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Red carpet treatment

Red carpet treatment

04/07/2011 | Channel: Business

Sellafield Ltd underwent a major restructuring to help it more successfully handle production and decommissioning at the UK’s pre-eminent nuclear waste treatment facility

Sellafield is a nuclear processing facility located in Cumbria, north England. It has been a headline name in the history of Britain’s nuclear capacity, both military and commercial, and today remains the country’s most important site for treatment and reprocessing of domestic nuclear waste and materials from around the world. The site has entered a long-term phase of decommissioning and, since 2005, Sellafield Ltd has operated the site along with two other key locations: a depleted uranium storage facility at Capenhurst and a design and project management office in Risley, both in Cheshire. The company faces challenging benchmarks in delivering its services and underwent recent infrastructural changes to ensure it meets those targets.

Head of Supply Chain Management Robert Astall briefly elaborates on the complex history of the site: “During World War Two, Sellafield was part of the Ministry of Defence’s (MoD) war effort as an ordnance production facility. By the late 1940s and early 1950s, though, it was established as a facility supporting the development of the UK’s nuclear weapons programme. The world’s first commercial nuclear power station was opened toward the end of the 1950s at Calder Hall, which is adjacent to Sellafield, so this site started to change its emphasis from weapons grade materials toward conventional commercial applications. Following this, it moved from MoDjurisdiction into the UK Atomic Energy Authority and then in the 1970s became part of British Nuclear Fuels Limited (BNFL) where it continued to grow to become the most important nuclear facility in the country”.

“At the end of the 1990s and early 2000s, many nuclear plants around the country including certain plants at Sellafield were past their operational lifetime and needed to be completely remediated. To achieve this the Labour Government passed the Energy Act 2004, creating the Nuclear Decommissioning Authority (NDA) to take over all operation and assets from BNFL including Sellafield. The NDAthen set about competing its sites for private sector management and expertise, with the first competed site being Sellafield and its site license company Sellafield Ltd. They picked this plant because it’s by far the largest site in terms of both liabilities and impact. In November 2008 the NDA picked Nuclear Management Partners Ltd (NMP), comprised of AMEC, URS Washington and Areva. They took ownership of Sellafield Ltd and were awarded a contract that could last up to 17 years.”

Sellafield houses more than 1000 facilities dedicated to different aspects of nuclear fuel production, waste treatment and reprocessing. Such facilities include the Magnox reprocessing plant used in handling domestic and international metal fuels from early nuclear reactors; the thermal oxide repressing plant (Thorp) that deals with oxide fuels from British advanced gas-cooled reactors (AGR) and international light water reactors (LWR); the plutonium-recycling Sellafield MOX plant (SMP); a waste monitoring and compaction plant for low-level waste; and a wide range of ponds, silos, evaporators and storage spaces. Sellafield Ltd is responsible for the complete operation of all facilities and activities, employing 9,000 + people across the six square kilometre Cumbrian site; together with a further 1,000 who work at the Risley offices.

To run such a complex array of facilities, Sellafield Ltd spends between £800 million and £900 million per year on the supply chain. “We undergo a fairly rigorous make-or-buy approach to determine what we do with our own resources and what goes into the supply chain,” Robert explains. “A significant spend of about £300 million to £400 million goes on indirect procurement for things such as services, facility management and design, business travel, professional services and so on. The other sizeable chunk is invested into project procurement as we place major construction and decommissioning projects into the supply chain. The site thus has an interesting mix of both indirect, project and operation types of procurement to ensure its good running.”

In all, Sellafield Ltd commands an operating budget of roughly £1.5 billion per year – 60 per cent of the NDA’s annual budget. Beyond an investment into services, large investments are made into commodity procurement to acquire the necessary materials, gases, chemicals and spare parts needed to keep Sellafield running. The other major expenditure at the moment of course is on decommissioning, whereby the site is progressively being dismantled as its buildings become safe enough to do so.

This decommissioning process is core to Sellafield Ltd’s current work. Some structures can be as old as 50 years and are physically degrading, so it is important of course to take care of the radioactive materials there which may be currently stored inside, transport them to another storage space, then knock down the older building in the least hazardous manner possible. Logistically it can be complex, with in some cases new waste storage facilities needing to be built before old ones can be demolished on what is a small, crowded patch of land.

“There are a lot of logistical and interconnectivity issues that need to be managed because if one facility fails to meet production targets there’s an immediate knock-on effect throughout the process,” says Robert. “Through very careful production, configuration and risk management and outage control, we make sure all facilities talk to each other and ensure our targets are met. When NMPL came in, it brought with it a new approach that we call a ‘projectised’ basis for management, as opposed to the highly functionalised approach that was taken previously. The functionalised method saw each particular function – such as procurement or engineering – being centralised and reporting only to the department director. That led to difficulties in terms of cohesive working, problem solving and project delivery.

“The projectised approach, on the other hand, is to create multidisciplined and integrated teams of people that will operate our plants and deliver our projects. From a commercial perspective what that means is the project manager has working for him all the functional specialists he needs to deliver that project, from design and engineering to procurement, installation and commissioning. We’ve stood the commercial organisation on its head, devolving it from a centralised function into either operational or project teams that all have strong links back to the central commercial department. It has been a big change culturally, and for the better.”

NMP’s role as the owners of Sellafield Ltd is highly dependent upon operational success particularly within continuing operations and decommissioning, so the incentive to create an efficient yet capable business is immense. The NDA is challenging NMP to ensure it meets its targets on behalf of the NDA, the Government and the taxpayer and although the £1.5 billion annual budget has been secured for the next three years, failure to meet these targets will see potential future repercussions, including affecting the funding Sellafield Ltd receives in the future.

Beyond this, however, is the future of the site itself. Sellafield has a lifetime plan stretching more than a century into the future meaning, whoever it is run by, the need for reducing liabilities, ongoing decommissioning, clean up, safe and efficient operation will remain a pressing need for Government and the country at large. Sellafield represents a national priority. Though the role of nuclear power remains and probably will always remain debated, Sellafield as a site will continue to be operable generations into the future and someone needs to manage that. The calibre of AMEC, URS Washington and Areva as NMPL certainly sets it up to be an important figure in Sellafield’s history.

Looking forwards, then, NMP and Sellafield Ltd have a plan. “We will have to do more for the same cost or even be able to do more for less than we’ve traditionally spent,” Robert muses. “There is a performance plan in place that has a number of stretch targets in terms of delivering more with the same amount of resources and, to my mind, we can do better than these benchmark norms. In doing so, we’ll retain the confidence of the NDA and the Government at large, in return for which they will continue placing resources into Sellafield so we can accelerate the clean up mission. In terms of market position, the future of the company is in many ways that simple.”

He goes on to conclude with a bright outlook on Sellafield’s role in the UK’s future energy needs: “Nuclear power is not a panacea but I think it has a major role to play in the energy mix, and Sellafield will be an important part of that going forward. Though the operations here will decline in terms of production and ultimately decommissioning, what we have with Sellafield is a facility well accepted by the local population and a skilled workforce already present. If a new nuclear power station is built in the region, or for that matter, other nuclear related missions, I think they would be readily received both from a stakeholder point of view and also in terms of the people already here. I believe Sellafield has a an important role to play whatever happens but should new developments occur around here, then the future could be really bright indeed.”

Sellafield Ltd
Employees 11,000
Services Nuclear waste plant operation