Rapid cost devel­op­ment of clean ener­gy technologies

Accel­er­at­ed cli­mate pro­tec­tion is a declared goal of the “Glas­gow Cli­mate Pact” adopt­ed at the week­end. A new study by econ­o­mists at the Uni­ver­si­ty of Mannheim now shows that the costs of clean ener­gy sources and stor­age such as solar mod­ules, bat­ter­ies or renew­able hydro­gen are falling much faster than pre­vi­ous­ly thought.

The cost of clean ener­gy sources is a key dri­ver for the suc­cess of the ener­gy tran­si­tion. Accord­ing­ly, the US gov­ern­ment recent­ly announced its inten­tion to halve the cost of solar ener­gy by 2030. At the same time, the cost of clean, renew­able hydro­gen is also expect­ed to drop by 80 per­cent, mak­ing it com­pet­i­tive with nat­ur­al gas.

But are these goals achiev­able in the short time avail­able? The research team of the Mannheim Insti­tute for Sus­tain­able Ener­gy Stud­ies (MISES) has inves­ti­gat­ed this ques­tion in a new study. The result: Con­tin­u­ous improve­ments of cur­rent­ly avail­able tech­nolo­gies should be suf­fi­cient to achieve the tar­get­ed cost reduc­tions. In con­trast, tech­nol­o­gy break­throughs do not seem nec­es­sary. The rea­son for this pos­i­tive fore­cast is that the costs for wind and solar plants as well as the pro­duc­tion of green hydro­gen have fall­en faster in the past decade than pre­vi­ous­ly assumed.

“The ener­gy tran­si­tion is a mam­moth task. But we can achieve many of our goals with the exist­ing tech­nolo­gies — pro­vid­ed we expand these tech­nolo­gies quick­ly and wide­ly,” states the study’s co-author Rebec­ca Meier.

Togeth­er with the econ­o­mists Prof. Ste­fan Reichel­stein, Ph.D. and Prof. Dr. Gun­ther Glenk, she analysed the devel­op­ment of the pur­chase prices of solar mod­ules, wind tur­bines, bat­ter­ies and elec­trol­y­sers. On this basis, the researchers inves­ti­gat­ed how the costs of pro­duc­ing clean elec­tric­i­ty from solar and wind ener­gy have devel­oped and at what rate the pro­duc­tion costs for renew­able hydro­gen have fallen.

The researchers used a proven method as the basis for the cal­cu­la­tion: Theodore Paul Wright’s learn­ing curve con­cept from 1936. The con­cept describes the obser­va­tion that the unit cost of a prod­uct often falls by a con­stant fac­tor with each dou­bling of the cumu­la­tive num­ber of units pro­duced of the product.

“Each unit of clean ener­gy source installed pro­vides learn­ing expe­ri­ences that lead to cost reduc­tions for the tech­nol­o­gy, which in turn lead to fur­ther expan­sion. Such cycles deci­sive­ly dri­ve the speed of the ener­gy tran­si­tion. How­ev­er, they must be trig­gered by ini­tial invest­ments and must not sub­se­quent­ly be slowed down by con­trary polit­i­cal mea­sures,” con­cludes Glenk.

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