 Small Modular InfrastructureEric Dahlgren, Caner Göçmen, Klaus Lackner and Garrett van Ryzin The Engineering Economist, 2013, vol. 58, issue 4, 231-264 Abstract: In this article we argue that advances made in automation, communication, and manufacturing portend a dramatic reversal of the “bigger is better” approach to cost reductions prevalent in many basic infrastructure industries; for example, transportation, electric power generation, and raw material processing. We show that the traditional reductions in capital costs achieved by scaling up in size are generally matched by learning effects in the mass production process when scaling up in numbers instead. In addition, using the U.S. electricity generation sector as a case study, we argue that the primary operating cost advantage of large unit scale is reduced labor, which can be eliminated by employing low-cost automation technologies. Finally, we argue that locational, operational, and financial flexibilities that accompany smaller unit scale can reduce investment and operating costs even further. All of these factors combined imply that with current technology, economies of numbers may well dominate economies of unit scale. Yet realizing the full potential of small unit scale will require technologists and business leaders to develop a new ability to “think small.” Date: 2013 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:uteexx:v:58:y:2013:i:4:p:231-264 Ordering information: This journal article can be ordered from DOI: 10.1080/0013791X.2013.825038 Access Statistics for this article The Engineering Economist is currently edited by Sarah Ryan More articles in The Engineering Economist from Taylor & Francis Journals |
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