Design Maturity: The Foundation of New Nuclear Project Planning and Execution
Category: Thought Leadership
The nuclear industry is gearing up to deliver a new generation of power plants.
If we are to meet the increasing demand for clean energy, this wave of projects must avoid past mistakes. Previous new nuclear projects have earned a reputation for running over budget and schedule, frustrating stakeholders.
But careful planning and adherence to best practices can help prevent the new nuclear projects in the queue from suffering the same fate.
Starting any construction project, let alone a complex nuclear power plant, with insufficient design maturity is a typical cause of project cost and schedule overruns. Understanding how design maturity is linked to project cost and schedule can help keep today’s vision for a plentiful, clean power source from turning into tomorrow’s negative headlines.
This post is the second in a series about what owners should understand to move new nuclear projects forward with confidence. (Read the first post about modularization.) It explains the importance of design maturity to new nuclear projects and provides guidelines for assessing and understanding it.
What is design maturity?
Design maturity is a way to express a particular design’s status, whether that design is for a system, component, functional specification, or an entire project.
Maturity is based on a set of requirements established at the beginning of a project, and it’s assessed and updated as the design progresses.
Why is design maturity important?
Many nuclear projects have suffered negative impacts from proceeding with immature designs. Here’s why:
A detailed design is the foundation for planning and executing a new nuclear plant. As scope advances, the design deliverable requirements become better defined, and the evolving design more accurately informs cost and schedule estimates. As the design matures, cost and schedule estimates can be developed with greater accuracy and less uncertainty.
It’s important to remember that the design is a collection of interrelated elements, where changes to one system can impact other major design elements. This means revisions that take place after systems, structures, or components have been installed can lead to removing, reinstalling, replacing, retesting, and other cost- and schedule-impacting requirements.
In addition, procurement specifications based on incomplete design can cause significant delays and increased costs if suppliers must modify their work in progress.
Thus, design maturation has to take into account the connection of these moving parts and accurately assess what state design is in at any point in the planning process.
At the start of the project’s execution phase, a properly mature design provides confidence that cost and schedule estimates can provide a baseline against which change control can be managed. If there is variability in the design, cost and schedule changes are likely to follow. Therefore, for Final Notice to Proceed, it is important to include final input from sources requiring near-complete design (e. g. PRA, I&C, Ops and Maintenance, Test/Startup).
Communicating design maturity
Design maturity is the most important ingredient for determining a prospective project’s estimate class. To communicate the accuracy of a project’s current cost estimate, the power industry has adopted guidance from the Association for the Advancement of Cost Engineering (AACE) about classifying cost estimates.
AACE’s estimate classification directly links the quality and maturity of design inputs to the “class” of estimate that can be achieved. The estimate class also communicates the confidence level and potential variability of the estimate based on further design maturation.
As an example, a Class 5 estimate is based on conceptual engineering (~1 to 5% complete) and carries a wide range of potential outcomes, while a Class 2 estimate is supported by execution-ready design (+90% complete) with a much higher level of confidence and narrower range of outcomes.
These estimates set expectations for the project’s viability and support its business case. Project owners must base their new nuclear build decisions on a design that reliably represents the completed project. Lenders and investors consider design uncertainty when they determine project funding terms. Off-takers and the public base their expectations on information created from designs.
All of these stakeholders deserve the confidence that a mature design supports. A poor understanding of the project’s cost estimate due to design immaturity can lead to poor decision-making and miscommunication of the project’s prospects for success.
If a project is approved for execution with an estimate that is thought to be Class 2 but doesn’t have that level of engineering maturity, the project’s stakeholders will be surprised by cost and schedule increases.
Ultimately, the objective is for the design to progress to a level that supports early-stage decision-making and where construction can proceed without disruptive design changes.
Design maturity on close follower projects
As we’ve established, low design maturity carries elevated risk and uncertainty that affect decision-making and project progress. Naturally, projects with first-of-a-kind (FOAK) features are at particular risk.
But while the industry is currently paying a lot of attention to FOAK projects, it’s equally important to think about how the close follower projects will be developed.
The nuclear industry’s goal is to have standard designs that can be repeated and adapted for subsequent projects, leading to efficiencies and economies of scale. But owners should not assume that a project previously performed elsewhere, potentially under different conditions, has automatically achieved a high level of design maturity applicable to succeeding projects.
Design maturity for close followers will involve assessing and integrating lessons learned from the first projects. The design process for successor projects must include refining and optimizing the design to reduce cost and uncertainty, while prudently preserving design standardization.
How is design maturity determined?
Quantifying design maturity
Design maturity needs to be assessed objectively based on the status and completion of expected design deliverables. Estimating design maturity based strictly on the experience of individuals is inadequate, except in the very early project planning stages. After the early Conceptual Design stage, a well-structured and defensible methodology utilizing earned value techniques for defining design maturity must be used.
Project Management Institute refers to earned value management as “management with the lights on,” and says that it is “based on the principle that past patterns and trends can indicate future conditions. EVM helps you clearly and objectively see where your project is headed compared to where it is supposed to be.”
The foundation for determining design maturity is the design scope, as defined by design deliverables — tangible design products that progress through stages of design to support field ready, execution-level design drawings.
Calculating the percentage completion of those deliverables as they mature gives a quantitative indication of overall design maturity. These are the fundaments of earned value — identifying a quantitative method to evaluate progress.
To determine the percentage of design completion, the total project scope of design deliverables must be identified as early as possible, and the progress progressively tracked based on objective and defined criteria.
Project managers need to accurately assess the percentage complete of each individual design element and the overall contribution to design completion. A deliverable-based system allows them to count the relative weight of each to establish their value when completed, or “earned.”
Design maturity progression
As part of assessing design maturity, the nuclear technology developer’s design process must include a plan for how the design needs to progress from concept to execution. There is a natural and generally accepted progression for design that the developer’s plans need to consider.
As noted above, design maturity is expressed quantitatively as a percentage of design completion. A qualitative representation is useful for establishing maturity targets in the progressive stages of project development.
Targets can be expressed in a phase gate progression by classifying design in terms of advancing progress designations (conceptual, preliminary, etc.). After the initiation phase, a described quantitative basis must support each of these designations.
Modern new nuclear projects track design (and overall project) progression using a phase gate process, whereby authorization is required to advance to the next phase. Here’s an example of such a progression, along with an example of how design deliverables might break down within these phases:
What is the process for determining design maturity?
The principles above should translate to the following planning actions.
Early-Stage Maturity Determination
In the Conceptual Design stage, developers are establishing the project’s definition and requirements and defining the scope of deliverables.
Because the design deliverables are being defined at this stage, the percentage of design completion will be difficult to quantify. The maturity will be less than 5%.
However, a qualitative rough design maturity classification may be established based on expert judgement and rough deliverable estimates. The early design basis and requirements developed in the Conceptual Design stage will support more accurate, quantifiable definition as described below.
Advanced Stage Maturity Determination
A more accurate quantitative approach becomes possible as responsible disciplines, coordinating with system leads, identify specific deliverables and progress them through the subsequent design stages, following these steps:
- Keeping project-specific requirements in mind, identify and record design deliverables with a specific title and quantity. Include this information in a status tracking database, which should include other data such as system, discipline, and progress requirements at each phase gate. This will allow sorting and tracking maturity by either discipline or system.
- Quantify the number or weight of each deliverable and establish percent completion requirements for each.
- Determine the percent design complete for the entire project by calculating the average percent complete of all deliverables. Each deliverable must be counted and scored to obtain a true average.
- The earned value tracking database can be sorted and averaged by discipline and system to determine their respective average project design percent complete (design maturity).
Disciplines must update this data on a periodic basis as the project proceeds, targeting values set forth in the project’s phase gate program.
Conclusion
Understanding design maturity is a critical element in planning new nuclear projects. Nuclear technology developers need to implement design processes that accurately assess the maturation of their work so that cost estimates and other planning work can be properly informed. Owners seeking to build nuclear projects need this information to make decisions and put proper controls in place to protect their investments.
References
AACE 18R-97, Cost Estimate Classification System.
Project Management Institute, The Standard for Earned Value Management (2019).
Nuclear Energy Institute Implementation Guidance 01 for NEI 20-08, “Design Completion and Reliability of Schedule and Cost Estimations to Support Construction Decisions.”
AACE International Recommended Practice No. 18R-97, “Cost Estimate Classification System – As Applied in Engineering, Procurement, and Construction for the Process Industries.”
U. S. Department of Energy (DOE), Project Definition Rating Guide for Traditional Nuclear and Non-nuclear Construction Projects, DOE G 413.3-12
Construction Industry Institute (CII) PDRI: Project Definition Rating Index – Industrial Projects
NOTE: New nuclear projects involve many design deliverables that are different from process or general industrial projects.