The cost of nuclear new build is nearly a fifth higher than expected due to delays, a new study has found.
Wind and solar present lower risks compared to nuclear new build
These delays increase the cost of new nuclear compared with older projects and are often overlooked when new projects are planned. The authors said that these extra costs need to be properly assessed when considering new nuclear projects.
The authors of the study, which is published in Energy Policy, added that nuclear projects are more like ‘mega-projects’, such as large dams, which require more rigorous financial assessments due to their high uncertainty and risk.
The research team from Imperial College London, the Universidade Federal do Rio de Janeiro, and the University of Minho in Portugal also suggest that because delay-related costs make nuclear projects high risk, decision makers might instead focus on more low-risk, low-carbon technologies such as wind or solar power.
According to Imperial, when assessing the cost of new nuclear projects, decision makers often use ‘overnight construction costs’, which assume the project is built on time, usually within five years. However, the ‘lead-time’ – between initiation of the project and completion – can cause significant extra costs.
The research team looked at total costs of nuclear projects between 1955-2016, including those incurred for delays.
Costs usually come down as technologies mature and experience is gained in construction. However, the team found that for nuclear new build, there has been a glitch in the learning curve, with costs currently increasing, especially for projects since 2010.
Lead author Dr Joana Portugal Pereira, from the Centre for Environmental Policy at Imperial, 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.”
The analysis is said to be one of the first to assess full financial costs of building nuclear projects throughout time, and not just the ‘overnight’ costs. It looked at projects around the world, including newer nuclear builders like China, India, and the UAE, rather than the traditional builders in Europe, the USA and Japan.
They said that while nuclear projects can help bridge the gap between fossil fuels and renewable energy, they could hinder progress if projects stall.
Dr Portugal Pereira said: “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.”