Modeling barriers to cost change in solar and nuclear energy technologies

Abstract

The cost of photovoltaic systems has declined more rapidly than other electricity production technologies, while nuclear plant costs have risen. Changing costs have contributed to global energy transitions in the past, and our capacity to decarbonize the electricity sector will depend on the cost of low-carbon electricity production technologies like photovoltaic and nuclear energy. Understanding the mechanisms behind historical cost evolution and potential future improvement can inform the design of energy technologies and the policies that advance them. This thesis investigates historical barriers and future opportunities for cost reduction in solar and nuclear power. By developing innovative mathematical and conceptual models, we address the following questions: (1) How can "plug-and-play" design improve costs in photovoltaic systems? (2) What were the sources of cost escalation and overruns in nuclear power plant construction? We address these questions in chapters 2 and 3.

Chapter 2 assesses the potential for plug-and-play designs to reduce non-module costs in photovoltaic systems. This work advances use of the design structure matrix for studying cost change in energy technologies by evaluating design factors across multiple systems. We identify the cost components with significant latent potential for improvement--profit, installation labor, overhead, electrical balance of system, and customer acquisition--and show that plug-and-play designs have advantageous effects on their constituent parts. A conventional small-scale photovoltaic project contains nearly 600 interactions across 30 or more system elements; we show that plug-and-play designs can reduce the number of interactions by two-thirds and elements by half.

Several mechanisms are important to the cost change potential of plug-and-play technology: eliminating various project tasks or shifting their responsibility to the consumer removes the associated overhead and profit of installation firms; pre-assembly of system components and standardization of project tasks eliminates installation labor costs; reduction and simplification of BOS electrical components lowers equipment costs; and standardization of system design precludes time-intensive tasks involved in customer acquisition. We compare the advantages of prevailing plug-and-play designs and consider future opportunities for technological innovation and policy advancement. Chapter 3 examines the engineering assumptions underlying many nuclear cost models using historical cost data from the U.S. nuclear industry. We show that expectations for technological improvement may have underestimated factors external to hardware design.

By mapping separate cost trajectories for standard plant designs, we find that nth-of-a-kind (NOAK) plants have been more expensive than first-of-a-kind (FOAK) plants, counter to traditional expectations. Indirect costs external to technological design were responsible for most of the cost rise observed between 1976 and 1987. Decomposition of cost changes in the reactor containment building shows that while safety was a significant factor driving cost increases, non-safety factors were comparably influential. Comparing productivity data from recent U.S. plant construction to industry expectations, we find that material deployment rates are up to thirteen times slower than cost estimating guidelines suggest. We discuss which technologies could potentially lower the impact of external, previously cost-increasing factors, with the support of regulatory changes and R&D.