Technological Learning in the Energy Sector

Technological Learning in the Energy Sector

Lessons for Policy, Industry and Science

Edited by Martin Junginger, Wilfried van Sark and André Faaij

Technological learning is a key driver behind the improvement of energy technologies and subsequent reduction of production costs. Understanding how and why production costs for energy technologies decline, and whether they will continue to do so in the future, is of crucial importance for policy makers, industrial stakeholders and scientists alike. This timely and informative book therefore provides a comprehensive review of technological development and cost reductions for renewable energy, clean fossil fuel and energy-efficient demand-side technologies.

Chapter 3: General Aspects and Caveats of Experience Curve Analysis

Wilfried van Sark, Gregory Nemet, Sondes Kahouli-Brahmi, Clas-Otto Wene and Lena Neij

Subjects: economics and finance, energy economics, environment, energy policy and regulation, innovation and technology, technology and ict


Wilfried van Sark, Gregory Nemet, Sondes Kahouli-Brahmi, Lena Neij and Clas-Otto Wene 3.1 INTRODUCTION While the basic experience curve principle described in Chapter 2 itself stands out due to its simplicity, using the experience curve is in practice often not as straightforward as it may seem. The attractiveness of the experience curve approach lies in the possibility to extrapolate the trend lines to make estimates for the future; however, this may lead to huge uncertainties as discussed by Neij (2008); see also Alberth (2008). Nevertheless, the availability of price (as proxy for cost) and output data, the connection to the well-established phenomenon of learning-by-doing, and the compact representation of the complex process of technological change to a single parameter, the learning rate, further adds to the attractiveness of the experience curve. However, a number of topics have to be taken into account concerning the construction of historical experience curves, and their use by policy makers, modellers and so on for extrapolation of experience curves and analysis of future cost developments. A list of topics is compiled and described below. These have largely been described in the literature and are of general concern. Issues that arise from the application to specific energy technologies are described in appropriate chapters in Part II, Chapters 6–18. 3.2 METHODOLOGICAL CONSIDERATIONS AND THEIR CONSEQUENCES The choice of performance and experience or learning indicators is a crucial issue inherent to the construction of the experience curve. In reviewing literature it is clear that the determination of...

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