Local and Global Experience Curves for Lumpy and Granular Energy Technologies

47 Pages Posted: 11 Jul 2022

See all articles by Donghyun Choi

Donghyun Choi

Georgia Institute of Technology

Yeong Jae Kim

KDI School of Public Policy and Management; RFF-CMCC European Institute on Economics and the Environment (EIEE), Centro Euro-Mediterraneo sui Cambiamenti Climatici, Italy

Date Written: June 27, 2022

Abstract

Current electricity generation systems have been dominated by lumpy energy technologies (e.g., coal-fired and nuclear plants) because the electricity they create has been cheaper than that generated from granular technologies (e.g., solar and wind). Accelerating the development and deployment of low-carbon technologies to mitigate climate change will require a better understanding of how lumpy and granular technology innovations work to reduce domestic and foreign technology costs. We estimated one-factor and two-factor experience curves to identify drivers and assess the relative importance of local and global learning experiences in Korea’s climate change mitigation efforts between lumpy and granular energy technologies. The results suggest that granular technologies are likely to play a key role in mitigating climate change due to a rapid decline in its cost. Further tapping the local potential of cost reduction in granular technologies will require decreasing the soft costs of solar technologies and ramping up wind power plant installations. The results also suggest that knowledge spillover is relatively limited and slow for lumpy technologies, but frequent and fast for granular technologies. To maximise the spillover of global learning to local innovators, policy makers should improve the absorptive capacity of a country and strengthen the global network ties of local firms.

Keywords: Experience curve; Research and development; Technological change; Energy technology

JEL Classification: O13, Q55

Suggested Citation

Choi, Donghyun and Kim, Yeong Jae, Local and Global Experience Curves for Lumpy and Granular Energy Technologies (June 27, 2022). Available at SSRN: https://ssrn.com/abstract=4146976 or http://dx.doi.org/10.2139/ssrn.4146976

Donghyun Choi

Georgia Institute of Technology ( email )

Atlanta, GA 30332
United States

Yeong Jae Kim (Contact Author)

KDI School of Public Policy and Management ( email )

P.O. Box 184
Seoul, 130-868
Korea, Republic of (South Korea)

RFF-CMCC European Institute on Economics and the Environment (EIEE), Centro Euro-Mediterraneo sui Cambiamenti Climatici, Italy ( email )

Via Bergognone, 34
Milan, 20144
Italy

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