Cost overruns and financial risk in the construction of nuclear power reactors: A critical appraisal

Gilbert, Alexander D.; Sovacool, Benjamin K.; Johnstone, Phil; Stirling, Andy

doi:10.1016/j.enpol.2016.04.001

Cited by 50 publications

(32 citation statements)

References 21 publications

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“…Notably, there are large uncertainties in the future investment cost for nuclear power and this cost varies significantly by country (high in Europe and USA, relatively low in Asia) [48,49,[54][55][56][57][58]. power.…”

Section: Discussionmentioning

confidence: 99%

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The cost of a future low-carbon electricity system without nuclear power – the case of Sweden

Kan

Hedenus

Reichenberg

2020

Energy

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To achieve the goal of deep decarbonization of the electricity system, more and more variable renewable energy (VRE) is being adopted. However, there is no consensus among researchers on whether the goal can be accomplished without large cost escalation if nuclear power is excluded in the future electricity system. In Sweden, where nuclear power generated 41% of the annual electricity supply in 2014, the official goal is 100% renewable electricity production by 2040. Therefore, we investigate the cost of a future low-carbon electricity system without nuclear power for Sweden. We model the European electricity system with a focus on Sweden and run a techno-economic cost optimization model for capacity investment and dispatch of generation, transmission, storage and demand-response, under a CO2 emission constraint of 10 g/kWh. Our results show that there are no, or only minor, cost benefits to reinvest in nuclear power plants in Sweden once the old ones are decommissioned. This holds for a large range of assumptions on technology costs and possibilities for investment in additional transmission capacity. We contrast our results with the recent study that claims severe cost penalties for not allowing nuclear power in Sweden and discuss the implications of methodology choice.2 for electricity supply [4][5][6]. In the case of Sweden, the government has set a goal of 100% renewable power production for the electricity sector by 2040 [7]. Currently, nuclear power accounts for 41% of the annual electricity production [8], however the nuclear fleet is aging and decommissioning is planned in the coming decades for economic reasons. This has spurred a political discussion about replacing the old nuclear reactors with new ones. Nuclear power is facing an uncertain future in the transition towards a low-carbon electricity system in Europe due to the risk of radiation leakage, social acceptance, and high investment cost, among other factors. Germany, Belgium, and Switzerland have decided to phase out nuclear power, while Finland and France are building new nuclear power plants.The cost difference for decarbonizing the electricity system with and without nuclear power has been subject to recent debate in the scientific community [9][10][11][12]. Some studies show that excluding nuclear power increases the electricity system cost modestly [13][14][15], while others claim that the increase in cost is substantial [16,17]. Jägemann et al. [13] investigated the decarbonization pathways of the European electricity sector and found that the total electricity system cost, together with the cost of decarbonization, would increase by 11% if nuclear power and carbon capture and storage (CCS) were excluded. Zappa et al. [14] evaluated the cost of a 100% renewable power system for Europe and found that the system cost would be 30% higher than a carbon-neutral electricity system which excludes nuclear and CCS. Pattupara and Kannan [15] analyzed the low-carbon electricity pathways in Switzerland and its neighboring countries and showed that t...

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Section: Discussionmentioning

confidence: 99%

“…Second, there are rather large uncertainties attributed to these costs [48][49][50][51][52][53][54][55][56]; Finally, including a wide range of assumptions about cost and technology allows us to investigate the breadth of conditions under which nuclear power can play a role in the future electricity system.…”

Section: ) Nuc-expmentioning

confidence: 99%

The cost of a future low-carbon electricity system without nuclear power – the case of Sweden

Kan

Hedenus

Reichenberg

2020

Energy

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“…Previous studies regarding risk management in construction projects have covered a wide variety of areas, such as overall risk management [20], safety risk management [21], financial risk management [22], quality risk management [23], risk assessment [24], advanced technology-driven risk management [25], and risk management in publicprivate partnerships [26,27]. However, less attention has been devoted to political risk management in international construction projects.…”

Section: Literature Reviewmentioning

confidence: 99%

Identifying Political Risk Management Strategies in International Construction Projects

Chang

Hwang

Deng

et al. 2018

Advances in Civil Engineering

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International construction projects are plagued with political risk, and international construction enterprises (ICEs) must manage this risk to survive. However, little attention has been devoted to political risk management strategies in international construction projects. To fill this research gap, a total of 27 possible strategies were identified through a comprehensive literature review and validated by a pilot survey with 10 international experts. Appraisals of these 27 strategies by relevant professionals were collected using questionnaires, 155 of which were returned. Exploratory factor analysis was conducted to explore the interrelationships among these 27 strategies. e results show that all of the 27 strategies are important for political risk management in international construction projects. Moreover, these 27 strategies were clustered into six components, namely, (1) making correct decisions, (2) conducting favorable negotiations, (3) completing full preparations, (4) shaping a good environment, (5) reducing unnecessary mistakes, and (6) obtaining a reasonable response. e 6 components can be regarded as 6 typical management techniques that contribute to political risk management in the preproject phase, project implementation phase, and postevent phases. e findings may help practitioners gain an in-depth understanding of political risk management strategies in international construction projects and provide a useful reference for ICEs to manage political risks when venturing outside their home countries.

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“…According to Haghnevis and Sajedi [40], despite various studies and proposed methodologies and models for managing risk, a specific methodology or model with concentrations on a single industry and its unique applications still had not been developed The same observation also is well understood by research reported by Gilbert et al [41]. Also, previous studies on risk management within OGC projects, concentrated more on risk identification rather than proposing new risk assessment methodologies [7,35].…”

Section: Problem Statement and Our Contributionsmentioning

confidence: 74%

DEMATEL-ANP Risk Assessment in Oil and Gas Construction Projects

et al. 2017

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Oil and gas construction projects are complex and risky because of their dynamic environment. Furthermore, rising global energy demand has increased the need for trustworthy risk assessment models for such projects that can provide adequate and precise policy planning. Traditional risk assessments in oil and gas construction projects do not consider the interrelationships of factors in the best-fit models. The Decision Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Network Processes (ANP), called the DEMATEL-ANP approach, have been applied to other research disciplines to address this shortcoming. This method is able to construct a structural relationship among the different influence factors to visualize complex correlations. Thus, the purpose of this study is to showcase the DEMTAL-ANP risk assessment model to assess the overall risk factors of OGC projects. This study thus identifies the crucial risk criteria of such projects. Data were collected in 2016 through interviews with experts active in OGC projects in Iran. DEMATEL in this situation is used to determine the interdependencies' relative strengths among the risks. The ANP method is applied to assess the relative importance of the risk factors and to determine the best strategy for implementation of a risk management program. The results presented in this study are a novel adaptation of the risk assessment methodology to OGC projects that determines the important risk factors that directly affect the project success, which in turn helps in formulation of policies for ensuring reliable energy supply planning.

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Cost overruns and financial risk in the construction of nuclear power reactors: A critical appraisal

Cited by 50 publications

References 21 publications

The cost of a future low-carbon electricity system without nuclear power – the case of Sweden

The cost of a future low-carbon electricity system without nuclear power – the case of Sweden

Identifying Political Risk Management Strategies in International Construction Projects

DEMATEL-ANP Risk Assessment in Oil and Gas Construction Projects

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