Technology Status - NET Nowak Energie & Technologie AG

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● The highest potential for cost reduction among the renewable electricity
technologies are a) expensive and b) recent in development. They tend to
have a steep learning curve with a progress ratio of about 80%, meaning
that every doubling of the volume manufactured leads to a cost reduction
of about 20%. Globally, solar technologies are expected to reduce their
costs by some 30%-50% for each of the next two decades as a result of
learning and market growth.
● Medium cost reduction potential can be identified among those
technologies that are a) in the low to medium cost range and b) relatively
recent in development. They tend to have a learning curve with a progress
ratio of around 90%, meaning that every doubling of the volume
manufactured leads to a cost reduction of around 10%. Globally, wind
is expected to reduce its costs by some 25% for each of the next two
decades on this basis, and geothermal by some 10%-25% in the same
periods.
● Smaller cost reduction potential is likely among the most mature
technologies; the learning curve for these technologies and their
components is fairly flat. Globally, technological development for
small hydropower and biomass is much slower, likely on the order of
about 5%-10% for each of the next two decades. Specifically,
conventional components (civil works, turbines) offer low cost reduction
potential, likely on the order of about 5%-10% for each of the next two
decades.
● Cost Structure, Investment and Generation Cost
A particular feature of renewable power is the wide range of investment and
generating cost they exhibit. Table 2 presents the ranges of investment and
generating cost presented for 2002 and projections for 2010. These ranges
reflect the variety of technologies for each renewable power source, the large
number of possible applications and the multiplicity of resources. Renewable
costs depend on the physical and geographic context, and the system definition
as well as the policy environment. Average indicators for renewable power
generation costs are thus not well suited to display their competitiveness in
either the off-grid or on-grid market in a given country or system.
All the renewable technologies assessed in this book have high up-front
investment costs. Capital cost depreciation and interest costs are, thus, the
major factor influencing generation costs. There are no fuel costs with the
exception of biomass. While operating and maintenance costs (O&M) are
generally low compared to conventional power generation, there are marked
differences among the technologies in the area of maintenance.
EXECUTIVE SUMMARY X