Investment Risk for Energy Infrastructure Construction Is Highest for Nuclear Power Plants, Lowest for Solar

Final Up to date on: twenty fourth Might 2025, 02:42 am

A brand new research from the Boston College Institute for World Sustainability finds that development prices run over funds for greater than 60% of vitality infrastructure tasks worldwide.

By Laura Hurley

Between now and 2050, the International Energy Agency tasks that greater than $100 trillion will likely be spent on constructing net-zero vitality infrastructure globally. But each single certainly one of these tasks runs the danger of higher-than-expected development prices or time delays. Newer applied sciences launched prior to now decade, similar to hydrogen or geothermal vitality, are much more tough to judge as authorities companies, vitality builders, utilities, buyers, and different stakeholders resolve which sustainable vitality techniques are finest for future tasks.

In a brand new state-of-the-art research, revealed within the journal Energy Research & Social Scienceresearchers on the Boston University Institute for Global Sustainability (IGS) discovered that runaway development prices and delayed timelines stymie many vitality tasks. In actual fact, the common venture prices 40% greater than anticipated for development and takes virtually two years longer than deliberate, because the research confirmed.

Nuclear energy crops are the worst offenders, with a mean development price overrun sometimes twice as a lot as anticipated or extra, and probably the most excessive time delays. To be precise, the common nuclear energy plant has a development price overrun of 102.5% and finally ends up costing $1.56 billion greater than anticipated.

Taking a look at newer net-zero choices reveals greater danger as properly. Hydrogen infrastructure and carbon seize and storage each exhibit vital common time and price overruns for development, together with thermal energy crops counting on pure fuel, calling into query whether or not these could be scaled up shortly to fulfill emission discount objectives for local weather mitigation.

“Worryingly, these findings raise a legitimate red flag concerning efforts to substantially push forward a hydrogen economy,” says Benjamin SOVACOOLlead and first writer of the research, director of IGS, and professor of earth and atmosphere.

In contrast, photo voltaic vitality and electrical energy grid transmission tasks have one of the best development monitor report and are sometimes accomplished forward of schedule or beneath anticipated price. Wind farms additionally carried out favorably within the monetary danger evaluation.

For Sovacool, the proof is obvious: “Low-carbon sources of energy such as wind and solar not only have huge climatic and energy security benefits, but also financial advantages related to less construction risk and less chance of delays,” he says. “It’s further evidence that such technologies have an array of underrated and underappreciated social and economic value.”

Utilizing an authentic dataset considerably bigger and extra complete than current sources, the research offers probably the most rigorous comparative evaluation of development price overrun dangers and time delays for vitality infrastructure tasks globally.

“Low-carbon sources of energy such as wind and solar not only have huge climatic and energy security benefits, but also financial advantages related to less construction risk and less chance of delays.”

The researchers compiled knowledge on 662 vitality infrastructure tasks protecting a various spectrum of know-how lessons and capacities, constructed between 1936 and 2024 throughout 83 nations, representing $1.358 trillion in funding. This consists of rising improvements similar to geothermal and bioenergy, offering contemporary insights into the associated fee dynamics of those just lately commercialized applied sciences. In whole, the research evaluated ten sorts of tasks: thermoelectric energy crops fueled by coal, oil, or pure fuel combustion; nuclear reactors; hydroelectric dams; utility-scale wind farms; utility-scale photo voltaic photovoltaic and concentrated solar energy services; high-voltage transmission strains; bioenergy energy crops; geothermal energy crops; hydrogen manufacturing services; and carbon seize and storage services.

Understanding what causes vitality tasks to go over funds and fall delayed—and when that tipping level happens—is one other necessary contribution of this world evaluation. The research examined diseconomies of scale, development delays, and governance elements to determine vital thresholds when venture prices surge, serving to to tell higher danger administration methods.

“I’m particularly struck by our findings on the diseconomies of scale, with projects exceeding 1,561 megawatts in capacity demonstrating significantly higher risk of cost escalation,” says Hanee Ryusecond and corresponding writer and a visiting researcher at IGS. “This suggests that we may need to reconsider our approach to large-scale energy infrastructure planning, especially as we commit trillions to global decarbonization efforts.”

What this might imply, Ryu explains, is that smaller, modular renewable tasks may not solely deliver environmental advantages, but in addition probably cut back monetary danger and provide higher funds predictability.

Press launch from Boston University Institute for Global Sustainability.