AREVA Risk Mapping and Risk Management Offshore Wind Projectsecrisponsor.org/Npresentations/aj12-2-1.pdf · 2019-02-16 · Risk Mapping and Risk Management Offshore Wind Projects

ECRI – 7 juin 2012 p 1

AREVARisk Mapping andRisk Management

Offshore Wind Projects

Louis-François DURRETSEVP AREVA RENEWABLES

ECRI – June 7th 2012


Film:ALPHA VENTUS WIND FARM


Table of contents

1.AREVA in Renewable Energies

2.AREVA Organization for Risk Management

3.Yearly Risk Mapping Campaign

4.Project Risks & Opportunities Management

5.Example: France – Offshore Wind – Saint Brieuc


Our StrategyNuclear energy

�Build one third of new nuclear generating capacity in accessible markets

�Secure fuel supplies for our current and future customers

Renewable energies

�Become a leading player in renewable energies

� Increase the competitiveness and efficiency of our technologies

�Supply solutions for baseload and peak demand

While constantly improving safety, security and transparency performance


Available low-carbon technologies within AREVA’s scop e of expertiseAvailable low-carbon technologies within AREVA’s scop e of expertise

4 AREVA EPR™

reactors under construction in China, France and Finland

Global strategy combining technological solutions and EPC capabilities for biomass power plants

Proven and bankable 5 MW Wind turbinededicated to large scale offshore wind fields

Most cost-effective,utility-scale turnkey concentrated solar power(CSP) solution

27 reactors upgraded by AREVA worldwide

A low-carbon power generation portfolio

Nuclear

New Build

Nuclear Plant

Modernization

Solar Steam

Augmentation

Solar Power

Generation

Bioenergy Power

Generation

Offshore Wind

Power Generation

The world’s first hybrid coal/solar power plant selected in Australia , a second one recently sold


Renewable energies: a low-carbon power portfolio with a strong track-record

More than 500 projects worldwide totalizing over

5 GW

35 years of experience

Bioenergy PowerGeneration

Supplying and installing 120 turbines with a 600 MW output (Global Tech 1 &

Borkum West 2)

Increasing production capacity up 100- 200

turbines per annum by 2012

Offshore WindPower Generation

2x125 MW solar thermal project selected by Reliance,

a major developer in India

544 MWe in operation, construction and advanced

development

Concentrated Solar Thermal

Source: AREVA

Hydrogen & Storage

Decentralised systems for storing and generating power with or without

renewable energy sources

Myrte storage system (500 KWc)


Synergies between nuclear andrenewable energy activities

AREVA financial strength

Innovative project financing solutions

Established relationship with numerous utilities in many countries

One-stop-shop for complementary low-CO 2 electricity generation solutions

AREVA brand

Quality Management

Long-term industrial commitments

Customer synergiesCustomer synergies Technical Know-how and R&D capacityTechnical Know-how and R&D capacity

Financial guaranteesFinancial guarantees Industrial synergiesIndustrial synergies

EPC and project management

Thermal transfer and steam management

Corrosion, welding and nanotechnologies


Table of contents







R&O Management – Why ?

Assets

Flow and processes safety

Activity continuity

Disaster Recovery Plan

PROTECTION PERFORMANCE IMPROVEMENT

Strategic targets achievement contribution

Differentiation

Continuous improvement

Opportunities

Company targets

ECRI – 7 juin 2012 p 10

AREVA Risk management is structured on two pillars:

1. « Yearly Risk Mapping Campaign »

� Identifies, characterizes and ranks risks of the Strat egic Action Plan (4years plan),

� defines the mitigation action plan,

� Controls their implementation and efficiency.

2. « Risks and Opportunities on Projects »

� identifies the risks on projects,

� defines the mitigation action plans and the financia lcontingencies included in project costs

� Controls their implementation and efficiency

� The two pilars are coherent and synchronized.

Organization & Process 1/4

ECRI – 7 juin 2012 p 11

AREVA organization is structured on two corresponding le vers:

1. Direction des Risques et Assurances (DRA) drives th e Yearly RiskMapping Campaign:

� Define methods, processes and tools,

� Leads a network of risk Managers assigned to the BGs/B Us/Units,

� Reports to AREVA Group CFO

� The Group Executive Management Board validates the ris k mapsand action plans

� The risk maps and action plan are presented to the Aud it Committee of the Supervisory Board

� The Audit Department controls the implementation and e fficiencyof action plans by conducting audits (about 20%)


ECRI – 7 juin 2012 p 12


ECRI – 7 juin 2012 p 13

AREVA organization is structured on two corresponding le vers:

2. Operational Units (BGs/BUs) are responsible for « Risks and Opportunities on projects »

� Projects:

� Investisments projects,

� Customer offers and large projects,

� JVs, etc.

� Project teams define the risk, opportunities, action plans and related contingencies in a « R&O Register »

� The Risk Managers (BGs/BUs) validate the R&O Register

� Regular Project Reviews control progress of action pla ns, evolution of the risks and validate the release/increa se of financialcontingencies


ECRI – 7 juin 2012 p 14

� Dedicated resources:

� A Central team in DRA defines and deploys tools and pr ocesses for the riskmapping campaign, provides coaching and control of ex ecution,

� A network or Risk Managers, in BGs and BUs drive the r isk mappingcampaign, coaches and validates risk and action plans on projects,

� High importance is given to the development of compete ncies:

� Training programs are defined and delivered by AREVA University, and existsince 15 years,

� « on demand & customized » training sessions for BGs / B Us according to the specificities of their businesses.

� In 2012: + 300 persons trained through 12 to 15 Group sessions acrossFrance, Germany & USA ,

� Risk Managers follow specific professional trainings an d are training instructors

Resources and development of competencies

ECRI – 7 juin 2012 p 15

Table of contents






ECRI – 7 juin 2012 p 16

Risk Mapping Campaign - Process

Phase 1

Phase 2

Phase 3

Identification of risks

Evaluation of the Probability

of Occurrence

Matrix Occurrence / Severity

=Level of Danger

Results of the Study = Level of

Control

Recommandations

Matrix Level of Control/Level of Danger

= Level of Risk

Study of processes and

site visits

Evaluation of the Severity of

consequences

ECRI – 7 juin 2012 p 17

TECHNOLOGY, PRODUCTION FACILITIES1.01 – Incidents/Accidents at installations1.02 – Product storage capacity1.03 – Pollution (radioactive, chemical)1.04 – Third-party damages1.05 – Local area1.06 – Natural disasters1.07 – Regulations1.08 – Safety at work (physical risks)1.09 – Transport 1.10 – Process performance1.11 – Dosimetry and health

NUCLEAR2.01 – Criticality accidents2.02 – Clean up/dismantling2.03 – Waste and/or nuclear material centers and

control

BUSINESS3.01 – Customer risks3.02 – Commercial / Marketing risks3.03 – Contractual risks3.04 – Supplier risks3.05 – Project risks3.06 – Product risks3.07 – Risk due to partners3.08 – Legal risks

ECONOMIC, POLITIC, STRATEGY4.01 – Country risks4.02 – Terrorism 4.03 – R&D and intellectual property4.04 – Strategy4.05 – Financial risks4.06 –Fluctuations/exposure of the portfolio of act ivities

4.07 – Minority shareholdings4.08 – Influence (loss/lack of) 4.09 – Ethics

HUMAN RESOURCES5.01 – Labor risks5.02 – Knowledge and key people management5.03 – Attractiveness

5.04 – Integrity5.05 – Confidentiality

ORGANIZATION6.01 – Crisis management6.02 – Organizational risks6.03 – Communication (excluding crisis)6.04 – Information systems6.05 – Synergies6.06 – Physical protection (safety of property and personnel)

R&O Identification – BRM categories

ECRI – 7 juin 2012 p 18

Severity rating Scale « BU level »

ImportanceFinancial Impact:

Annual Operating Income 2010

Social Impact Image Impact

4 > 20 MEUR Social consequences that could endanger entity strategy/ integrity or affect significantly the entity above

Impact on image with potential consequences on entity strategy/ continuity or affecting significantly the entity above

3 10 – 20 MEURSocial consequences that could endanger entity business continuity or impacting heavily entity efficiency

Impact on entity image affecting mainly local stakeholders or specific customers and generating a lasting loss of confidence

2 4 - 10 MEUR Identified social impact but without lasting consequences on human resources

Identified impact on image but without lasting consequences on the entity

1 < 4 MEUR Negligible social impact Negligible impact on image

Scale at BU level, Please indicate the scale used at the entities level

ECRI – 7 juin 2012 p 19

Main Risks summary

˚̊̊̊To be launched83rtyui

Clean-up / Dismantling

ÆCritical72qsdfg

Criticality accidents

¯To be launched63plk,n

Dosimetry and Health

˚̊̊̊Unsatisfactory43okjhbvcx

Process performance

ZZZZCritical82n,;:!

Transport

ZZZZTo be launched53ijhb

Safety at work (physical risks)

-Unsatisfactory64hjklm

Regulations

¯To be launched74fghjkl

Natural disasters

¯Closed73erfgb

Local area

˚̊̊̊Critical54cvbn,;

Third-party damages

¯Closed33azsdc

Pollution (radioactive, chemical)

ZZZZTo be launched

72azerty

Product Storage Capacity

-In progress64aqsdfgn,;

Incidents / Accidents at installations

Risk evolutionaction plan statusLevel of control

(from 0 to 8)

Importance(1, 2, 3 ou 4)

Description of consequences and impacts

on others entities, BU, …

Description of causes and expected events

Risk category

First Updating

ECRI – 7 juin 2012 p 20

0

1

2

3

4

5

0 1 2 3 4 5 6 7 8 9Level of Control

Importance

Critical

Risk not controlled Risk unsufficently controlled Risk basically controlled Risk completely controlled

Strong

Medium

Weak

ECS - Green Box commercial positioning-----

Wind - GT1 Risk Analysis Impact & PM capability-----

ECS - Intellectual Property Protection

ECS - Performance industrial tool-----

Bio - AKB Masisa & Hamburgo Project overcosts

Bio - AKB - Project Management & accounting-----

Wind - Gear box design validation

Bio - Projects not materialized or delayed-----

Bio - AKB Accounting

ECS - Fire H2 / O2-----

Bio - Safety at w ork

Wind - Safety at w ork-----

EC&S - Safety at w ork

Wind - New product development capability

Wind - Warm-up Alpha Ventus

Wind - Ramp-up capacity of production-----

Wind - Re-sell DOTI WTG-----

ECS - Loss of key competencies

Wind - DOTI Claim

2010 Risk Mapping BG/BU/Unit

Xxxxxxx

Xxxxxxx

Xxxxxxx

XxxxXxxXXXXXX

XxxxXxxXXXXXX

XxxXXXXXX

XxxXXXXXX

Xxx

Xxx

Xxx

ECRI – 7 juin 2012 p 21

Sites, Entities, BU and BG Yearly synthesis

2011 Main Risks

Sites, Entities, BU and BG

2012 New Main Risks

For each one :

Description of theirimpacts (environnemental, media, operational, financial) evaluatedat the moment the present Risk Mapping exercise isconducted and including the results of the action plans alreadylaunched in 2011 and before, with as muchquantification elements as possible.

The arbitration for the choice of those 5 risks isthe responsibility of the Operational Unit Management at eachlevel.

2012 Risk Mapping

For each one :

Precise and detailed description of the action plans to correctly manage the risk at full term

-Detailed actions,

-Detailed Resourcesallocation (finance, human,…

-Schedule of the actions (including multiyear)

- Description of the potential impact level weare aiming after the action plans are achieved

GROSS IMPACT NET IMPACT

2011 Risk Mapping

For each one :

Precise, detailed and understandabledescription of the chosen risks

5 Main Risks for each site,

entity, BU and BG

From the 2011 results.

Take the 5 Main Risks for each entity (Site, entity, BU, includingBG).

If any, replace some of the chosen risks by new main risks appearedfrom 2011 on, but keep a maximum of 5 Main Risks.

CAUSES IDENTIFICATION

ECRI – 7 juin 2012 p 22

Table of contents






ECRI – 7 juin 2012 p 23

CUSTOMER

� Project context : scope, organization...

� Specific stakes : new technology, new market/customer …

� Project Objectives : scope, planning, budget, performances

� Perimeter : entities concerned by the analysis: risks and opportunities for who? Possibility to perform the analysis with partner(s)

R&O Identification Which scope for the analysis ?

Consortium

LEADER

supplier

Partner

ECRI – 7 juin 2012 p 24

Project Management Methodology (PMM)

Project Management Methodology (PMM)Architecture

Project Rating

AREVA Project Management Policy

Small Project Manual

Project Management Plan

Project Charter Project Closeout

ContractManagement

1 1 -- IntegrationIntegration ManagementManagement

2 2 -- Scope ManagementScope Management

Verification & Validation

RequirementManagement

Product Breakdown Structure

Time Management

Project Execution Logic

Progress Method

3 3 -- Time ManagementTime Management

Schedule Practice

4 4 -- CostCost ManagementManagementEarned Value Management

CostManagement

8 8 -- R&O ManagementR&O Management

9 9 -- ProcurementProcurement ManagementManagement

5 5 -- QualityQuality ManagementManagement

Lesson LearnedManagement

Project Quality Plan

Configuration management

Risk & OpportunityManagement

R&O MethodProcurementManagement

6 6 –– HumanHuman ResourcesResources ManagementManagement

Project Organization

Project Organization

Note

7 7 -- Communication ManagementCommunication ManagementProject

Performance Report

Project Finance Report

Project Governance

Documentation Management

Work Breakdown Structure

Project Management

Glossary

Mandatory In progressRecommende

d

R&O Management Plan

TRAC

Interface Management

Change Management

ECRI – 7 juin 2012 p 25

Importance of Risk management in the end-to-end project cycle

Contract Award

Provisional Acceptance

& Warranty Start

TenderIn itiation

& PlanningExecution, Monitor ing and Control Closing

Transfer

to Project

Transfer Meeting

Customer Kick-off

TenderReception

Transfer to Service

Internal Kick-off

Partner Kick-off

F inal Acceptance & Warranty

End

Closing Review & Lessons Learnt

TenderSubmission

Qualification

AOC M0

Contract Signature

Authorization

AOC M4

Transfer Meeting

Basic & Detailed Design

Manufacturing

Integration & Testing

Transport.

Construction, Install. & Commissioning

Observation Period Punch List Clearance

Design Launch

Manuf. Launch

Factory Acceptanc

e

Site Acceptance Customer Handover

Project Execution Reviews

Key activities& deliverables

• Commercial Pipeline

• BUSTAM Data & Validation- Project & Customer Description- EAS, Cash Curve, Taxes

- Cost Breakdown Structure- Legal Executive Summary- Risk Analysis

• Industrial Capacity Check

• Offer

• Negotiations with the Customer

• Contract

• Project Manager Appointment

Integration

Scope

Time

Cost

Quality

Human Resources

Comm.

Risk

Contract & Procurement

Project Charter Project Management Plan

Requirements Matrix , WBS

Detailed Schedule

Budget, Detailed Costs

Quality /EHS Measures & Plan

Team & Organization Setup Staffing Plan, Workload

Communication Channels

Risks Analysis, Action Plans

Site Permits, Crit ical Sourcing

Execution Governance Interfaces Management

Products/Documents Design, Delivery, Acceptance & Handover

Progress Monitoring and Control

Cost Monitoring & Control Invoic ing

Quality /EHS Assurance & Control

Organization & Workload Management

Project Execution Review & Report Customer Relationship Management

Risk Monitoring & Control

Changes & Variation Orders Management

In tegration

Scope

Time

Cost

Quality

Human Resources

Comm.

Risk

Contract & Procurement

Go No Go

AOC M2

Offer Validation

AOC M3

Key Gates

Design Acceptanc

e

Contract coming into force

Offer & contract Project

execution

ECRI – 7 juin 2012 p 26

Table of contents






ECRI – 7 juin 2012 p 27

R&O on a Project such as Saint Brieux

R&O process started as part of tender preparation & will continues to project close out.

The overall programme is broken down into individual projects e.g.

� Implantation of manufacturing facilities,

� Wind turbine manufacturing, installation and commissioning,

� Wind turbine maintenance.

Each project is analysed individually and the results subsequently consolidated to give programme view.

The analysis used as decision making and project management tool.

ECRI – 7 juin 2012 p 28

Risks on integration & very diverse scopes:

�Marine operations (transportation, installation, commissioning, O&M)

�Leading edge technology products (various components in offshore wind turbines)

�Construction (wind turbine foundations)

�Grid connection (cabling, sub-station)

�Convince local populations on environmental impact.

Major risks encountered

ECRI – 7 juin 2012 p 29

What to remember

AREVA has a long and rich experience of Risk and Op portunities management, inherited from Nuclear operations,

This Risk management perfectly applies to Renewable activities considering the complexity of projects,

Offshore Wind is one of the most complex and demand ing activity for the Group:

• Need for high availability of the turbine,• Need for a clear interface with installation activi ties,• A highly complex supply chain,• Offshore services require the highest safety standa rds.

ECRI – 7 juin 2012 p 30

Conclusion

Questions

& Answers