Nuclear power plants have the highest construction cost overrun and the longest time delays of all energy projects. In the clean energy sector, the worst marks for violation of set construction cost and timelines go to hydrogen, carbon capture and storage as well as gas power plants, according to a study by the Boston University Institute for Global Sustainability.
The average project costs 40% more than expected for construction and takes almost two years longer than planned, the Boston University Institute for Global Sustainability (IGS) said.
Its researchers used an original dataset 50% larger than the ones in previous literature. They examined cost overrun risks for 662 energy infrastructure projects across 83 countries built between 1936 and 2024, covering USD 1.358 trillion in investment and a total capacity of more than 400 GW.
In total, the study evaluated ten types of projects: coal-, oil-, and natural gas–fueled power plants; nuclear reactors; hydropower plants; utility-scale wind farms; utility-scale solar photovoltaic and concentrated solar power (CSP) facilities; high-voltage transmission lines; bioenergy and geothermal power plants; hydrogen production units; and carbon capture and storage (CCS) facilities.
Both hydrogen and CCS projects exhibited significant time and cost overruns
“We found that more than three fifths of the projects experienced cost overruns, with these overruns being particularly prominent in projects exceeding 1,561 MW in capacity. Positively, the escalation rate in cost overruns has been declining since 1976,” reads the study, published in the Energy Research & Social Science journal.
However, the findings show patterns of cost overruns varied by fuel source. Nuclear and fossil thermal projects exhibited higher cost escalation rates over time, whereas solar power projects showed a decline.
Critically, both hydrogen and CCS projects exhibited significant time and cost overruns, casting doubt on their ability to be rapidly scaled up, to address climate change or meet energy and climate policy priorities, the authors underlined.
The average nuclear power plant has a construction cost overrun of 102.5% and ends up costing USD 1.56 billion more than expected, IGS said.
Red flag for efforts to substantially push forward a hydrogen economy
“Worryingly, these findings raise a legitimate red flag concerning efforts to substantially push forward a hydrogen economy,” said Benjamin Sovacool, lead and first author of the study, director of IGS, and professor at Boston University’s Department of Earth and Environment.
In the results, solar energy and electricity grid transmission projects have the best construction track record and that they are often completed ahead of schedule or below expected cost.
Wind farms also performed favorably in the financial risk assessment, according to the study, called ‘Beyond economies of scale: Learning from construction cost overrun risks and time delays in global energy infrastructure projects’.
“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,” Sovacool stated.
For him, it’s further evidence that such technologies have an array of underrated and underappreciated social and economic value.