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Costs of Nuclear Power Plant Construction: Theory and New Evidence


  • John M. Marshall
  • Peter Navarro


Studies of the cost of construction of nuclear power plants rely upon a measure of cost, called "overnight cost," that contradicts accepted capital theory. The studies report evidence that construction cost per megawatt of capacity decreases as plant scale increases. We employ a more correct measure of cost and compare the results of this measure versus overnight cost for Japanese nuclear power plants. Using overnight cost, the results give "evidence" of economies of scale in Japanese power plants, but when the correct measure of cost is substituted, the scale variable is not statistically significant.

Suggested Citation

  • John M. Marshall & Peter Navarro, 1991. "Costs of Nuclear Power Plant Construction: Theory and New Evidence," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 148-154, Spring.
  • Handle: RePEc:rje:randje:v:22:y:1991:i:spring:p:148-154

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    Cited by:

    1. Sovacool, Benjamin K. & Gilbert, Alex & Nugent, Daniel, 2014. "Risk, innovation, electricity infrastructure and construction cost overruns: Testing six hypotheses," Energy, Elsevier, vol. 74(C), pages 906-917.
    2. Dismukes, David E. & Upton, Gregory B., 2015. "Economies of scale, learning effects and offshore wind development costs," Renewable Energy, Elsevier, vol. 83(C), pages 61-66.
    3. Sascha Samadi, 2016. "A Review of Factors Influencing the Cost Development of Electricity Generation Technologies," Energies, MDPI, Open Access Journal, vol. 9(11), pages 1-25, November.
    4. Lovering, Jessica R. & Yip, Arthur & Nordhaus, Ted, 2016. "Historical construction costs of global nuclear power reactors," Energy Policy, Elsevier, vol. 91(C), pages 371-382.
    5. Koomey, Jonathan & Hultman, Nathan E., 2007. "A reactor-level analysis of busbar costs for US nuclear plants, 1970-2005," Energy Policy, Elsevier, vol. 35(11), pages 5630-5642, November.
    6. del Sol, Felipe & Sauma, Enzo, 2013. "Economic impacts of installing solar power plants in northern Chile," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 489-498.

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