Estimating the Cost of Future Global Energy Supply
20 Pages Posted: 25 Nov 2012
Date Written: November 25, 2012
This study produces an attempt to estimate the cost of future global energy supplies. The approach chosen to address this concern relies on a comparative static exercise of estimating the cost of three energy scenarios representing different energy futures. The first scenario, the business as usual scenario predicts the future energy-mix based on the energy plans held by major countries. The second scenario is the renewable energy scenario, where as much of the primary energy supply as possible is replaced by renewable energy by 2050. The cost of the renewable energy generating technologies and their theoretical potential are taken into account in order to create a plausible scenario. The third scenario, the nuclear case, is based on the use of nuclear and renewable energy to replace fossil-fuels by 2050. Endogenous learning rates for each technology were modeled using an innovative approach where the learning rate of a traditional experience curve is diminishing overtime. It results from the analysis that going fully renewable would cost about 10-40% extra compared to a business as usual case. Extensively using nuclear power can greatly this gap in costs.
Keywords: primary energy supply, experience curve, scenario
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