Clean Energy Technologies

Clean energy technologies that cost more than fossil fuel technologies require support through research and development (R&D). Learning-by-doing relates historical cost decreases to accumulation of experience.

 

A learning investment is the amount of subsidy that is required to reach cost parity between a new technology and a conventional technology. We use learning investments to compare the relative impacts of two stylized types of R&D. We define curve-following R&D to be R&D that lowers costs by producing knowledge that would have
otherwise been gained through learning-by-doing. We define curve-shifting R&D to be R&D that lowers costs by producing innovations that would not have occurred through learning-by-doing.

 

We show that if an equal investment in curve-following or curve-shifting R&D would produce the same reduction in cost, the curve-shifting R&D would be more effective at reducing the learning investment needed to make the technology competitive. The relative benefit of curve-shifting over curve-following R&D is greater with a high starting cost and low learning rate.

 

Our analysis suggests that, other things equal, investments in curve-shifting R&D have large benefits relative to curve-following R&D. In setting research policy, governments should consider the greater benefits of cost reductions brought about by transformational rather than incremental change.

 

Papers:

1.   Shayegh S., Sanchez D. L., Caldeira K. “Evaluating relative benefits of different types of R & D for clean energy technologies”, Energy Policy, 2017

 

2.    Shayegh S., Sanchez D. L.

 

Presentations:
1.    

curve-shifting R&D works better than curve-following R&D for technologies with low learning rates and high costs.