Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/now/jirere/101.00000128.html
   My bibliography  Save this article

How Are Future Energy Technology Costs Estimated? Can We Do Better?

Author

Listed:
  • Ajay Gambhir
  • Richard Green
  • Michael Grubb
  • Philip Heptonstall
  • Charlie Wilson
  • Robert Gross
Abstract
Making informed estimates of future energy technology costs is central to understanding the cost of the low-carbon transition. A number of methods have been used to make such estimates: extrapolating empirically derived learning rates; use of expert elicitations; and engineering assessments which analyse future developments for technology components' cost and performance parameters. In addition, there is a rich literature on different energy technology innovation systems analysis frameworks, which identify and analyse the many processes that drive technologies' development, including those that make them increasingly cost-competitive and commercially ready. However, there is a surprising lack of linkage between the fields of technology cost projections and technology innovation systems analysis. There is a clear opportunity to better relate these two fields, such that the detailed processes included in technology innovation systems frameworks can be fully considered when estimating future energy technology costs. Here we demonstrate how this can be done. We identify that learning curve, expert elicitation and engineering assessment methods already either implicitly or explicitly incorporate some elements of technology innovation systems frameworks, most commonly those relating to R&D and deployment-related drivers. Yet they could more explicitly encompass a broader range of innovation processes. For example, future cost developments could be considered in light of the extent to which there is a well-functioning energy technological innovation system (TIS), including support for the direction of technology research, industry experimentation and development, market formation including by demand-pull policies and technology legitimation. We suggest that failure to fully encompass such processes may have contributed to over-estimates of nuclear cost reductions and under-estimates of offshore wind cost reductions in the last decade.

Suggested Citation

  • Ajay Gambhir & Richard Green & Michael Grubb & Philip Heptonstall & Charlie Wilson & Robert Gross, 2021. "How Are Future Energy Technology Costs Estimated? Can We Do Better?," International Review of Environmental and Resource Economics, now publishers, vol. 15(4), pages 271-318, December.
    • Handle: RePEc:now:jirere:101.00000128
    DOI: 10.1561/101.00000128
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1561/101.00000128
    Download Restriction: no
    File URL: https://libkey.io/10.1561/101.00000128?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Newbery, David M., 2023. "High renewable electricity penetration: Marginal curtailment and market failure under “subsidy-free” entry," Energy Economics, Elsevier, vol. 126(C).
    2. Kim, Seokyoung & Dodds, Paul E. & Butnar, Isabela, 2024. "Technoeconomic characterisation of low-carbon liquid hydrocarbons production," Energy, Elsevier, vol. 294(C).
    3. Burke, Joshua & Gambhir, Ajay, 2022. "Policy incentives for greenhouse gas removal techniques: the risks of premature inclusion in carbon markets and the need for a multi-pronged policy framework," LSE Research Online Documents on Economics 115010, London School of Economics and Political Science, LSE Library.
    4. Wen, Xin & Jaxa-Rozen, Marc & Trutnevyte, Evelina, 2023. "Hindcasting to inform the development of bottom-up electricity system models: The cases of endogenous demand and technology learning," Applied Energy, Elsevier, vol. 340(C).

    More about this item

    Keywords

    Energy technologies; technology innovation system frameworks; technology cost reductions; technology innovation policies;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:now:jirere:101.00000128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lucy Wiseman (email available below). General contact details of provider: http://www.nowpublishers.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.