The document provides information about an online event on the Nuclear Sector Deal (NSD). It includes sections on housekeeping, questions, troubleshooting, sponsors, poll questions, targets, and the webinar series schedule. The document outlines that attendees will be muted and their cameras off, the meeting will be recorded, and there are instructions for asking questions and chatting. It also presents poll questions on understanding of the NSD and the cost reduction target.
Nuclear Sector Deal webinar series 2021. Cost reduction in nuclear new build. 14 enablers
1.
2. Housekeeping
• As an attendee your microphone will be on mute and you will not be visible on camera
for the duration of the event
• The meeting will be recorded. A copy of this will be available after the event.
NSD PMO - Public
3. Questions and chat
• During the meeting you will have the opportunity to ask questions. To do this, click on the
Q&A button at the bottom of your screen and submit your question.
• You will also be able to upvote questions that other attendees have asked if you like a
question or comment that has been made.
• You can also use the chat function if you wish to contact the host or interact with other
participants. You will need to select who you wish to send your message to before sending.
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4. Troubleshooting
• If you experience any connection problems on the day, try logging out and logging back
in to see if this resolves the problem.
• Close all other applications on your computer / device.
• If you lose your connection, log out and back in again.
• If you need specific help, contact the event management team through the chat function
to send a message directly to the host.
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6. Poll Questions
1. What is your level of understanding of the Nuclear Sector Deal (NSD)? (1 is low, 5 is
high)
2. What is the New Build Cost Reduction Working Group’s cost reduction target?
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7. Nuclear Sector Deal targets
• A 30% reduction in the cost of new build projects;
• Savings of 20% in the cost of decommissioning compared with current estimates;
• 40% women in nuclear; and
• Up to £2 billion domestic and international contract wins.
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8. Nuclear Sector Deal Webinar Series 2021
Purpose of this Webinar
Q&A panel
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Today’s speakers
➢ Jay Bhart, Nuclear Sector Deal PMO Director (Facilitator)
➢ Humphrey Cadoux-Hudson CBE, EDF & NBCR working
group lead
➢ Allison Aschman, Independent Project Analysis (IPA)
➢ Ken Owen, Baunton Consulting
➢ Kirsty Gogan, LucidCatalyst
9. New Build Cost Reduction Target
Deliver a 30% reduction in the cost to the consumer of low carbon new nuclear
generation by 2030, in support of the UK’s net zero commitment.
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Contributors & Working Group Members
https://www.niauk.org/wp-
content/uploads/2020/09/New-Build-Cost-
Reduction-Sector-Deal-Working-Group.pdf
10. of cost of nuclear is finance; cost of finance is driven by
risk perception
of industrial megaprojects are >25% overbudget, over
schedule and with poor operability¹. Statistics are even
worse for nuclear projects
chance of success if you have proper front-end-loading
(from 30%¹)
cost overruns between 20% (roads) and 157% (nuclear in
general)² - Bent Flyvberg / Oxford Global Projects
Case for Change
NSD PMO - Public ¹source: IPA Inc
²source: EDF workshop, February 2020
60%
70%
80%
Reference reports:
➢ ETI cost drivers
➢ INPO Report
➢ IPA Initiation RouteMap
➢ Ed Merrow
➢ NAO report on Cross Rail
➢ NAO report on HS2
➢ NAO report on MoD
nuclear regulated sites
➢ Folz Report on FA3
20% to
157%
11. Enabling Change
Critical decision point 1 – Should we do the
project?
Critical decision point 2 – Are we ready to start
construction?
Enablers into 4 groupings
➢‘Shaping’
➢‘Governance’
➢‘Data’
➢‘Front-End Loading’
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14
Governance FEL
Shaping Data
12. Why do we have
confidence in the 14
enablers?
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13. Evidence: The Potential for Nuclear Cost
Competitiveness
• The Nuclear Sector Deal set of 14 enablers are
anchored in best practices identified in the Energy
Technologies Institute Nuclear Cost Drivers Study,
which is a global study of 33 of the most recently
completed plants
• Documented experience with multi-unit and
intentional new build programmes demonstrates
how a range of potential cost and risk savings have
been successfully achieved, as well as the actions
required to realize cost and risk reduction
• Achieving these reductions, requires “the right kind
of collective action and demonstrating risk
reduction by all project stakeholders...”
• In addition, the 14 enablers are based on an
extensive review of other best practices in linked
sectors such as construction and manufacturing.
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15. NSD PMO - Public
14 Enablers: Confidence! Why?
• Framework to help remove a fragmented approach.
• Help to Reinforce Structure & Discipline
Development >> Delivery >> Operations
• We must reduce quantum & Impact of “Change”
• Creates a common focus and checklist for all!
Funders, Stakeholders
Clients, Sponsors, Operators
Program Team, Supply Chain
• Affordability – Infrastructure Schemes are becoming
unaffordable and less attractive to Investors and the
Supply Chain.
Personal “Hands-On” Experience
“ +30 yrs Industrial Apprenticeship”
£
1996
2020
16. What is the basis
for understanding
how much the 14
enablers will drive
down cost?
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17. • Large, complex projects either succeed or fail
• The majority (about two-thirds) experience
significant cost growth and schedule slip
• But, a good number are successes
• Successful projects set and achieve competitive
targets
• What can we learn from them? How did they do it?
What We Know From
Industrial Megaprojects
Index: Project Performance vs Industry Benchmark (average) for similar facilities
How do you end up
here…
…vs here? 40 percent higher
cost!
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IPA Industrial Megaprojects Data:
500+ megaprojects executed by 80+ companies globally
18. Best Practices Drive Success
• There are three workstreams to develop, define,
and plan megaprojects
• The Successful projects use best practices for each
workstream
• The 14 Risk Reduction Enablers cover all three of
these workstreams
• The requirements, activities, and deliverables, of
the enablers are aligned with best practices
IPA Industrial Megaprojects Data:
500+ megaprojects executed by 80+ companies globally
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20. Low-cost outcomes are achievable when the following key
concepts are addressed
• The 14 key enablers are highly aligned with achieving important outcomes
below that have been demonstrated to lead to cost and risk reduction
• Policy environments strongly affect the cost of building plants [01]
• Continuity is critical to maintain skills and supply chain, project leadership
and application of learning [02, 04, 06, 07, 08, 09, 11, 12, 13, 14]
• Standardisation of design enables regulatory efficiency, construction
planning and supply chain readiness [05, 06, 07, 08, 09, 10, 11, 12, 13, 14]
• Efficient interaction with regulators drives cost-efficient outcomes [02, 03]
• Investment in and depth of supply chain delivers competitive and high-
quality outcomes [02, 06, 12, 13]
• Cost of capital can be reduced when risk is reduced through increased
budget and schedule certainty [01 –> 14]
• Experienced project delivery organizations reduce risk by increasing budget
and schedule certainty [03, 07, 09, 10, 11]
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21. How do we use the
14 enablers to
drive success?
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22. Driving Success …. ….. How?
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1 Robust E2E Route Map
Better Contracts to align “Clients” & “Supply Chain”
• Mindset Change – Risk Transfer is a Myth!
• Mindset Change – Mega Projects & Operations!
• Reward & Incentivise Outcomes
• Promote a “collective Responsibility”
• Interfaces, Interfaces & Interfaces
Procurement: Rethink aspects of our approach!
• “Competition” or “Replication”
• “Know How”, “Interfaces” & “Productivity”
• Think Added Value: circa 80% of cost is non Materials!!!
Streamline Arrangements & Structures
• Operate & think like an extended Project enterprise
2
3
4
The
14 E’s
1996 2020
23. Organizational Alignment
• Megaprojects require extensive interaction among
multiple functions: leadership, technology, sub-
projects, suppliers, partners, stakeholders, etc
• Each interface represents opportunities for conflict
and misunderstandings to occur!
• Organization must promote (not hinder)
information- and work-flow
• Organization must be aligned on project goals,
priorities, and trade-offs
• Project Leader (vs Project “Manager”) traits matter
Examples of organization options
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24. Reduction of cost to the consumer
Cost type
Potential cost
reduction range
Cash cost of
construction
~10% -20%
Risk premium
reduction
~65% -90%
Financing cost ~10% - 20%
Operating cost 0%
Total ~30-45%
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1. Financing
2. Regulation
3. Governance
4. Site data
5. Technology
data
6. Design
7. Estimates
8. Contractual
interfaces
9. Project
management
10. Data system
11. Construction
preparation
12. Supply chain
13. Skills
14. Operations
preparation
Cash cost of
construction
Cost of
financing risk
Financing
cost (for low-
risk activity)
Operating
cost
27. Poll Questions
1. What is your level of understanding of the Nuclear Sector Deal (NSD)? (1 is low, 5 is high)
2. What is the New Build Cost Reduction Working Group’s cost reduction target?
3. Do you believe that the 14 enablers will help to deliver successful infrastructure
projects?
4. Would you attend another NSD webinar?
5. How likely would you be to recommend a similar NSD event to a friend or colleague?
(where 0 is not at all likely, 10 is extremely likely)
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28. Webinar Series 2021 Provisional Programme
January 2021 - Webinar 1: How do we achieve cost reduction in new nuclear build?
March 2021 - Webinar 2: Future Workforce Working Group
June 2021 - Webinar 3: Winning UK Business Working Group
September 2021 - Webinar 4: Nuclear Sector Deal 3rd Anniversary
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29. Get involved!
Tower House, 10 Southampton
Street London WC2E 7HA
nuclearsd.co.uk/
N/A
NSD@niauk.org
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Thank you to our Sponsors:
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