Experience Curves for Electrolysis Technologies

Saheed Bello and Reiner

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Given the rapid increase in green hydrogen research funding and the hopes that this will help drive cost reductions, it is important to incorporate the latest RD&D spending into the estimation of the learning rate for electrolysis technologies. Thus, we develop a two-factor experience curve model with spillovers and economies of scale that allows us to estimate learning rates for both alkaline and PEM electrolysis technologies using both global- and country-level data from OECD countries. Our research strategy allows us to mitigate estimation or omitted variable bias from ignoring technology-push measures, unobserved country-specific characteristics, and knowledge spillovers. Using an OECD cross-country dataset over 2000-2022, we estimate global learning-by-doing rates of 17.5 %-46.8% and global learning-by-researching rate of 9%-42.3% for electrolysis technologies after incorporating learning parameter estimates into the progress equation. When we allow for spillovers, we find a linear relationship between PEM technology and alkaline technology improvements. Based on our OECD panel dataset, which incorporate more observations, we estimate learning-by-doing rates of 0.6%-9.4% and learning-by-researching rates of 4.0%-19.9%. In addition, country-level electrolysis cost is reduced by about 28% for the sample period 2000-2022 because of global experience spillover effects. Therefore, our empirical findings suggest that the role of technology-push measures remains critical for promoting and achieving cost improvements of electrolysis technologies. Furthermore, the absorptive capacity of a country should be improved to maximise the benefits of spillovers from global learning.

Keywords: Green Hydrogen Technology; Experience Curves; RD&D Spending; Global and OECD; Cost Reductions (search for similar items in EconPapers)
JEL-codes: C50 O30 Q42 Q55 (search for similar items in EconPapers)
Date: 2024-12-18
New Economics Papers: this item is included in nep-ene, nep-env and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2476

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