Billions in investments: Why nuclear power remains an expensive risk

Billions in investments: Why nuclear power remains an expensive risk

A comprehensive analysis from the Boston University Institute for Global Sustainability (IGS) examines the challenges and costs of energy projects worldwide. Based on 662 projects from 83 countries implemented since 1936, the study shows that total investments were around 1.25 trillion euros. Particularly noticeable are the significant cost overruns and delays in nuclear power plants, which on average cost twice as much to build as originally planned. These projects are characterized not only by high additional costs, but also by the longest delays, which often leads to stress and political conflicts.

Investments in nuclear energy often require additional financing amounting to billions. Another focus is on hydrogen and carbon capture and storage (CCS) technologies, which are also struggling with financial and construction difficulties. In contrast, solar parks and new power lines perform significantly better in terms of costs and planning. Wind turbines also offer a comparatively high level of planning security, which makes them an attractive option for future investments.

Costs and risks of large projects

A key finding of the study is the significant increase in risks for large power plants, especially those larger than 1,560 megawatts. In these cases, both the likelihood of time and cost overruns increase significantly. Delays exceeding 87.5% of the original construction time result in skyrocketing costs. Smaller, modular projects, on the other hand, could represent a more predictable and cost-effective alternative to mastering the challenges of the energy transition.

If you put the results of the IGS study in the context of the German energy transition, you can see a rapidly growing share of renewable energies. In 2024, this share was 55%, while fossil energies such as coal and natural gas as well as nuclear power account for a shrinking share of the electricity supply. It is noteworthy that nuclear power was switched off in April 2023, which has reduced dependence on this risky technology.

Global investments in the energy transition

In 2023, global investment in the energy transition reached $1.8 trillion, up 17% year-on-year. Forecasts suggest the global renewable energy market could reach over $2 trillion by 2030. In Germany, wind power in particular accounts for around a third of electricity generation, while fossil energies are becoming increasingly more expensive and less competitive.

In summary, it can be seen that the analysis carried out by the IGS and the current developments in Germany point to a significant realignment in energy production. Nuclear power projects are proving financially risky and inefficient, while renewable energy is gaining traction as long-term, sustainable solutions. The economic advantage of nuclear power is increasingly seen as weak, which is further fueling the discussion about the construction of new plants, including small modular reactors (SMR).

These findings provide a valuable database for future investments in energy infrastructure and the risk assessments that are necessary. Further information can be found in the reports from Focus and Polaris.