Clean Energy Technologies: Dynamics of Cost and Price

Abstract

The rapid transition to a decarbonized energy economy is widely believed to hinge on the rate of cost improvements for certain clean energy technologies, in particular renewable power and energy storage. This paper adopts the classical learning-by-doing framework of Wright (1936), which predicts cost (price) to fall as a function of the cumulative volume of past deployments. We examine the learning rates for key clean energy system components (e.g., solar photovoltaic modules) and the life-cycle cost of generating clean energy (e.g., wind energy and hydrogen obtained through electrolysis). Our calculations point to significant and sustained learning rates, which, in some contexts, are much faster than the traditional 20% learning rate observed in other industries. Finally, we argue that the observed learning rates for individual technologies reinforce each other in advancing the transition to a decarbonized energy economy.

Book Reviews

“…However, even in the seven years since publication of the book, some of these costs have fallen further (e.g. solar PV module cost fell from steadily from $1.96 in 2010 to $0.26/W in 2019, Glenk, Meier, andReichelstein, 2021, Figure 2, Table A1 andIRENA, 2020).…”

Nuclear Power Sustainability Path for China from the Perspective of Operations

“…It endangers the global environment and biodiversity, as well as the sustainable development of the economic society. To avoid serious consequences, the Paris agreement is proposed to control the global average temperature that increase below 2 degrees Celsius compared with the preindustrial level [1][2][3]. To achieve this goal, CO 2 must be limited to around 450 ppm and the average intensity of carbon dioxide from electricity must be reduced from 430 g CO 2 /kWh today to around 50 gCO 2 /kWh by 2050 [3].…”

“…Solar, wind, and other renewable clean energy generation costs have been signifcantly reduced in recent years, particularly when the learning rate of the photovoltaic power cost was greater than 23% [1,2,6,7]. Te cost of construction of nuclear power plants was increasing due to increasingly stringent safety regulations.…”