Level:
Intermediate
TCM Section(s)
7.6. Risk Management
3.3. Investment Decision Making
Venue: 2024 AACE International Conference & Expo
Abstract: Keeyask is a new 695-megawatt hydroelectric generating station on the Nelson River in Canada’s Manitoba province developed as a collaborative effort between Manitoba Hydro (MH) and four First Nations – Tataskweyak Cree Nation and War Lake First Nation (operating as the Cree Nation Partners), York Factory First Nation, and Fox Lake Cree Nation – working together as the Keeyask Hydropower Limited Partnership (KHLP). MH managed the construction and operates Keeyask, which has been fully online since 2022. The primary Keeyask project scope included earth-filled dams and earthen dikes, a powerhouse with seven turbine units, and a seven-bay spillway. In the early stages of Keeyask’s stage-gate process, quantitative risk analysis (QRA) was performed using range estimation. In 2013, prior to the start of construction, Keeyask switched to using cost and schedule QRA applying the hybrid parametric and expected value (P+EV) method along with analyses of specific management reserves and a tipping point (non-linearity) assessment (AACE Recommended Practice 113R-20 covers the P+EV method). This case study reviews the use of the P+EV method on a megaproject during execution.
P+EV has advantages for early stages; however, Keeyask applied it during construction. Identified, but under-appreciated, systemic fragility challenges led to non-linear behavior; total cost increased from $6.5 to $8.2 billion Canadian dollars and the first unit in-service milestone slipped 15 months from November 2019 to February 2021. This is not a story of flawless prediction, but is a practical lesson learned guide on applying P+EV on a project in which the nature of the risk and analysis teeters on the brink of statistical disorder. Learnings and recommendations are provided.
TCM Section(s)
7.6. Risk Management
3.3. Investment Decision Making
Venue: 2024 AACE International Conference & Expo
Abstract: Keeyask is a new 695-megawatt hydroelectric generating station on the Nelson River in Canada’s Manitoba province developed as a collaborative effort between Manitoba Hydro (MH) and four First Nations – Tataskweyak Cree Nation and War Lake First Nation (operating as the Cree Nation Partners), York Factory First Nation, and Fox Lake Cree Nation – working together as the Keeyask Hydropower Limited Partnership (KHLP). MH managed the construction and operates Keeyask, which has been fully online since 2022. The primary Keeyask project scope included earth-filled dams and earthen dikes, a powerhouse with seven turbine units, and a seven-bay spillway. In the early stages of Keeyask’s stage-gate process, quantitative risk analysis (QRA) was performed using range estimation. In 2013, prior to the start of construction, Keeyask switched to using cost and schedule QRA applying the hybrid parametric and expected value (P+EV) method along with analyses of specific management reserves and a tipping point (non-linearity) assessment (AACE Recommended Practice 113R-20 covers the P+EV method). This case study reviews the use of the P+EV method on a megaproject during execution.
P+EV has advantages for early stages; however, Keeyask applied it during construction. Identified, but under-appreciated, systemic fragility challenges led to non-linear behavior; total cost increased from $6.5 to $8.2 billion Canadian dollars and the first unit in-service milestone slipped 15 months from November 2019 to February 2021. This is not a story of flawless prediction, but is a practical lesson learned guide on applying P+EV on a project in which the nature of the risk and analysis teeters on the brink of statistical disorder. Learnings and recommendations are provided.