Feb 27, 2017

4 min read

Megaprojects are Failing Everywhere, Leading to an Uncertain Economic Future

I am dismayed and shaken by the failures of American nuclear projects being built in South Carolina. The exact mode of these failures follows the vernacular of “cost overruns and delayed schedule”, leading to billions upon billions of losses piling up.

Out of everything in this story, the thing that saddens me the most is the fact that it was not unique. This was merely one more data point in a historical trend. The same chorus of cost overruns, delays, and even supply chain problems were sung with almost the same relative timeline for the Olkiluto 3 plant construction.

Accounting scandals are anything but business-as-usual, but the trajectory was already in-place. Amidst a decline, actors on the inside make moves hoping that things are really better than they are. In the end, this always makes the situation even worse than it otherwise would have been. Insularity might have always been a cultural component in the stagnation of commercial nuclear power.

Fumbling in the Dark for Answers

With the recent news, I have returned to the old hobby of mine of reading nuclear blogs. Nowadays, I see some articles organically pop up in Medium of the same flavor. As an example, Is Nuclear Too Innovative by The Third Way shows an attempt by a solid nuclear advocate to mix the good and the bad. Only problem is that right now, the points in the “bad” category is tremendously concrete and convincing while the points in the “good” category are vague and general, reading almost more like cheer-leading than analysis.

Already, I see some near direct retorts to that article in the genuine nuclear blog-o-sphere. Almost every writer seems to start off acknowledging the realities of the recent developments (early retirements, more delays, grim future prospects), these are followed by a call-to-arms. Keep the running plants open for longer, get the current builds back on track, reform the NRC. Examples abound, Nuclear Economics blog, Atomic Power Review author, and the behemoth of nuclear blogging now publishing under Neutron Bytes.

It’s difficult for me to read these (a feeling that has crept up on me over many years) because on one hand, I agree with the pro-nuclear stance. But on the other hand, I see no effort making a difference. Some fledgling answers like over-pricing the brand name are somewhere between pointless and just wrong.

I don’t have all the answers for this particular time, but I really do believe that this story is a part of a much larger trend that spans further than just nuclear.

Dying Megaprojects

That larger context, I believe, is the sunset of the age of megaprojects. Megaprojects and individual coherent pieces of infrastructure that are fundamentally monolithic in nature. A nuclear reactor is monolithic because there is only one independent volume in which energy-producing neutrons are flying about. Shut down the reactor, and you’ve shut down the entire revenue-producing capability. In different types of reactors, the entire heat load of the reactor moves through 2 or 4 super-large pipes out of the reactor, without any meaningful capability to operate with either one out of commission. There are many systems that will shut down the entire plant if they go offline.

Economically, I think our expectation was to acknowledge that, yes, megaprojects will get bigger and thus impose greater risk from failure of subsystems because those subsystems will grow in number as scale increases. But we had a commensurate expectation that we make up for that in improved reliability of the subsystems as well as improved systems engineering generally.

Well, the data is basically in. Modern megaprojects have seen a slow but steady decline in their ability to deliver on time and on schedule. This isn’t just about nuclear, it’s about skyscrapers, oil and gas, wind turbines, and many other things.

A few years ago, I saw this report on the status of oil and gas megaprojects which is a broad and well-research study that gives a barometer of the greater economic environment.

A secondary source:

We are getting worse and worse at megaprojects, and nothing could be more vulnerable to this trend than nuclear power.

This should concern us far beyond a personal preference for nuclear power for future clean energy. Megaprojects have defined China’s industrialization, just as they defined the industrial revolution of Western nations that underwent industrialization longer ago.

As we find it ever-increasingly impossible to fill the wideing industrial void from giant monolithic entities like nuclear power plants, we will have to come up with something to fill the niches opened up.

An irreversible reversal in our industrial capability (fully as a species) is concerning in ways that I can’t even quite articulate. We should all be concerned about this trend, and we should look at the entire nuclear industry as the canary in the coal mine.