Learning, economies of scale, and knowledge gap effects on power generation technology cost improvements

Pratama, Y., Gidden, M. ORCID: https://orcid.org/0000-0003-0687-414X, Greene, J., Zaiser, A., Nemet, G., & Riahi, K. ORCID: https://orcid.org/0000-0001-7193-3498 (2025). Learning, economies of scale, and knowledge gap effects on power generation technology cost improvements. iScience 28 (1) e111644. 10.1016/j.isci.2024.111644.

Preview

Text 1-s2.0-S2589004224028712-main.pdf - Published Version Available under License Creative Commons Attribution. Download (3MB) | Preview

Abstract

Cost reductions are essential for accelerating clean technology deployment. Because multiple factors influence costs, traditional one-factor learning models, solely relying on cumulative installed capacity as an explanatory variable, may oversimplify cost dynamics. In this study, we disentangle learning and economies of scale effects at unit and project levels and introduce a knowledge gap concept to quantify rapid technological change's impact on costs. Our results show that a substantial proportion of cost declines in several technologies is attributable to economies of scale rather than learning processes. Thus, relying on one-factor learning may underestimate cost declines during upscaling periods for technologies with strong economies of scale effects and overestimate reductions for those approaching maximum size. Notably, the knowledge gap concept can endogenously capture how rapidly technology sizes can evolve through learning. These insights can improve decision-making and highlight the benefits of separating learning and economies of scale effects to estimate technology costs.

Item Type:	Article
Uncontrolled Keywords:	Applied sciences; Engineering; Natural sciences
Research Programs:	Energy, Climate, and Environment (ECE) Energy, Climate, and Environment (ECE) > Integrated Assessment and Climate Change (IACC)
Depositing User:	Luke Kirwan
Date Deposited:	27 Jan 2025 14:36
Last Modified:	27 Jan 2025 14:36
URI:	https://pure.iiasa.ac.at/20367

Actions (login required)

View Item