APM Hinkley Point C - how to build a power station, Ken Owen, presentation
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Presentation given by Ken Owen to the SWWE branch on 26 September 2018 in Bristol
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APM Hinkley Point C - how to build a power station, Ken Owen, presentation
- 1. 1 Hinkley Point C - Industrial Collaboration UK PROTECT COMMERCIAL Hinkley Point C
- 2. 30 Years of Experience
- 3. Core Values 1. Integrity 2. Customer Satisfaction 3. Employee Engagement 4. Innovation 5. Sustainability Automotive
- 4. BAA Terminal 5 Wembley Stadium London 2012 Metronet Tubelines 10 Years pre HPC
- 5. 5 Olympic Park, Assets 8 Olympic Park Sporting Venues 1 Broadcast / Media Centre (93,000 sq m) & Multi Storey Car Park 26 bridges and 7 underpasses 12km of roads 2 million m3 of earthworks Energy Centre 13km of tunnels New utilities infrastructure and 32kv & 11kv utility diversions 79 hectares of Landscape & Public Realm 21 PSAs and VSAs
- 7. Making NEC3 Work Key Ingredients of Success • Early Warning • Change Management (Compensation Event Notices) • Accepted Programme Key Enablers • People • Training • Clear & Simple Processes • Organisational Model
- 8. Some of the Dynamics Volume of Change and Risk 13,501 EWNs 6,362 CENs 24,723 CI/CEs 750 Tier 2 Accounts 90 Assurance Reviews 120 Contracts 96 Tier 1’s 1 17,648 RFIs 14,321 EWNs 7,394 CENs 26,665 CI/CE’s 850 Tier 2 Accounts 123 Assurance Reviews ( Data correct as of 23rd March 2012)
- 9. NEC and Commercial Close Out Well defined close out process embedded • ODA/CLM > Tier 1 > Tier 2 • Rigorous 3rd Party Assurance adopted • Commenced early 2010 The contract (NEC 3) has ‘enabled’ risk reduction and facilitated early close out Clients ‘Risk Profile’ has dramatically reduced 69% complete by value 17 weeks before Games (NEC Olympic Park Contracts)
- 10. Olympic Park Delivery Strategy & Organisational Framework 1. NEC3 Contract Management: Real Time 2. Supplier Management • Tier 2 value for money • Incentivisation • Final account strategy • Insolvency risk 3. Integration management 4. Contingency and risk management 5. Performance and control (cost, time) Contract Management Framework Delivery Management FrameworkOlympicIntegratedView Traditional View Risk Management Framework Performance Management Framework (Project Controls)
- 11. Delivering Major Programmes (25 yrs Reflection) Business Driver Observations and Key Learnings Power station outages at Nuclear Electric Automotive Vehicle Systems at Johnson Controls Airport Infrastructure at BAA Underground Upgrade at Metronet London 2012 Olympics (CLM Delivery Partner) Lost Revenue Time to Market Capital Efficiency 27th July 2012 & Affordability Scope, Organisation, Supply Chain Process Discipline, Operational Readiness vs. Supply Chain Relationships Commercial Rigour Integration Management & NEC3 Private Investment Scope, Change Control, Common Alignment
- 13. Government Policy: Two National Concerns 0 10 20 30 40 50 60 70 80 90 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 GW Existing and under construction generation and contracted plant in Great Britain 2013-2030 Peak Peak Demand 80% C02REDUCTION BY 2050 Climate Change Act, 2008
- 14. Title of Presentation, Existing Nuclear NOT PROTECTIVELY MARKED/ RESTRICTED/CONFIDENTIAL (delete as appropriate) BEG/FORM/COMM/026A 14
- 15. MEH Strategy ©April 2018 EDF Energy plc. All rights Reserved. 1 5 Nuclear Fission
- 16. Nuclear Reactor (Simplified) Primary Circuit (pressurised water) Secondary Circuit (feed water) Secondary Circuit (steam) Cooling Water Circuit Steam Generator Main Feed Pump Reactor Coolant Pump Reactor Vessel Pressuriser Condensers Cooling Water Pump Generator Turbine
- 17. Human & Industrial Adventure
- 18. 18
- 19. 1 9 Hinkley Point C more than a Power Station!!
- 20. HPC Emerging Complex Supply Chain International, National & Local partners working together to deliver Hinkley Point C
- 21. 6Consortia +£465m Contract Value +660 Jobs Doing Business Differently Local Supply Chain
- 22. 22 Priorities – next 12 Months
- 23. 23 Importance of Real Time Contract Management: General Communications Contract Communications 122,841 Formal Response Required 46,361 CE’s / Variations / Claims Raised 6,267 Early Warnings Raised 12,054 Technical Queries Raised 4,036 Accepted Programmes 81 - Aligned to all key contracts 1,933 2,283 2,321 1,942 2,166 2,722 2,385 2,451 1,468 2,307 2,897 3,792 55% 59% 71% 64% 65% 67% 59% 64% 68% 72% 73% 64% 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Oct- 17 Nov- 17 Dec- 17 Jan- 18 Feb- 18 Mar- 18 Apr- 18 May- 18 Jun- 18 Jul-18 Aug- 18 Sep- 18 Communications Dealt with On Time Volume of Communications % Dealt with On Time Contract Management (Key CEMAR Metrics)
- 24. 24 Real Time Effective Contract Management: Overall Architecture Accepted Programme Contract Deliverables Risk Management Variations Payments Target Achievements Contract AdministrationProcurement Tendering Selection and Award Handover and Initiation Contract Manage- ment Contract Close-Out C o n t r a c t L i f e c y c l e Challenge 1: No E2E Commercial Approach Challenge 2: Money and ‘Claims’
- 25. 25 The Contract Structure Contract Mechanisms Key Commercial Terms + Conditions Constraints for obligations specific to EDF nuclear site license Supporting appendices (works information) • Obligations of the parties •Approach to risk management •Issue resolution •Price of the works (inc adjustments) •Payments •Protection of EDF commercial position •Liability constraints •Defect + handover management •Key dates •IP •Unique requirement applicable to •Technical requirements •Performance specification •Detail Project/contract workings + processes •Constraints •Project Requirements Output Definition of the works to Be performed + Project And site requirements Mechanisms for Compensation a) For the works b) Variations c) Default Compliance with ONR requirements Expectations of How the parties will Deliver/manage the works behaviour Corporate B2BChallenge 3: Understanding of what a ‘Contract’ Actually is?
- 26. September 2016 © NNB Generation(HPC)Ltd - Not Protectively Marked26 Risk Management (Supplier Engagement) Transactional • well defined brief •Design + build •Simple asset-functionality of asset performance does not greatly impact the client business • Controllable site constraints •Known risks – management solutions involve single party •Minimal likelihood of change •Single supplier environment and manageable interfaces Collaborative • Complex asset – clients future business heavily dependent on asset performance •Complex interfaces (both design + delivery) •Unknown/unquantifiable risks Management solutions involve many parties • Integrated supply chain – multi hand over hand back arrangements •Employers design (first of kind) •Complex supply chain – factory to site •Multi site constraints – logistics •IR has potential to ‘impact’ productivity The contract establishes the architecture + behaviour of the parties
- 27. Restructured NEC/ FIDIC Contract Templates WI 100 Core Conditions Guidance for compiler. Minimum WI needs identified Core Conditions Appendices (Employer’s Requirements) Guidance for compiler. Minimum information needs identified WI 200 W I etc. App 1 App 2 App etc FIDICNEC Owner 1 Owner 2 Owner etc. WI following NEC Guidance Note (Jan 2012) WI 100 WI 2000 Appendices and Employer requirements App 1 App 37 T’s & C’s DMIC T’s & C’s DMS T’s & C’s Call Off (DMIC, DM “Clean” T’s & C’s Z Clauses applicable to all Contracts Z Clauses applicable to each NEC main Option Z Clauses project / special Document “spine” EDF Standard documentation 27 Z Clauses selection Works Information Guidance for compiler. Minimum WI needs identified WI 100 WI following NEC Guidance Note (Jan 2012) WI 100 WI 2000 Appendices and Employer requirements App 1 App 16 Z Clauses applicable to each NEC main Option Z Clauses project / special Challenge 4: Different applications required different approaches!
- 28. 28 Priorities – next 12 Months
- 29. NOT PROTECTIVELY MARKED2929 Supply Chain Engagement • Poor quality: plant & delivery • Lack of supplier alignment with the overall Project’s schedule + critical path • Late handover (missed key dates) • Cost increase • Claims beyond scope additions + the employer’s unavoidable risks • Safety incident What risks are we trying to mitigate?
- 30. • Ultimate Risk ‘always’ resides with the client. • Appropriate level of design completeness is fundamental. • Risk transfer is a myth. • ‘Procurement’ represents the start of the Journey …it does not guarantee the outcome!! • Not a ‘one size fits all’. • The ‘contract’ is the key link between client & supply chain. 30 HPC Supply Chain & Contract Strategy “The six Golden Rules”
- 31. 31 1. In the first Instance the Contract should drive performance, and NOT be used to protect EDF Energy in the event of Default Doing Business Differently – The Contract & Supply Chain! 2. Management of the Contract should ALWAYS ensure the commercial interest of the parties remain aligned, in order to avoid adverse impact on delivery
- 32. Contract Administration Manual (‘Blue Book’) Equipment Contract Administration Manual (‘Red Book’) Manufacturing and Delivery Management Manual (‘Green Book’) Contract Management Manuals:
- 33. Rigorous Contract Management Balancing “Commercial Tension” & “Collaboration”
- 34. Launch of NEC Contract Management approach – ‘The HPC Way’ • Create a common Purpose and understand of how the contract will be administered and the key behavioural requirements. • Inspire a level of collaboration and togetherness not experienced before on a project of this scale • Invitees: 320 staff involved in HPC in the management of the Key NEC contracts • x17 Exhibition stands created to articulate key learning and aspects of NEC and HPC : • Accepted Programme • Early Warnings • Deliverables • Subcontracting • Compensation Events • Equipment Supply • CEMAR • Project Controls • Nuclear Site Licence & Intelligent Customer • Collaborative Framework & Behaviours • Apprenticeships & Assessment Centres
- 35. Key Enablers – Technical & Procedural, plus Behavioural & Talent development Contract Administration – #17 Exhibition Stands
- 36. Launch of NEC Contract Management approach – ‘The HPC Way’
- 37. Launch of NEC Contract Management approach – ‘The HPC Way’
- 38. Launch of NEC Contract Management approach – ‘The HPC Way’
- 39. September 2016 © NNB Generation(HPC)Ltd - Not Protectively Marked39
- 40. Contract Administration Manual (‘Blue Book’) Equipment Contract Administration Manual (‘Red Book’) Manufacturing and Delivery Management Manual (‘Green Book’) Supply Chain Alignment: Ensure consistent and Common understanding of Requirements NEC Launch – 29 Nov 2017 (Bristol) FIDIC/Equipment launch – Planned 22 Nov 2018 (Paris)
- 41. INTRODUCTION 3words to describe the HPC event in Paris 3words to describe the HPC event in Bristol The world of Manufacturing The world of Construction 97% Material & Workshops Beneficial 98% Felt Inspired 100% Event good use of their Time 95% Material & Workshops Beneficial 98% Felt Inspired 95% Event good use of their Time
- 42. Title | BUSINESS UNITS (SNI) | PROTECT – LEGALLY PRIVILEGED | PROTECT – PROPRIETARY | PROTECT – COMMERCIAL & CONTRACTS | PROTECT – PRIVATE | NOT PROTECTIVELY MARKED | ©1 Jan 2017 EDF Energy plc. All rights Reserved. 42
- 43. 43 “Commercial Tension” & “Collaboration” Rigorous Contract Management ‘…Change Control…’ Collaborative Working is all about…. RELATIONSHIPS Relationships are all about …. BEHAVIOURS Critical Behavior in any Relationship Is… TRUST ……Fairness…..
- 44. COLLABORATIVE WORKING IS ABOUT RELATIONSHIPS ARE ALL ABOUT THE CRITICAL BEHAVIOUR IN ANY RELATIONSHIP IS RELATIONSHIPS BEHAVIOURS TRUST
- 45. MEH Erection Challenge! 45 BoQ’s & Equipment List (illustrative only) 380km of pipework, 20,000 valves, 200 pumps, 42 heat exchanges, 86 Filters, 120 Tanks, 6,325km of main power and I & C Cables , 404km of Cable Containment, 51,700 Supports, 218 LV Switchboards, 136 Transformers, 43 HV Switchboards, 3,000km of small power Cables , 47,000 Lighting units
- 46. MEH Alliance is Unique in ‘UK Industry’ 46 (BoP, HVAC* Mech) (BNI Mech) (Electrical) (Services) ‘Joint & Several ‘for Deliver of Site Erection works; Unified by a Single Commercial Model ‘.. A £2bn Alliance within an overall Integrated £19bn ‘Mega Project’….’
- 47. Q. What do you See? A. Different Way at Looking at YOUR Career?
- 48. Mastering Your Career: 4 + 1 traits 1. Technical your chosen field 2. Behavioural skills influence, team work, co-operation 3. Business acumen judgement, trade-offs etc 4. Ambiguity coping with uncertainty +1 Passion and Enthusiasm – no matter what!
- 49. 49 “Commercial Tension” & “Collaboration” Rigorous Contract Management Collaborative Working is all about…. RELATIONSHIPS Relationships are all about …. BEHAVIOURS Critical Behavior in any Relationship Is… TRUST ……Fairness…..