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Nuclear reactors' construction costs: The role of lead-time, standardization and technological progress

Abstract : This paper provides an econometric analysis of nuclear reactor construction costs in France and the United States based on overnight costs data. We build a simultaneous system of equations for overnight costs and construction time (lead-time) to control for endogeneity, using change in expected electricity demand as instrument We argue that the construction of nuclear reactors can benefit from standardization gains through two channels. First, short term coordination benefits can arise when the diversity of nuclear reactors' designs under construction is low. Second, long term benefits can occur due to learning spillovers from past constructions of similar reactors. We find that construction costs benefit directly from learning spillovers but that these spillovers are only significant for nuclear models built by the same Architect-Engineer. In addition, we show that the standardization of nuclear reactors under construction has an indirect and positive effect on construction costs through a reduction in lead-time, the latter being one of the main drivers of construction costs. Conversely, we also explore the possibility of learning by searching and find that, contrary to other energy technologies, innovation leads to construction costs increases
Keywords : Nuclear energy
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Journal articles
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https://hal-mines-paristech.archives-ouvertes.fr/hal-01523016
Contributor : Yann Ménière Connect in order to contact the contributor
Submitted on : Monday, May 15, 2017 - 11:03:57 PM
Last modification on : Monday, June 27, 2022 - 3:06:08 AM

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Michel Berthélemy, Lina Escobar Rangel. Nuclear reactors' construction costs: The role of lead-time, standardization and technological progress. Energy Policy, Elsevier, 2015, 82, pp.118-130. ⟨10.1016/j.enpol.2015.03.015⟩. ⟨hal-01523016⟩

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