Investment risk highest for nuclear power, lowest for solar

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.

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June 13, 2016

by AEA in Events, News

Bioenergy integrated in the bio-based economy crucial to meet climate targets

Amsterdam, 9 June – The 24th European Biomass Conference and Exhibition in Amsterdam has provided a unique overview of the state of play of the sector and a much clearer view than before of the role biomass can play in achieving the transition to a low carbon economy.

After the historical Climate agreement at COP 21, international institutions and scientific organizations agree that biomass and the bio-based economy are crucial to meet the 2 degrees target of climate change.

Scientific evidence indicates that 730 Gt (billion tonnes) out of the 1,000 Gt of carbon budget available to keep global temperatures below this threshold were already consumed, therefore the time we have to put in place effective measures is limited. We need low carbon solutions that deliver now and the sustainable use of biomass is undoubtedly included. Bioenergy itself can provide 10%-30% of all total CO2 emission reductions needed and this should be achieved by putting bioenergy in the integrated context of the bio-based economy, in order to maximize the efficiency of how we use this resource, to produce renewable energy, food and materials.

A careful review of the available scientific literature indicates that mobilizing one billion dry tons of ligno-cellulosic biomass by 2030 in Europe is possible and this can be done sustainably. This would mean doubling the current use of biomass and would be sufficient to meet the expected demand both for carbon neutral fuels and materials, without competing with food production.

Unsustainable displacement of food and loss of forest cover can be readily avoided by means of higher resource efficiency in agriculture, livestock management and by restoration of degraded lands. This can also provide major synergies between sustainable Bio-based economy and sustainable, resource efficient food production. State-of-the-art analysis shows that when agriculture and livestock are modernized over time, exploiting yield gaps and efficiency improvements in management, there is both enough food production capacity to feed the world with less land and to produce bioenergy on the surplus land. This can also lead to considerable improvements in carbon stocks on that same land, reduced water use per unit of output, lower GHG emissions and more efficient use of nutrients. Such necessary improvements are also highly desirable from a food security perspective, alleviating poverty, enhancing rural development and making agriculture more resilient to climate change. Similar reasoning holds for forest management, where integrated strategies can enhance forest productivity, maintain or improve carbon stocks, protect biodiversity and maintain the vitality of forest.One of the biggest opportunities lies in the revitalization of marginal and degraded lands by (re-)planting them with trees and grasses. Permanent vegetation cover can over time restore soil structure, water retention functions, minimise soild erosion and improve overall productivity. This changes the perspective on bioenergy from hedging problems to achieving synergies with better agriculture.

After decades of continuous research and technological development, a number of large scale demonstration plants is proving that biomass can be effectively converted into energy, advanced biofuels and bio-based products. Recognizing the value of those good examples is fundamental to build the consensus needed for finally setting a clear, stable European policy framework, which is still lacking, but is essential to enable the widespread development of the bio-based economy. The attention of policy makers and media has been focussed too much on possible negative effects of bioenergy. Attention needs to shift to the positive results that the bio-based economy can deliver in achieving the low carbon economy.

This conference demonstrated that there are high level talents working on these issues, said Prof. André Faaij, conference general chairman in his concluding remarks. It is now about how do we link all this good work to the right arena. Now we need to ensure close interplay and engagement of the research community, the industry and the governance arena. I would like to call upon all the key players in the field, especially international bodies such as UN, FAO, IRENA, IEA, EC, to organize the debate and to give it the focus it needs to solve the problems to progress, he said. He also launched the idea to form a coalition among the GBEP, the Global Environment Facility, the European Commission and the Energy Coalition of the world billionaires, to discuss how to support a series of large scale demonstrations of sustainable biomass production in different settings, integrating biorefineries, BECCS (bioenergy with carbon capture and storage), and bio-chemicals.

More information on www.eubce.com