Researchers from Imperial College London, the Universidade Federal do Rio de Janeiro, and the University of Minho have looked at the difference between the projected cost of nuclear power plants from 2010 to the present and compared them to the actual cost of those projects once completed. They find that, on average, delays in the construction process added about 18% to the budgeted cost of those projects.
At a time when entrenched energy interests are doing everything in their power to convince regulators new nuclear facilities make economic sense, it’s important to know that what the planners say a project will cost is only an hypothesis. What it actually costs will be significantly higher, based on historical data. Which means those comparing the cost of renewables to the cost of nuclear should use the higher number that experience shows to be accurate rather than some pie in the sky projections that are more likely to be dreams than real numbers? The new research has been published recently by the journal Energy Policy.
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.”
When assessing the cost of new nuclear projects, decision makers often use “overnight construction costs,” according to Science Daily. The assumption is that projects will be built on time, usually within five years. However, the “lead-time” — the time between the initiation of the project and its completion — can cause significant extra costs.
The study included nuclear projects in China, India, and the UAE in addition to traditional locations like Europe, the USA, and Japan. Dr. Pereira adds, “If we want to decarbonize 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.”
The research should be a warning to those who finance and insure such projects — the projected costs are often little more than vaporware designed to get a project moving forward. The researchers say nuclear projects are more like ‘mega-projects’ — such as large dams — which require more rigorous financial assessments due to their high uncertainty and risk.
Once a new nuclear project gets moving, it takes on a life of its own, dragging ratepayers deeper and deeper into a quagmire of higher cost electricity that may last for 40 years or more. Regulators also need to be aware of this research, as it suggests many of the basic assumptions about the cost of new nuclear facilities are artificial and bear little relation to reality.
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