Literature review
Energy plays a significant role in driving the economy of countries all over the world. In the recent years, there have been concerns over the increased use of fossil fuels in many parts of the world (Schuman & Brent 2005). As such, debates and concerns have been raised regarding the adoption of other sources of energy following the need for sustainable development and energy security (Bock et al. 2004). Based on this assertion it has become important for countries to come up with other ways of generating power such as through the use of thermal plants. As far as capacity addition is concerned it is important to optimize electricity tariff as well as the assessment of cost of investing in power generation (Carlsson 2005; Stamford & Azapagic 2012).
In the context of such investments and the need to fulfill the present objective to achieve sustainable development Bock et al. (2004) pointed out that a lot of focus ought to be given on the life cycle costing according to the proposal of the United Nations Environmental agenda of life cycle management practices as well as approaches aimed at the promotion of coherence in implementing sustainable development’s environmental dimensions. This review of literature focuses on the essentiality of life cycle costing (LCC) drivers in life cycle management of nuclear power plant.
The technique of life cycle costing dates back to many years ago and it is commonly used within the energy sector (IAEA 2002). The determination of the LCC drivers in the context of a power generation plant is crucial (Carlsson 2005). This is attributable to the fact that nuclear power plants are required to long-term investment (Yao 2014). For this reason, carrying out a life cycle costing acts as a better option towards ensuring that the necessary precautions are considered at the earliest possible age of any given nuclear plant (Schuman & Brent 2005; IAEA 2002).
In addition, such an approach is important as it sets out background for any management decisions in the course of the life cycle of the nuclear plant that might have various impacts in the future. The need to carry out cost and benefits analysis of nuclear plants aligns with recent concerns that have been raised regarding the need for a healthy economy (IAEA 2002). Such concerns led to the introduction of UNEP’s global environmental authority on the promotion of sustainable development. As such, there has been a need to ensure the provision of a link between the efficient use of available resource and the need to have better ways of addressing shortages of resources (Seier & Zimmermann 2014). Based on this assertion, the process of achieving sustainability in various aspects requires the adoption of social and environmental dimensions that are considerate of the life cycle.
Just as Blanchard (2004) noted, the aspect of life cycle management focuses on the need to reduce socio-economic as well as environmental challenges that re related to any product and its entire life cycle. In the case of energy, researchers and scholars have emphasized the need for drivers of life cycle management to reduce the challenges impacted on the environment, social and economic aspects (Carlsson 2005). For this reason, the management of life cycle of energy ensures operationability of energy sustainability via consistent improvement of polices and systems. For this reason, the application of LCM in the energy sector ensures the collection, structuring and propagation of energy-related information from various tools, concepts and programs.
In spite of the increased emphasis on life cycle costing, recent studies have showed that majority of nuclear plants were developed without the consideration of life cycle stages (Taylor 2011). However, a review of the benefits of life cycle costing in the life cycle management of nuclear power plant shows that there are economic, environmental and social advantages associated with such practices (Seier & Zimmermann 2014). For example, through determination of the life cycle of a nuclear power plant, it makes it possible to design the plant taking into consideration the efficiency of the plant’s decommissioning process (Taylor 2011). In addition, the management of life cycle stages of any given nuclear plant allows efficiency in decision making as far as operational safety is concerned (Wallbridge, Banford & Azapagic 2012). The rationale for the adoption of the LCC technique in the life cycle management of nuclear plant is that there is always the need to ensure that organizational assets’ stewardship is balanced in the long term.
The process of life cycle costing provides the background on which the nuclear plant is based thereby ensuring robust conceptual design such that all aspects of the plant like costs of final decommissioning and handling of wastes are factored in (Chattopadhyay 2004; IAEA 2002). In addition, carrying out of life cycle costing ensures that there the cost of the nuclear does not outweigh the expected benefits and income (Stamford & Azapagic 2012). As well, such analysis ensures that there are effective ways of managing any by-products from the nuclear planta and associated wastes with regard to the need to ensure sustainability of the entire project in terms of social, economic and environmental perspectives (Seier & Zimmermann 2014). For this reason, it is important to consider all financial provisions in terms of costs used projected for handling associated waste as well as decommissioning is concerned. Such consideration should also factor any possible strategies required to ensure sustainability of the nuclear plant both in the short and long run (Taylor 2011; Wallbridge, Banford & Azapagic 2012). Such assertion is informed by the fact that decommissioning is likely to occur over several years.
Evidently, the review of literature above is aligned to the principles of Blanchard (2004), in that determination of the drivers of life cycle costing in the life cycle management of any asset is an essential step as it lays out the right strategies for effective decision making. Therefore, effective life cycle management of nuclear power plants ensures the sustainability of the plant in that it provides the background information on factors that need to be considered for a long-term nuclear power plant.
Annotated bibliography
IAEA, V 2002, ‘Safe and Effective Nuclear Power Plant Life Cycle Management Towards Decommissioning,’ IAEA-TECDOC, vol. 2, no.1, pp.11-189.
The article Safe and Effective Nuclear Power Plant Life Cycle Management Towards Decommissioning aims to provide insights on life cycle management of nuclear power plant with a specific focus on the promotion of the need to carry out long-term cost and benefit analysis of nuclear plants. As such, the article offers an in-depth discussion on the need for effective management of the life cycle of a nuclear power plant (IAEA 2002). According to the scope of this article, the achievement of economic development in country is depended on adequate as well as reliable supply of energy. In spite of this, the provision of safe energy is a challenge in many parts of the world.
In the context of life cycle management of nuclear power plant the article indicates that there is a need for safe operations if economic performance within a society is to be achieved. For this reason, the article indicates that there is a need for effective management of nuclear plant with a lot of consideration given on the life cycle stages of the plant. Such an approach ensures that decommission aspects as well as any associated costs and benefits of the nuclear plant are taken into consideration for the purpose of ensuring socio-economic success of the plant to the society (IAEA 2002). Life cycle management of nuclear plant to this article is important in that it lays out background for strategic decisions.
The process of life cycle costing provides information that ensures the sustainability of the concerned nuclear power plant. For example, the article Safe and Effective Nuclear Power Plant Life Cycle Management Towards Decommissioning indicates that consequence strategic decisions ought to be taken into consideration as they determine the feasibility of any project. Such decisions are important since they have potential impact in the present as well as in the future. Secondly, according to the article, consequence strategic decisions are important in the life cycle management of nuclear plant since they act as reference points to any actions taken presently and in the future thereby ensuring that there are set strategies to avoid the occurrence of financial penalties in the future.
Life cycle management of nuclear plant is an important element in that it ensures the making of decisions that are grounded on facts, are considerate of the interests of shareholders, and take into consideration both risks an opportunities as well as factor in the long term impact on the project with respect to social, economic, and environmental perspectives (IAEA 2002).
According to Blanchard (2004), effective life cycle management should take consideration of business management decisions, ageing management, safety management as well as economic factors that are associated with eth life cycle of the nuclear plant. Such consideration is important since it ensures that the necessary performance level of the nuclear plant is achieved, optimization of components and systems, operation, as well as the maintenance of the required structures with the aim of achieving sustainability (IAEA 2002). Therefore, this article shows that there LCC drivers needed to be determined to ensure that all the necessary standards and codes are met in the process of designing and constructing a nuclear power plant. Such an approach ensures sustainability of the plant by focusing on extended life span and the generation of optimum electricity while putting into consideration economic, social and environment aspects.
Discussion
Life Cycle Cost (LCC) analysis takes into consideration various aspects of the life cycle of any given product with the main focus on the quantification of the wholesome cost of owning a given product right from the research and development of the product, its construction, operational and maintenance aspects as well as disposal strategies (IAEA 2002). However, the analysis of the life cycle of any given products focuses on sustainable development and thus considers social, environmental and economic aspects of the particular product.
The reviewed article above aligns to the principles set out by Blanchard in that it focuses on ensuring that cost effectiveness. In addition, IAEA (2002) noted that safety management is a very important aspect of any product’s life cycle. In the light of Blanchard (2004), the achievement of socio-economic and environmental objectives, requires a lot of emphasis on the aims of any product ought to be based on uncompromising in safety in terms of operations. Therefore, the improvement of safety performance is achieved laying out effective plans, control strategies as well as ensuring that there are supervision measures in place for the purpose of enhancing the safety of all project’s related activities (Wallbridge, Banford & Azapagic 2012). For this reason, ensuring safe behaviors and attitudes is important in fostering as well as supporting a robust safety culture.
In the case of nuclear power plant, safety management is an integral aspect that should be exercised at all times. For this reason, to enhance safety performance of any project, careful consideration ought to be given. In addition, consistent assessment of the project should be carried out to offer a platform to examine how effective various approaches of the given project are in terms of safety management. The periodic assessments can either be external or internal. Nevertheless, the outcomes of such assessments form the basis for improvement of safety management as well as the identification of any corrective actions that ought to be taken to achieve long-term objectives of any given project. For this reason, safety management approaches should be adopted in in the life cycle management of a nuclear power plant for the purpose of maintaining the required level of safety within the plant while ensuring consideration of the socio-economic and environmental impacts of the plant.
According to a study carried out by Wallbridge, Banford and Azapagic (2012), the management of any asset and the integration of life cycle costing models is a comprehensive process. In relation to the life cycle cost of any asset Soni, Singh and Banwet (2016) asserted that there is a need for definition of system requirements as well as TPMs, development of a cost-breakdown structure developed, identification of input data requirements as well as evaluation of alternatives that are feasible with respect to the given asset.
Therefore, the safety management life cycle aspect is important in life cycle cost analysis in that it ensures that all the necessary structures and systems are put in place and that they match the required standards including allowance for ageing effects (Soni, Singh & Banwet 2016). Evidently, safety management provides background through which the life cycle of any given asset is monitored and tracked from the early stages of development to disposition. For improve operations, assets need to be managed according to social, economic and environmental perspectives. Effective management of assets and the consideration of all safety precautions both in the present and future ensure sustainability of any given project. Often, such an approach is aimed at reduction of associated costs as well as increment of the productivity of nay given assets and product over its life.
Recommendations
Asset management comprises of comprehensive processes aimed at achieving high degree of efficiency and to achieve high returns from a given asset over its life (Schuman & Brent 2005). Based on this assertion, any asset management activities should follow various decisions in their design, implementation and control. For this reason, it is important to determine the life cycle cost drivers of asset management in the life cycle analysis.
To address the cost drivers in the life-cycle analysis a lot of consideration ought to be on field actions which include plan of actions, accomplishment of planned projects, ensuring effective control of all activities aimed at safety improvement and quality asset management, as well as making sure that the necessary information systems are in place. Often, such consideration should focus on achieving corporate value, human objective as well as the environmental objective (Stamford & Azapagic 2012). However, such objectives cannot be achieved without well-laid out asset management goals, as the absence of such goals would lead to possible increase in associated costs and emergence of unplanned expenses that might have adverse effects on the asset’s social, economic and environmental aspects. As such, goals should be formulated that take into consideration any perceived cost drivers based on the life-cycle analysis.
In addition, an aligned asset management framework is required with respect to the life cycle’s sequence of the concerned asset as such an approach factors in all the social, economic and environmental needs associated with the asset’s operations (IAEA 2002). Often, any form of decentralized arrangement in the process of managing assets results to inconsistencies in terms of the functionality of goals. To avoid such cases and address cost drivers in the life-cycle analysis, all decision areas of the asset management ought to be aligned optimally. However, it is more likely that the management of an entire asset could be faced by numerous challenges due to isolation of costs at different stages of the asset’s life cycle. In spite of this, such a challenge can be overcome through the implantation of technology that takes consideration of approved budget’s boundary, time frame as well as any required technical specifications.
On the other hand, cost drivers associated with the operations and maintenance phase such as the product distribution costs can be addressed through risk-based maintenance, reliability centered maintenance, as well as through total productive maintenance. However, in order to ensure enhanced and sustainable physical assets’ value, a paradigm shift ought to be considered that exceeds the cost principles of maintenance. Moreover, carrying out the life cycle cost analysis ensures that all subsystems are integrated to ensure minimum total costs of any given investment (IAEA 2002). Such objective can be achieved through ensuring that all the involved tasks are defined, conditions and factors specified, and outputs set for the purpose of ensuring performances can be compared.
From the foregoing, it is evident that the determination of life cycle costing drives in life cycle management of any asset is crucial. This is based on the fact that LCC provides a structured assessment which focuses on all the important elements of maintenance functions and utilities functions to provide the necessary help in asset management. As such, life cycle costing analysis identifies opportunities and areas requiring attention for the purpose of improving the profitability and performance of any given asset. Basically, LCC focuses on the identification of problem areas and their quantification as opportunities, provision of suitable strategies towards realization of identified opportunities, provision of an action plan, detailed evaluation of benefits and costs, definition of associated benefits, and the establishment of a reference ground to measure future progress. Based on this approach, it suffices that life cycle costing allows maximum plant life management by addressing cost drivers.
References
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