7 ms·

Why is the nuclear industry plagued with cost and schedule overruns? And shouldn’t they have thought by now, “hey our estimates are always off so let’s double t

Why is the nuclear industry plagued with cost and schedule overruns? And shouldn’t they have thought by now, “hey our estimates are always off so let’s double them”?

allannienhuis 8y ago
s/nuclear/software/g There, fixed that for ya. :P
- yazr 8y ago
  Your comment is more insightful that u realize ;) Software projects often suffer from exponential variations in specs, implementation, testing, environment, etc. Nuclear projects often suffer from inflexible and pre-defined specs and constraints.
ummonk 8y ago
That happens in basically every industry. The problem is that if you double your own estimate, but no one else does, then your project doesn't get selected. Also, if you double your estimate and go ahead with the project, it will have a psychological impact which causes wasteful spending and slow work that will result in additional overruns...
- greglindahl 8y ago
  I haven't heard much about cost overruns for wind farms and solar panel farms. Solar thermal, yes, that's a startup industry.
  - ummonk 8y ago
    To clarify, it happens in basically any industry with megaprojects.
    - greglindahl 8y ago
      So, it applies to all of the recent large solar, wind, and battery projects... which appear to hit their budgets and dates? Or are those not megaprojects?
      - angry_octet 8y ago
        Most megaprojects have mega complexity. In contrast, wind, solar and batteries are scaling by having many units, feeding in to a dumb grid, and don't have the complexity explosion. Distributed generation and smart loads were invented to add enough complexity (technical, regulatory) to allow them to achieve massive system failure :-)
        CompelTechnic 8y ago
        This is why I think solar can win in the long term (wind already has won) - just scale up linearly. Doing so is geared toward standard assembly line production, standardized installation for the technicians, regardless of scale.
johngalt 8y ago
Imagine their surprise when the estimates are still wrong after doubling.
mikeyouse 8y ago
They do -- And then they come in at 2x time/cost of the doubled estimate. The initial estimate for the Vogtle expansion in Georgia was $11.5 billion total with first power coming in 2016 and 2017 for the two reactors. The cost was repeatedly revised upwards with the latest estimate at $27 billion and they aren't expecting power before 2022. The entire project might still be cancelled and rate payers will just lose ten billion+ dollars. Can you imagine a project that is over 100% over budget in time and money when the scale is billions of dollars and a decade? Anyone with the background should try and pencil out a financial forecast to make money off tying up tens of billions of dollars for 15 years before you see a penny of revenue.
- hospes 8y ago
  Meanwhile in 8 months in India they have built 648 MW solar plant that costs $679 million [1]. [1] https://youtu.be/gM-0lrIxCnE https://youtu.be/gM-0lrIxCnE
  - adventured 8y ago
    11 of the 12 most polluted cities on earth are in India. They need to build a lot faster given coal is still 3/4 of their energy generation. The US is a laggard on solar as a percentage of energy generation, and even the US has a larger share of its energy derived from solar than India does. https://www.bbc.com/news/world-asia-india-43972155 https://www.bbc.com/news/world-asia-india-43972155
    - Reason077 8y ago
      India's air pollution problem is only partially due to power plants. Much of it comes from things like cooking fires, agricultural burning, and combustion vehicles. Closing down coal would be a step forward, but wouldn't solve the problem alone.
  - DoctorOetker 8y ago
    Pretty much off topic by me but: Do you know what is the total surface area of currently installed solar panels by SolarCity? Alternatively the largest total area solar panels operated by a single entity? (it's for an astronomy idea I have)
pharrington 8y ago
They do, the logistics of constructing a nuclear power plant is one of the most complex things humans currently do, and federal funding that was promised at the outset of construction can be (and in this case, was) reneged by a new administration.
jjoonathan 8y ago
Because NIMBYs have figured out how to drag the process out indefinitely. It's very effective at making nuclear projects un-economical.
rory096 8y ago
Relevant: https://www.reuters.com/article/us-toshiba-accounting-westinghouse-nucle/how-two-cutting-edge-u-s-nuclear-projects-bankrupted-westinghouse-idUSKBN17Y0CQ https://www.reuters.com/article/us-toshiba-accounting-westin...
ekingr 8y ago
They do. If you want an order of magnitude of how huge the drifts are, have a look at the construction of the EPR of Flamanville in France[1]: started in 2007 with an initial timeline of 5 years and budget of €3.3bn, it is still not completed as of today (they just announced targeting the end of 2018) and the current budget is over €10.5bn. In the end, the complexity, criticality and sheer scale of these projects make them extremely hard to lead properly and any setback can have gigantic impacts. [1] https://en.wikipedia.org/wiki/Flamanville_Nuclear_Power_Plant https://en.wikipedia.org/wiki/Flamanville_Nuclear_Power_Plan...
- realusername 8y ago
  The Flamanville EPR is a bit of a special case since it's the first of its kind, so it's not surprising that it's not on budget and schedule, I hope EDF learned some lessons from that.
ajnin 8y ago
As the article states, they lost their competency. Here in France, the reason is poor planning, focus on cost-cutting and lack of long term vision by top management and government. EDF, the historical state power company turned into a private company in 2004, laid off most of the technicians that built the power plants over the years and subcontracted all the maintenance work to hundreds of subcontractors that fight for the lowest bid and employ only underqualified people, who often work in illegal conditions. The latest EPR reactor in construction in France is riddled with defects, the pressure vessel, built by Framatome, also absorbed by EDF, has uneven carbon content which means it could crack. The concrete enclosure has many large holes due to poor work. The bridge on top of the reactor was made of low-quality steel bought in Russia and had to be replaced. Basically everything is badly done, because they constantly try too make it in the cheapest way possible. But it's not working out for them because fortunately the nuclear safety authority is there to force them to redo things correctly. In its current state, the nuclear industry is basically dead in France. As another example, they can't decomission the plants arriving in end of life, and EDF officially postponed it until 2100.
- cc439 8y ago
  >As the article states, they lost their competency. I think people undereatimate how bleak the short term future (50-100 years) is looking right now. We've forgotten how to properly build many of the things we once touted as the pinnacles of modern civilization and the current societal status quo is too fractured and stressed to ever pursue the kind of learning process needed to reaquire that knowledge. This is but one example among many.
  - greglindahl 8y ago
    We have plenty of competence in wind and solar energy. What we need to pay attention to is that many of the nuclear plants built in the past are flawed, and so we always had less competence at building them than we thought.
    - candiodari 8y ago
      Not at all. We had plenty of competence. We just chose to save a buck instead of using it. And the risk ? "You cannot blame me for that !" (especially since this is taxpayer funds, ie. everyone, decided by democratic vote, at least in France and the US. The democratic contract ought to mean that since we collectively decided to do this, we are also collectively responsible for the results, and yes, even if you voted for the other guy)
AngryData 8y ago
The politics of it all introduces a lot of problems. You don't just have some single guy or few people that decide to build a plant. You gotta go through federal politics to even be allowed to attempt to build a nuclear facility, and lower levels of government will have a lot of push back to not put the actual facility near themselves, especially fuel and waste storage. There is a lot of pockets to lube up with money along the way before you even get to having your plant designs reviewed and approved. There are also international politics to deal with in most cases depending on how you are sourcing your material. And by time you get all that done and are ready to build the plant, there is an entirely new set of politicians to introduce more potential holdbacks, and then any one working in the construction phases are going to be demanding a premium just because of what it is. And although those costs aren't unknown, if you do state all those extra costs straight out people will just assume its going to cost even more on top of that anyways and deny the project from the start.
adrianN 8y ago
There are lots of large construction projects that overrun their budget, not just for nuclear power plants. Just check out Berlin's new airport: Fifteen years planning phase, construction start 2006 with initial estimates of five years construction time. Initial cost estimate ~700 million Euros. Cost estimate at the start of construction 2400 million Euros. Cost estimate five years into the construction 4200 million. Cost estimate nine years into the construction nearly 6000 million Euros... now we're 12 years into construction and still don't have a reliable estimate when it's going to open. And it's not like we haven't been building new airports for decades like with nuclear power plants.
- CompelTechnic 8y ago
  I work at a nuclear equipment supplier. The focus on paperwork as opposed to real engineering work is something to be in awe at. Process drains competence, but even under ideal scenarios, these are large, complicated machines, and the base incentives for all layers of management are to underestimate the time and cost to complete a project. For many nuclear projects, cost overruns do not hurt the people who made the initial estimates, and the estimates are impossible to do correctly anyway due to the vast complexity. EDIT: One thing I will also add is that as time goes on, the corpus of knowledge you need to know in order to effectively engineer the parts we supply only grows, as the nuclear fleet ages, documentation rots, and more code editions are released. This means that young engineers face a steeper learning while the graybeards (70 year old engineers, not 35 years old, aka graybeard in software years) face retirement.
anonfunction 8y ago
Hofstadter's Law: It always takes longer than you expect, even when you take into account Hofstadter's Law.
clarkmoody 8y ago
Because the government is heavily involved. The process is both massively bureaucratic and political, which is a surefire way to spend way more time and money than originally estimated.
jabl 8y ago
Mike Shellenberger argues the way to build nuclear plants on time and budget is to build the same design over and over cookie cutter style. https://www.forbes.com/sites/michaelshellenberger/2018/06/21/if-innovation-makes-everything-cheaper-why-does-it-make-nuclear-power-more-expensive/ https://www.forbes.com/sites/michaelshellenberger/2018/06/21... Basically we're building so few of them so seldom, that every time it's a FOAK and we start the learning process from scratch.

Why is the nuclear industry plagued with cost and schedule overruns? And shouldn’t they have thought by now, “hey our estimates are always off so let’s double them”?

allannienhuis 8y ago

s/nuclear/software/g There, fixed that for ya. :P

yazr 8y ago
Your comment is more insightful that u realize ;) Software projects often suffer from exponential variations in specs, implementation, testing, environment, etc. Nuclear projects often suffer from inflexible and pre-defined specs and constraints.

ummonk 8y ago

That happens in basically every industry. The problem is that if you double your own estimate, but no one else does, then your project doesn't get selected. Also, if you double your estimate and go ahead with the project, it will have a psychological impact which causes wasteful spending and slow work that will result in additional overruns...

greglindahl 8y ago
I haven't heard much about cost overruns for wind farms and solar panel farms. Solar thermal, yes, that's a startup industry.
- ummonk 8y ago
  To clarify, it happens in basically any industry with megaprojects.
  - greglindahl 8y ago
    So, it applies to all of the recent large solar, wind, and battery projects... which appear to hit their budgets and dates? Or are those not megaprojects?
    - angry_octet 8y ago
      Most megaprojects have mega complexity. In contrast, wind, solar and batteries are scaling by having many units, feeding in to a dumb grid, and don't have the complexity explosion. Distributed generation and smart loads were invented to add enough complexity (technical, regulatory) to allow them to achieve massive system failure :-)
      - CompelTechnic 8y ago
        This is why I think solar can win in the long term (wind already has won) - just scale up linearly. Doing so is geared toward standard assembly line production, standardized installation for the technicians, regardless of scale.

johngalt 8y ago

Imagine their surprise when the estimates are still wrong after doubling.

mikeyouse 8y ago

They do -- And then they come in at 2x time/cost of the doubled estimate. The initial estimate for the Vogtle expansion in Georgia was $11.5 billion total with first power coming in 2016 and 2017 for the two reactors. The cost was repeatedly revised upwards with the latest estimate at $27 billion and they aren't expecting power before 2022. The entire project might still be cancelled and rate payers will just lose ten billion+ dollars. Can you imagine a project that is over 100% over budget in time and money when the scale is billions of dollars and a decade? Anyone with the background should try and pencil out a financial forecast to make money off tying up tens of billions of dollars for 15 years before you see a penny of revenue.

hospes 8y ago
Meanwhile in 8 months in India they have built 648 MW solar plant that costs $679 million [1]. [1] https://youtu.be/gM-0lrIxCnE https://youtu.be/gM-0lrIxCnE
- adventured 8y ago
  11 of the 12 most polluted cities on earth are in India. They need to build a lot faster given coal is still 3/4 of their energy generation. The US is a laggard on solar as a percentage of energy generation, and even the US has a larger share of its energy derived from solar than India does. https://www.bbc.com/news/world-asia-india-43972155 https://www.bbc.com/news/world-asia-india-43972155
  - Reason077 8y ago
    India's air pollution problem is only partially due to power plants. Much of it comes from things like cooking fires, agricultural burning, and combustion vehicles. Closing down coal would be a step forward, but wouldn't solve the problem alone.
- DoctorOetker 8y ago
  Pretty much off topic by me but: Do you know what is the total surface area of currently installed solar panels by SolarCity? Alternatively the largest total area solar panels operated by a single entity? (it's for an astronomy idea I have)

pharrington 8y ago

They do, the logistics of constructing a nuclear power plant is one of the most complex things humans currently do, and federal funding that was promised at the outset of construction can be (and in this case, was) reneged by a new administration.

jjoonathan 8y ago

Because NIMBYs have figured out how to drag the process out indefinitely. It's very effective at making nuclear projects un-economical.

rory096 8y ago

Relevant: https://www.reuters.com/article/us-toshiba-accounting-westinghouse-nucle/how-two-cutting-edge-u-s-nuclear-projects-bankrupted-westinghouse-idUSKBN17Y0CQ https://www.reuters.com/article/us-toshiba-accounting-westin...

ekingr 8y ago

They do. If you want an order of magnitude of how huge the drifts are, have a look at the construction of the EPR of Flamanville in France[1]: started in 2007 with an initial timeline of 5 years and budget of €3.3bn, it is still not completed as of today (they just announced targeting the end of 2018) and the current budget is over €10.5bn. In the end, the complexity, criticality and sheer scale of these projects make them extremely hard to lead properly and any setback can have gigantic impacts. [1] https://en.wikipedia.org/wiki/Flamanville_Nuclear_Power_Plant https://en.wikipedia.org/wiki/Flamanville_Nuclear_Power_Plan...

realusername 8y ago
The Flamanville EPR is a bit of a special case since it's the first of its kind, so it's not surprising that it's not on budget and schedule, I hope EDF learned some lessons from that.

ajnin 8y ago

As the article states, they lost their competency. Here in France, the reason is poor planning, focus on cost-cutting and lack of long term vision by top management and government. EDF, the historical state power company turned into a private company in 2004, laid off most of the technicians that built the power plants over the years and subcontracted all the maintenance work to hundreds of subcontractors that fight for the lowest bid and employ only underqualified people, who often work in illegal conditions. The latest EPR reactor in construction in France is riddled with defects, the pressure vessel, built by Framatome, also absorbed by EDF, has uneven carbon content which means it could crack. The concrete enclosure has many large holes due to poor work. The bridge on top of the reactor was made of low-quality steel bought in Russia and had to be replaced. Basically everything is badly done, because they constantly try too make it in the cheapest way possible. But it's not working out for them because fortunately the nuclear safety authority is there to force them to redo things correctly. In its current state, the nuclear industry is basically dead in France. As another example, they can't decomission the plants arriving in end of life, and EDF officially postponed it until 2100.

cc439 8y ago
>As the article states, they lost their competency. I think people undereatimate how bleak the short term future (50-100 years) is looking right now. We've forgotten how to properly build many of the things we once touted as the pinnacles of modern civilization and the current societal status quo is too fractured and stressed to ever pursue the kind of learning process needed to reaquire that knowledge. This is but one example among many.
- greglindahl 8y ago
  We have plenty of competence in wind and solar energy. What we need to pay attention to is that many of the nuclear plants built in the past are flawed, and so we always had less competence at building them than we thought.
  - candiodari 8y ago
    Not at all. We had plenty of competence. We just chose to save a buck instead of using it. And the risk ? "You cannot blame me for that !" (especially since this is taxpayer funds, ie. everyone, decided by democratic vote, at least in France and the US. The democratic contract ought to mean that since we collectively decided to do this, we are also collectively responsible for the results, and yes, even if you voted for the other guy)

AngryData 8y ago

The politics of it all introduces a lot of problems. You don't just have some single guy or few people that decide to build a plant. You gotta go through federal politics to even be allowed to attempt to build a nuclear facility, and lower levels of government will have a lot of push back to not put the actual facility near themselves, especially fuel and waste storage. There is a lot of pockets to lube up with money along the way before you even get to having your plant designs reviewed and approved. There are also international politics to deal with in most cases depending on how you are sourcing your material. And by time you get all that done and are ready to build the plant, there is an entirely new set of politicians to introduce more potential holdbacks, and then any one working in the construction phases are going to be demanding a premium just because of what it is. And although those costs aren't unknown, if you do state all those extra costs straight out people will just assume its going to cost even more on top of that anyways and deny the project from the start.

adrianN 8y ago

There are lots of large construction projects that overrun their budget, not just for nuclear power plants. Just check out Berlin's new airport: Fifteen years planning phase, construction start 2006 with initial estimates of five years construction time. Initial cost estimate ~700 million Euros. Cost estimate at the start of construction 2400 million Euros. Cost estimate five years into the construction 4200 million. Cost estimate nine years into the construction nearly 6000 million Euros... now we're 12 years into construction and still don't have a reliable estimate when it's going to open. And it's not like we haven't been building new airports for decades like with nuclear power plants.

CompelTechnic 8y ago
I work at a nuclear equipment supplier. The focus on paperwork as opposed to real engineering work is something to be in awe at. Process drains competence, but even under ideal scenarios, these are large, complicated machines, and the base incentives for all layers of management are to underestimate the time and cost to complete a project. For many nuclear projects, cost overruns do not hurt the people who made the initial estimates, and the estimates are impossible to do correctly anyway due to the vast complexity. EDIT: One thing I will also add is that as time goes on, the corpus of knowledge you need to know in order to effectively engineer the parts we supply only grows, as the nuclear fleet ages, documentation rots, and more code editions are released. This means that young engineers face a steeper learning while the graybeards (70 year old engineers, not 35 years old, aka graybeard in software years) face retirement.

anonfunction 8y ago

Hofstadter's Law: It always takes longer than you expect, even when you take into account Hofstadter's Law.

clarkmoody 8y ago

Because the government is heavily involved. The process is both massively bureaucratic and political, which is a surefire way to spend way more time and money than originally estimated.

jabl 8y ago

Mike Shellenberger argues the way to build nuclear plants on time and budget is to build the same design over and over cookie cutter style. https://www.forbes.com/sites/michaelshellenberger/2018/06/21/if-innovation-makes-everything-cheaper-why-does-it-make-nuclear-power-more-expensive/ https://www.forbes.com/sites/michaelshellenberger/2018/06/21... Basically we're building so few of them so seldom, that every time it's a FOAK and we start the learning process from scratch.