Solar Outranks Nuclear in Energy Investment Risk

From now until 2050, the International Energy Agency estimates that over $100 trillion will be invested in developing net-zero energy infrastructure worldwide. However, each of these projects carries the potential for unexpected cost overruns or construction delays. Emerging technologies like hydrogen and geothermal, introduced in the past decade, present even greater challenges in assessment, as governments, energy developers, utilities, investors, and other stakeholders work to determine the most viable sustainable energy solutions for the future.

Study Reveals Soaring Costs and Delays in Energy Projects, With Nuclear Plants Facing the Worst Overruns

A cutting-edge study published in the journal Energy Research & Social Science by researchers at Boston University’s Institute for Global Sustainability (IGS) reveals that soaring construction costs and extended timelines hinder many energy projects. On average, projects run 40% over budget and are delayed by nearly two years, according to the findings.

Nuclear power plants are the most problematic, with construction costs averaging more than double initial estimates and experiencing the longest delays. Specifically, the typical nuclear project exceeds its budget by 102.5%, resulting in an additional $1.56 billion in costs.

Examining newer net-zero technologies also highlights considerable risks. Hydrogen infrastructure and carbon capture and storage projects, along with natural gas-based thermal power plants, show substantial average cost and schedule overruns. These challenges raise concerns about their ability to scale rapidly enough to meet climate mitigation and emissions reduction targets.

“These results raise serious concerns about the viability of rapidly advancing a hydrogen economy,” says Benjamin Sovacool, the study’s lead author, director of IGS, and professor of Earth and Environment.

In contrast, solar energy and electricity grid transmission projects demonstrate the most reliable construction performance, frequently finishing ahead of schedule or under budget. Wind farms also showed strong results in terms of financial risk.

Wind and Solar Offer Underrated Financial and Social Benefits, Study Finds

For Sovacool, the evidence is undeniable: “Low-carbon energy sources like wind and solar offer not only substantial climate and energy security benefits but also financial advantages due to lower construction risks and fewer delays,” he states. “This further highlights the often overlooked social and economic value of these technologies.”

The study, based on an original dataset much larger and more thorough than previous ones, offers the most detailed comparative analysis of construction cost overruns and time delays in global energy infrastructure projects.

The researchers gathered data from 662 energy infrastructure projects, spanning a wide range of technologies and capacities, completed between 1936 and 2024 across 83 countries, amounting to $1.358 trillion in investment. This includes emerging technologies like geothermal and bioenergy, providing new insights into the cost factors of these recently commercialized innovations.

Comprehensive Study Evaluates Construction Risks Across Ten Major Energy Technologies

The study analyzed a total of ten types of projects: thermoelectric power plants fueled by coal, oil, or natural gas; nuclear reactors; hydroelectric dams; large-scale wind farms; large-scale solar photovoltaic and concentrated solar power plants; high-voltage transmission lines; bioenergy power plants; geothermal plants; hydrogen production facilities; and carbon capture and storage projects.

A key insight of this global analysis is understanding the factors that cause energy projects to exceed budgets and experience delays, as well as when these issues tend to arise. The study explored diseconomies of scale, construction setbacks, and governance issues to pinpoint critical points where costs spike, providing valuable information for improving risk management strategies.

“I’m particularly struck by our findings on diseconomies of scale, where projects exceeding 1,561 megawatts in capacity show a much higher risk of cost overruns,” says Hanee Ryu, the study’s second author and a visiting researcher at IGS. “This indicates that we may need to rethink our approach to large-scale energy infrastructure planning, especially as we invest trillions in global decarbonization efforts.”

Ryu further explains that this could mean smaller, modular renewable projects not only offer environmental advantages but may also lower financial risks and improve budget predictability.

Read the original article on: Tech Xplore

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