“A new study from the Boston University Institute for Global Sustainability finds that construction costs run over budget for more than 60% of energy infrastructure projects worldwide.”

Why this is important: Over the next few decades, trillions of dollars in investments will be poured into the clean energy sector both at home and abroad. Many, if not most, of these projects will involve exorbitant budgets paired with large-scale construction and logistics. Despite this wealth of resources, most of these major energy projects will run behind schedule and far over budget. In fact, according to a study published in the journal Energy Research & Social Sciences, the average energy project comes in 40 percent more expensive than the initial projected construction cost and takes around two years longer than planned to build.

According to the study, the most egregious offenders are typically nuclear power plants. The plants usually cost more than double what was initially anticipated and are well behind schedule on construction. Nuclear power projects are not the only problematic form of energy construction projects, and even newer forms of clean energy, such as hydrogen and natural gas, run outsized risks of coming in far over budget and behind schedule.

Despite these dire statistics, it’s not all bad news. While their energy counterparts tend not to meet projected budgets or timetables, solar energy and electricity transmission projects have been a recent marker of efficiency and often come to completion under budget and ahead of schedule. These projects, also including wind farms, stand out among their energy project peers as relatively cheap, quick, and small-scale, making them attractive to public and private actors alike.

As the world transitions away from fossil fuels and looks to clean energy alternatives to meet its energy needs, the cost and speed at which new energy infrastructure can be completed will be of the utmost importance. While these findings do put a damper on the massive clean energy projects that have been popular in the past, the alternative may actually be better for energy generation and the environment. These smaller-scale projects, which allow for relatively quick and easy energy infrastructure construction, will be attractive for parties looking to transition from their fossil fuel-based energy infrastructure to one based on clean energy, and allow for these transitions to occur on a smaller and more local scale. --- Jonathan E. Gharib, Summer Associate