Supporting New Build and Nuclear Manufacturing in South Africa

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					    Supporting New Build and Nuclear
    Manufacturing in South Africa
    ASME Nuclear Codes and Standards Workshop
    Sandton, South Africa
    October 7 – 8, 2008

    Dr. Mahendra Patel
    Westinghouse Nuclear Power Plants
    Supply Chain Management



1
     Growing Energy Demands
                 9,000
                 8,000                                                              Asia

                 7,000
    Forecast
                                                                                   Europe
    Electricity   6,000
    Demand                                                                              U.S.
    (Billion KWh) 5,000
                 4,000
                                                                           Rest of World
                 3,000
                 2,000
                 1,000
                     0
                          1990   1995   2000    2010        2015        2020       2025

                                               Source: Energy Information Administration (EIA)




2
    Nuclear Renaissance
    When?
    Right now!                    Nuclear Power to Come
                                  In From the s r Cold
                                  ear Enginee
                       g for Nucl
     Deman d Increasin
                                     Safely, Greenly Nuclear
                              Nucl
                                    ear P
                             Affo
       Georgia Power Picks       rdab ower an
       Westinghouse AP1000TM           l e Op
                                              tion


3
    The Nuclear Renaissance
    Where? Just About Everywhere!
    Americas
    Americas        Europe
                    Europe                         Oceana
                                                   Oceana
      Argentina
      Argentina      Belgium
                      Belgium        Slovakia
                                     Slovakia        Australia
                                                     Australia
      Brazil
      Brazil         Bulgaria
                      Bulgaria       Slovenia
                                     Slovenia        New Zealand
                                                     New Zealand
      Canada
      Canada         Czech Republic Spain
                      Czech Republic Spain
                                                   Africa
                                                   Africa
      Chile
      Chile          France
                      France         Switzerland
                                     Switzerland
                                                     South Africa
                                                     South Africa
      United States
      United States  Germany
                      Germany        Turkey
                                     Turkey
                                                     Egypt
                     Hungary
                      Hungary        United Kingdom Egypt
                                     United Kingdom
     Asia
     Asia                                            Morocco
                                                     Morocco
                     Italy
                      Italy          Finland
                                     Finland
       China                                         Nigeria
                                                     Nigeria
       China         Lithuania
                      Lithuania      Sweden
                                     Sweden
       India
       India         Netherlands
                      Netherlands                  Other
                                                   Other
       Indonesia
       Indonesia     Poland
                      Poland                         Belarus
                                                     Belarus
       Japan
       Japan         Romania
                      Romania                        Russia
                                                     Russia
       South Korea
       South Korea
                                                     Ukraine
                                                     Ukraine
       Taiwan
       Taiwan
       Vietnam
       Vietnam




4
    Drivers of Global Market for Nuclear Plants
    ● Rapidly growing economies - Asia
    ● Coal transport limits
    ● Need for fuel supply security, price stability – natural
      gas deliveries cut by Russia in contract dispute
    ● Kyoto Accords – reduce greenhouse gas emissions
    ● Old plants retiring




5
    Nuclear Power Reactors, Worldwide
     • 439 reactors operating in 30 countries
       • Generate about 15% of world’s electricity




6
    Current and Future Construction
    • 35 power reactors
      currently being
      constructed in 14
      countries (source: Nuclear
     Energy Institute)


    • 90 reactors with total
      net capacity of almost
      100,000 MWe are
      planned, 200 more are
                                   Shin-Kori 1&2 under construction in 2007
      proposed (source: World
     Nuclear Association)




7
    Global Capacity Forecast (in GW)
                      600                                                                          400




                                                                                                         New Capacity Needed
                      500                                                                          300
     Capacity (GW )




                      400                                                                          200


                      300                                                                          100


                      200                                                                         0
                        2005           2010           2015        2020          2025           2030

                            New Capacity      Current Capacity   Retired Capacity      Global Capacity

                                                                                        Source: EIA 2008 data


8
    Demand by Country through 2030
             250                                                            Current                  Future Need
                      1 GW/Plant
             200


             150
    Plants




             100


             50


               0




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                                                                    Ko

                                                                                Source: NPP Opportunity List 6/08



9
     New Capacity Forecast by Country
     through 2030
             160
                         1 GW/Plant
             140

             120

             100
     Plant




             80

             60

             40

             20
               0




                                                                                          r
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                                                                           h
                                                                        ut
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                                                                    Source: NPP Opportunity List 6/08



10
11
     Key Developments
     Renewed U.S. Interest in Nuclear
     ● Natural gas prices soar
     ● Existing nuclear plants running safely and cheaply
     ● NRC develops new licensing process (avoid
       another Shoreham)
     ● Energy Policy Act 2005
     ● Concerns about greenhouse gas emissions
     ● Electricity demand grows




12
     Energy Policy Act of 2005
     Key Nuclear Energy Provisions
     ● Renewal of Price Anderson Act for 20 years
     ● Production tax credits
     ● Loan guarantees
     ● Standby support for delays beyond owner’s control




13
     Notable Quotes
     ● “Toshiba expects to have orders for 33 AP1000TMs and
       ABWRs worldwide by 2015”
        – by President and CEO Atsutoshi Nishida May 8,
          2008 in Tokyo during a 2008 strategies for growth
          presentation.
        – Nishida said that projection "is rather conservative.“

     ● US Presidential Candidate John McCain said “he
       wanted 45 new nuclear reactors built in the United
       States by 2030” on June 18, 2008


14
     Nuclear Power Reactors, United States
     • 104 reactors operating in 31 states
       • Generate about 19% of nation’s electricity




15
     Total US Plants Forecast
              170       1 GW/Plant
              160
              150
              140
     Plants




              130
              120
              110
              100
               90
               80
                 08

                         10

                                 12

                                         14

                                                 16

                                                         18

                                                                 20

                                                                         22

                                                                                 24

                                                                                         26

                                                                                                 28

                                                                                                         30
              20

                      20

                              20

                                      20

                                              20

                                                      20

                                                              20

                                                                      20

                                                                              20

                                                                                      20

                                                                                              20

                                                                                                      20
16
        US Capacity Forecast (in GW)
                120                                                               60
                             1 GW/Plant




                                                                                       New Capacity Needed
                                                                                  50
                110
                                                                                  40
     Capacity




                100                                                               30

                                                                                  20
                 90
                                                                                  10

                 80                                                            0
                  2005           2010     2015         2020   2025          2030

                         New Capacity      Current Capacity    Retired Capacity

                                                              Source: EIA and Westinghouse data




17
     New Reactor License Applications in US
     34 units as of August 2008




                       Source: US Nuclear Regulatory Commission (NRC) August 2008
18
     New Reactor License Applications in US




     Source: NRC
19
     Current and Future Construction




                                       Source: NRC
20
     Westinghouse Supply Chain Vision




21
     Supply Chain Vision
     Localized Supply Base as a partner with Westinghouse in the
            AP1000™ Integrated Global Supply Chain network.

     1. Localization & horizontal integration – We Buy Where We BuildTM
     2. Progression of Localization

          •   Minimum Development/ Investment: Construction labor and
              construction commodities
          •   Medium: Localization of equipment by qualified local industries. Mainly
              Commercial off the shelf, build-to-spec, non-safety, but need to be
              commercially competitive
          •   Maximum: Qualified safety-related, Tech Transfer. TT develops local
              industries, licensed technology. Usually viable only for national fleet
              program aspirations




22
     SCM Organization Integrated Supply Chain

                                                                      NPP
                                                                      SCM
                                                                 Vice President




                            Primary Equipment       Auxiliary / BOP
      Demand Planning &                                                                       Programs &    Transportation &
                                Program &             Equipment                   Modules
     Business Development                                                                     Engineering       Logistics
                                 Sourcing         Program & Sourcing




     Plan                                       Source                                      Make            Deliver



23
     Progression of Localization

      AP1000TM’s Passive Safety
        Design Requires Less
       Safety-Grade Equipment                       Technology Transfer
         Allowing for Greater
           Participation of                          JV & Acquisitions
           Local Suppliers




                                 Equipment Fabricated to
                                      Specifications
                           Non-safety grade progressing to more
                            complex & safety grade equipment

         Construction Crafts
                 &
        Commodity Materials


24
     Localization Opportunities
     Most Equipment and Commodities are non-safety class
           ● Concrete           ● NSSS & BOP Valves:
           ● Rebar              ● Pumps & Compressors
           ● Formwork           ● Heat Exchangers & Condensers
           ● Structural Steel   ● Tanks & Accumulators
           ● NSSS Piping        ● Air Handling Units, HVAC Fans
           ● BOP Piping         ● Switchgear, MCCs, Panels
           ● Cable              ● Batteries
           ● Cable Tray         ● Instruments
           ● Metallic Conduit   ● Forgings
           ● HVAC Duct          ● Modules



25
     Target list for Capacity Expansion
      ● Forgings – UL               ●   RCS Coolant Loop Piping
      ● Tubing – In 600TT           ●   Polar Crane
      ● Major equipment – Primary
                                    ●   Valves – Safety class
        (RV, SG, PSZR)
      ● RCPs                        ●   MSIV
      ● Reactor Internals           ●   Squib valves
      ● CRDM                        ●   TG
      ● IHP                         ●   I&C
      ● Containment Vessel
      ● Modules – CA01, CA20




26
     The Westinghouse AP1000TM




      The passive design allows more
       procurement of materials from
        commercial grade suppliers




27
     SCM Portal –
     http://supply.westinghousenuclear.com
                         ● One focal point of access for suppliers
                           to do business with Westinghouse
                         ● Provide Westinghouse information to
                           suppliers inquiring to do business with
                           Westinghouse (Quality, Regulatory,
                           Generic Term and Conditions, etc.)
                         ● Central collection point for supplier’s
                           information, capabilities and capacity
                         ● Provides broader, updated and
                           consistent communication with supply
                           base
                         ● Allows timely and consistent
                           evaluations of suppliers to add to
                           our ASL/QSL for targeted
                           commodities / services
                         ● Long term transition to E-commerce



28
     Supplier Development Activities
     ●   Supplier Survey Inputs (Forms, SCM Portal, ..)
     ●   Sourcing commodity leads to review (Go/No Go)
     ●   NDA Execution
     ●   ITB/Feasibility Evaluation package to Supplier
     ●   Supplier – SCM meetings/visits
     ●   Preliminary QA Evaluation
     ●   Preliminary RFQ
     ●   QA Audit and Corrective actions
     ●   ASL
     ●   Formal RFQ



29
     AP1000TM Quality Assurance Program
     ● Westinghouse QMS meets:
        – 10CFR50 App. B (USNRC)
                                                 QMS
        – NQA-1, 1994 Edition
        – IAEA-50                           W / BUSINESS UNIT
        – ISO-9001:2001 Edition          POLICIES & PROCEDURES

     ● Referenced in AP1000TM
       Design Certification               DEPARTMENT / PLANT
                                             PROCEDURES
     ● Basis for current Westinghouse
       supply globally (and in Canada)




30
     Equipment and System Classifications
     ● “Safety Related”
        – Maintain integrity of the reactor pressure boundary
        – Required for safe shutdown of the plant.
        – Prevent release of radiation to the public.
     ● “Safety Significant”
        – Non-safety related systems that contribute to plant
          safety.
        – Important for protection of investment.
     ● “Non-safety Related”




31
     Westinghouse Supplier Quality Requirements
     ● Safety Related components
       – 10CFR50 Appendix B (regulatory requirement)
       – NRC Regulatory Guide 1.28 (endorses NQA-1)
       – ASME NQA-1 1994
       – 10CFR21 (Reporting of significant safety issues)
       – Westinghouse PQR-1 (oversight, right of access)
       – ASME Code (where applicable)




32
     Westinghouse Supplier Quality Requirements
     ● Safety Significant systems and components
       – Based on USNRC NUREG-0800 Section 17.5 II V
         (Westinghouse Spec APP-GW-GAM-200)
       – Review of suppliers quality program with proposal
       – Audit performance of suppliers QA program
       – Westinghouse PQR-1 (oversight, right of access)
         Sometimes referred to NQA-1 “lite”
       – Aligned with 18 Criteria of 10CFR50 Appendix B and
         ASME NQA-1



33
     Westinghouse Supplier Quality Requirements
     ● Non-safety related components
        – Review of suppliers quality controls with proposal
        – Good commercial practice
        – Past performance
        – Westinghouse PQR-1 (witness, hold point, right of
           access)




34
     Time-Phased Approach to Global Participation
     ● Not a “One size fits all” approach
     ● Initial level is determined by supply capacities and
       capabilities.
     ● Phased-in over time based on development of skills and
       investment.
     ● Driven by supplier readiness and compliance to regulatory
       and Westinghouse QA requirements.
     ● Can include technology transfer where appropriate.




35
     Opportunities for RSA Suppliers
     ● Opportunities enhanced by AP1000TM Design & Delivery Plan
           – Design Simplification, Standardization and Passive Safety
           – Extensive Localization Scope
     ● Our Supply Chain strategy is predominantly horizontal
     ● We Buy Where We Build TM -Localization and Technology Transfer
     ● Global Sourcing - Participate in our global projects

     Challenges
     ● Need to be competitive for global participation
     ● Additional investments to expand capacities & strengthen capabilities.




36
     Perfect Partnership
     ● Westinghouse is world-wide supplier
     ● Horizontal Integration – Global supplier base
     ● Cost and Schedule Control – Simplification and
       Standardization
     ● Localization – We Buy Where We BuildTM
        – Opportunities enhanced by AP1000TM design and
          delivery plan
        – Committed to Technology Transfer with successful track
          record




37
     Questions




38

				
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