Clean Energy Technologies: Dynamics of Cost and Price

Gunther Glenk, Rebecca Meier and Stefan Reichelstein
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Gunther Glenk: University of Mannheim
Rebecca Meier: University of Mannheim
Stefan Reichelstein: University of Mannheim and Stanford University

Research Papers from Stanford University, Graduate School of Business

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.

Date: 2021-04
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3958

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