What Lego—Yes, Lego—Can Teach Us About Avoiding Energy Project Boondoggles
In the late 1980s, Denmark’s government announced plans for a massive bridge and tunnel project, the largest infrastructure plan in the history of a country that had little experience building tunnels. Bent Flyvbjerg watched the announcement on the news with his father, who had worked in bridge and tunnel construction.
“Bad idea,” his father said. “If I were digging a hole that big, I would hire someone who had done it before.”
The Great Belt project, as it was called, would go on to face years of delays and the equivalent of billions of dollars in cost overruns. It provided inspiration for Flyvbjerg, now a professor of management at Oxford University, to spend much of his career studying why big projects often go horribly wrong.
This is one of the opening anecdotes in Flyvbjerg’s new book, How Big Things Get Done, written with journalist Dan Gardner. It’s a breezy summary of decades of research into big projects, with a lot to say about the transition to clean energy.
Flyvbjerg told me in an interview this week that his findings about wind and solar give him optimism about the transition to clean energy.
Wind and solar are the kinds of technologies that tend to have predictable costs and finish on time. The key is modularity, which means that a gigantic project is really a series of smaller parts that can be mass produced. Mass production leads to improvements over time, with opportunities to refine construction methods and reduce costs.
He uses the analogy of Lego, the construction toys, to explain modularity. In short, if a big project can be broken down into modular units like Lego pieces, then a project manager has a decent chance of finishing on time and on budget. If not, then headaches are ahead.
“It turns out that humans are actually very bad at getting things right the first time. This is just not what we are made for,” Flyvbjerg said, speaking in a video call from Oxford. “Our sort of learning system is designed for trial and error.”
Flyvbjerg’s project database includes just about every kind of power plant and related infrastructure. He found that solar power projects were the leader—not just among energy projects, but all projects—in terms of avoiding cost overruns. Electricity transmission lines are second best, followed by wind power projects. Fossil fuel power plants also do well in terms of coming in close to their budgets, falling just behind wind power projects.
Meanwhile, he found that nuclear power plants and hydroelectric dams are both prone to going wildly over budget. Nuclear’s lack of modularity is one of the reasons that so many projects turn into financial disasters. Each nuclear plant is its own complicated thing, and because of safety concerns, everything needs to be close to perfect right away.
Hydropower suffers from some of the same problems as nuclear, with each project highly customized and a lack of modularity.
The nuclear projects that he studied had, on average, cost overruns of 120 percent; hydroelectric dams were 75 percent; fossil fuel plants were 16 percent; wind power was 13 percent; transmission lines were 8 percent and solar power was 1 percent.
The figures come from Flyvbjerg’s database of about 16,000 projects in 136 countries over several decades. He only includes projects that are complete, so current megaprojects, like the long overdue Vogtle nuclear plant in Georgia, are not yet part of the mix.
The nuclear industry is focusing on small modular reactors as the potential next generation of nuclear power, with several startups working to develop equipment that they say will be cheaper and safer than existing reactors.
While the idea of mass producing nuclear reactors would seem to be right in line with the lessons of Flyvbjerg’s research, he is skeptical.
“If we could solve the nuclear waste storage problem and get small modular reactors to work, there might be a good future for nuclear, but it’s completely unclear at this stage whether that’s going to happen,” he said.
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He looks at the history of nuclear projects facing long delays and cost overruns and thinks it’s reasonable to expect more of the same, at least initially, for the first projects that use small modular reactors. If that happens, then new plants wouldn’t be coming online until the 2030s, which means this technology wouldn’t be contributing at all during this crucial decade for making a rapid transition away from fossil fuels.
Still, there is value for having nuclear as an option when looking at a longer time horizon, like 2050. But he thinks planners need to have their eyes wide open about what they are getting into when they look at costs and timelines for nuclear.
“Nuclear is so difficult, almost like it’s obstinately difficult,” he said.
Flyvbjerg spends much of the book talking about some of the principles that underlie successful projects and unsuccessful ones. One of the keys is the idea that organizations should be slow and careful with their planning, and then move quickly when they are putting those plans into action.
“Planning is a safe harbor. Delivery is venturing across the storm-tossed seas,” he writes.
When projects go bad, it’s often when the action phase gets bogged down in delays. Flyvbjerg calls this the “window of doom,” when unforeseen circumstances fly through the open window of a partially finished project.
He is not an energy scholar, and some of his conclusions are not going to be new to people familiar with energy industries. We who are enmeshed in the world of energy already know that wind and solar are among the best resources in terms of affordability and predictability, and nuclear is among the worst by those same measures. We also know that nuclear can be an essential resource, whose ability to run around the clock and lack of carbon emissions make some planners willing to endure the financial risks.
What I find interesting is the way Flyvbjerg puts big energy projects in a broader context with other kinds of big projects, from highways to rollouts of new IT systems.
The upshot is that the energy transition is likely going to be financially workable. In a world prone to boondoggles, this isn’t one, at least not so far.
“We’re actually very lucky that the technology that we need in order to decarbonize is the least risky,” he said.
Other stories about the energy transition to take note of this week:
Minnesota Moves Toward Landmark Clean Energy Bill. But What About Those Incinerators?: Minnesota Democrats, newly in control of both houses of their legislature, are moving toward passing a bill that would require the state’s utilities to get 100 percent of their electricity from carbon-free sources by 2040. But some environmental justice advocates are raising concerns that the bill doesn’t do enough to protect the communities that stand to lose from projects that are defined as clean energy, as my colleague Aydali Campa reports. Some of this pushback may have led to changes in the bill. For example, the bill no longer counts electricity generated from all trash incinerators as clean energy, although power from some of those plants is still included. “Throughout the course of my work on the bill, we have tried hard to center environmental justice concerns and be in touch with advocates and communities,” said Rep. Jamie Long, the author of the bill and House majority leader. The bill has passed the House and is scheduled for debate in the Senate today.
General Motors to Help Lithium Americas Develop Nevada’s Thacker Pass Mine: General Motors said this week that it will invest $650 million in Lithium Americas Corp. to help develop the Thacker Pass lithium mining project in Nevada. GM said the mine holds enough lithium to make batteries for 1 million electric vehicles per year, as Ernest Scheyder reports for Reuters. The mine is controversial because of concerns that the mining process will cause environmental damage that exceeds the benefits of being able to build more EVs, as ICN reported in 2021.
Ford Drops the Price of Its Tesla Competitor, Showing Signs of a Price War in EV Market: Ford has dropped the price of its Mustang Mach-E, an electric SUV, soon after Tesla reduced the price of its vehicles. The Mach-E, a midsize family SUV, now costs $46,000 for its least-expensive version, which is $900 less than before, as Peter Valdes-Dapena reports for CNN. The model competes with the Tesla Model Y, which has a starting price of $53,490 following its own price cut. However, base prices are only part of the equation as both models come in a variety of configurations with different features. Some versions of both vehicles qualify for federal tax credits, which require sticker prices of $55,000 or below. The price changes are happening at a time of rising competition in the EV market as automakers are ramping up production of EVs and trying to balance the supply with demand following a time when some customers had to endure long waits to get popular models.
Proposed Transmission Line Would Link Eastern and Western Interconnections: Allete and Grid United are proposing to build a 385-mile interstate power line that would more than double the capacity for moving electricity between the Eastern and Western interconnections of the U.S. grid. The $2.5 billion project would go from North Dakota to Colstrip, Montana, as Ethan Howland reports for Utility Dive. The line, which would need approval from federal and state regulators, would have 3,000 megawatts of bi-directional capacity. It would be a small step toward increasing the flow of electricity between two grid regions that are almost completely cut off from each other. Energy analysts and clean energy advocates have long called for an increase in connections between the two regions because it would allow for renewable energy in areas rich with sun and wind to be quickly transported across the country.
New Wind and Solar Are Cheaper Than the Costs to Operate All But One Coal-Fired Power Plant in the United States: Dry Fork Station, a coal-fired plant near Gillette, Wyoming, stands alone in the nation on one measure of economic viability—a positive distinction for that plant, but a damning one for coal-fired electricity in general. Dry Fork Station is the only coal plant in the country that costs less to operate than it would take to replace the plant’s output by building new wind or solar plants in the same communities or regions, according to a new report issued Monday by the think tank Energy Innovation, as I reported for ICN. But even that plant is barely competitive with new wind and solar, said Michelle Solomon, one of the report’s co-authors.
Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to email@example.com.
<div class="post-author-bio"> <div class="image-holder"> <img width="300" height="300" src="https://insideclimatenews.org/wp-content/uploads/2020/10/Gearino2-300x300.jpg" class="attachment-thumbnail-medium-square size-thumbnail-medium-square" alt decoding="async" srcset="https://insideclimatenews.org/wp-content/uploads/2020/10/Gearino2-300x300.jpg 300w, https://insideclimatenews.org/wp-content/uploads/2020/10/Gearino2-150x150.jpg 150w, https://insideclimatenews.org/wp-content/uploads/2020/10/Gearino2-64x64.jpg 64w" sizes="(max-width: 300px) 100vw, 300px"> </div> <!-- /.image-holder --> <div class="content"> <h3 class="author-name"> <a href="https://insideclimatenews.org/profile/dan-gearino/"> Dan Gearino </a> </h3> <h4 class="profile-subtitle">Clean Energy Reporter, Midwest, National Environment Reporting Network</h4> <span>Dan Gearino covers the midwestern United States, part of ICN’s National Environment Reporting Network. His coverage deals with the business side of the clean-energy transition and he writes ICN’s <a href="https://insideclimatenews.org/tags/inside-clean-energy/">Inside Clean Energy</a> newsletter. He came to ICN in 2018 after a nine-year tenure at The Columbus Dispatch, where he covered the business of energy. Before that, he covered politics and business in Iowa and in New Hampshire. He grew up in Warren County, Iowa, just south of Des Moines, and lives in Columbus, Ohio.</span> </div> <!-- /.bio --> </div> <!-- /.post-author-bio -->