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Delivering Wylfa Newydd: Supply Chain Ivor Sheppard & Ron Surrock, Horizon Nuclear Power Advanced Engineering and Nuclear Engineering 2018. 31st Oct 2018.

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Presentation on theme: "Delivering Wylfa Newydd: Supply Chain Ivor Sheppard & Ron Surrock, Horizon Nuclear Power Advanced Engineering and Nuclear Engineering 2018. 31st Oct 2018."— Presentation transcript:

1 Delivering Wylfa Newydd: Supply Chain Ivor Sheppard & Ron Surrock, Horizon Nuclear Power Advanced Engineering and Nuclear Engineering st Oct 2018

2 Corporate overview, commercial structure and contracting strategy
Ivor Sheppard Commercial Director

3 Corporate overview

4 Progress Formal negotiations entered into with UK Government
DCO and wider permits applications accepted Bechtel appointed Project Management Contractor and development contracts signed with Hitachi Nuclear Energy Europe and JGC New Energy UK Limited UK ABWR successfully completed Generic Design Assessment Clearance to buy reactor components Operational Partners – JAPC and Exelon Site Licence Company Board established Site Licence Application submitted Optimisation of plant Apprenticeship programme running £1 million funding for Coleg Menai Announced Training Services Partnership with Tecnatom Submitted application for Radioactive Substances Regulation Environmental Permit to Natural Resources Wales

5 Development sequence Final Investment Decision Where we are today
GENERIC DESIGN ASSESSMENT DEVELOPMENT CONSENT ORDER CONSTRUCTION OPERATION UNIT 1 COMMERCIALOPERATION Mid 2020s UNIT 1 - FIRST NUCLEAR CONCRETE COMMISSIONING ALL AGREEMENTS/PERMISSIONS IN PLACE SITE LICENCE GRANT Final Investment Decision MAJOR EARTHWORKS DEVELOPMENT Where we are today

6 Project in numbers

7 Japan, UK & Wales Partnering
Technology Local supply chain, collaborative working with UK and Japan partners. Opportunity for long-term partnering with wider international supply chain Government support, Nuclear Sector Deal, potential future shareholder Finance

8 Commercial Strategy The strategic rationale for the HNP Commercial approach. The principles we will work to: safety, security & quality. The rationale from the stakeholder perspective – Welsh Government, Her Majesty’s Government, Isle of Anglesey County Council, Office for Nuclear Regulation. Project culture Horizon developing a supplier code of conduct – principles will flow down through all tiers with particular focus on quality. Expect full compliance, but urge suppliers to go beyond this and demonstrate best practice. Will encourage suppliers to cascade project values and behaviours through their tiers of supply.

9 Mitigating risk through contracting:
Qualified & experienced partners, and early engagement to de-risk Early Long Lead Items readiness Early design maturity Resist scope creep Heed ABWR lessons learned (proven technology) Focus on Quality

10 How we must deliver Safely Quality On schedule On cost

11 Considering our delivery model
A carefully designed structure is critical to successful delivery. A well designed model: Establishes clear lines of responsibility, and appropriate allocation of risk. Ensures clear, costed and scheduled objectives. Supports effective packaging. Supports overall cost reductions. (ie: prevents duplication of risk contingencies). Ensures Horizon meets regulatory expectations of the intelligent customer.

12 Careful design of contracting structures will:
Establish a strong, capable and affordable supply chain Support an affordable & financeable project Avoid over-paying for risk through ineffective risk transfer Potential mechanisms: Avoid over-penalising supply chain Combine “sticks” and “carrots” Incentive based contracting Reflect regulatory requirements Avoid prospect of extreme variations and claims

13 Previous Menter Newydd structure
Tier-2 partners, and wider supply chain Investor/shareholder: Owner/operator: ECE/EPC delivery: Tier-2 supply:

14 Delivery model

15 Establishing our delivery model
Menter Newydd Joint Venture produced understandings which underpinned site optimisation & planning. August 2018 – transition to forward delivery model: Specific contracts with each major contractor = specific responsibility & focus. World class principle contractors in each major area. Horizon will appoint an Owner’s Engineer. Project Management Contractor will manage majority of supplier relationships with Horizon (excl. Owner’s Engineer). Will provide early engagement with supply chain, to prepare for future project opportunities. Will provide access for local suppliers to engage in contracts through the procurement process, Be informed of key contractor engagements to enable participation through sub contracting opportunities. Will NOT sign contracts directly – but will establish and manage contracts signed by Horizon.

16 Nuclear Island, Turbine Island & Balance of Plant
Will provide engineering and procurement of the UK ABWR nuclear island scope. Includes full supply of sub-scope goods and services. Will manage existing and new supply chains, globally and locally. Hitachi Nuclear Energy Europe is the Architect Engineer that will assure the integrity of the design. Turbine Island Will provide the engineering and procurement of the Turbine System, including all sub-scope systems and components. Will manage existing and new supply chains, globally and locally. Balance of Plant Preference for one integrated BOP-E&P contract, likely to require an alliance / joint venture to provide necessary capabilities. Very significant scope for UK suppliers at Tier-1, and in sub-scope supply through first tier contractor Full range of BoP facilities, systems and components.

17 Owner’s Scope & Construction Procurement
Direct Horizon Contracts This will cover site enabling contracts Strategic interface contracts Roads Interface with national utilities Services Professional services Archaeology Temporary workers accommodation Logistics centre Park and ride Common source facilities e.g. bulks Sundry plant and equipment Construction Procurement This will cover Multiple Tier 1 packages. Self-contained package procurement model. Some centralised site-wide support services & prelims. Sub-scope contracts for workforce, goods, materials and services.

18 Next steps We are developing our procurement schedule.
We have initiated requests for qualification and initial invitations to tender on key early packages. Our progressive approach will continue to evolve.

19 Project Management Contractor
Ron Surrock Head of construction, PMC

20 Introduction to PMC PMC Director Deputy Director Head of Supply Chain
Head of Engineering Management Head of HS & E Head of Construction Head of Quality PMC Director Head of Business Operations Programme management NI / AE TI BOP Prime Contract Programme engineering management Requirements Management BIM Safety Programme Management Environmental Project Management Quality control Preliminary management Field engineer Module management Construction contract management Ethics & Compliance Project Control HR Doc control Training Security Transitional Activities Site Operations (Future) Communications Contract Management Material Procurement Audits Corrective action Supplier quality

21 Our role Perform all project management activities required for delivery of the Project: Project management; Quality; Project Controls; Supply Chain Management; Engineering Management; Construction Management. We do this by: Managing the project cost and schedule; Preparing and managing Project Contracts; Integrating and supervising construction among all suppliers; Acting as the Principal Contractor; Operating the Requirements Management, Change Control and Design Control processes; Implement the change management programme; Facilitate and manage the project risk programme.

22 Our approach Bring proven procedures, process and people to the project Work as a team with Horizon to develop the plan for execution of the project. Engage with our supply chain partners to ensure the scope and objectives of each contract aligns with the Project /Programme goals. Recognise our impact on the community and local stakeholders and work with them to ensure good co-operation, communications and community involvement is occurring. Ultimately to deliver two UK ABWRs on time and on budget and leaving the supplier base and local community with an overall positive experience.

23 Packaging routes to market & Construction Scope

24 Key principles Competitive Environment Value for Money
Nuclear Safety Culture Quality – Do it Right the First Time Sustainability Selecting the Right Supplier / Contractor Collaboration Alliance

25 Scopes of work packaging
Early Works Construction Contracts Preliminaries Speciality Contracts Bulk Procurement

26 Next Steps – Routes to market
Publish scope of work packages Portal registration - CompeteFor Pre-Qualification of bidders Issue Request For Proposals (RFP) Receive bids Technical and commercial clarifications / evaluations Recommendation Select bidder Contract award

27 Upcoming scope of work packages
Starting in 2019 through 2020 Marine and Earthwork Construction Packages Civil Electrical Mechanical and Piping HVAC

28 Upcoming scope of work packages
Starting in 2019 through 2020 Preliminaries (sample of scopes of work) Batch Plant Catering Cranes & Rigging Busing Facilities Operations Waste Management Construction Equipment Speciality (sample of scopes of work) Fire Protection Insulation Water Proofing Painting & Coating

29 Package Categories ‘Typical’ Construction Scopes
‘Specialty’ Construction Scopes General Services & Support Nuclear Quality Related Aspects Sensitive Nuclear Information

30 Key Principles PMC will be Principal Contractor
There will be a single Wylfa Newydd Safety program Preliminaries will be managed centrally PMC will manage contractor to contractor and contractor to designer Coordination and Integration PMC will manage gaps between all parties PMC will manage and control all material (including bulk buys and qualifications)

31 Construction Contracts
Main works Preliminaries Early works Speciality

32 Construction Scopes Preliminaries Early works Main works Speciality
Construction Equipment Campus Accommodations Catering Busing VHL Cranes / Operators Fuel Concrete Supply Waste Management Facilities Operations Misc / small services Main works Civil Electrical Piping mechanical HVAC Ancillary buildings Consolidated Earthworks Underground services Outfall tunnel Marine facility Speciality Fire protection system Fireproofing Special doors Lifts Paintings & coatings Insulation Waterproofing National Grid Hoists Liner plate

33 Delivery Model – Construction Contracts
Spring 2018 June/July 2018 Q4,18 - Q1,19 FID RfP --- Main Works Construction Contracts V3 V2 iV2 Oct ‘19 RfP -- Prelim / Support Services RfP – Speciality Supplier RfP --- Earthworks / Marine RfQ Price Firming [ V2i ] RfQ Price Firming [ V2 ] Construction Alliance / Industrial Relations Policy Arrangements Developed

34 Take aways Understand the Project Register online - Compete For
Identify your specific role and interest Monitor for upcoming opportunities Deliver value Market alliance Collaboration

35 For more information

36 Thank you


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