrc.gov, Backgrounder on Power Uprates for Nuclear Plants
- 4. Copyright © 2015 by ScottMadden, Inc. All rights reserved. EPU Project Challenges EPU projects pose significant scope, implementation, and workforce management challenges ￭ Scope • Scope is fluid as the EPU project is implemented • Outages are typically much bigger in scope than a refueling outage, requiring the significant change-outs or upgrades of major equipment • Changes to the plant configuration (structures, equipment, and systems) must be precisely documented ￭ Implementation • In many cases, the work is done while other units are still in operation • A high degree of project control rigor is required to accurately track cost and schedule against evolving scope • Physical security, ALARA limits, lock-out/tag-out requirements, etc., make the work environment very complex ￭ Workforce management • A large number of skilled teams (craft workers and supervisors) that may have never worked together are involved • Some trades and/or skills are likely to be in short supply • Many workers are new to a nuclear plant work environment and lack knowledge of nuclear safety and quality standards 3 Sources: 1. IAEA Nuclear Energy Series No. NP-T-3.9, Power Uprate in Nuclear Power Plants: Guidelines and Experience, 2011 2. Von Lazar, Laszlo, “Lessons Learned from Successful Nuclear Uprate Projects”, Nuclear Power International Magazine, Volume 6, No. 4, July/August 2013
- 5. Copyright © 2015 by ScottMadden, Inc. All rights reserved. Lessons Learned from Recent EPU Efforts ￭ Planning for contingences is critical. In some cases: • Actual costs more than doubled over initially planned costs • Outage durations were as much as 25% longer than planned • Additional outages were required to complete the work ￭ Costs and schedules should include contingencies for productivity issues, replacing vs. repairing components, and licensing delays • Preliminary cost estimates, based on conceptual scope, may not capture all of the work necessary to complete the project • Some components that are initially expected to be repaired or recertified will require replacement, i.e., during configuration control verification, perform a detailed drawing walk-down of pumps, motors, valve controls, etc., to minimize scope surprises • Major construction activities at an operating nuclear plant, many of which occur in remote and radiologic-controlled portions of the plant, can cause significant implementation difficulties and delays – Space for installation can be extremely tight and may require removal or working around hundreds of interferences – Productivity can be slowed due to the specialized and time-consuming procedures to ensure worker safety in radiologic- controlled and electrically sensitive areas of the plant • Increasingly conservative regulatory requirements outside of a company’s control can cause significant licensing delays ￭ Obtaining and retaining experienced workers is a challenge ￭ Active management of vendors is required to ensure productivity is maintained, issues are raised, and progress is on schedule 4
- 6. Copyright © 2015 by ScottMadden, Inc. All rights reserved. EPU Project Keys to Success 5 ￭ Encourage workforce collaboration and the ability of employees to voice concerns early and often to avoid costly errors, re-work, and safety hazards, i.e., maintain a focus on quality and safety ￭ Develop a self-critical culture focused on improvement and efficiency ￭ Recognize that the EPU team can not anticipate all the changes that will occur during the project ￭ Utilize project management technology where possible to improve efficiency and communication ￭ Hold regular project team meetings and invite senior leadership periodically to reinforce the priority of the project Work Environment Planning ￭ Be honest and realistic about the complexity and uniqueness of the EPU project; investing early in planning and current state analysis can save a lot of rework ￭ Recognize that the planning process continues all the way to project completion and that the EPU team should always be looking to improve costs, schedule, and general efficiency ￭ Make benchmarking trips and incorporate lessons learned and insights, e.g., NEDO-33159, from recent EPU and stretch uprates projects into planning ￭ Bring in field engineers and/or craft supervisors early in the process for review and comment on actual configuration vs. drawings and equipment installation implications ￭ Hold combined design reviews with members from different disciplines; utilize the experience and expertise from each discipline to come up with a collectively better solution ￭ Develop integrated work packages to improve efficiency and overall performance Sources: 1. IAEA Nuclear Energy Series No. NP-T-3.9, Power Uprate in Nuclear Power Plants: Guidelines and Experience, 2011 2. Von Lazar, Laszlo, “Lessons Learned from Successful Nuclear Uprate Projects,” Nuclear Power International Magazine, Volume 6, No. 4, July/August 2013
- 7. Copyright © 2015 by ScottMadden, Inc. All rights reserved. EPU Project Keys to Success (Cont’d) 6 Vendor/ Contractor Alignment ￭ Align vendors and contractors with project objectives and the uniqueness of the project ￭ Ensure vendors and contractors are aware of and held to the tenets of nuclear safety and align their nuclear safety culture with that of your company ￭ Work collaboratively with contractors and combine cost, schedule, and human performance monitoring tools and processes ￭ Ensure contracts have clear terms and conditions and are very specific in scope and timing ￭ Plan for vendor handoffs of work products and resolve disputes promptly to reduce idle vendor time Implementation ￭ Manage like a large-scale engineering, procurement, and construction project and not like a modifications project or refueling outage, e.g., funding is stage-gated ￭ Collect accurate data and monitor relevant performance metrics throughout the EPU project ￭ Conduct periodic independent project audits using industry experts with previous EPU experience ￭ Involve employees who will operate the plant during implementation ￭ Ensure operating staff are adequately trained on how the plant will operate after the power uprate, e.g., operations, maintenance, engineering, radiation protection personnel, etc. ￭ Update all affected documentation, e.g., operating and maintenance procedures, to reflect the new operating conditions ￭ Focus on procedure development, training, and simulator modeling to help verify actual plant response vs. expected plant response in power uprated conditions Sources: 1. IAEA Nuclear Energy Series No. NP-T-3.9, Power Uprate in Nuclear Power Plants: Guidelines and Experience, 2011 2. Von Lazar, Laszlo, “Lessons Learned from Successful Nuclear Uprate Projects,” Nuclear Power International Magazine, Volume 6, No. 4, July/August 2013
- 8. Copyright © 2015 by ScottMadden, Inc. All rights reserved. How ScottMadden Can Help 7 ScottMadden Capital Program/Project Assistance Perform a top-to-bottom assessment of the capital program to position it for success from the start Capital Program Assessment Capital Program/Project Management Capital Program/Project Tools and Performance Reporting Assist in establishing and implementing the organization and governance to successfully deliver the program/project Assist in establishing and implementing the tools and performance reporting to successfully control and monitor the program/project
- 9. Copyright © 2015 by ScottMadden, Inc. All rights reserved. Capital Program Assessment Overview ScottMadden’s Capital Program Assessment examines how the capital program is implemented—from top to bottom—with a look at the PMO and a review of the performance reporting and tools in place. 8 Program Management Office Step 1: Capital Program Analysis Step 2: Process Evaluation Copyright © 2013 by ScottMadden. All rights reserved. 5 Constructability activities within alliance projects are being introduced later in the cradle to grave construction process than is typical for large project management Findings Constructability – Cost Savings Driver Current lack of a constructability process across all the elements of the construction cradle to grave process is a significant driver in NEA cost estimates being high Best In Class Projects Typical NEA Project ScottMadden’s approach analyzes these critical areas to provide a detailed assessment of your capital program with actionable recommendations. Step 6: Recommendations and Action Plan EPU Project Step 4: Execution AssessmentStep 3: Organization Analysis Step 5: Performance Reporting and Tools Evaluation ScottMadden Capital Program/Project Assistance Capital Program Assessment Capital Program/Project Management Capital Program/Project Tools and Performance Reporting
- 10. Copyright © 2015 by ScottMadden, Inc. All rights reserved. Capital Program/Project Management Overview 9 Focus On ◼ Organization and governance ◼ Functional relationship management ◼ Partnership with other entities Tools ◼ Performance Dashboard ◼ Issue List (high impact and level) ◼ Monthly Progress Report ◼ Risk Analysis and Mitigation Plan (high impact and level) ◼ Inter-project coordination ◼ Inter-project resource coordination ◼ Cross functionalities ◼ Best practice usage ◼ Documentation management ◼ Project milestones ◼ Costs ◼ Times ◼ Business/technical goals ◼ Projects List ◼ Project Procedures ◼ Project Dashboard ◼ Milestones Tracking ◼ Issue List (Aggregated) ◼ Risk Analysis and Mitigation Plan (Aggregated) ◼ Weekly and Monthly Progress Reports ◼ Project Plan ◼ Project Documentation Management ◼ Milestones Tracking ◼ Risk Analysis and Mitigation Plan ◼ Change Request Management ◼ Issue List Management ◼ Project Baseline and Progress Report ◼ Weekly Progress Meeting Minutes ◼ Weekly Progress Report ◼ Monthly Progress Report Program Manager Project Office Project Managers ScottMadden Capital Program/Project Assistance Capital Program Assessment Capital Program/Project Management Capital Program/Project Tools and Performance Reporting
- 11. Copyright © 2015 by ScottMadden, Inc. All rights reserved. Capital Program/Project Management Tools and Performance Reporting Overview 10 F.G.P. PROJECTS DRIVING BOARD Status Tendency (previous) Tendency (actual) TIME COST (Euro) Open issues Order Project Description Project Manager Type Impact 30-Apr-01 31-M ay-01 Baseline Start Baseline End Forecast End Budget Actual Forecast & Critical Points CMFR0027 PRGT00PB Powerbrain Sorrenti F M 1-Nov-00 31-Aug-01 31-Aug-01 26,550 26,085 26,550 CMEV0007 PRGT1572 Impl. Verrone Plant Serafino F M 15-Jan-01 28-Sep-01 28-Sep-01 82,633 0 82,633 CMSP0015 PRGT2982 HRMS new. Devel. Pukly F H 1-Jan-01 31-Dec-01 31-Dec-01 108,785 0 108,785 CMSP0015 PRGT3044 Web professional Pukly F M 15-Apr-01 31-Dec-01 31-Dec-01 71,975 0 71,975 CMSP0039 PRGT0017 Estesa Di Carlo O L 7-May-01 30-Jun-01 30-Jun-01 23,750 0 23,750 CMSP0015 PRGT3047 I.I.S. HR FGP Pukly F L 1-Jan-01 31-Jul-01 31-Jul-01 77,468 0 77,468 CMSP0028 PRGT0014 Engine Sperim. Appl. Brezigar O M 12-Apr-01 31-Dec-01 31-Dec-01 158,479 0 158,479 Total 549,640 26,085 549,640 Legend Type Compulsory (O) Impact High (H) Status Critical Tendency Flat Firm(F) Medium(M) Medium Raising Opportunity (O) Low (L) On track Falling CODE NAME TYPE ORDER XXX XXX Date 05/17/2001 PROJECT PRGTnnnn Implementation Compulsory Firm Opportunity Description: References Architecture Client: Operating System: Windows NT Client Legal Entity/Functions: IT Project Manager: HW Platform: Server Compaq NT IT Client Manager: Data Base: TBD User Legal Entity/Functions: IT Application Manager: IT Architect: Impact on other Projects/Applications Notes Operating Costs Forecast Operational: TBD Maintenance: TBD Milestones Issues Start 28-Feb-01 Initial Budget 40,949 End (Baseline) 31-Mar-03 Actual 19,208 Open Issues 10 End (Estimate to date) 31-Mar-03 Total Cost Forecast 38,489 Expected gap 0.00% Expected gap -6.01% Closed Issues 20 Total Issues 30 % Open Issues/Total Issues 33.33% Overall Project Status Best Practice Adherence Impact: Supplier: Costs (Euro) Project Characteristics 50% 100% 150% 200% total cost forecast 50% 100% 150% 200% total duration forecast actualtoday CRITICAL MEDIUM GOOD HIGH MEDIUM LOW 0 1 2 3 4 CODE NAME TYPE ORDER XXX XXX Date 05/17/2001 PROJECT PRGTnnnn Implementation Compulsory Firm Opportunity Description: References Architecture Client: Operating System: Windows NT Client Legal Entity/Functions: IT Project Manager: HW Platform: Server Compaq NT IT Client Manager: Data Base: TBD User Legal Entity/Functions: IT Application Manager: IT Architect: Impact on other Projects/Applications Notes Operating Costs Forecast Operational: TBD Maintenance: TBD Milestones Issues Start 28-Feb-01 Initial Budget 40,949 End (Baseline) 31-Mar-03 Actual 19,208 Open Issues 10 End (Estimate to date) 31-Mar-03 Total Cost Forecast 38,489 Expected gap 0.00% Expected gap -6.01% Closed Issues 20 Total Issues 30 % Open Issues/Total Issues 33.33% Overall Project Status Best Practice Adherence Impact: Supplier: Costs (Euro) Project Characteristics 50% 100% 150% 200% total cost forecast 50% 100% 150% 200% total duration forecast actualtoday CRITICAL MEDIUM GOOD HIGH MEDIUM LOW 0 1 2 3 4 CODE NAME TYPE ORDER XXX XXX Date 05/17/2001 PROJECT PRGTnnnn Implementation Compulsory Firm Opportunity Description: References Architecture Client: Operating System: Windows NT Client Legal Entity/Functions: IT Project Manager: HW Platform: Server Compaq NT IT Client Manager: Data Base: TBD User Legal Entity/Functions: IT Application Manager: IT Architect: Impact on other Projects/Applications Notes Operating Costs Forecast Operational: TBD Maintenance: TBD Milestones Issues Start 28-Feb-01 Initial Budget 40,949 End (Baseline) 31-Mar-03 Actual 19,208 Open Issues 10 End (Estimate to date) 31-Mar-03 Total Cost Forecast 38,489 Expected gap 0.00% Expected gap -6.01% Closed Issues 20 Total Issues 30 % Open Issues/Total Issues 33.33% Overall Project Status Best Practice Adherence Impact: Supplier: Costs (Euro) Project Characteristics 50% 100% 150% 200% total cost forecast 50% 100% 150% 200% total duration forecast actualtoday CRITICAL MEDIUM GOOD HIGH MEDIUM LOW 0 1 2 3 4 PROJECT PRGTnnnn Implementation MONTHLY STATUS REPORT REF. 1 / 24 MONTH MARZO 2001 PHASE PROTOTIPAZIONE PROJECT STATUS E’ stato definito il System Integrator. E' stato definito il Piano di progetto. E' stata impostata la proposta di Struttura Organizzativa di Progetto. E' stata impostata la baseline per i costi di Progetto Sono state attivate le Procedure di Gestione Scope Change Request, di Gestione Issue List e di Gestione della Documentazione. E' stato Definito il tool di gestione della documentazione di Progetto. E' stata impostata l'Analisi del Rischio. OPEN ISSUES ACTIONS RESPONSILE DUE DATE 1 - L'Ambiente di Prototipazione non è disponibile. Predisporre ambiente prototipazione IT Project Manager 06/04/01 NEXT STEPS Ufficializzazione Struttura Organizzativa di progetto. Definizione dei componenti dei team da parte dei Responsabili/Referenti. Verifica profilo di spesa e budget Architettura Tecnologica. Impostazione attività di Quality Assurance. APPROVED CHANGE REQUESTS Nr. Description Approval Allocated Date Contingency 15000 19108 21356 25130 28733 33000 38114 34303 36545 40949 15020 19208 21531 25355 29058 33375 34678 36920 38489 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 Gen01 Feb01 Mar01 Apr01 Mag01 Giu01 Lug01 Ago01 Set01 Ott01 Nov01 Dic01 Gen02 Feb02 Mar02 Apr02 Mag02 Giu02 Lug02 Ago02 Set02 Ott02 Nov02 Dic02 Gen03 Feb03 Mar03 Baseline (Core) Baseline (Contingency) Actual Forecast Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 Capability Release Design 1 Capability Release Design 2 System Test Set Up and Realisation 1 System Test Set Up and Realisation 2 Test & Training Start Up Support ORDER COMM NameComm BASELINE VS ACTUAL VS FORECAST F.G.P. PROJECT PRGTnnnn Implementation COST (Euro) Cost Type Cost Element Baseline Actual Forecast Notes Development & Implementation 18,550 2,434 18,550 External Resources 0 0 0 Operational/Applicational Mngt 3,783 3,783 3,783 Total System Development 22,333 6,217 22,333 HW/SW Design & Consultancy 1,572 1,572 1,572 HW/SW Acquisition 6,500 6,500 6,500 I costi relativi all'architettura tecnologica saranno dettagliati al termine SW Licences 3,145 3,145 3,145 della fase di definizione dei requisiti Total HW/SW Mgnt 11,217 11,217 11,217 Total External Costs 33,550 17,434 33,550 Total Internal Resources 4,564 1,674 4,564 Partial Project Total 38,114 19,108 38,114 Contingency 2,835 100 375 Sono state attivate 3 Scope Change Request Overall Project Total 40,949 19,208 38,489 HW/SW Management System Development Back to index Performance Dashboard Cost Tracking Project Scorecard Risk Map Progress Report Schedule Costs Detail Data Migration and Go-Live Resources Change Management Project Governance Low High Low High Value Manageability Data Migration and Go-Live Project Documentation Resources Change Management Project Governance Project Management Technological Architecture Application Legacy Systems Interfaces Project Management Technological Architecture Application Legacy Systems Interfaces Project Documentation ScottMadden Capital Program/Project Assistance Capital Program Assessment Capital Program/Project Management Capital Program/Project Tools and Performance Reporting