Modeling the Economics of Greenhouse Gas Mitigation Summary of a Workshop (2011) / Chapter Skim
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Uncertainties in Technology Experience Curves for Energy-Economic Models--Sonia Yeh and Edward Rubin
Uncertainties in Technology Experience Curves for Energy-Economic Models--Sonia Yeh and Edward Rubin
Pages 76-91
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From page 76... ...
While this is regarded as an important step toward more realistically representing the dependency of cost reductions on other variables, experience curves remain an imperfect representation of technical change. It is argued, for example, that the statistical correlation between a reduction in unit cost and the cumulative installed capacity of an energy technology offers little explanation for the underlying process of technological change and the causality between these two variables [6, 8-10]
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From page 77... ...
Origins of the Technology Experience Curve In 1936, the aeronautical engineer Thomas P Wright published a landmark paper in which he observed that the average direct man-hours required to manufacture a given model of Boeing aircraft dropped systematically with each unit produced [11]
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From page 78... ...
While Wright's initial formulation of a one-parameter model may have accurately explained observed decreases in the time needed to manufacture a particular airplane, extension of that learning curve model to experience curves for a class of technology is certainly not as simple. At best, the parameter of cumulative installed capacity of a technology serves only as a surrogate for a combination of factors that contribute to cost reductions -- including not only learning-by-doing and learning-by-using, but also continued investments in R&D, spillovers from other activities, and a host of other possible factors.
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From page 79... ...
Not surprisingly, these studies typically find smaller learning rate impacts for cumulative installed capacity compared with studies using the one-factor learning curve. Multi-factor models of this type offer improved explanations of the processes that contribute to cost reductions for the technology under study.
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From page 80... ...
For example, experience with carbon capture systems in the oil and gas industries may directly benefit similar applications in the electric utility industry. This concept of "clustered learning" has been used in integrated assessment models such as found in Seebregts et al.
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. We hypothesize that these low initial learning rates resulted in large part from the rapid deployment of "first generation" technology in response to new environmental regulatory requirements, with little FIGURE C.11 Best-fit experience curves for capital costs of flue gas desulfurization (FGD)
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From page 82... ...
, there are relatively few empirical studies that document such trends for energy and environmental technologies. One recent study, however, reported an experience curve progress ratio above 100 percent for natural gas combined cycle (NGCC)
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From page 83... ...
2001, Carnegie Mellon University: Pittsburgh, PA; E.S. Rubin, et al., The App C-12 Effect of Government Actions on Environmental Technology Innovation: Applications to the Integrated Assessment of Carbon Sequestration Technologies, Final Report of Award No.
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From page 84... ...
. Cost Trends for CO Capture Systems Environmental technologies that capture and sequester CO2 from power plant flue gases are of growing worldwide interest as a potential climate change mitigation measure [91]
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From page 85... ...
Rubin, et al., The Effect of Government Actions on Environmental Technology Innovation: Applications to the Integrated Assessment of Carbon Sequestration Technologies, Final Report of Award No. DE-FG02-00ER63037 from Carnegie Mellon University, Pittsburgh, PA to Office of Biological and Environmental Research, U.S.
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From page 86... ...
and drying but do not include the cost of power plant capacity needed to supply the energy required for capture plant operation (E.S. Rubin, et al., The Ef fect of Government Actions on Environmental Technology Innovation: Applications to the Integrated Assessment of Carbon Sequestration Technologies, Final Report of Award No.
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From page 87... ...
In the near term, a broader set of sensitivity studies could be helpful to assess the impacts of different types of uncertainties on key model results. Although computationally more demanding, the use of input distributions of learning rates and other experience curve parameters would better represent our limited understanding of the processes underlying technological
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From page 88... ...
F.M. Bass, The relationship between diffusion rates, experience curves and demand elasticities for consumer durable technological innovations.
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From page 89... ...
Using the experience curve to analyze the cost development of the combined cycle gas turbine. in Proceedings of the IEA International Workshop Experience Curves for Policy Making: The Case of Energy Technologies.
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Cornland, The Economics of the Combined Cycle Gas Turbine -- an Experience Curve Analysis. Energy Policy, 30 (2002)
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From page 91... ...
A.B. Rao, A Technical, Environmental and Economic Assessment of Amine-Based Carbon Capture Technologies for Greenhouse Gas Control, in Department of Engineering and Public Policy.
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