An international comparative assessment of construction cost overruns for electricity infrastructure

Earlier this year, we assessed the construction costs affiliated with 401 electricity infrastructure projects worldwide. We found that these projects collectively involved $820 billion worth of investment, and represented more than 325,000 MW of installed capacity and 8500 km of transmission lines. Taken together, these projects incurred $388 billion in cost overruns, equivalent to a mean cost escalation of $968 million per project, or a 66.3 percent overrun per project. In this article, we extend upon that earlier analysis to explain how hydroelectric dams, nuclear reactors, wind farms, solar facilities, fossil fueled thermal plants, and transmission lines pose distinct construction risks. We highlight that electricity infrastructure is prone to cost overrun issues almost independently of technology or location, that hydroelectric dams and nuclear reactors have the greatest amount and frequency of cost overruns, even when normalized to overrun per installed MW, and that solar and wind projects seem to present the least construction risk. Consequently, investors, electric utilities, public officials, and energy analysts need to rethink and reevaluate the methodologies they use to predict construction timetables and calculate budgets.