Delays Cause Nuclear Projects to Cost up to 20% More Than Intended
Questions are being raised over the future of energy technologies after a recent study has shown that nuclear power plant projects are often significantly delayed, costing up to 20% more than initially intended.
Researchers at King’s College London, the Universidade Federal do Rio de Janeiro, and the University of Minho compared initial projections and actual costs of large-scale energy projects. Their findings showed that that, since 2010, delays have contributed to average project costs in the sector by 18%. These delays can run for years, even decades.
We’re at a time right now where our environmental impact is more relevant than it ever has been – all over the world, the consequences of our technological developments can be seen in ecological disasters and climate change, which, if left unchecked, will cause further damage on an unprecedented scale. This is our mess, and finally, people are starting to take decisive action towards addressing climate change. Research such as this is demonstrating to scientists and activists that we need to move away from projects that, potentially, aren’t going to be complete for decades when the problem needs to be addressed much sooner. Most of these monumental projects require continuous funding due to their sheer size, as well as the risk involved.
The research suggests that because these delay costs make nuclear projects high risk, investors are leaning towards low-risk low-carbon initiatives such as wind or solar power. When assessing nuclear projects, investors often refer to ‘overnight construction costs’ which, by default, assume that the project will be completed on time. This, of course, doesn’t take into account various setbacks that will affect any project in the real world, leading to significant additional costs and potential claims for construction.
Lead author Dr. Joana Portugal Pereira of the Center for Environmental Policy at Imperial College London, said: “Nuclear projects are actually becoming more complex to carry out, inducing delays and higher costs. Safety and regulatory considerations play heavily into this, particularly in the wake of the 2011 Fukushima Dai-ichi nuclear accident in Japan.”
Usually, as technologies mature and experience is gained in construction principles and methods, costs come down and line up with their projections. These findings suggested that this wasn’t the case with the nuclear industry, however, instead illustrating that there has been a blip in the learning curve, with costs currently increasing, especially since 2010.
The study covered nuclear projects in China, India and the UAE in addition to traditional locations such as Europe, the USA, and Japan between 1955-2016. Dr. Pereira adds, “If we want to decarbonise our energy system, nuclear may not be the best choice for a primary strategy. Nuclear power is better late than never, but to really address climate change, it would be best if they were not late at all, as technologies like wind and solar rarely are.”
This is one of the first research projects that has shed some light on the financial costs of building nuclear power stations, rather than the ‘overnight’ costs that are calculated by investors. These findings should also act as a warning to those who finance and insure such projects – as the overnight projections are often just there to get the project moving in the first place and in no way relate to the reality of the situation.