IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v83y2015icp61-66.html
   My bibliography  Save this article

Economies of scale, learning effects and offshore wind development costs

Author

Listed:
  • Dismukes, David E.
  • Upton, Gregory B.

Abstract

This paper presents a model of overnight development costs for offshore wind projects and tests for the presence of economies of scale and learning effects. Both industry-wide and country-specific learning effects are analyzed. Recently, “pilot projects” have been proposed in states such as Maine and New Jersey with the hope of inducing cost savings in future larger utility scale projects. Therefore the impact of country-specific learning effects are of particular importance.

Suggested Citation

  • Dismukes, David E. & Upton, Gregory B., 2015. "Economies of scale, learning effects and offshore wind development costs," Renewable Energy, Elsevier, vol. 83(C), pages 61-66.
    • Handle: RePEc:eee:renene:v:83:y:2015:i:c:p:61-66
    DOI: 10.1016/j.renene.2015.04.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148115002827
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2015.04.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tooraj Jamasb, 2007. "Technical Change Theory and Learning Curves: Patterns of Progress in Electricity Generation Technologies," The Energy Journal, , vol. 28(3), pages 51-72, July.
    2. Junginger, M. & Faaij, A. & Turkenburg, W. C., 2005. "Global experience curves for wind farms," Energy Policy, Elsevier, vol. 33(2), pages 133-150, January.
    3. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    4. Caleb A. Smith, 1955. "Survey of the Empirical Evidence on Economies of Scale," NBER Chapters, in: Business Concentration and Price Policy, pages 213-238, National Bureau of Economic Research, Inc.
    5. Martin B. Zimmerman, 1982. "Learning Effects and the Commercialization of New Energy Technologies: The Case of Nuclear Power," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 297-310, Autumn.
    6. Mowery, David C., 1983. "The relationship between intrafirm and contractual forms of industrial research in American manufacturing, 1900-1940," Explorations in Economic History, Elsevier, vol. 20(4), pages 351-374, October.
    7. John M. Marshall & Peter Navarro, 1991. "Costs of Nuclear Power Plant Construction: Theory and New Evidence," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 148-154, Spring.
    8. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-676, August.
    9. Snyder, Brian & Kaiser, Mark J., 2009. "Ecological and economic cost-benefit analysis of offshore wind energy," Renewable Energy, Elsevier, vol. 34(6), pages 1567-1578.
    10. Giovanni Fraquelli & Massimiliano Piacenza & Davide Vannoni, 2004. "Scope and scale economies in multi-utilities: evidence from gas, water and electricity combinations," Applied Economics, Taylor & Francis Journals, vol. 36(18), pages 2045-2057.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pata, Ugur Korkut & Alola, Andrew Adewale & Erdogan, Sinan & Kartal, Mustafa Tevfik, 2023. "The influence of income, economic policy uncertainty, geopolitical risk, and urbanization on renewable energy investments in G7 countries," Energy Economics, Elsevier, vol. 128(C).
    2. Fouz, D.M. & Carballo, R. & López, I. & González, X.P. & Iglesias, G., 2023. "A methodology for cost-effective analysis of hydrokinetic energy projects," Energy, Elsevier, vol. 282(C).
    3. Dedecca, João Gorenstein & Hakvoort, Rudi A. & Ortt, J. Roland, 2016. "Market strategies for offshore wind in Europe: A development and diffusion perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 286-296.
    4. Mauler, Lukas & Duffner, Fabian & Leker, Jens, 2021. "Economies of scale in battery cell manufacturing: The impact of material and process innovations," Applied Energy, Elsevier, vol. 286(C).
    5. van der Loos, Adriaan & Normann, Håkon E. & Hanson, Jens & Hekkert, Marko P., 2021. "The co-evolution of innovation systems and context: Offshore wind in Norway and the Netherlands," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    6. Santhakumar, Srinivasan & Meerman, Hans & Faaij, André, 2021. "Improving the analytical framework for quantifying technological progress in energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    7. McDonagh, Shane & Ahmed, Shorif & Desmond, Cian & Murphy, Jerry D, 2020. "Hydrogen from offshore wind: Investor perspective on the profitability of a hybrid system including for curtailment," Applied Energy, Elsevier, vol. 265(C).
    8. Laido, Ahti Simo & Hansen, Tyler A. & Kitzing, Lena, 2024. "The influence of seabed lease fees on offshore wind farm design," Energy Policy, Elsevier, vol. 190(C).
    9. Levi, Peter G. & Pollitt, Michael G., 2015. "Cost trajectories of low carbon electricity generation technologies in the UK: A study of cost uncertainty," Energy Policy, Elsevier, vol. 87(C), pages 48-59.
    10. John W. Day & Christopher F. D’Elia & Adrian R. H. Wiegman & Jeffrey S. Rutherford & Charles A. S. Hall & Robert R. Lane & David E. Dismukes, 2018. "The Energy Pillars of Society: Perverse Interactions of Human Resource Use, the Economy, and Environmental Degradation," Biophysical Economics and Resource Quality, Springer, vol. 3(1), pages 1-16, March.
    11. Elia, A. & Taylor, M. & Ó Gallachóir, B. & Rogan, F., 2020. "Wind turbine cost reduction: A detailed bottom-up analysis of innovation drivers," Energy Policy, Elsevier, vol. 147(C).
    12. Santhakumar, Srinivasan & Smart, Gavin & Noonan, Miriam & Meerman, Hans & Faaij, André, 2022. "Technological progress observed for fixed-bottom offshore wind in the EU and UK," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    13. Schwanitz, Valeria Jana & Wierling, August, 2016. "Offshore wind investments – Realism about cost developments is necessary," Energy, Elsevier, vol. 106(C), pages 170-181.
    14. Dylan F. Jones & Graham Wall, 2016. "An extended goal programming model for site selection in the offshore wind farm sector," Annals of Operations Research, Springer, vol. 245(1), pages 121-135, October.
    15. Vieira, M. & Snyder, B. & Henriques, E. & Reis, L., 2019. "European offshore wind capital cost trends up to 2020," Energy Policy, Elsevier, vol. 129(C), pages 1364-1371.
    16. Elia, A. & Kamidelivand, M. & Rogan, F. & Ó Gallachóir, B., 2021. "Impacts of innovation on renewable energy technology cost reductions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    17. Bigerna, Simona & Bollino, Carlo Andrea & Micheli, Silvia, 2016. "Renewable energy scenarios for costs reductions in the European Union," Renewable Energy, Elsevier, vol. 96(PA), pages 80-90.
    18. Benini, Giacomo & Cattani, Gilles, 2022. "Measuring the long run technical efficiency of offshore wind farms," Applied Energy, Elsevier, vol. 308(C).
    19. Lenzen, Manfred & McBain, Bonnie & Trainer, Ted & Jütte, Silke & Rey-Lescure, Olivier & Huang, Jing, 2016. "Simulating low-carbon electricity supply for Australia," Applied Energy, Elsevier, vol. 179(C), pages 553-564.
    20. Rubio-Domingo, G. & Linares, P., 2021. "The future investment costs of offshore wind: An estimation based on auction results," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).
    21. Shields, Matt & Beiter, Philipp & Nunemaker, Jake & Cooperman, Aubryn & Duffy, Patrick, 2021. "Impacts of turbine and plant upsizing on the levelized cost of energy for offshore wind," Applied Energy, Elsevier, vol. 298(C).
    22. Vetters, Jade & Thomassen, Gwenny & Van Passel, Steven, 2024. "Sailing through end-of-life challenges: A comprehensive review for offshore wind," Renewable and Sustainable Energy Reviews, Elsevier, vol. 199(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samadi, Sascha, 2018. "The experience curve theory and its application in the field of electricity generation technologies – A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2346-2364.
    2. Lovering, Jessica R. & Yip, Arthur & Nordhaus, Ted, 2016. "Historical construction costs of global nuclear power reactors," Energy Policy, Elsevier, vol. 91(C), pages 371-382.
    3. Paul Kerr & Donald R. Noble & Jonathan Hodges & Henry Jeffrey, 2021. "Implementing Radical Innovation in Renewable Energy Experience Curves," Energies, MDPI, vol. 14(9), pages 1-28, April.
    4. Sascha Samadi, 2016. "A Review of Factors Influencing the Cost Development of Electricity Generation Technologies," Energies, MDPI, vol. 9(11), pages 1-25, November.
    5. Sun, Xiaojing & Huang, Diangui & Wu, Guoqing, 2012. "The current state of offshore wind energy technology development," Energy, Elsevier, vol. 41(1), pages 298-312.
    6. Oh, Jong-Min, 2017. "Absorptive capacity, technology spillovers, and the cross-section of stock returns," Journal of Banking & Finance, Elsevier, vol. 85(C), pages 146-164.
    7. Arthur van Benthem & Kenneth Gillingham & James Sweeney, 2008. "Learning-by-Doing and the Optimal Solar Policy in California," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 131-152.
    8. Stefan Seifert, 2015. "Measuring Productivity When Technologies Are Heterogeneous: A Semi-Parametric Approach for Electricity Generation," Discussion Papers of DIW Berlin 1526, DIW Berlin, German Institute for Economic Research.
    9. Schwiebacher, Franz, 2012. "Complementary assets, patent thickets and hold-up threats: Do transaction costs undermine investments in innovation?," ZEW Discussion Papers 12-015, ZEW - Leibniz Centre for European Economic Research.
    10. Bottasso, Anna & Conti, Maurizio & Piacenz, Massimiliano & Vannoni, Davide, 2011. "The appropriateness of the poolability assumption for multiproduct technologies: Evidence from the English water and sewerage utilities," International Journal of Production Economics, Elsevier, vol. 130(1), pages 112-117, March.
    11. Schauf, Magnus & Schwenen, Sebastian, 2021. "Mills of progress grind slowly? Estimating learning rates for onshore wind energy," Energy Economics, Elsevier, vol. 104(C).
    12. Berthélemy, Michel & Escobar Rangel, Lina, 2015. "Nuclear reactors' construction costs: The role of lead-time, standardization and technological progress," Energy Policy, Elsevier, vol. 82(C), pages 118-130.
    13. Sijm, Jos & Lehmann, Paul & Chewpreecha, Unnada & Gawel, Erik & Mercure, Jean-Francois & Pollitt, Hector & Strunz, Sebastian, 2014. "EU climate and energy policy beyond 2020: Are additional targets and instruments for renewables economically reasonable?," UFZ Discussion Papers 3/2014, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    14. Braun, Frauke G. & Hooper, Elizabeth & Wand, Robert & Zloczysti, Petra, 2011. "Holding a candle to innovation in concentrating solar power technologies: A study drawing on patent data," Energy Policy, Elsevier, vol. 39(5), pages 2441-2456, May.
    15. Dalton, Gordon & Allan, Grant & Beaumont, Nicola & Georgakaki, Aliki & Hacking, Nick & Hooper, Tara & Kerr, Sandy & O’Hagan, Anne Marie & Reilly, Kieran & Ricci, Pierpaolo & Sheng, Wanan & Stallard, T, 2015. "Economic and socio-economic assessment methods for ocean renewable energy: Public and private perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 850-878.
    16. Lehmann, Paul, 2013. "Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers," Energy Policy, Elsevier, vol. 61(C), pages 635-641.
    17. Mauleón, Ignacio, 2016. "Photovoltaic learning rate estimation: Issues and implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 507-524.
    18. Klette, Tor Jakob & Griliches, Zvi, 1996. "The Inconsistency of Common Scale Estimators When Output Prices Are Unobserved and Endogenous," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(4), pages 343-361, July-Aug..
    19. Levin, Mark (Левин, Марк) & Matrosova, K. (Матросова, К.), 2016. "Research, Modeling and Process Management Dissemination of Innovations in Socio-Economic Systems [Исследование, Моделирование И Управление Процессами Распространения Инноваций В Социально-Экономиче," Working Papers 1443, Russian Presidential Academy of National Economy and Public Administration.
    20. Olav Sorenson & Jan W. Rivkin & Lee Fleming, 2010. "Complexity, Networks and Knowledge Flows," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 15, Edward Elgar Publishing.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:83:y:2015:i:c:p:61-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.