Material Availability and Infrastructure Challenges

1
Material Availability and Infrastructure
Challenges

• ICAAP 08 Plenary Session
• Planning for New Plant Construction
• June 9, 2008
• Ed Cummins
• VP Regulatory Affairs
• Westinghouse Electric Co.

2
The Demand for Nuclear PowerAP1000 Worldwide

• AP1000 Design Certification Approved by the NRC
  on 12/30/2005
• 4 AP1000 Units contracted in China Haiyang
  Sanmen
• 5 AP1000 Combined Operating Licenses submitted to
  date
• South Carolina Electric Gas Co. signed letter
  of intent with Westinghouse Shaw to purchase
  long lead materials for 2 AP1000s
• Progress Energy Florida signed letter of intent
  with Westinghouse Shaw to purchase long lead
  materials for 2 AP1000s
• Southern Company signed EPC contract for 2
  AP1000s
• South Africa tendered Submission C
  (Westinghouse, Murray Roberts, Shaw) proposal
  for three AP1000s(competition 2 EPR)
• UK Jan 08 Gordon Brown gives the go ahead for
  Nuclear, potential for up to 20 GW of nuclear.

3
Best Solution for New PlantsSimplification

• Simplicity in
• Design
• Safety
• Construction
• Procurement
• Operations
• Maintenance

4
Design SimplificationFewer Components
5
Construction SimplificationModularization
6
Infrastructure Challenges

• Focus of industry attention changes with time.
• Recent Past Focus on engineering and regulatory
  resources (some residual challenges remain)
• Current Focus Supply Chain
• Next Focus Project management and construction
  craft
• Future Focus Startup and plant operations

A healthy focus on infrastructure challenges
mitigates the risks and impacts of the challenges.
7
Westinghouse Challenge.
8
What is Westinghouse Purchasing?Equipment/Compone
nts/Commodities
9
Supply Chain ChallengesHigh Level Concerns

• The Nuclear Industry is competing for limited
  capacity with other industries
• Fossil Fuel
• Petrochemical
• Does the supply chain consider the renaissance
  real?
• The risk and cost of investment for suppliers
  must be addressed

10
Supply Chain ChallengesSpecific Concerns

• Status of component design
• Design finalization
• Component design delay in entering manufacturing
  process
• Raw material supply
• Extended lead times
• Price fluctuations
• Sub-component supply (i.e. forgings, subsystems,
  tubing)
• Capacity constraints
• High cost to increase capacity
• Long lead-time for capacity expansion

11
Supply Chain ChallengesSpecific Concerns
Contd.

• Lack of specialized manufacturing workforce
  equipment/machinery
• Translating orders into factory instruction for
  Procurement, Manufacturing and QA Procedures
• No or limited capacity
• Long lead-time to process equipment/ramp-up
  production
• Limited Nuclear Grade Suppliers
• Certification has lapsed
• Loss of nuclear grade discipline

12
Westinghouse Supply Chain Management Actions to
Support New Plant Build

• Identify Supply Chain Risk and Implement
  Mitigation Plans
• Detailed risk analysis of the AP1000 systems and
  components
• Working with NEI to identify risks and develop
  mitigation plans
• Identify the Right Suppliers
• Supplier Evaluation Process
• Approved Supplier List
• Early Customer Engagement
• Assure Capacity
• Sub-component reservation agreements
• Master agreements to reserve capacity

13
Summary

• Make the Nuclear Industry the customer of
  choice for critical suppliers
• A balanced sharing of cost, risk and benefit
• Communicate to the supply chain, the enormous
  gain to be realized by the nuclear renaissance
  and acknowledge and deal with the risk and cost
  at all levels of the supply chain
• Owners, A/Es and NSSS Suppliers must demonstrate
  a commitment to the Nuclear Renaissance.
• Supplier capacity expansion depends on realistic
  assessments of the future scope of supply.
• Mitigation of future infrastructure challenges
  will be addressed when the commitment and focus
  occurs.