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Maintaining capital discipline in the rush to net-zero energy systems
Chris Greig1, Michala Techau2, Andreas Leed2
1Andlinger Center for Energy & the Environment, Princeton University, Oxford, UK.
Accelerating clean energy projects risks delays and cost overruns due to unforeseen challenges. Strengthening public institutions is crucial for effective project selection, oversight, and learning to ensure net-zero targets are met.
Area of Science:
- Energy Policy
- Project Management
- Sustainable Development
Background:
- Ambitious net-zero targets necessitate rapid execution of large-scale energy transition projects.
- Energy transition projects historically exhibit cost and time underperformance, similar to other sectors.
Purpose of the Study:
- To explore potential risks associated with accelerating clean energy project deployment.
- To identify strategies for mitigating underperformance in energy transition projects.
Main Methods:
- A mixed-methods approach was employed to investigate risks in speeding up project deployment.
- Qualitative insights were gathered from experienced clean energy practitioners.
Main Results:
- Accelerated deployment and time-limited incentives may lead to inaccurate performance estimates, increasing delays and cost overruns.
- Challenges include supply chain disruptions, community opposition, regulatory hurdles, and scope changes.
Conclusions:
- Robust public institutional capabilities are needed for project selection, oversight, and expectation management.
- Capturing and disseminating lessons learned is vital for adapting plans and preventing project failures.
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