Learning Curve Analysis of Wind Power and Photovoltaics Technology in US: Cost Reduction and the Importance of Research, Development and Demonstration

Yi Zhou,Alun Gu

doi:10.3390/su11082310

Abstract

The strategic transition from fossil energy to renewable energy is an irreversible global trend, but the pace of renewable energy deployment and the path of cost reduction are uncertain. In this paper, a two-factor learning-curve model of wind power and photovoltaics (PV) was established based on the latest empirical data from the United States, and the paths of cost reduction and corresponding social impacts were explored through scenario analysis. The results demonstrate that both of the technologies are undergoing a period of rapid development, with the learning-by-searching ratio (LSR) being greatly improved in comparison with the previous literature. Research, development, and demonstration (RD&D) have contributed to investment cost reduction in the past decade, and the cost difference between high and low RD&D spending scenarios is predicted to be 5.5%, 8.9%, and 11.27% for wind power, utility-scale PV, and residential PV, respectively, in 2030. Although higher RD&D requires more capital, it can effectively promote cost reduction, reduce the total social cost of deploying renewable energy, and reduce the abatement carbon price that is needed to promote deployment. RD&D and the institutional support behind it are of great importance in allowing renewables to penetrate the commercial market and contribute to long-term social welfare.

Highlights

Energy crises have become increasingly prominent worldwide
The one-factor model does not take the contribution of RD&D into account, overestimating learning-by-doing ratio (LDR), as shown in the research that is presented in Rubin [21]
The learning rates that were obtained in this paper were higher than his, with an LDR value even higher than that being achieved by some one-factor studies [14,16], indicating that, with large-scale investments and commercialization, the learning ability of wind power technology has substantially improved

Summary

Introduction

Energy crises have become increasingly prominent worldwide. At the end of 2017, it was estimated that the known reserves of oil, natural gas, and coal will only be able to meet energy requirements for 50.2, 52.6, and 134 years, respectively, according to the 2017 annual production level. The high demand for economic growth and energy consumption continue, as exemplified by the 1.7% average growth rate in the global primary energy consumption from 2006 to 2016 [1]. This contradiction necessitates a strategic transition from energy production via fossil fuels to the use of renewable energy sources. Wind power and photovoltaic (PV), as clean, high-efficiency, and convenient methods of energy production, are playing increasingly significant roles in the global energy structure transition. The laws governing the development of wind power and PV, and their relationship with policy, are of particular importance

Methods

Results

Conclusion