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The IHS CERA Power Capital Costs Index (PCCI)—which tracks the costs of building coal, gas, wind, and nuclear power plants indexed to 2000—measures power plant project cost inflation, similar in concept to the Consumer Price Index. And do talk about inflation: The latest PCCI registers 231 index points, indicating a power plant that cost $1 billion in 2000 would, on average, cost $2.31 billion today. That’s 130 percent in the last eight years and 69 percent since 2005. The latest PCCI also shows a 1-percent sag in the first quarter of 2008. But, says CERA, this is a miniscule drop and does not signal a changein the long-term factors that have been driving up costs. The decrease came from one narrow factor—an easing of nuclear equipment costsas a result of market volatility driven by high global demand. The costs for other plants—coal, gas, and wind—continued to rise. Wind has shown the largest increase at 6 percent since the third quarter of 2007, and 108 percent since 2000, in response to increased demand for wind turbines that in turn has pushed up equipment costs and delivery time.
The IHS CERA Power Capital Costs Index (PCCI)—which tracks the costs of building coal, gas, wind, and nuclear power plants indexed to 2000—measures power plant project cost inflation, similar in concept to the Consumer Price Index. And do talk about inflation: The latest PCCI registers 231 index points, indicating a power plant that cost $1 billion in 2000 would, on average, cost $2.31 billion today. That’s 130 percent in the last eight years and 69 percent since 2005.
The latest PCCI also shows a 1-percent sag in the first quarter of 2008. But, says CERA, this is a miniscule drop and does not signal a changein the long-term factors that have been driving up costs. The decrease came from one narrow factor—an easing of nuclear equipment costsas a result of market volatility driven by high global demand. The costs for other plants—coal, gas, and wind—continued to rise.
Wind has shown the largest increase at 6 percent since the third quarter of 2007, and 108 percent since 2000, in response to increased demand for wind turbines that in turn has pushed up equipment costs and delivery time.