Advanced Nuclear Power Sept2001

Advanced Nuclear Power - The Magazine of Framatome ANP

A new type of service contract was signed on October 2, 2001, between British Energy and "FMA Services," a Consortium led by Framatome ANP with Mitsui Babcock and Alstec. It is a win-win contract with transparent costs, equitable risks and rewards based on performance, incentives to meet station goals, and continuous improvement.

Sizewell B, a 1200 MWe Nuclear Power Station in Suffolk, England, was built by Westinghouse and commissioned in 1995. Operated by British Energy (BE), it is the only PWR in the UK. The well established relationship between Sizewell B and Framatome ANP, based on the reactor vessel supply, valve and pump maintenance for the four first refueling outages, and a fuel supply contract for cycles four to six (including an option for four additional reloads) now is enhanced by this extensive service contract.

A Wide Scope
This new contract combines, in a "one-stop shop" approach, refueling and maintenance activities during outages as well as year-round maintenance for five outages (eight years) with an option for four additional ones (to 2014). The Consortium is responsible for the full scope of work, including planning and health physics.

This contract, truly a global endeavor, combines the expertise and experience of the global capabilities of Framatome ANP, Mitsui Babcock and Alstec. The Framatome ANP US region provides refueling and steam generator (SG) activities as well as expertise in outage management, while the Framatome ANP French region provides experience in mechanical work and project management as developed at Sizewell B since 1995. The UK partners in the FMA Services Consortium, Mitsui Babcock and Alstec, mainly will be involved in the year-round maintenance and Balance-of-Plant work. They also bring experience gained in the Dungeness plant (UK) where a similar type of alliancing contract was successfully implemented a few years ago.

It is anticipated that up to 400 engineers, technicians and artisans will perform the outage work with a team of 30 to 50 permanently based at the station for year-round routine maintenance.

Win-win Commercial Arrangements
The commercial arrangements of this contract are innovative and complex. The Consortium, in a risk/reward-sharing program, aligns its interests with those of BE for an equal share of both risks and rewards. By jointly defining work scopes and expected costs, if actual costs are less than expected, the Consortium shares the benefit within pre-defined limits with BE. If actual costs are more, then the Consortium and BE share the loss. All account books for this project will be open to the customer.

In addition, a risk/reward-sharing program is tailored to key performance indicators (KPI) as identified by BE. The KPI includes schedule, quality, safety, and individual and cumulative dose. These provisions ensure that performance meets or exceeds BE's expectations by coupling compensation directly with performance.

Teaming and Culture Change
Entering into a long-term partnering agreement requires a culture change. A joint approach to change management with BE has led to a teaming arrangement with a three-tier change-management structure. This change- management structure is integrated into the overall project management structure with the following objectives:

Create a team with a collaborative culture,
Develop a mutual understanding of each other's business objectives,
Use innovation to improve Sizewell B's performance and availability.

Safety and Performance Enhancement Projects (SPEP)
As seen by BE, the deregulated electricity market in the UK, together with the new electricity trading arrangement (NETA) since October 2000, are increasing pressure on Sizewell B to reduce costs at the same time as increasing output and reliability. A dedicated project called The Safety and Performance Enhancement Project (SPEP) has been set up at the Sizewell B Power Station. Key members, BE, the Consortium and Alstom (for the turbine), formed a team to assist the station in achieving the following goals:

Outage length reduction,
Maintenance scope reduction,
Fuel utilization,
Lifetime extension.

Framatome ANP has already assigned an expert to participate to the SPEP program.

A Response to New Marketing Conditions
The innovative arrangements of this contract with British Energy foreshadow the new conditions of the nuclear services business in the areas of cost optimization, performance improvement and risk sharing. These arrangements demonstrate the capability of both BE and the Consortium, led by Framatome ANP, to respond to the new market condition.

Through transparency and risk/ reward-sharing, as well as with the reduction of the number of contracting companies, the utility orchestrates its own success through outage cost savings and increase plant availability.