TY - JOUR AU - Broom,, Rob AB - Abstract With a global push to reduce dependence on burning fossil fuels (oil, gas and coal) which emit greenhouse gases, many countries continue to consider nuclear power as a clean, proven, reliable and alternative baseload supply of electricity. Nuclear generation is further expected to play an increasingly important role in improving energy supply security in addition to meeting national targets on climate change. Ian Wood (Partner) and Rob Broom (Associate) from the Energy and Natural Resources team at Squire Patton Boggs examine the issues faced by countries, which are considering or planning their first nuclear power plant (these countries are referred to in this article as ‘Newcomer Countries’). The authors discuss: (i) the various construction contract models and key project risks that ought to be addressed prior to entering into the construction contract, where possible, drawing on case studies where such risks have materialized, (ii) classification of which risks are quantifiable and which are not, (iii) possible methods on how to address and mitigate such risks, and (iv) the key issues that need to be addressed in construction contracts. Furthermore, by reference to the current climate, the authors have provided a summary of the challenges and key considerations associated with Newcomer Countries developing a new build nuclear project. 1. Introduction The challenges to meet electricity demand, reduce reliance on imported energy and promote local economic growth while lowering carbon dioxide emissions, leave many countries with no feasible alternative but to consider incorporating a new nuclear power plant (NPP) as part of that country’s energy generation mix. But with a legacy of high budget over-runs, extensive schedule delays, exemplified recently by the Olkiluoto 3 (OL3) EPR project in Finland, mitigating risks associated with project construction for technically complex and capital-intensive NPPs is paramount. This article sets out the key considerations and issues as they relate to construction contracts for new build NPPs, especially when these NPPs are being built in countries new to nuclear energy (‘Newcomer Countries’). According to the World Nuclear Association (WNA), nuclear power capacity is projected to grow by up to 60 per cent, to 543 GWe in 2030, and further to 624 GWe by 2040, and based on declared intensions of various host governments, much of this growth is assigned to Newcomer Countries; nuclear power is planned in over 20 countries, which do not currently have it and is under some level of consideration in over 20 more.1 It is highly likely that the amount of Newcomer Countries will rise in years to come, especially amongst developing countries that lack access to fossil fuels, who view nuclear as a viable and cost-effective form of baseload power. 2. Construction contract models Typical models for NPP construction contracts include: EPC turnkey contracts—where a single contractor takes responsibility for the engineering, procurement and construction, which is the entire NPP project from concept to commissioning—an EPC contract does not necessarily have to be fixed price; Split package approaches—where a number of contractors take the overall responsibility for the design, supply, construction and setting to work of different functionally complete parts of a nuclear facility; multi- package contract approaches—where a customer, or typically the architect-engineer, invites bids for a NSSS (that part of an NPP which incorporates the nuclear heat source, the heat transfer equipment, the heat transport system and other systems directly connected to the NSSS), turbine generator and fuel, selects the preferred bids, places contracts and then designs the balance of plant around this equipment; or arrangements often based on country-to-country agreements where the NPP vendor takes on an equity share (BOO build own operate, DBF design build finance, BOT build own transfer, or similar arrangements).2 A detailed look at the procurement and contracting approach of NPP projects reveals a correlation between the contract approach chosen and the owners’ experience. The main model predominately used is the EPC contract which passes a considerable amount of responsibility and, consequently, project risk to the contractor. However, whichever model is used, it is critical that there is a clear allocation of risk between the parties. As Newcomer Countries are likely not to have mature regulatory environments: (i) where the law is generally well settled and outcomes relatively predictable, and (ii) that can cater for new NPPs, a well-drafted construction contract will explicitly define the applicable law as of the effective date, and any changes will be measured against that ‘baseline standard’.3 The parties should start by allocating risk in the contract as measured against that agreed baseline. 3. Contract forms: FIDIC and NEC FIDIC FIDIC is short for the ‘Fédération Internationale des Ingénieurs – Conseils’ (International Federation of Consulting Engineers), an international federation of associations of consulting engineers representing the profession in their respective countries. Its contracts committee has been responsible for producing the most commonly used standard forms of contract for international construction projects. FIDIC contracts are popular as they are generally considered to be a balanced set of contracts with fair allocations of risk between employer and contractor. FIDIC contracts are well known to international contractors working on large infrastructure projects and are also approved by funders. New engineering contract The New engineering contract (NEC) is a very different set of standard form contracts, compared to the FIDIC contracts. Its differences from traditional construction contracts range from the simple and brief language, less detailed terms and conditions, clause numbering, absence of numbered cross-references to the use of the present tense. NEC is not widely-used internationally and is perceived to have largely untested and unusual legal language. The parties will need to ensure that they have sufficient resources to effectively administer and manage the project.4 NEC versus FIDIC Both NEC and FIDIC contracts are standard forms of contract that are part of standard families for procuring works or consultancy services (FIDIC), goods, works or services (NEC). Each has an allotted person to act on behalf of the employer (engineer in FIDIC, project manager in NEC). They both contain obligations relating to time, cost and quality, although the explicit requirements are quite different; NEC allows more extensive provisions and choice requiring and enabling a more proactive and collaborative approach to managing the contract. Key NEC drafting features centre around flexibility, clarity and simplicity, and a stimulus to good management; no such aims exist within FIDIC. NEC has probably many advantages over FIDIC particularly in clarity, flexibility, explicit project management procedures, partnering and teamwork, risk management, objective measurements of weather and ground conditions risks, and variations.5 4. Key issues prior and relevant to the construction contract formation Launching a new NPP is a major commitment for any country, let alone a Newcomer Country; it has to be carefully planned for it requires huge resources investments and involves many stakeholders: the government, regulatory bodies, electric utilities, grid operators, research institutes, universities and the public. In this section, we consider the issues that these stakeholders must consider. Securing funding Nuclear power stations are capital intensive, making the cost of capital and the allowed rate of return the crucial variables in determining the economics of new build. They are mammoth investments: taking years to build before they start generating electricity and realising revenues, they can therefore attract limited investor appetite. This is particularly so considering that reactors have been built at a very rapid pace which has tended to drive up unit costs which has scared off investors. Government subsidies through, for example a Contract for Difference to hedge the power offtake price under a power purchase agreement (PPA) from the NPP and ensure a stable revenue source are a key requirement to be implemented, possibly alongside state guarantees. What kind of market support mechanism? PPA or revenue guarantee mechanism is mandatory for both Lenders and Sponsors and should include, depending on the detailed risk allocation, a minimum duration to allow adequate return for the Sponsors and to attract long-term financing, which is key for achieving a viable cost of generated electricity; a guaranteed output/take-or-pay, ie fixed volume assumptions; pass through of some key costs (fuel costs, insurance for example); Liquidated Damages’s/performance guarantee to be back-stopped by the EPC contractor; a final cost of ‘radwaste’ disposal and decommissioning risk borne by government with a fixed and pre-agreed contribution by Sponsors through adequate and ring-fenced funds; a well defined licensing schedule with any delay not due to Sponsors passed-through in the PPA. Flexibility and willingness of all parties to adapt the tariff/price to cope with the project uncertainties will be necessary to guarantee final project viability.6 Conducting a risk management process When structuring a NPP project it is imperative to conduct a thorough due diligence assessment of all the risks associated with the project throughout the whole project life cycle and not just in relation to the construction phase. Inadequacies in the performance of risk management has been the main contributor to historical under performance of nuclear deployment projects. The Newcommer Country utility who will take over the project should undertake a comprehensive risk assessment, which should be reviewed and updated as the project progresses through each stage. Table 1 below provides a high-level overview of such risks during each stage. Table 1. NPP project risk matrix NPP Project Stage Development Construction Operation Decommissioning Technical Regulatory assessment Site suitability Environmental impact Planning approvals Safety Design completion/changes Regulatory assessment approvals Vendor and contract performance Equipment supply chain Skilled & Experienced workforce Construction quality Transport routes to site Industrial relations Plant performance Safety Plant performance Skilled and experienced workforce Nuclear event elsewhere Nuclear event The environment Fuel supply chain Safety Design completion/changes Regulatory assessment/approvals Contractor performance Equipment supply chain Skilled and experienced workforce Transport routes to/from site Business Case Economics Demand forecast Used fuel and radioactive waste disposal Design Changes Delay Electricity trading arrangements Electricity price Carbon price Fuel costs Capital additions Early closure Cost of waste and used fuel disposal Decommissioning fund performance Decommissioning Fund Societal and Political General public support and local approval Policy supporting the need for nuclear power Policy for waste management Decommissioning and waste management mechanism Carbon pricing mechanism Environmental policy NPP Project Stage Development Construction Operation Decommissioning Technical Regulatory assessment Site suitability Environmental impact Planning approvals Safety Design completion/changes Regulatory assessment approvals Vendor and contract performance Equipment supply chain Skilled & Experienced workforce Construction quality Transport routes to site Industrial relations Plant performance Safety Plant performance Skilled and experienced workforce Nuclear event elsewhere Nuclear event The environment Fuel supply chain Safety Design completion/changes Regulatory assessment/approvals Contractor performance Equipment supply chain Skilled and experienced workforce Transport routes to/from site Business Case Economics Demand forecast Used fuel and radioactive waste disposal Design Changes Delay Electricity trading arrangements Electricity price Carbon price Fuel costs Capital additions Early closure Cost of waste and used fuel disposal Decommissioning fund performance Decommissioning Fund Societal and Political General public support and local approval Policy supporting the need for nuclear power Policy for waste management Decommissioning and waste management mechanism Carbon pricing mechanism Environmental policy Source: World Nuclear Association Report ‘Structuring Nuclear Projects for Success, An Analytic Framework’. Table 1. NPP project risk matrix NPP Project Stage Development Construction Operation Decommissioning Technical Regulatory assessment Site suitability Environmental impact Planning approvals Safety Design completion/changes Regulatory assessment approvals Vendor and contract performance Equipment supply chain Skilled & Experienced workforce Construction quality Transport routes to site Industrial relations Plant performance Safety Plant performance Skilled and experienced workforce Nuclear event elsewhere Nuclear event The environment Fuel supply chain Safety Design completion/changes Regulatory assessment/approvals Contractor performance Equipment supply chain Skilled and experienced workforce Transport routes to/from site Business Case Economics Demand forecast Used fuel and radioactive waste disposal Design Changes Delay Electricity trading arrangements Electricity price Carbon price Fuel costs Capital additions Early closure Cost of waste and used fuel disposal Decommissioning fund performance Decommissioning Fund Societal and Political General public support and local approval Policy supporting the need for nuclear power Policy for waste management Decommissioning and waste management mechanism Carbon pricing mechanism Environmental policy NPP Project Stage Development Construction Operation Decommissioning Technical Regulatory assessment Site suitability Environmental impact Planning approvals Safety Design completion/changes Regulatory assessment approvals Vendor and contract performance Equipment supply chain Skilled & Experienced workforce Construction quality Transport routes to site Industrial relations Plant performance Safety Plant performance Skilled and experienced workforce Nuclear event elsewhere Nuclear event The environment Fuel supply chain Safety Design completion/changes Regulatory assessment/approvals Contractor performance Equipment supply chain Skilled and experienced workforce Transport routes to/from site Business Case Economics Demand forecast Used fuel and radioactive waste disposal Design Changes Delay Electricity trading arrangements Electricity price Carbon price Fuel costs Capital additions Early closure Cost of waste and used fuel disposal Decommissioning fund performance Decommissioning Fund Societal and Political General public support and local approval Policy supporting the need for nuclear power Policy for waste management Decommissioning and waste management mechanism Carbon pricing mechanism Environmental policy Source: World Nuclear Association Report ‘Structuring Nuclear Projects for Success, An Analytic Framework’. Securing and developing the workforce The overall manpower needs for a NPP construction are higher at the construction stage (ie the period immediately following the closure of a contract for the purchase of an NPP and ending with the completion of the commissioning stage of the NPP and its acceptance which allows the requisite utility to start commercial operation) than any other stage of the NPP project.7 Furthermore, the extent to which nuclear energy can achieve its potential for contributing to energy security and sustainable development in the Newcomer Country will ultimately depends on the availability of suitable human resources. Effective recruitment and selection processes are particularly important for nuclear facilities and nuclear related activities due to the long period of time that is needed to train and qualify personnel,8 in Newcomer Countries, these processes are likely to be non-existent and ought to be developed ahead of time. As best practice, a quality assurance programme designed and implemented by trained personnel should be in place in each supply chain organization. All managers and personnel in supply chain companies should understand how their work contributes to the effective and safe delivery of new nuclear plants. All parties to the supply chain must fully understand and implement agreed processes for inspections, tests, analysis and acceptance criteria. To mitigate the competencies challenge, the Newcomer Country should plan and recruit, train and retain workforce for the design, construction and the operation phases, by, inter alia: mobilizing skilled people and skilled suppliers; developing local manpower competency; creating partnerships with research centres and universities; and fostering bilateral support agreements. It is also important to look ahead and plan for staffing requirements through setting a timeline and process to facilitate local and secondee recruitment. Agreeing risk allocation If a Contractor (being the tenderer whose tender has been accepted by the Purchaser) is asked to bear all risks in a fixed price construction contract, then the cost of those risks will be inbuilt into the fixed price and any risk that cannot be quantified will likely need to be over-priced. Conversely, if the Purchaser will shoulder the risks, the benefits of a fixed price are lost. Transferring risk to the contractor can help greatly with obtaining finance for the NPP project, as it may be conductive to a more clear-cut risk profile. A key point for Lenders in a new build NPP project is that all project risk has been allocated to a project participant and no risk is left unaccounted for. The Contractor exporting to an emerging or less developed market will know what certain items will cost (to a good degree of certainty), these items include: (i) supply of NSSS and BOP equipment, (ii) domestic skilled labour costs and design and engineering. As stated above, the need for a Contractor to account for all NPP project risks, price all subcontracts and project contingencies may lead to a higher contract price. Some examples of quantifiable and non-quantifiable risks are set out in the Table 2 below. Table 2. Examples of quantifiable and non-quantifiable risks Risk quantifiable by contractor at contract execution (fixed fee) Local risks not quantifiable by contract at contract execution (fixed rate) Risks due to market forces (cost reimbursable) Design and engineering Fabrication of components in home market Procurement of equipment Baseline licensing Fuel fabrication Computer systems software Civil works Dredging Local trash disposal Housing of workers Local regulatory requirements in excess of baseline Subsurface conditions Enriched uranium purchase Water Electricity Risk quantifiable by contractor at contract execution (fixed fee) Local risks not quantifiable by contract at contract execution (fixed rate) Risks due to market forces (cost reimbursable) Design and engineering Fabrication of components in home market Procurement of equipment Baseline licensing Fuel fabrication Computer systems software Civil works Dredging Local trash disposal Housing of workers Local regulatory requirements in excess of baseline Subsurface conditions Enriched uranium purchase Water Electricity Source: Vincent Zabielski, ‘Managing Licensing Risk in New Build Construction Contracts for Emerging Markets’. Table 2. Examples of quantifiable and non-quantifiable risks Risk quantifiable by contractor at contract execution (fixed fee) Local risks not quantifiable by contract at contract execution (fixed rate) Risks due to market forces (cost reimbursable) Design and engineering Fabrication of components in home market Procurement of equipment Baseline licensing Fuel fabrication Computer systems software Civil works Dredging Local trash disposal Housing of workers Local regulatory requirements in excess of baseline Subsurface conditions Enriched uranium purchase Water Electricity Risk quantifiable by contractor at contract execution (fixed fee) Local risks not quantifiable by contract at contract execution (fixed rate) Risks due to market forces (cost reimbursable) Design and engineering Fabrication of components in home market Procurement of equipment Baseline licensing Fuel fabrication Computer systems software Civil works Dredging Local trash disposal Housing of workers Local regulatory requirements in excess of baseline Subsurface conditions Enriched uranium purchase Water Electricity Source: Vincent Zabielski, ‘Managing Licensing Risk in New Build Construction Contracts for Emerging Markets’. One of the most important lessons learned from a recent difficult project case study (set out below) is that the NPP project owners took far too much comfort from placing a huge amount of risk on the contractor. In addition, the contractors’ willingness to take on this risk was accepted as a proxy for both capability and confidence that the overall level of risk was manageable. Case study example—Olkiluoto 3 reactor project The new 1600 MW Olkiluoto 3 reactor project on the west coast of Finland is being built by Areva, the French reactor manufacturer in partnership with Siemens of Germany. Because of problems with construction and the sourcing of components, Olkiluoto 3 has fallen at least 12 months behind schedule. The budget for Olkiluoto 3 has been exceeded by more than €3bn. Areva and Siemens, through their Framatome joint venture, signed a fixed-price contract with project owner Teollisuuden Voima Oyj (TVO) of Finland, and therefore, theoretically, have to bear the extra costs themselves.9 The financial assurance an EPC turnkey contract seemed to give was an important element in Areva NP winning the Olkiluoto contract. The clear conclusion from the above case study is that simply ‘transferring a risk’ does not make it disappear, the receiving party should ensure that it can control the risk if uncertainty is to be lowered to acceptable levels. Table 3 illustrates ways in which the risks of NPP projects can be monitored and controlled, to match Table 1. Table 3. How to manage risks in NPP projects Development Construction Operation Decommissioning Technical Internationally accepted designs Building on existing nuclear sites Develop sound contractual arrangements for involved parties Invest in supply chain infrastructure Good training programmes Invest in transport infrastructure near the site Previous construction experience Strong project management Involvement in WANO, INPO etc Good training programmes Invest in new nuclear fuel facilities ‘fleet’ approach to reactor management Invest continuously in plant maintenance and improvement Decide on decommissioning strategy as early as possible Invest in workforce training Business case Seek investment from major power users Build business case on various demand scenarios Stick to standardised designs Use good mix of permanent and contract stages Develop sound long term power contracts Develop good balance of duel contracts Nuclear knowledge management Contribute to well defined fund, as required Societal and political Public debates and hearings Regular opinion polling Gaining cross party political support Emphasise environmental advantages of nuclear Develop waste management policy with government Development Construction Operation Decommissioning Technical Internationally accepted designs Building on existing nuclear sites Develop sound contractual arrangements for involved parties Invest in supply chain infrastructure Good training programmes Invest in transport infrastructure near the site Previous construction experience Strong project management Involvement in WANO, INPO etc Good training programmes Invest in new nuclear fuel facilities ‘fleet’ approach to reactor management Invest continuously in plant maintenance and improvement Decide on decommissioning strategy as early as possible Invest in workforce training Business case Seek investment from major power users Build business case on various demand scenarios Stick to standardised designs Use good mix of permanent and contract stages Develop sound long term power contracts Develop good balance of duel contracts Nuclear knowledge management Contribute to well defined fund, as required Societal and political Public debates and hearings Regular opinion polling Gaining cross party political support Emphasise environmental advantages of nuclear Develop waste management policy with government Source: World nuclear association report ’Structuring Nuclear Projects for Success, An Analytic Framework’. Table 3. How to manage risks in NPP projects Development Construction Operation Decommissioning Technical Internationally accepted designs Building on existing nuclear sites Develop sound contractual arrangements for involved parties Invest in supply chain infrastructure Good training programmes Invest in transport infrastructure near the site Previous construction experience Strong project management Involvement in WANO, INPO etc Good training programmes Invest in new nuclear fuel facilities ‘fleet’ approach to reactor management Invest continuously in plant maintenance and improvement Decide on decommissioning strategy as early as possible Invest in workforce training Business case Seek investment from major power users Build business case on various demand scenarios Stick to standardised designs Use good mix of permanent and contract stages Develop sound long term power contracts Develop good balance of duel contracts Nuclear knowledge management Contribute to well defined fund, as required Societal and political Public debates and hearings Regular opinion polling Gaining cross party political support Emphasise environmental advantages of nuclear Develop waste management policy with government Development Construction Operation Decommissioning Technical Internationally accepted designs Building on existing nuclear sites Develop sound contractual arrangements for involved parties Invest in supply chain infrastructure Good training programmes Invest in transport infrastructure near the site Previous construction experience Strong project management Involvement in WANO, INPO etc Good training programmes Invest in new nuclear fuel facilities ‘fleet’ approach to reactor management Invest continuously in plant maintenance and improvement Decide on decommissioning strategy as early as possible Invest in workforce training Business case Seek investment from major power users Build business case on various demand scenarios Stick to standardised designs Use good mix of permanent and contract stages Develop sound long term power contracts Develop good balance of duel contracts Nuclear knowledge management Contribute to well defined fund, as required Societal and political Public debates and hearings Regular opinion polling Gaining cross party political support Emphasise environmental advantages of nuclear Develop waste management policy with government Source: World nuclear association report ’Structuring Nuclear Projects for Success, An Analytic Framework’. Agreeing construction phases of the NPP project The timelines for phases of the NPP’s construction needs to be determined, and the plans pertaining to them documented and adhered to for the project’s entire life cycle. The key phases in this category are: (i) preparation of site infrastructure, (ii) detailed design engineering, (iii) equipment and components manufacture, (iv) construction, errection and installation, and (v) commissioning and plant acceptance. As delay related costs make nuclear projects high risk, the importance of adhering to these phases cannot be over emphasized. All timelines must be realistic and be achievable for all aspects of construction and handover. The timelines should include major milestones, critical paths and logic ties. Allowance should be made for personnel orientation and skills verification activities.10 Once a nuclear new build NPP is approved, the key date is first nuclear concrete, and everything else can be scheduled round this date. An inaccurate understanding of project risks and inaccurate prioritization of critical activities often lead to significant delays and budget overruns, NPP projects in France (Flamanville 3), Finland (Olkiluoto 3) and the US (South Texas 3 and 4) have demonstrated these risks dramatically.11 Construction delays are common due to a number of factors, including political upheaval (the US embargo caused a 15-year delay to Iran’s first NPP in Bushehr before construction resumed in 1995) and the type of prolonged protest experienced during the delivery of India’s largest NPP. The progress of the Kundankulam NPP (KNPP) was besieged by various activist groups over potential radiation threats and issues related to nuclear waste disposal, with the anti-Kudankulam campaign intensifying following the Fukushima nuclear incident in Japan in 2011.12 It should not be assumed though that NPPs can never be built to cost and schedule, the overwhelming evidence shows that this is not the case; China and Korea where they have been successfully implementing large ongoing new NPPs consisting of standardized designs for many years. Managing licensing risk Regulators and Licenses play a major role in the design, construction and operation of a NPP; a typical licencing process can be broken down into several stages: (i) pre-licensing steps—where the regulatory authority provides generic approval for a design or a site, (ii) reactor design certification, (iii) site approval,13 and (iv) licenses for construction and operation. These stages are supplemented by local planning approvals, which are both required under law and as a means of achieving and demonstrating public acceptance.14 From a commercial perspective, the Financial Investment Decision (FID) ie the decision to mobilize the capital and means to carry out a project is a critical milestone. Whether or not the FID should be taken before the construction licence is obtained will depend on the investor or group of investors, and on their degree of experience and risk appetite. Some key examples of licensing risks include: failure of delay by a regulator to issue a required permit or licence; increased burden on a contractor caused by a change in law/interpretation of the law; and incorrect assumptions (for example: subsurface conditions, cooling water temperature, etc). The requirements of regulatory and licensing bodies in respect to delivery of design documentation and the resulting approval process can significantly influence a NPP time schedule, therefore, to ensure a level of predictability which is highly valued by commercial developers, a precise, staged, licensing plan will be necessary to be agreed between all stakeholders. Regulator engagement and government guarantees are crucial in this respect. A formally binding positive decision about a nuclear plant project taken by the government (and possibly parliament) of the Newcomer Country, at the outset, would remove political considerations from the licensing process, which could then shift the project focus on safety issues.15 Site location and choosing a design The project owner will need to select a site and choose a design, depending on the circumstances, one or both of these may be pre-defined by, for example, being selected by the government rather than by the project developer. In first-in-a-country (FIAC) projects cases, a design will usually need to be adapted to national regulations. A standard deign will be lower in risk than a first of a kind (FOAK) design. Flamanville is a FOAK and it is principally because of the nature of its design, which is why it has gone three times over budget and over time. A reasonable level of design maturity should be reached before applying for a licence for a FOAK project—and, by the time of first concrete, a high proportion of the detailed design should have been completed. It should be noted that just entering one or more delivery contracts for the plant (eg EPC contracts) is not sufficient. What is truly required is the achievement of a high degree of design maturity (nuclear, conventional and balance of plant) prior to contract fixing, this is fundamental as a baseline for achieving a well structured contract. Early works contracts with more than one nuclear supplier help to establish this (additional) baseline.16 Developing a legal and regulatory environment, and Government Policy NPP projects need a consistent and predictable application of mature regulations on nuclear safety and liabilities, both national and international. A key challenge in Newcomer Countries is the need to adapt to existing laws and regulations. In terms of allocation, governments and regulators have the responsibility to: define the National Energy Policies and sign the International Conventions; and put a stable and consistent legal framework in place, national Acts and Laws. The government’s policy needs to endure over the life of the NPP to provide developers (investors and financiers) with the confidence to push ahead with such a long-term development. The Belene plant in Bulgaria, for example, previously suffered from changes in government policy that caused the market to lose confidence in the project. Alongside certainty over policy, government needs to provide a strong and stable legal and regulatory platform on which the nuclear plant can be built. Investors and developers need to understand the regime in which they are working, and to have the assurance that the legal and regulatory position is not going to be in constant flux during their project’s lifetime. While both developers and government recognize that some changes may be required during the life of the project, they also acknowledge that government—which establishes the laws—should be in the best position to manage the resulting risks. Challenges to Newcomer Countries In the current climate there are a number of challenges to Newcomer Countries. Some are market driven: William D. Magwood, IV, director general of the OECD Nuclear Energy Agency (NEA) in 201617 noted that ‘markets are broken; they don't work and don't do what they are supposed to do. The time has come to recognise that we have a situation where large utilities are losing money and are almost on the verge of bankruptcy. When you have a situation in many markets where the only things that can be built are things that are subsidised, then we have a serious problem’. In addition, Mr Magwood added that ‘the way projects are implemented, the supply chain, and particularly the financing environment, have all changed radically’. Changes to financing models, the plethora of reactor technologies being marketed aggressively and the commitment to carbon reduction have created opportunity and uncertainty, the latter of which presents financing challenges for modest projects, let alone those of the magnitude of a NPP requiring build and development expenditure in the $10–25bn range. With significant capital expenditure, utility and governmental scrutiny presents opportunities for other energy sources to compete with nuclear to be preferred on investment decisions: gas, wind or solar combined with large scale battery storage and waste to energy are competing for investment as well as multiple sources supplied to disaggregated grids (so-called ‘disrupted energy supply’). Newcomer Countries face other challenges, being the capacity, ability and willingness to regulate. At the recent World Nuclear Association symposium held in London in September 2017, Alexey Ferapontov, deputy chairman of Russia’s Rostechnadzor stated that Newcomer Countries ‘must realise the importance of having the necessary infrastructure’. He went on to state that a key area of this is a robust regulatory safety system; ‘Practice shows that it is impossible to do this without studying the experience of countries with an existing nuclear infrastructure and regulatory framework’ he added. Mr Ferapontov went on to opine that a regulator with no previous experience of nuclear power plant licensing and the various stages of the nuclear lifecycle ‘pays special attention’ to regulatory authorities in the country supplying the technology on everything from licensing and assessing the safety of a reactor design, to construction and operation. Rostechnadzor is ‘fully involved’, for example in assisting regulatory authorities in Bangladesh and Belarus, where Rosatom has new-build projects. Other regulators have noted how the UAE government had required a ‘reference plant’, meaning a reactor design that had been licensed before by a recognized regulator and which had already been put into operation. This was been done with the APR1400 by developing a system with a secondee in the office of FANR (Federal Authority for Nuclear Regulation) who is the link between them and KINS (Korea Institute of Nuclear Safety) and NNSC (Nuclear Safety and Security Commission). Developing an appropriate ‘Safety Culture’ is also a challenge: see (sub-Section ‘Design standards and creating a safety culture’) below. Powerful and often aggressive reactor vendors and NPP developers with a wealth of experience of the challenges facing such projects create a potential contrast to the goals and obligations of regulators and governments in Newcomer Countries. Managing such interests is clearly not straight forward: look at the well-documented issues at Olkiluoto-3. TVO, the consortium behind Olkilouto, face a difficult balancing act between co-operating with Areva to finish the project and pursuing it and its erstwhile partner Siemens for billions of euros in compensation. Add to that tricky path Areva’s well documented financial difficulties and one can well see how complex and challenging delivering new build NPPs can be for even the most experienced of nuclear nations, let alone Newcomer Countries. It is understandable that Newcomer Countries will have aspirations to grow indigenous expertise, skills and knowledge so that they are able to both build further new NPPs and (potentially) sell those skillsets to other Newcomer Countries. This was a clear plank to ENEC’s programme to build Barakah. However, the reality is significant expenditure on an expatriate workforce and expertise to meet the need for ‘suitably qualified and experienced’ (SQEP’d) personnel. By extension, the UAE Regulator, FANR, has also invested significantly in expatriate expertise: in May 2012, FANR’s staff comprised 52 per cent expatriates, and 48 per cent Emiratis, with a majority of operational positions filled by expatriates and the majority of administrative positions filled by Emiratis.18 As an extension to the desire to create skills and jobs within the indigenous population is the understandable desire to develop a local supply chain, which has the attendant issue of quality control and the resultant safety implications. By definition a new and indigenous supply chain will not have the experience of a more mature one. One has to wonder of the wisdom in using a local supply chain in new programmes in the likes of Belarus, Bangladesh, Egypt, Malaysia, Poland, Saudi Arabia, Thailand and Vietnam? Reactor design and engineering cannot be procured from local suppliers, but localization of the supply chain is always an important objective. Yet there is a potential problem with this; localization could be seen as getting in the way of the need to internationalize the supply chain for economic reasons. Local may mean more expensive and, at the margin, conceivably render a particular project uneconomical. With the diminishing number of reactor vendors will come with a consequent reduction in their highly specialized reactor supply chain, which has tended to be nationally based. From a supply-side perspective the challenge in emerging economies which are candidates for a first reactor involves finding an appropriate mix of local and international suppliers and the development of the technical capability to manage and finance a programme effectively. Notably even in mature industrial countries like the France, the UK and the Czech Republic, the proportion of local content in reactor projects is expected to be not more than 50–70 per cent. ‘Localisation’ is far from being a ‘silver bullet’. Those countries that have pursued localization most vigorously have done so in order to foster self-reliance in design, build and operation. In an increasingly interdependent and international economy there is little economic advantage in locating every possible industry on a national territory. A recent WNA report19 suggests that the solution lies in developing an international supply chain that delivers high-quality, reliable and cost-competitive components. However there is no single solution to securing a safe and reliable supply chain; the challenges are complex and inter-related. There are, however a number of key issues which are clearly important. Firstly, there needs to be investment in manufacturing and engineering capacity to minimize bottlenecks and assure availability of nuclear-grade components. Secondly, investment is necessary in business and technical processes that enable companies and organizations to adopt good practice and integrate their activities. Thirdly, there needs to be certification of suppliers to international standards for quality control of manufacturing and construction processes. Finally, the institutional framework between government and industry should be strengthened so that national technical regulation and licensing facilitates international trade and technical exchange. A recent report20 theorized that good international practice in local economic development suggests that a localization strategy should be built around two axes. Firstly, there should be close collaboration between the EPC contractor and the relevant economic development agency and the plant operator on the procurement procedures to be followed. Realistic opportunities for increasing local content can be identified and then followed up by a joint task force, so that requirements can be announced well in advance of tendering, giving local companies the chance to pre-qualify and compete. Secondly, complementary measures are necessary by the economic development agency to promote capacity upgrading among local companies and to help them achieve the necessary certification. There are some successes: South Korea has built up an internationally competitive indigenous nuclear power industry from a low base. The local content of early plants, such as Kori 1-4 begun during the 1970s, ranged from 8% to 29% of equipment. By the early 2000s when Yonggwang 5&6 came online local content had reached 79%. The first reactor at the Barakah plant in Abu Dhabi supplied by KEPCO is set to go online within months, on time and possibly on budget. If it succeeds, the reason is likely to be consistency. KEPCO always works with the same suppliers and construction firms hailing from Korea. For Newcomer Countries there are salutary lessons from the recent experiences of arguably sub-standard delivery, such as the welding problems at Flammanville In addition, Newcomer Countries should be aware of obvious pitfalls, for example, trying to develop and rely upon indigenous workers and a local supply chain: as even developed nations are failing. Developing the necessary infrastructure Nuclear power infrastructure includes all the activities and arrangements needed to set up and operate a nuclear power programme. The IAEA helps the newcomers develop necessary infrastructure by providing publications, trainings, expert missions, fellowships, scientific visits and by connecting them with other countries to share experiences in building an infrastructure for nuclear power. Newcomer Countries are frequently requesting the IAEA’s assistance in developing the proper infrastructure to establish safe, secure and sustainable nuclear power programmes and cope with the challenges posed by the rise in global demand for energy and the need to mitigate climate change and in the period 2009–2016, the IAEA has conducted 17 such missions in 13 countries. The IAEA is an essential resource hub for Newcomer Countries. They can access the IAEA’s energy planning tools and tap into its knowledge of nuclear power to make informed decisions about the role of this energy source in their countries.21 The IAEA’s recommended approach to preparing nuclear power infrastructure is known as the ‘Milestones’ approach. The Milestones contains three phases and is holistic in approach. It covers 19 issues related to nuclear power infrastructure. Phase 1 of the Milestones is all about making a decision to have a nuclear power programme. In this phase, it is important for countries to understand its options and the implications of having nuclear power. After a country has made a decision, it moves onto Phase 2, which includes assembling a team and assigning the roles and responsibilities for addressing the 19 issues so that it is ready to invite bids or sign a contract for the first NPP. Phase 3 is when the construction and commissioning processes for the NPP take place. It takes 10–15 years of preparation from the initial thinking, so even before a decision to pursue nuclear power is taken, to when the first NPP is connected to the grid, generating electricity (Figure 1).22 Figure 1. View largeDownload slide IAEA phases and milestones. Source: IAEA website. IAEA website, available at accessed 24 July 2018. Figure 1. View largeDownload slide IAEA phases and milestones. Source: IAEA website. IAEA website, available at accessed 24 July 2018. 5. Key issues for NPPs, which need to be addressed in construction contracts Detailing a scope of work for the contractor A scope of work can be set to a standard of performance (see sub-Section ‘Representations and warranties’ below) or by way of definition, exclude the owner’s scope of work, reflecting the full-scope nature of the contractor’s work under an EPC contract. Parties should add a highly detailed schedule setting out the exact description of the works and specifications. The owner should retain the ability to require a variation to the contract scope of work. Cost overruns An NPP is a capital-intensive investment, however, over a long period (nominal design lifetime is between 25 and 40 years) it can provide very good, reliable, large-scale baseload power, which can operate constantly 24/7. Projected NPP construction costs are very preliminary and highly uncertain; decision makers often use ‘overnight construction costs’, which assume the project is built on time, usually within five years. However, the ‘lead-time’—ie the stage between initiation of the project and completion—can cause significant extra costs. The cost of delay can mean a loss of revenue for the NPP project due to lost production capability as well as grid connection agreement penalties. At the extreme, cost overruns can even lead to bankruptcy of parties involved in the project. Especially in the context of Newcomer Counties, the key risks, which have led to rising NPP construction costs, are, in part to significant increase in worldwide demand for power plants, ie the demand for plants is straining the supply. Furthermore, due to regional labour shortages, demand and cost have escalated significantly for both on-site construction labour and skilled manufacturing labour. Design standards and creating a safety culture One of the fundamental design principles that contributes to assuring nuclear safety is the principle of ‘Defence in Depth’, a strategy that relies on multiple barriers to reinforce integrity and prevent unintended release of radioactivity. However, good design standards and quality regimes are inadequate without a positive nuclear safety culture being developed and demonstrated by the organizations involved in the construction process. The design standard should be set out in the contract and referenced back to a ‘Reference Plant’—see sub-Section ‘Reference plant’) below. When assembling the contract documents, the works information is vital and must contain more information that a typical bills of quantities or employer’s requirements document. In order for the contract to work properly, the works information must also include, among other things, works to be carried out by the employer or third parties and procedures for submission and review of information, and details of the extent to which the contractor is responsible for design. The design most commonly marketed by nuclear vendors in the western hemisphere is Westinghouse’s AP1000 (selected for 29 units), followed by Areva’s EPR reactor (selected for 22 units). The ABWR reactor design family, marketed by several nuclear vendors (GE–Hitachi, Toshiba and its subsidiary Westinghouse), is less popular in terms of units. With regard to Safety Culture, which WANO defines as ‘the core values and behaviours resulting from a collective commitment by leaders and individuals to emphasise safety over competing goals, to ensure protection of people and the environment’, Newcomer Countries face a particular challenge, as they do not have either the experience to benchmarks to develop what might be considered as an acceptable Safety Culture. Juliette Murray of PWC23 describes the challenges of a start up in respect of Safety Culture, equally applicable to a Newcomer Country as follows: For new build “start up” organisations establishing Safety Culture is a particular challenge; there is no existing culture consistently modelled by your employees’ day in day out for new hires to replicate. Instead you have maybe a number of legacy cultures, cultures that don’t easily fit together and ultimately a culture born out of dominating behaviours from employees’ previous organisations. What behaviour does the new hire emulate? And more importantly, who do you want them to emulate? There are obvious tensions between delivering a successful NPP to time and budget and doing so in a safe and sustainable manner, particularly when under pressure from powerful reactor vendors or nuclear developers who will have often invested significantly and stand to lose significantly if delayed or subject to additional costs due to an inefficient safety or regulatory regime. Reference plant As mentioned earlier, for Newcomer Counties who will inevitably have a low risk tolerance, the construction contract ought to stick to proven plant designs. As such, it is expected that the ‘reference plant’ concept will be employed whereby the country’s first NPP would have essentially the same design and safety features as a nuclear power plant that is already licensed by an experienced regulator. Consequently, the Newcomer Country must also develop an accompanying regulatory framework, an option is to start development of national regulations by adopting or adapting regulations from a country that has licensed the same type of NPP. However, if the intention is to have an open technology selection process, care should be taken to establish a set of technology neutral regulations, such as by using the IAEA safety standards as the foundation.24 Project schedule The construction contract will typically require the contractor to perform the work in accordance with a project schedule attached to it. The project schedule will set out the time for completion and key milestone dates. Project delays can increase the project cost and, will have a knock on effect, by delaying the generation of revenues to pay off project debt and realize a profit for the project sponsors/investors.25 A scheduling technique often utilized in construction contracts (including on NPP projects) is the ‘Critical Path Method’ (CPM), which is a network of events, each one of them linked to the following activities. Each activity is represented as a node on the network, and connecting lines are drawn to represent the time schedule to complete that activity. The CPM is built around and referenced to a ‘critical path’, being the longest-duration path through the CPM network. What does this mean? Activities located on the critical path cannot be delayed without delaying the project. Because of its impact on the entire project, critical path analysis is an important aspect of project planning. The critical path can be identified using these parameters: ES—Early Start: earliest time to start a predetermined activity, given that prior activities must be completed first; EF—Early Finish: earliest finish time for the activity; LF—Late Finish: latest time the activity must be completed without delaying the entire project; and LS—Late Start: latest start date that the activity must be started without delaying the project. The CPM schedule shall include all work specified in the all contract documents, including all expected activities of subcontractors, vendors, suppliers and all other parties associated with construction of the project. This method generates a graphical view of the project and is used to calculate how much time and resources are required to complete an activity. It also determines critical activities requiring attention so the project can be completed on time. As the NPP project is being developed, in tandem, the CPM should also be updated.26 As the owner of the NPP project will seek to require that the contractor meets the project schedules and critical path models, it can facilitate this through certain ways including by encompassing a liquidated damages clause by the owner in the event of delay. If the contractor has an equity stake in the project, its interests will be somewhat aligned with the owner in meeting the milestones. The contract should also include a formal procedure for review and approval of variations and extension of time events. Minimizing disputes and construction contract changes Where things do not go as planned and a risk materializes, the construction contract should clearly address which party bears the consequences. In the absence of clear, unambiguous wording in the contract, each party will incur time and effect to resolve the dispute in a way that is most favourable to itself. While all construction contracts ought to include provisions for changes (which are inevitable), changes themselves can lead to disputes between the contract parties. As a dispute resolution process can cause project delays as well as wasting valuable time and money, it is critical that the EPC contract clearly address changes. Table 4 sets out who ought to pay for various categories of changes. Table 4. Who pays for what changes? Category 1—contractor pays Category 2—purchase pays Category 3: Contractor pays for design, customer pays for implementation Delay in delivery of components (see 2012 Georgia example in sub-section ‘Conducting a risk management process’ above) Defective materials or workmanship Changes in law in Supplier home country Supply chain interruptions Design deficiencies Failure to meet agreed-upon standards Customer initiated changes Changes in law of house country above agreed ‘baseline’—see Section 2. Changes caused by sub-surface conditions Changes caused by owner action or inaction Changes that will be used in future applications by the Contractor Improvements requested by customer that will have general application to the NPP/fleet. Category 1—contractor pays Category 2—purchase pays Category 3: Contractor pays for design, customer pays for implementation Delay in delivery of components (see 2012 Georgia example in sub-section ‘Conducting a risk management process’ above) Defective materials or workmanship Changes in law in Supplier home country Supply chain interruptions Design deficiencies Failure to meet agreed-upon standards Customer initiated changes Changes in law of house country above agreed ‘baseline’—see Section 2. Changes caused by sub-surface conditions Changes caused by owner action or inaction Changes that will be used in future applications by the Contractor Improvements requested by customer that will have general application to the NPP/fleet. Source: Vincent Zabielski, ‘Managing Licensing Risk in New Build Construction Contracts for Emerging Markets’. Table 4. Who pays for what changes? Category 1—contractor pays Category 2—purchase pays Category 3: Contractor pays for design, customer pays for implementation Delay in delivery of components (see 2012 Georgia example in sub-section ‘Conducting a risk management process’ above) Defective materials or workmanship Changes in law in Supplier home country Supply chain interruptions Design deficiencies Failure to meet agreed-upon standards Customer initiated changes Changes in law of house country above agreed ‘baseline’—see Section 2. Changes caused by sub-surface conditions Changes caused by owner action or inaction Changes that will be used in future applications by the Contractor Improvements requested by customer that will have general application to the NPP/fleet. Category 1—contractor pays Category 2—purchase pays Category 3: Contractor pays for design, customer pays for implementation Delay in delivery of components (see 2012 Georgia example in sub-section ‘Conducting a risk management process’ above) Defective materials or workmanship Changes in law in Supplier home country Supply chain interruptions Design deficiencies Failure to meet agreed-upon standards Customer initiated changes Changes in law of house country above agreed ‘baseline’—see Section 2. Changes caused by sub-surface conditions Changes caused by owner action or inaction Changes that will be used in future applications by the Contractor Improvements requested by customer that will have general application to the NPP/fleet. Source: Vincent Zabielski, ‘Managing Licensing Risk in New Build Construction Contracts for Emerging Markets’. One of the key areas of dispute for parties is the additional payment due to an extension of time (EOT) or the actual EOT itself. Historically, disputes have arisen due to ambiguous contractual conditions and due to a failure to read, understand or take exception to onerous conditions prior to signing the construction contract. Potential solutions to mitigate cause for disputes Industry standard approaches can be refined to address the potential for and magnitude of such failures. The recognition of the potential areas of disputes should in fact occur at the contract stage, in formal meetings, in which both the owner and contractor: must identify and jointly address possible circumstances leading to EOT disputes and include comprehensive and explicit project controls related to timely identification of and management of EOT-type risks in the contracting stage (before signing); can replace Contract defined computation, negotiation, arbitration and possible litigation of EOT claims from either side with liquidated damages defined by a comprehensive schedule (timing, duration) for calculation of EOT-related claims. The schedule can be two-way, for claims of the owner against the contractor, and vice versa; can require, in the construction contract, that the contractor affirmatively provide formal notice of EOT or Additional Payment claims, or to affirmatively state that there are known circumstances which could lead to finding of an EOT claim, and to formally provide this information to the owner on a regular basis (eg monthly, to be included in the master project schedule); require, in the construction contract, regularly scheduled meetings between the owner and contractor to explicitly address contract disputes, even when there are no formal issues in dispute; require, in the construction contract, regular training of both Owner and Contractor managers and staff on compliance with the Contract in terms of EOT reporting and conflict resolution.27 Agreeing the requisite performance standards to be achieved Performance standards under the construction contract should: include reference to international best practice; require compliance with laws, regulations, codes and standards; encompass a fitness for purpose standard and remedy of defects along with a quality assurance procedure. Sub-contracting The contractor ought to be allowed to pass certain obligations down to subcontractors, however, the contractor should retain ultimate responsibility for the work and services performed by such subcontractors. For each piece of equipment or service provided under the construction contract intended to be subcontracted to another party, the construction company should write product specific requirements or specification (which it will be incorporated in the construction contract as standards to be adhered to) incorporating details such as: Technical and functional requirements; Project management and programme requirements; Quality arrangements and quality documentation/quality plans required including specification of hold and witness points; Document submission schedules; Design codes to be used plus any special additional requirements; Material specifications and additional material testing requirements; Reporting requirements including a process for identifying; and Closing out concessions; Arrangements for issuing tracking and close out of technical queries; Applications of non-conformance process and non-conformance reporting; Inspection and test procedures to be applied; Delivery requirements including timescales, packaging, etc. Sub-contractors can work to the specification provided. There are multifaceted advantages of providing this level of detailed specification in the construction contract, one of these advantages is that the level of checking, intervention, inspection, witnessing and testing can be aligned with the nuclear safety significance of the equipment or service being provided. For equipment with a high impact on nuclear safety, a much greater level of checking, verification and independent assessment will be required. This may involve the licensee and the regulatory inspectors of the Newcomer Country, as well as the main contractor and an independent third party assessor.28 Representations and warranties Obligations in a construction contract must be carefully drafted and accompanies by representations and warranties given by each party to one another, these will be the subject of intense negotiation. With regards to the scope of work, the contractor will typically provide the owner with representations and warranties related to the technical aspects of the NPP projects, these will typically be in very generic terms. The contractor will not want to agree to fitness for purpose style or life service clauses. If the construction contract contains terms which require construction of the NPP to be produced in accordance with a prescribed design, and which, when provided, will comply with prescribed criteria, and literal conformity with the prescribed design (which proves later to be faulty) will inevitably result in the product falling short of one or more of the prescribed criteria. Parties may further consider a duty of the contractor to make minor alternations to improve or vary on the design, by mutual agreement, accordingly to take account of any risk (later discovered) linked to the prescribed design used. If under, an EPC contract, the contractor’s scope of work includes the design of a plant, the contractor is likely to be required to give a specific representation and warranty relating to the technical aspects of the design. However, the contractor will be required to warrant that the plant will be capable of performing in accordance with an agreed capacity factor.29 The contractor should ensure its professional indemnity insurance policy will respond by ensuring that its obligations under its appointment in the construction contract, are always subject to the ‘reasonable skill and care’ obligation. Training a workforce Since the development of technical competences requires considerable time, the Newcomer Country regulatory body needs to plan for human resources development at a very early stage. A realistic scenarios estimate a labour-demand peak of 35,000 people—not taking into account upstream supply chain labour involved in the manufacture of equipment and components. As a first step, the essential competences required for the different phases of the nuclear power programme should be identified. Thereafter, formal training arrangements should be established between the regulatory body and one or more experienced regulators that have licensed a similar facility. This should include early interaction between senior managers of the two regulators followed by detailed training of selected staff who will form the technical core of the regulatory body. 6. Conclusion For Newcomer countries, before we welcome you to the ‘Nuclear Club’, here is the summary of key considerations before you embark your first NPP project: One: Choose a design standard (rather than FOAK) design that has been built before which has been demonstrated to be lower in risk. If it is not possible to avoid a new design, then, ideally the engineering should be completed before a final decision is made to proceed with the rest of the project; Two: Do invest in your supply chain. Do not proceed to select your major contractors based on reputation alone. NPP projects are built by people, not reputations. Make sure the best people are assigned to your project. Assume the contractors are not as good as you think they are and be prepared; Three: Choose contract structures that transfer risk to your contractors sufficient to incentivize them to perform. However, pushing too much risk and then driving your main contractors into bankruptcy serves no one and ultimately will lead to the project collapse; Four: Most of all, no matter the construction contract structure and whether there is a fixed price or not, there must always be transparency through the contract as the owner must regardless, manage its project. No party succeeds in cases where the contractor must manage risk; Five: Be realistic with project timelines and ensure strict adherence to them. It is only with a strong set of project metrics and efficient reporting that problems can be identified early on and immediately acted upon—by all parties—with an unwavering focus on project success.30 Ensure parties deliver on time and in accordance with the agreed quality, manufacturing and construction plans; Six: Develop a workforce with a nuclear safety culture and the necessary skills; and Seven: In the construction contract, ensure robust quality assurance arrangements, including quality plans for manufacturing and construction activities are included and made reference to, with agreed hold points for independent inspection. Footnotes 1 World Nuclear Association Website ‘Plans For New Reactors Worldwide’ (January 2018) accessed 31 May 2018. 2 IAEA ‘Nuclear Contracting Toolkit’, accessed 31 May 2018. 3 Vincent Zabielski, ‘Managing Licensing Risk in New Build Construction Contracts for Emerging Markets’ ; accessed 31 May 2018. 4 ‘New to Nuclear; Nuclear New Build Procurement and Contract Strategy’ Built Environment Group (July 2010) accessed 31 May 2018. 5 NEC, ‘A Comparison of NEC and FIDIC’, accessed 31 May 2018. 6 Engie Presentation, ‘Experience feedback from recent Nuclear New Build Projects; How to manage the risks?’ accessed 4 June 2018. 7 IAEA, ‘Managing the First Nuclear Power Plant Project’ (May 2007), accessed 31 May 2018. 8 IAEA, ‘IAEA Helps Newcomer Countries with Nuclear Workforce Planning’, accessed 31 May 2018. 9 Rebecca Bream, ‘OLKILUOTO 3: The problem with starting from scratch’ (23 October 2006) accessed 31 May 2018. 10 The Royal Academy of Engineering, “Engineering the Future, Nuclear Construction Lessons Learned’ 2012 paper, accessed 3 June 2018. 11 Power Engineering International ‘Understanding the challenges of nuclear new build’, accessed 3 June 2018. 12 Dan Brightmore, “A Year in Review: The Trends in Nuclear Construction’ Global Construction (12 February 2018) accessed 4 June 2018. 13 Typically easier where the site has had a previously constructed reactor. 14 World Nuclear Association Report, ‘Structuring Nuclear Projects for Success, An Analytic Framework’. 15 World Nuclear Association Report, ‘Licensing and Project Development of New Nuclear Plants’, January 2013 accessed 3 June 2018. 16 Power Engineering International, ‘Understanding the Challenges of Nuclear New Build’ accessed 3 June 2018. 17 At a conference titled Nuclear Energy's Role in the 21st Century: Addressing the Challenge of Financing. The event was jointly organized by the NEA and the International Framework for Nuclear Energy Cooperation (IFNEC). 18 accessed 3 June 2018. 19 ‘The World Nuclear Supply Chain Outlook 2030’ report as a companion to its biennial reports on the nuclear fuel market. 20 Steve Kidd, ‘Localisation of Supply – How Can It Work’ accessed 3 June 2018. 21 Lenka Kollar, Department of Nuclear ‘Newcomer Countries Face Common Challenges in Nuclear Infrastructure Development’ (8 February 2016). 22 Jong Kyun Park, ‘What Newcomers Need to Know about Nuclear Power Programmes’ Asian power (24 February 2018) accessed 3 June 2018. 23 accessed 3 June 2018. 24 IAEA,’Licensing the First Nuclear Power Plant’ INSAG-2A Report by the International Nuclear SA, accessed 31 May 2018. 25 Helen Cook, ‘The Law of Nuclear Energy’ (1st edn, Sweet & Maxwell 2013). 26 Rachal Burger, ‘What is the Construction Critical Path Method?’ (27 January 2018): accessed 31 May 2018. 27 Yong Seon Seo, ‘Use of Standard FIDIC Contracting to Minimise Disputes in Nuclear Power Plant Construction’ (October 2017) ; accessed 31 May 2018. 28 Nuclear Industry Association, ‘The Essential Guide to the New Build Nuclear supply chain’ February 2011 accessed 31 May 2018. 29 Sweet & Maxwell (n 25). 30 Milton Caplan, ‘Planning for Nuclear Project Success: The False Security of a Fixed Price Contract’ the Energy Collective (30 October 2017) accessed 3 June 2018. © The Author(s) 2018. Published by Oxford University Press on behalf of the AIPN. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model) TI - Newcomer countries, welcome to the ‘Nuclear Club’ but before you join, plan ahead and take example from those before you; issues relating to construction contracts in countries developing new build nuclear power plants JF - Journal of World Energy Law and Business DO - 10.1093/jwelb/jwy037 DA - 2019-03-01 UR - https://www.deepdyve.com/lp/oxford-university-press/newcomer-countries-welcome-to-the-nuclear-club-but-before-you-join-VJw6eB0Prf SP - 89 VL - 12 IS - 1 DP - DeepDyve ER -