US AP1000 projects advance on revamped EPC terms

New contractor structures should provide fresh impetus to the delayed Vogtle and V.C. Summer new build projects as the stakeholders look to improve efficiencies in the modular construction process.

Ambitious plans for Small Modular Reactor (SMR) development have heightened the interest in the modular construction being used to build two Westinghouse AP1000 reactors at the Vogtle site in Georgia and two reactors at the V.C. Summer site in South Carolina.

Georgia Power announced this month that the 2.2 GW Vogtle 3 & 4 nuclear power project is 60% complete and Georgia Public Service Commission (PSC) has verified and approved $148 million of costs set out in its latest monitoring construction report.

In addition, Georgia Power has named Mark D. Rauckhorst as executive vice president of construction for the project and a new contractor structure has been put in place as the project partners seek to improve the execution of the construction plan.

Georgia Power filed January 21 details of a settlement agreement with Westinghouse and CB&I, the contractor consortium for the project, to the Georgia Public Service Commission (PSC). This followed long-running litigation between the project company and the contractor consortium responsible for the Engineering Procurement and Construction (EPC), over delays to the project.

The agreement settles all claims currently in litigation with the contractors, reaffirms the current in-service dates and adds additional contractual protections and positions.

Georgia Power owns 45.7% of the project, while Oglethorpe Power Corporation holds a 30% share, Municipal Electric Authority of Georgia 22.7% and Dalton Utilities 1.6%.

"Georgia Power's portion of the settlement cost is approximately $350 million, significantly less than the claims that were in litigation," Georgia Power said in a statement.

In the lead up to this settlement, Westinghouse announced on October 27, 2015 that the company had signed a definitive agreement with CB&I to buy its nuclear construction and integrated service business and this acquisition was approved by the US government on December 31.

This made Westinghouse the sole primary contractor for the project and the company then subcontracted Fluor group to manage the construction workforce at Vogtle, as well as the VC Summer 2 & 3 plant being developed by the SCE&G and Santee Cooper group in South Carolina.

“Fluor is supporting Westinghouse to quickly transition construction responsibilities, as well as the craft labor and a significant portion of the existing field staff workforce, from the previous contractor,” Fluor said in a statement.

                        Georgia's nuclear power capacity 

Source: Nuclear Energy Institute

Under construction in Waynesboro, Georgia, the Vogtle 3 & 4 reactors were originally scheduled to come online 2016 and 2017, but delays have pushed back the expected start up dates to June 2019 (Unit 3) and June 2020 (Unit 4).

The modular construction process aims to reduce the construction timeline and therefore control the risk of cost overruns. The estimated construction time for the AP1000 is three years upon widespread deployment of the technology.

According to Westinghouse, structural, piping and equipment modules provide a shortened construction schedule, reduced field manpower, improved quality - pre-testing and inspection of modules prior to shipment, as well as reduced site congestion.

The AP1000 designs have 50% fewer valves, 35% fewer pumps, 80% less piping, 45% less building volume and 70% less cable than earlier-generation nuclear plants.

However, modular construction does bring about specific challenges.

The cost of transportation, temporary assembly yards, and heavy lift cranes can be high, and design changes during the construction phase can often lead to rework in construction, Dr. Chris Zhang of the University of Saskatchewan said in his 2014 presentation "Construction Experience from Modular Nuclear Power Plants."

Site contractors must work particularly closely with the vendor and designer of the plant, and increased cross-construction between civil construction and mechanical/electrical installation teams leads to further challenges for project management, Zhang said in his presentation.

“As with any large-scale project, there are going to be challenges such as logistics, safety, and the transportation of the equipment to the site,” John O’Brien, Georgia Power media relations representative, told Nuclear Energy Insider.

“With safety as a primary focus, the contractor has overcome these challenges and has delivered millions of pounds of equipment to the site to date,” he said.

According to O’Brien’s office, some of the major equipment already delivered includes four 1.3 million-pound steam generators from South Korea, four 298,000-pound core make-up tanks from Italy, Unit 3 and 4 reactor vessels, and the Unit 3 pressurizer.

In August 2015, Georgia Power announced it had successfully placed the primary structural CA01 module for Unit 3. The module had been assembled onsite in Vogtle's modular assembly building (MAB). At 70 feet tall, 80 feet wide, and weighing 1,140 pounds, it was lifted into place with a 560-foot tall heavy lift derrick.

Stronger terms

The V.C. Summer 2 & 3 AP1000 project, has also faced its share of setbacks using a similar contractor consortium to the Vogtle project.

South Carolina Electric & Gas Company (SCE&G) is the majority stakeholder in the project company and owns 55%, with the remaining 45% held by Santee Cooper.

Last October, SCANA, the holding company of SCE&G, announced an adjusted EPC contract with Fluor after experiencing multiple delays with the Westinghouse-CB&I consortium arrangement.

“We have strengthened the language in the EPC contract defining regulatory changes, which has been the basis for many of our disputes with the consortium in the past,” Kevin Marsh, chairman and CEO of SCANA, said in a statement.

“We also negotiated a fixed price option which, if exercised, would limit the construction cost of the new nuclear plants,” he said.

In a quarterly report issued earlier this month, SCANA said Westinghouse and Fluor are "moving to standardize and simplify work packages for construction activity related to the nuclear islands (NIs) for the four units, streamline the process for the transfer of equipment between suppliers and contractors, and minimize design changes being communicated to module and submodule vendors."

SCANA also said it had created a new Project Management Organisation (PMO) which will oversee the integrated project schedule and provide project management for non-EPC contract -related construction activities.

"Fluor is in the process of updating the construction schedule for the Units to reflect the changes due to the Settlement and its review of the work streams," it said.

According to SCANA, the cost of the 55% share held by SCE&G has increased by $935 million since the initial forecasts, in 2007 dollars, implying an overall capital cost increase of close to $2 billion.

In future dollars, SCE&G’s portion of the total project capital cost is now estimated at approximately $7.1 billion, an increase of around 12% from initial estimates and putting the total projected cost at almost $13 billion.

According to the latest timeline published by SCANA, the scheduled completion dates for Units 2 and 3 are August 31, 2019 and August 31, 2020, respectively.

By Nick Georgandis