A major misconception that burns plant owners is an assumption that dismantling a power plant is easier than plant construction.
FREMONT, CA: Most of the plant owners have a wrong assumption that plant decommissioning and dismantling (D&D) is more comfortable and less-risky than plant construction. But thinking this way is a mistake, and it is a significant misconception.
During the time of the post-World War II era, economies across the world grew, and power plant construction expanded. Until the current cost competitiveness of solar, wind, and energy storage technologies, that usually meant the development of thermal power plants.
Generally, oil, gas and coal capacity was easy to build and relatively fast, but some of the other nations added nuclear plants, which were more complicated. One reason for recent construction cost overruns is the hiatus in U.S. nuclear new builds.
Independent power producers (IPPs) and utilities have even less recent experience decontaminating and dismantling these plants than they are constructing them. Experience shows that a lack of familiarity with a process can cause cost and schedule overruns.
D&D is a growing business
Several existing U.S. power plants and well over 100 gigawatts of capacity are facing D&D before their anticipated retirement date as the energy sector transitions to cleaner and cheaper sources of electricity.
This can create a challenge for utilities and IPPs, which are experienced with the front side of a plant's lifecycle, no matter what is its technology. The primary reasons to exercise greater caution and diligence are that D&D are often time-consuming and expensive.
In the D&D business, the recent ramp-up in retirements has created significant opportunities for firms. Although these companies provide essential services, project owners, eager to focus on the future and can sometimes be too hasty in signing contracts for the disposition of retired assets. Another risk factor may be D&D fund availability, especially in locations with deregulated power markets, RFF found.
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