Can Lego save the world? This is one idea that stuck with me while reading How great things are done, a new book by Bent Flivbjerg and Dan Gardner. Flivbjerg is arguably the world’s leading authority on the failure of megaprojects—or how great things get done, but terribly late and at horrendous costs—and therefore he is an unlikely optimist.
For decades, Flivbjerg, a professor of management at the University of Oxford, has compiled a database of major projects, from high-speed rail lines to hosting the Olympic Games. His conclusions are so depressing that he proposed the “iron law of megaprojects”: they go over budget and over time over and over again. Even worse, these disappointments have a long tail. A significant minority of megaprojects are not just late and expensive, but disastrously so.
Despite this grim evidence, he and Gardner argue that we could work wonders if we instead used the principle most familiar from Lego sets. This principle is modularity: a complex Lego model is assembled from a limited set of bricks, each of which is made with high precision and is interchangeable with other bricks.
Modularity has a number of advantages. First, individual components can be produced on a large scale, which quickly reduces costs. In the 1930s, American aeronautical engineer TP Wright made a thorough study of aircraft factories. He concluded that the more often a particular aircraft model was assembled, the faster and cheaper the next aircraft became. Workers have learned the best ways to work, and special tools have been developed to help with specific tasks. Wright found that the second plane was typically 15% cheaper than the first. The fourth plane will be 15 percent cheaper than the second, and the eighth plane will be 15 percent cheaper again. Each time cumulative production doubled, unit costs fell by 15 percent. Wright called this phenomenon the “learning curve”.
More recent researchers have found learning curves in over 50 products, from transistors to beer. Sometimes the learning curve is flat and sometimes steep, but it always seems to be there. And because modular projects consistently use the same plans and structures, they make the most of the learning curve.
Modular projects have other benefits as well. They’re more likely to be able to use factory components, and when you’re doing complex things in factories, you’re less susceptible to surprises than when you’re doing them at a construction site, especially if that construction site is deep underground. or offshore
By their nature, modular building projects are more likely to be able to continue working even if there is a problem with one structural element. This helps explain why, in the Flyvbjerg database, modular projects are almost immune to the most dramatic black swan cost overruns that always pose a risk to other large projects.
Such are the joys of modularity. Now let’s turn to the problem of climate change, and an intriguing pattern emerges. Low carbon energy projects include some of the most modular and least modular projects in the Flyvbjerg database. Solar and wind energy are at the modular end, while nuclear and hydropower are at the opposite pole. Perhaps that is why it is not surprising that solar and wind projects are rapidly becoming cheaper.
I have no fundamental objections to nuclear power, but I wonder if it will ever be possible to create clean and safe nuclear power at a reasonable cost, unless nuclear power plants can move to a much smaller modular design. Nuclear power plants have been supplying electricity to the grid since the mid-1950s, but they never get much cheaper, perhaps because we can’t repeat the same projects often enough to climb the learning curve. I keep reading news about companies with big plans for small reactors, so maybe it’s not impossible.
However, the contrast with solar energy is stark. Silicon photovoltaic cells began to provide practical energy around the same time: they were first used by the American satellite Vanguard 1, which launched six solar panels into orbit in 1958. (The sun always shines in space, what else can you think of to power a multi-million dollar satellite?) At that time, these solar panels produced half a watt, which was, no doubt, a painfully high cost.
By the mid-1970s, solar panels cost up to $100 per watt, or $10,000 for enough panels to power a light bulb. By 2021, the cost was less than 27 cents per watt. Why? This is the learning curve in action. The learning curve for photovoltaic cells is estimated at 20 percent per doubling — steeper than for aircraft.
Chris Goodall, author Switch, notes that between 2010 and 2016, the world produced 100 times more solar cells than in all decades before 2010. Batteries, an important modular addition to solar cells, also have a steep learning curve. A similar story can be told about wind energy. Wind turbines are made up of standard components, while a wind farm is made up of standard turbines. The price of wind power has also been falling faster than most proponents could have dreamed of two or three decades ago.
I’m not a nuclear power engineer, but I’m sure modular reactors should be possible. I hope so. We need a big change in our ability to generate clean energy. And the best way to achieve more is to start with small repeating blocks.
Written and first published in Financial Times January 27, 2023
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