{"id":35806,"date":"2025-03-03T11:01:25","date_gmt":"2025-03-03T11:01:25","guid":{"rendered":"https:\/\/www.cdr-news.com\/?p=35806"},"modified":"2025-03-04T13:54:35","modified_gmt":"2025-03-04T13:54:35","slug":"nuclear-renaissance-avoiding-new-generation-reactor-construction-issues","status":"publish","type":"post","link":"https:\/\/www.cdr-news.com\/categories\/expert-views\/nuclear-renaissance-avoiding-new-generation-reactor-construction-issues\/","title":{"rendered":"Nuclear renaissance \u2013 avoiding new generation reactor construction issues"},"content":{"rendered":"\n<p><strong>Nuclear power is being rehabilitated, writes HKA Chicago partner and damages analysis professional Kim Reome, but stakeholders should heed past lessons on costs and scheduling.<\/strong><\/p>\n\n\n\n<p>After decades of stagnation and decline, nuclear power is resurgent. The outlook for the industry is being transformed by climate change policies, shifting energy priorities and technological advances. But delivery of a new generation of nuclear facilities could be compromised unless lessons are learned from past projects and the nuclear sector\u2019s endemic cost and schedule overruns.<\/p>\n\n\n\n<p>The International Energy Agency (IEA) predicts 2025 will mark an all-time high for nuclear power generation as output increases in France, Japanese plants start up again after the pause following the 2011 Fukushima disaster, and commercial reactors begin operations in many markets, including Europe, China, India and Korea.<\/p>\n\n\n\n<p>In the US too new output is coming online. The first new-builds in 30 years \u2013 Vogtle 3 and 4 in Georgia \u2013 have entered commercial service. The Palisades plant in Michigan is scheduled to come back online this year after a USD 2 billion upgrade following its closure in 2022.<\/p>\n\n\n\n<p>The US and other governments are supporting this nuclear comeback to meet increased electricity demand and climate goals. Although the new Trump administration has already made moves to drop other low-carbon policy initiatives and funding, nuclear plant licences have been extended, and nuclear projects usually command bipartisan support.<\/p>\n\n\n\n<p>Elsewhere (and in some US states), climate policies will drive nuclear expansion. Nuclear energy must make a growing contribution \u2013 alongside renewables \u2013 if the world is to decarbonise electricity generation. In December 2023, more than 20 countries from four continents at the COP28 climate action summit in Dubai signed a declaration to triple nuclear capacity to achieve global net zero by 2050.<\/p>\n\n\n\n<p>The European Union has given nuclear power the green light for funding to promote sustainability. The transition to clean energy is also enabling China \u2013 which plans to double its nuclear capacity by 2030 \u2013 to reduce air pollution from coal-powered plants in major cities. Other Asian countries face similar challenges.<\/p>\n\n\n\n<p>As coal is phased out, wind and solar power have become a bigger source of energy, but renewable energy is intermittent in the absence of large-scale battery storage. Nuclear can provide a reliable baseload supply. Having nuclear in the mix can also protect a nation\u2019s energy security. Russia\u2019s invasion of Ukraine highlighted Europe\u2019s dependence on imported fossil fuels.<\/p>\n\n\n\n<p>Meanwhile, the electrification of transport and other industries, and the expansion of data centres running power-hungry AI is stoking demand. In 2024, the IEA reported that <strong>electricity consumption by data centres, AI and the cryptocurrency sector could double by 2026. E<\/strong>lectrification needs to accelerate rapidly on the IEA\u2019s pathway for net zero by 2050. Electricity\u2019s share in final energy consumption, which was up from 18% in 2015 to 20% in 2023, could approach 30% in 2030. &nbsp;<\/p>\n\n\n\n<p>Big Tech as well as other industrial users and governments are willing to pay a premium for secure, low-carbon power. In the US, <strong>Amazon<\/strong>, <strong>Google<\/strong> and <strong>Microsoft<\/strong> have struck high-value purchase agreements with nuclear generators. The energy will be supplied by a mixture of currently operating and recommissioned plants and a new generation of small modular reactors (SMRs).<\/p>\n\n\n\n<p>Microsoft\u2019s 20-year contract (with <strong>Constellation<\/strong>, the US\u2019 largest nuclear operator) will help restart a mothballed reactor at Three Mile Island in Pennsylvania. The facility is expected to produce 835 megawatts of power to offset Microsoft\u2019s data centre electricity needs. Amazon and Google are also investing in start-ups developing SMRs, while Meta has released requests for proposals from providers of 1-4 gigawatts of nuclear generation capacity to power data centres needed for AI.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>SMR \u2013 SMALL, MODULAR AND REPEATABLE?<\/strong> <\/h3>\n\n\n\n<p>With outputs up to 300 megawatts, SMRs promise a more flexible and affordable nuclear option for supplanting fossil fuel power stations. Conventional larger-scale nuclear reactors can be challenged by their upfront capital costs and construction timelines. Some are projecting that building SMRs could take less than half the construction time for large reactors. Manufacturing modules in controlled factory settings may increase efficiency and assure quality. Modular designs also allow capacity to be increased incrementally, further reducing financing risk.<\/p>\n\n\n\n<p>Apart from American SMR-powered nuclear submarines, the first SMR units are already operating in China and Russia. As with solar and wind technology, China gained an advantage over the West in SMR nuclear technology, while Russia leads in SMR fuel production. The US government and companies have been investing in SMR technology to catch up.<\/p>\n\n\n\n<p>Other countries \u2013 including Canada and the UK \u2013 are also backing SMR technology and its export potential. Some years away from commercial scale, there are said to be more than 80 SMR designs using diverse technologies at different stages of development globally. Demonstration projects later this decade could pave the way for a rollout of commercial SMR fleets beginning in the 2030s.<\/p>\n\n\n\n<p>Champions of SMRs believe that their smaller scale and simpler designs should allow standardisation and cost-effective manufacturing and assembly. This product-based approach \u2013 modelled on \u2018shipyard\u2019 production \u2013 could improve cost and schedule performance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>THE CASE FOR CAUTION<\/strong> <\/h3>\n\n\n\n<p>Experience of major nuclear engineering and construction projects \u2013 and other sectors including shipbuilding \u2013 teaches caution.<\/p>\n\n\n\n<p>Early SMRs will be first-of-a-kind projects with the associated risks and uncertainties that entails. In 2023 the first planned SMR in the US was cancelled due to rising construction costs and an electricity price uncompetitive with wind and solar.&nbsp;Costs and delays could arise as the industry adapts to new designs and processes. This may also apply to the new generation of \u2018advanced nuclear reactors\u2019 using futuristic technologies (that some SMRs may leverage), such as molten salt, high-temperature gas cooling and sodium cooling, and travelling wave designs.<\/p>\n\n\n\n<p>Also, shorter SMR construction schedules do not guarantee programme certainty. Building a downsized reactor is still a complex capital project. Units should be easier to deploy \u2013 on brownfield sites of retired coal-fired plants, for example, or off-grid to provide power or heat to industry. Every location has unique features that can challenge contractors, however.<\/p>\n\n\n\n<p>HKA\u2019s integrated research programme CRUX, which analyses the incidence and causes of claims and disputes, confirms the comparatively poor record of nuclear projects. Over the seven-year timeframe to 2024, disputed costs averaged 62.8% of budgeted capital expenditure on 27 nuclear projects in seven countries. This was notably higher than for power stations fuelled by fossil fuels (74 projects in total, in 32 countries), which faced overruns of 40.7%.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"902\" height=\"451\" src=\"https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image.jpg\" alt=\"\" class=\"wp-image-35807\" srcset=\"https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image.jpg 902w, https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-300x150.jpg 300w, https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-768x384.jpg 768w, https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-600x300.jpg 600w\" sizes=\"auto, (max-width: 902px) 100vw, 902px\" \/><\/figure>\n\n\n\n<p>The extensions of time claimed by contractors were highest on European nuclear projects \u2013 averaging 74% of planned schedules, and three times longer than in the Middle East (the region with the longest overruns for all infrastructure and capital projects).<\/p>\n\n\n\n<p>Resultant distress may be higher, but most of the main causes of claims and disputes on nuclear projects are shared with other types of construction projects. Change in scope, the primary and near-universal driver of conflict in construction, was nearly twice as likely to affect nuclear projects (34.5%) as fossil-fuel power stations.<\/p>\n\n\n\n<p>Another, related cause was late design information (24.1%). Immature designs not only make conflicts and delays during construction more likely, they also make it difficult to verify cost estimates and schedules. Optimism bias is by no means unique to the nuclear sector, but unrealistic budgets and schedules and the significant overruns that result can derail projects.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>LEARNING LESSONS<\/strong> <\/h3>\n\n\n\n<p>Costs have ballooned on EPC (engineering, procurement and construction) contracts for nuclear plant projects around the world. This has often arisen from the civil (non-nuclear) construction element, according to a 2023 US National Academy of Sciences (NAS) report, <em>Laying the Foundation for New and Advanced Nuclear Reactors in the United States<\/em>. Global in scope, the report also noted that past studies had cited \u201cnegative learning for nuclear\u201d.<\/p>\n\n\n\n<p>It is no surprise that most recurrent causes of conflict across the CRUX database of 2,000 projects are also prominent in the nuclear sector. Poor management of subcontractors and their interfaces affected almost one in four nuclear projects (24.1%); and clashes over contract interpretation even more (27.6%).<\/p>\n\n\n\n<p>Alleged bias or failure to cooperate was far more common in nuclear (17.2%) than fossil power (2.9%) projects, perhaps reflecting a greater cultural diversity of project partners, if not sheer complexity.<\/p>\n\n\n\n<p>Part of that complexity arises from the regulatory requirements around nuclear safety. CRUX indicates that nuclear projects were more likely to be affected by late approvals than fossil fuel power stations (20.7% <em>versus<\/em> 8.8%) or all non-nuclear power projects (16.5%). Such delays may be due to the procedures of either employers or regulators, or both. Inadequate responses to information requests were also notably more common in the nuclear sector than in the power sector as a whole (20.7% <em>versus<\/em> 8.1%). However, poor interface management with third parties was blamed for disputes on a slightly smaller proportion of nuclear than non-nuclear power projects (10.3% <em>versus<\/em> 13.2%).<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"903\" height=\"451\" src=\"https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-1.jpg\" alt=\"\" class=\"wp-image-35808\" srcset=\"https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-1.jpg 903w, https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-1-300x150.jpg 300w, https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-1-768x384.jpg 768w, https:\/\/www.cdr-news.com\/wp-content\/uploads\/2025\/02\/image-1-600x300.jpg 600w\" sizes=\"auto, (max-width: 903px) 100vw, 903px\" \/><\/figure>\n\n\n\n<p>Some argue skills shortages are to be expected in an industry that has been stagnant for many years. The IEA identified investment in human capital as a priority for countries committing to nuclear growth. Utilities have generally not retained the staff needed to execute large nuclear projects. Many megaproject owners rely on outsourced technical expertise, and lack the capacity to oversee projects (which is not unique to the nuclear industry). Much of the global construction industry suffers from skills gaps and problems with workmanship. The US, for example, has a shortfall in mechanical and electrical engineering talent, as well as critical trades such as welding.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>MORE PROACTIVE REACTOR CONSTRUCTION<\/strong><\/h3>\n\n\n\n<p>As much as USD 1.5 trillion could be invested in the nuclear renaissance through to 2050, according to <strong>Morgan Stanley<\/strong>, but the scale and unpredictability of construction costs remain a major obstacle. Citing past cost and schedule overruns, an investment analysis of the European nuclear market by <strong>S&amp;P Global<\/strong> has called for new frameworks to mitigate the construction risks and attract capital.<\/p>\n\n\n\n<p>Our CRUX research and some of the other evidence explored here point to some essential guardrails for new-build nuclear projects.<\/p>\n\n\n\n<p>At the outset, challenge sessions and war gaming can help crystallise the risks and choices for investors, promoters and other stakeholders. Independent checks of cost estimates and schedules by industry experts can mitigate optimism bias. The earlier the design is completed on a project, the fewer associated delays are likely to be encountered, and the greater chance the project will be delivered on time and budget.<\/p>\n\n\n\n<p>A proactive approach by project employers and fairly balanced allocation of risks among the parties will improve risk management and foster more productive working relationships with EPC contractors. Intelligent use of BIM (building information modelling) can enhance coordination and construction management. The potential benefits over the life cycle of both the project and operations may justify the creation of digital twins. During construction, comprehensive risk registers and robust project controls remain essential to keep projects on track.<\/p>\n\n\n\n<p>Notwithstanding new funding models, most nuclear projects worldwide rely on some level of government support \u2013 not only financial, but also to address skills shortages and regulatory risk. In the US, for example, the 2022 CHIPS and Science Act recognised the need to fund the training of a new generation of nuclear engineers and fill gaps in other project-critical professions and trades.<\/p>\n\n\n\n<p>Meanwhile, project teams can tailor design processes to align with regulation so that approvals overlap with design progress to minimise hold-ups. The ability to replicate proven SMRs should ease this regulatory burden. International efforts to streamline and harmonise design certification are also encouraging.<\/p>\n\n\n\n<p>At the project level, a proactive approach to engineering and construction will be needed to mitigate risk and avoid past pitfalls, enabling cost-effective delivery of the nuclear renaissance.<\/p>\n\n\n\n<p><em>Kim Reome is a specialist in damages analysis in the construction and electric utility industries with over 30 years\u2019 experience. A HKA partner, based in Chicago, she has undertaken more than 40 expert commissions in matters relating to construction damages and delay, quantum, forensic accounting, and commercial damages.<\/em><\/p>\n\n\n\n<p><em>Kim has supported clients from a broad range of sectors including nuclear and other electric power plants and renewable energy, as well as diverse industries ranging from residential and commercial real estate to oil, mining and wastewater treatment.&nbsp;<\/em><\/p>\n\n\n\n<p><em>A Certified Construction Industry Financial Professional and a Certified Fraud Examiner, Kim has acted as an expert for disputed projects on matters in excess of USD 8 billion.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nuclear power is being rehabilitated, writes HKA Chicago partner and damages analysis professional Kim Reome, but stakeholders should heed past lessons on costs and scheduling.<\/p>\n","protected":false},"author":14,"featured_media":15256,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[32],"tags":[737,3675,292,2302,10875,6903,448,3854,4384,2301,4422,4424,7516,438,6865,10874,4862,279,881,1106,3702,2300,1874,4449,566,2306,506,357,767,2608,332,2635,1722,3451,1415,8361,1337,172,1120,2020,318,9155,1720,297],"class_list":["post-35806","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-expert-views","tag-amazon","tag-big-tech","tag-china","tag-clean-energy","tag-constellation","tag-construction-defects","tag-construction-disputes","tag-crux","tag-data-centres","tag-decarbonisation","tag-delay-and-disruption","tag-design-and-engineering","tag-electricity","tag-energy","tag-energy-sector","tag-energy-security","tag-epc","tag-eu","tag-europe","tag-forensic-accounting","tag-forensic-accounting-and-commercial-damages","tag-fossil-fuels","tag-france","tag-georgia","tag-google","tag-hka","tag-india","tag-japan","tag-licensing","tag-michigan","tag-microsoft","tag-morgan-stanley","tag-nuclear-energy","tag-nuclear-power","tag-pennsylvania","tag-power-plants","tag-quantum","tag-regulatory","tag-risk-mitigation","tag-russia-ukraine-war","tag-south-korea","tag-trump-administration","tag-ukraine","tag-united-states"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - 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