Commercial Challenges Within the Decommissioning Process.

While there are different ramifications for decommissioning projects in different sectors (and even within sectors), efficient project management including financial projections will be key to success.  2016 has seen numerous reports from across the sectors, stating that the cost projections of decommissioning are rising. The Fukushima plant is perhaps the most published single project to be facing this concern (with the initial estimates ¥11 trillion almost doubling to ¥20 trillion).  In both Japan and the UK, the costs of decommissioning are being passed (in ever higher degrees) to the public purse, leading to the tax-payer footing large chunks of the bill. Decommissioning operators and their major contractors are under huge pressure to forecast costs accurately, plan and execute projects effectively whilst ensuring community, workforce and environmental security. As the Decommissioning industry matures, the costs associated with the varying processes will become lower and clearer. By looking to appropriate skills and knowledge across sectors, there is great potential for this process to be expedited.

office-875697__340
The cost element of project management is further compounded by the long term nature of these projects. The Nuclear sector, in particular, lends itself to applying a longer term strategy, with experts debating whether fifty or a hundred years would be the optimum for projections (naturally giving specific allowances for the type of site).  This means that the management of such projects needs not only to be robust in terms of current legislation and technologies but able to adapt to the requirements and opportunities in the future.

Further to the inevitable changes within the technology supporting the industry, projects will change dramatically as the technical complexity of decommissioning activities is uncovered. While all energy producers will have formulated decommissioning outlines, in order to get their licenses. For a number of these projects, the situation surrounding the asset may have dramatically changed. One common example is the extended lifespan that many assets have been used for. This has taken place in a bid to gain maximum profit or to put off the costs associated with the Decom process. There are also vast sums being invested in generating research to prove that less invasive decommissioning process would be better for the environment (Such as the concept of Rigs to Reefs). This would benefit many sites in that they may not have to initiate some elements of their Decom plans. Variable factors such as the price of oil, the weather and environmental conditions can also force substantial changes to these projects.

The Commercial Challenges element of the TotalDecom Decommissioning Conference (27th -29th March 2017) will delve into the detail of collaborative ventures, complex project management and the global prediction of the size and scale of decommissioning liabilities. We have lined up great speakers from renowned companies such as Citigroup, Aecom, McKinsey & Company and Integrated Decom.

Leave a Reply