Report illuminates a project gone wrong
A report on what caused the refurbishment of Unit 4 at the Pickering A nuclear generating plant east of Toronto to...
A report on what caused the refurbishment of Unit 4 at the Pickering A nuclear generating plant east of Toronto to run grossly over budget and schedule says serious management and project planning flaws were to blame.
Written by the Pickering A Review Panel headed by the Honourable Jake Epp for the Ontario Ministry of Energy, the report starts: “From the outset, OPG [Ontario Power Generation] failed to appreciate the full scope and complexity of the project. … Management of the project from initial planning to execution was seriously flawed. The Panel found that well-established industry practices and steps for carrying out a project of this size and complexity were not followed.”
The project to refurbish the first of four units at the 1970s plant took two years longer than predicted to come back into service, and tripled from its initial budget cost to $2.5 billion.
Ontario Power Generation initially thought it would be short-term outage, continues the report. But instead: “The restart project was, in fact, a major design and construction project, with modifications required to virtually all systems in the plant.”
The OPG managers thought that the regulatory approval process could be completed in three months and that it would not be necessary to have a formal environmental assessment. Instead, because of the scope of the work, environmental approvals took more than two years.
The Panel notes that there was no project execution plan, which is “industry practice” in a construction project of this magnitude.
It notes that the team was uncoordinated. Atomic Energy of Canada was engaged for design services, but any engineering changes had to be reviewed and approved by OPG’s own engineering unit. In September 1999 OPG outsourced the project management and general manager functions to Canadian Nuclear Engineers and Constructors (CANEC), but CANEC had no direct contractual relationship over other participants. By July 2001 OPG was reasssuming the full role of project manager.
The Review Panel noted that there were significant delays in reviewing engineering packages. “The average time taken was 10 weeks. The longest delay identified was 18 months. … This was a result of awaiting a decision on whether to replace moderator pump motors or rewind them.”
The budget was being constantly revised. From August 1999 to September 2003 there were 13 different return-to-service dates. There were 11 different cost estimates that eventually rose to $2.5 billion. But such was the confusion that the Review Panel could not sort out the details: “Finally, the Panel was unable to attribute cost overruns to specific causes because of the inadequacies of the method that OPG used to track costs.”
The Panel noted the seriousness of the problems and their wide-ranging effects:
“The delay in the return to service of Pickering A has adversely affected Ontario’s electricity sector and pushed up prices for residential and business consumers. The costs and delays of the project have also reduced OPG’s revenues, capital resources and corporate value. But perhaps most seriously, faith has been compromised in the affordability and certainty of the supply of electricity vital to Ontario’s citizens and businesses.”
A decision on whether to proceed with refurbishing the other three reactors at Pickering A has still to be made.
Meanwhile, conservationists and environmentalists are balking at proposals by Atomic Energy of Canada Limited to ease Ontario’s power woes by building four new advanced Candu reactors. The Sierra Club of Canada has said that the answer to power shortages is reducing consumption in buildings; Tom Adams of Energy Probe has been promoting the use of hydro and gas generation, and a dispersed, modular network instead of relying on a few very large plants. The Ontario government is waiting until it receives reports back on the state of the province’s industry before it makes a decision.
The Report of the Pickering “A” Review Panel was issued November 30, 2003, and is published on the Ontario Ministry of Energy’s web site, www.energy.gov.on.ca