Understanding cost escalation in nuclear reactor construction projects

Abstract

This work seeks to evaluate overnight construction costs (OCC) and lead time escalation of nuclear reactors from 1955 to 2016. To this end, a comprehensive database of commercial Light Water Reactors (LWR) was developed and a statistical analysis was conducted. Findings reveal that there is significant delay in lead time, especially for the last generation reactors constructed from 2010’s. This results in the escalation of capital costs rather than a decline. Average OCC of newer reactors are 60% higher than the ones implemented in the earlier stages of the nuclear era. This suggests a negative learning curve effect for both OCC and lead time, which threats the market and financial sustainability of current and future nuclear energy projects. Although this is a general trend, this negative effect is country specific and, thus, induced by national policies and regulatory frameworks. Therefore, the role of nuclear technology to cope with the decarbonisation of the power sector must be better evaluated, taking into account the real cost impacts of nuclear technology implementation.