Big Is Fragile: Why the UK Government Should Not Approve the Hinkley Point C Nuclear Power Station

Petroleum Review, Vol. 70, No. 834, pp. 37-40, July 2016

4 Pages Posted: 6 Sep 2016

See all articles by Atif Ansar

Atif Ansar

University of Oxford - Said Business School

Bent Flyvbjerg

University of Oxford - Said Business School

Date Written: July 29, 2016

Abstract

Paradoxically, big is not scaleable. But modular is. Energy mega-projects are pursued in order to deliver a big step-up in capacity ahead of demand. Moreover, big is thought to generate economies of scale. However, Instead of making good on these promises, big investments typically fail — crushed under the weight of their sunk costs. We call this propensity of energy mega-projects to entail more pain than gain "investment fragility," based on Nassim Taleb's book Antifragile. In this article we take Hinkley Point — the big nuclear power plant proposed to be built in Somerset, UK — as an example of a project that is at such a heightened risk of fragility.

Keywords: Nuclear Power, Energy, Finance, Economics, Investment Fragility, Viability

Suggested Citation

Ansar, Atif and Flyvbjerg, Bent, Big Is Fragile: Why the UK Government Should Not Approve the Hinkley Point C Nuclear Power Station (July 29, 2016). Petroleum Review, Vol. 70, No. 834, pp. 37-40, July 2016. Available at SSRN: https://ssrn.com/abstract=2831603

Atif Ansar (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Bent Flyvbjerg

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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