Hubris Games: Analyzing Success and Failure of Large-Scale Energy Projects

Abstract

You might think that because of the recent global economic downturn and slow recovery that the number of proposed energy "megaprojects" would be declining. However, you would be wrong. Indeed, just one of the lessons from the excellent new book by Benjamin K. Sovacool and Christopher J. Cooper, The Governance of Energy Megaprojects: Politics, Hubris and Energy Security (2013, Edward Elgar), is that the" hubris" is not so much extreme pride or arrogance, but rather "an overestimation of one's own competence, accomplishments or capabilities, especially when the person exhibiting it is in a position of power." The authors demonstrate that not only is there no shortage of megaprojects being developed in the world, but the pace and scope of megaprojects is rapidly increasing, especially energy projects -- even though most such projects have cost overruns and other forms of failed expectation. Until our and other societies build more efficiency or renewable energy projects that save or generate in the 100-500 MWs or so range (not the 2-20,000 MWs range of supersized projects), only then can we best determine how to better slow the growth of fossil fueled greenhouse gas emissions while minimizing externalities and risks. And slow the pace of flawed mega-and tera-sized energy projects.

Keywords: Energy, megaprojects, economics

JEL Classification: D62, D63, K32