Smarter Nuclear Power: Using a Maturity Model to Help Prepare for the Nuclear Renaissance

Transcription

1 S e c t i o n Reinventing Energy White Paper Smarter Nuclear Power: Using a Maturity Model to Help Prepare for the Nuclear Renaissance The nuclear industry is experiencing a re-birth requiring new tools to ensure safe, efficient, and effective business operations By Neil Gerber and Terry Ray, IBM The Context of the Nuclear Business Maturity Model (NBMM) The nuclear power industry is one of the most globally sharing, self-critical industries in the world. Various organizations, such as the Institute of Nuclear Power Operators (INPO), the World Association of Nuclear Operators (WANO), the Nuclear Energy Institute (NEI), the Electric Power Research Institute (EPRI), and many others were created by the industry, for the industry, in order to foster cooperation and instill best practices throughout the commercial nuclear world. These entities have been very successful in meeting their goals. Each industry group has a specific focus and specialty, from technology and research, to policy, to operations. The industry has worked hard to make sure that these organizations do not overlap significantly for maximum efficiency. While these groups are very effective in carrying out their missions, we have identified a need within the industry for the development of a comprehensive nuclear business tool that provides complementary capabilities to the existing organizations, while focusing on strategic business requirements. Evolution of the NBMM Based on the above realization, in early 009, IBM along with three U.S. nuclear power fleet owners set out to develop a Nuclear Business Maturity Model. The purpose of the model is to advance the business of operating and constructing nuclear power plants globally. The value from the model covers a wide range of potential benefits such as: Providing a holistic view of the entire enterprise Providing a long-range planning tool and forcing a long-term view Evaluating the current state of the overall business and how new initiatives can impact the future state Providing the ability to link specific capabilities to achieving superior performance Showing interdependencies, side by side Identifying opportunities that may have been overlooked At its low end, the model provides indicators for concern At its high end, the model identifies possibilities The model can identify areas that may benefit from additional focus Comparing differences between individual sites, fleets, and corporate management Providing a quantitative link between execution of strategic plans and outcomes (through metrics observed over time) To show opportunities for improvement that could include useful capabilities to develop that are outside the scope of industry organizations and/or associations 90

2 Background On the morning of March 8, 1979, several water pumps failed on Unit # of General Public Utilities nuclear plant on Three Mile Island (TMI) near Harrisburg, Pennsylvania, triggering the worst nuclear power accident in U.S. history. As a result of this incident, the INPO was formed on December, This organization was funded by the industry to address many facets of the nuclear power industry. In his book dealing with the industry s response to TMI, author Joseph Rees quotes then chairman of INPO s board of directors Walter J. McCarthy, Jr., chief executive officer of Detroit Edison: Never before has the Hostages of Each Other concept become as relevant as it is today, as the industry launches into what many are calling a nuclear renaissance. Some view the term nuclear renaissance as relating to the large number of plants that are being re-licensed to operate for decades more; others are using it to describe the surge in new plant construction. Regardless of bias or belief, we believe that the industry is, in fact, experiencing a re-birth, and that new tools are required to ensure efficient and effective business operations. The Nuclear Renaissance There are currently 438 operating reactors globally, producing about 16 percent of the world s electricity. Many of these reactors are reaching an age where they will either be re-licensed for additional operation or decommissioned (currently, most are expected to be re-licensed). In addition to this substantial fleet, more than fifty reactors are under construction, another 140-plus reactors are planned, and another 00-plus reactors are proposed. This tremendous growth is one factor prompting widespread use of the term nuclear renaissance. How the NBMM was Created Over a period of nine months, an eleven-person project team, with over 300 combined years of nuclear, engineering, academic, and business experience, developed the Nuclear Business Maturity Model. Primary domains in the model are: Strategy,, and Organization Environmental Guardianship and External Relations Work and Asset It took the shock of a world-focusing event such as TMI to make us realize major changes must be made in operations, in information exchange, in training, in management, in attitude, in culture overall. For the first time, I believe it hit us that an event at a nuclear plant anywhere in our country could and would affect each nuclear plant. He [McCarthy] then went on to quote a phrase that his audience had heard time and again since the TMI accident, as it had become a root metaphor in the nuclear power industry s basic cultural orientation: Each licensee is a hostage of every other licensee. Why? Because a single catastrophic accident (think of Chernobyl) at any one U.S. nuclear plant would have ruinous consequences for the entire industry. Hostages of Each Other: The Transformation of Nuclear Safety since Three Mile Island Joseph V. Rees, 1994 by the University of Chicago Press 91

3 S e c t i o n Reinventing Energy White Paper Figure 1: Nuclear power plants worldwide, in operation and under construction, as of June 30, 010 Business Operations and Human Resources proficient, and at Level 4, companies are optimized Technology and Research & Development and innovative. In addition to the four distinct levels, Construction the star level indicates companies that are leading the transformation by promoting collaboration, generating Safety and Security new ideas, pushing the envelope, and being emulated Nuclear Operations and Training by their peers. In addition to the eight primary domains, the model A company s assessment is determined after completion has forty-three sub-domains. The model contains of an extensive questionnaire that is domain-, over one hundred themes and over five hundred sub-domain-, and level-driven. characteristics. Examples of themes are leadership w w w.g e n e r at i n g i n s i g h t s.co m 9 style, benchmarking, supply chain, and safety Early Results and Observations culture. Characteristics describe a company s level of The general consensus from the three developing maturity in any domain or sub-domain. For example, companies is that the model is a very good strategic tool in the outage management area, a Level 1 operator s in that it can be used to complement current strategic outage plan accommodates periodic maintenance, planning as well as to confirm tactical, operational, and surveillances, and plant modifications. At Level 4, their excellence plans. At the strategic level, the model can be outage schedule grows to accommodate emergent used to identify strategic initiatives/action programs work as it is identified. aimed at achieving target performance. This concept is The maturity model contains five levels of maturity as shown in the slide below. We describe Level 1 companies as compliant or conforming to industry requirements. At Level, companies are functionally proficient. At Level 3, companies are cross-functionally pointed out in The Execution Premium Linking Strategy to Operations for Competitive Advantage (Robert S. Kaplan and David P. Norton Harvard Business School Publishing Corporation, copyright 008). Kaplan and Norton suggest that the strategic investments, for

4 initiatives that cross functions and business units, must be removed from operational budgets and managed separately by the executive team. The creation of a special budget category called STRATEX (strategic expenditures) facilitates this process. Further, Kaplan and Norton state that companies are introducing a new accountability structure for executing strategy through strategic themes. They assign executives to become theme owners, fund them with STRATEX, and support them with theme teams drawn from across the organization. The maturity model, with its eight primary domains, forty-plus sub-domains, and one hundred-plus themes, can be used to identify and prioritize those strategic initiatives and action programs. Smarter Nuclear Power Many human beings, companies, organizations, cities, nations, natural systems, and man-made systems or plants are becoming more interconnected, instrumented, and intelligent. So, what do we mean when we say that a nuclear power plant is becoming instrumented, interconnected, and intelligent? Instrumented We now have the ability to measure, sense, and see the exact condition of almost everything. Sensors can be found in nearly everything from simple infrared motion detectors in security systems, to sophisticated sensors in engineering and nuclear operations equipment. In addition, we are also beginning to measure business performance in ever-increasing detail. Interconnected These sensors and business systems can now be interconnected more easily than ever before, enabling the data to be integrated and transmitted between plants and across fleets in real time, thus removing geographic and organizational barriers to sharing data. Engineering and operations data can be combined with business, commercial, and regulatory data to give a business-wide perspective. Intelligent By combining the data with modern analytical techniques, we now have the ability to make better decisions. We can now analyze the growing volume of data in real time, combined with Strategy, & Organization Strategy Decision Making Culture Leadership Industry Coordination Economic Regulation & Policy Knowledge Best Practices Environmental Guardianship & External Relations Environmental Stewardship External Relations Regulation (Non-Economic) Crisis Nuclear Waste Work & Asset Maintenance & Work Maintenance Planning & Execution Reliability Bid Business Operation & Human Resources Financial Performance & Sustainability Enterprise Risk Operational Cost People Planning Retention Compensation Recruiting Technology & Research and Development IT Architecture & Standards Document & Data Analytics & Decision Support Research & Development Construction Project/Vendor Project Financial Risk Standardization Commissioning Licensing Security Safety (reactor, radiological, industrial) Physical Security Cyber Security Internal & External Risks (Terrorism) Nuclear Operations & Training Operations Outage Engineering Education & Training Operational Excellence 93

5 S e c t i o n Reinventing Energy White Paper improved algorithms to identify trends and patterns, and reporting tools to present data in useful formats. We believe that becoming smarter is leading to new safety, savings, and efficiency; and perhaps as important, new possibilities for progress and ways to experience the nuclear renaissance. As the nuclear renaissance unfolds, we face: More complexity in plant design and asset management techniques More required and demanding capabilities such as knowledge management and best practices identification More reliance on business management and technology systems In spite of these challenges, the nuclear power industry has an opportunity to achieve: More insight and collaboration More efficiency, profit, growth More innovation In this new era of smart and the nuclear renaissance, nuclear power plant owners and operators continue to face many of the same industry challenges. First and foremost, safety remains at the core of every activity, whether operating existing plants or building new units. Never before has the Hostages of Each Other concept become as relevant as it is today, as the industry launches into what many are calling a nuclear renaissance. Linking the Maturity Model to Smarter Nuclear We believe that the maturity model can be used as a level-set as to why and how nuclear power companies must be smarter on building and operating these critical plants and assets. Some of the key smarter areas are: Smarter designs to build a smarter plant Smarter delivery to get a plant on-stream faster Smarter operation to maximize safe production Smarter maintenance to keep plants and systems secure, reliable, and available. We continue to work with customers, partners and the industry in five key areas, as detailed below: Smarter design Model, simulate, and visualize critical financial, engineering, and operational events Use smart plant monitoring and management systems with integrated analytics Automate business process and knowledge capture Extend plant life through high performance computing Smarter delivery Share structured information among the ecosystem Create and maintain the digital plant alongside the physical plant for the seventy-year asset life Manage capital program and supply chain in a constrained and competitive global market Smarter operation Virtual reality and simulation Fleet-wide performance management Address skills shortage through increased knowledge capture and process automation Monitor IT systems in real time for threats 94

6 Smarter maintenance Integrate intelligent devices and analytics to enable condition-based maintenance and advanced prognostics Improve physical and cyber security and safety through biometrics, video recognition, locational awareness Provide a reliable and secure infrastructure to underpin operations Smarter business support Establish new organizations and operating models Summary In order to meet the challenges and industry needs of the nuclear renaissance and smarter nuclear, thought leadership and advanced solutions are necessary. The new approach must transcend operations, information exchange, training, management, attitude, and culture (as stated by former INPO Board Chairman Walter J. McCarthy back in 1979). The maturity model is one tool/vehicle that can be used by nuclear industry participants to maintain and raise the overall industry awareness and performance. Automate business processes Provision shared services To view references and sources please visit Change management support and workplace transformation About the Authors Neil Gerber leads Global Power Generation Solutions for the Energy & Utilities industry at IBM. He is responsible for developing and executing IBM s solution portfolio strategy for the power generation business. Prior to IBM, Gerber was the CEO of a power plant simulation company. He has a Bachelors of Science degree in Mechanical Engineering from the University of California at Berkeley and a Masters of Engineering degree from Stanford University. Terry Ray leads IBM Software Group s energy strategy and product management activities for Tivoli/Maximo. Before joining IBM, he was vice president of Gartner s Energy & Utilities Industry Advisory Service. He has a long and successful energy career spanning oil and gas exploration and production, gas transmission and distribution, petrochemical design and construction, information technology, and consulting. 95