An international comparative assessment of construction cost overruns for electricity infrastructure
By Benjamin Sovacool, Alexander Q. Gilbert, Daniel Nugent. 2014
171 citations recorded by the source corpus.
Earlier this year, we assessed the construction costs affiliated with 401 electricity infrastructure projects worldwide. We found that these projects collectively involved $820 billion worth of investment, and represented more than 325,000 MW of installed capacity and 8500 km of transmission lines. Taken together, these projects incurred $388 billion in cost overruns, equivalent to a mean cost escalation of $968 million per project, or a 66.3 percent overrun per project. In this article, we extend upon that earlier analysis to explain how hydroelectric dams, nuclear reactors, wind farms, solar facilities, fossil fueled thermal plants, and transmission lines pose distinct construction risks. We highlight that electricity infrastructure is prone to cost overrun issues almost independently of technology or location, that hydroelectric dams and nuclear reactors have the greatest amount and frequency of cost overruns, even when normalized to overrun per installed MW, and that solar and wind projects seem to present the least construction risk. Consequently, investors, electric utilities, public officials, and energy analysts need to rethink and reevaluate the methodologies they use to predict construction timetables and calculate budgets.
Subfields: Building and Construction, Civil and Structural Engineering, Management Science and Operations Research
View Paper: https://www.semanticscholar.org/paper/f50afb095a8daf134476a2f2504972850725ee06
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In Building and Construction
In Management Science and Operations Research
Citations in the corpus
- Simulation versus Optimisation: Theoretical Positions in Energy System Modelling (2017, background): “In some situations a specific model has formed the basis for a dialogue between different parties [21], while in other cases a specific model has been criticized for being biased towards certain solutions and technologies [22] or infrastructures [23].”
- Power plants as megaprojects: Using empirics to shape policy, planning, and construction management (2015, unknown): “Sovacool et al. (2014a) shows that three-quarters of megaprojects are over budget with an average overrun of 66%.”
- A comparative analysis of electricity generation costs from renewable, fossil fuel and nuclear sources in G20 countries for the period 2015-2030 (2018, background): “However, several projects worldwide have shown that such costs can exceed 300% of capex (Koistinen, 2012; Le Monde, 2012; Schneider and Froggatt, 2016) and the averaged cost overrun for 180 reactors has been found to be 117% (Sovacool et al., 2014a,b).”