The Application of Value Engineering within

Ontario Power Generation

Prepared by: Macy Jafarzadeh

Approved by: Mark Arnone
November, 2009
 Agenda

¾Ontario Power Generation (OPG)

¾OPG Nuclear Projects & Modifications
¾Problems with Projects
¾Front End Planning Integrates Best
Practices
¾Role of Value Engineering in the Solution
¾Lessons from Experience

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 Ontario Power Generation

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 Ontario Power Generation

Hydroelectric Fleet
Generating Capacity: 6,963 MW
Stations: 65
2008 Output: 36.4 TWh
Currently Generating: 4570 MW

Fossil-Fuelled Fleet
Generating Capacity: 8,177 MW
Stations: 5
2008 Output: 23.2 TWh
Currently Generating: 3550 MW

Nuclear Fleet
Generating Capacity: 6,600 MW
Stations: 3
2008 Output: 48.2 TWh
Currently Generating: 6476 MW

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 Nuclear

Pickering A & B
Capacity: 3,100 MW
P. A: 1971, 2 CANDU
P. B: 1983, 4 CANDU

Darlington Nuclear
Capacity: 3,500 MW
1990, 4 CANDU

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 OPG Nuclear Projects & Modifications

~$300M CDN annual spend

~100 active projects
Typical project:
• $5M - $10M
• 3 year duration

Delivered through:
• 25 project managers
• 500 engineering/technical staff
• Construction services vendors
• Engineering services vendors

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 Project Environment

¾ Highly regulated
¾ Complex scope
¾ Primarily retrofit/revamp
¾ One of a kind
¾ Critical because of implementing in an operating
nuclear power plant

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 Problems with Projects

¾High cost and schedule deviances

¾Frequent scope changes
¾Inefficient processes to track
contractor performance
¾Inconsistent processes to manage
risks

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 Value For Money

¾Identify and utilize Industry Best

Practices
¾Use advanced tools to support
improved performance
¾Find the balance between business
needs and technology offerings

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 Three Year Plan

Business Goals
¾ Zero cost growth
¾ Control scope
¾ Add value
¾ Meet authorization
commitments
¾ Apply project management
best practice

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 The Solution

The solution lay in utilizing tools such as:

¾ Value Engineering
¾ Risk Management
¾ Cost Management
¾ Contract management
¾ Portfolio Optimization
¾ Time Management (Scheduling)

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 Front End Planning Integrates Best Practices

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 The Challenges

¾Change management
¾Senior Management leadership and
support was needed
¾No single system solution met the needs
¾Integration across multiple systems
¾Difficulty in acceptance of new tools

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Role of Value Engineering in the Solution

¾ Builds confidence in design solution and

scope
¾ Guarantees stake holders buy in of the project
scope
¾ Makes end user involved in making decisions
¾ Minimizes scope changes
¾ Lowers the cost
¾ Lowers the risk

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 Front End Planning Process

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 How VE crawled in

¾ A half day introduction to VE was provided to nuclear

staff.
¾ A position for a VE specialist was created.
¾ VE application started on some large projects using
external consultant.
¾ Procedures, guidelines, and instructions specific to
our company and industry were generated.
¾ More training got provided to project related
employees.

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 Bridge Tilt Sensor FAST Diagram

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 Lessons from Experience

¾ Upper management support is essential.

¾ Shift from external consultant should be gradual.
¾ Long workshops do not serve project needs.
¾ Retaining seminars protect VE from deviating from
standard.
¾ Increase in demand for implementing non mandatory
VE workshops indicates the degree of success.
¾ VE can be used in many diverse areas.
¾ VE must work as an integrated part of the best
practices.
¾ The community of practice provides valuable support.

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 Where VE is now

¾ VE is the first step of FEP.

¾ VE Center of Excellence is within PMO.
¾ VE is mandatory for projects with budget over
$ 5M.
¾ VE has its own governance in the projects
management process.
¾ VE is applied to nuclear projects.

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 What VE has done so far

¾Improved scope definition and increased

quality of project plans
¾More confidence in funding requests
¾Welcome new ideas
¾A culture shift through Value
Engineering
¾Project management and planning
improvement

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 What dreams VE has

¾To be applicable to all OPG sectors

¾To be used for the improvement of the
processes
¾To be used for strategic planning
¾To be a culture within OPG

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 Questions?

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