sectoral economic costs and benefits of ghg mitigation - IPCC

Renewable Energy
originates in the elasticity of costs to the stock – and not the flow – of R&D and installed
capacities (thus inducing “maturity effects”), the second one corresponds to a floor level for
technology costs that acts as a limit in the learning curves. These features are very important in
order to avoid extreme “increasing returns to adoption” and “lock-in” situations and thus to give
each technology a chance in the process of development and maturity of the different
alternatives.
Scarce, disparate and incomplete information has meant that gathering data on past R&D flows,
as well as harmonising and formatting them according to the technology disaggregation
embedded in POLES has necessitated a considerable amount of (hopefully reasonable)
assumptions. The end result of this effort has been the construction of cumulative R&D time
series corresponding to each technology, as shown in Figure 14. Data on total private R&D
energy technology expenditure have been derived broadly as a function of public R&D
expenditure supplemented and corroborated by more fragmentary information specific to the
private sector. The data sets used for this study are planned to be extended and improved in the
framework of a new study (the SAPIENT project).
Figure 13
Private and public cumulative R&D time series
PRIVATE CUMULATED R&D
PUBLIC CUMULATED R&D
Million $90
12000
10000
8000
6000
4000
2000
0
1975 1980 1985 1990 1995
Year
HYD
NUC
NND
PFC
ICG
ATC
LCT
CCT
OCT
GCT
OGT
GGT
CHP
SHY
WND
SPP
DPV
RPV
LTS
BF1
BGT
FCV
SFC
MFC
Source: POLES model database, see below for acronyms
Million $90
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
1975 1980 1985 1990 1995
Year
HYD
NUC
NND
PFC
ICG
ATC
LCT
CCT
OCT
GCT
OGT
GGT
CHP
SHY
WND
SPP
DPV
RPV
LTS
BF1
BGT
FCV
SFC
MFC
Data were collected and aggregated at world level (essentially OECD where most of the R&D
can be safely assumed to occur), i.e. full spillover is assumed for R&D investment. According to
the data from BERD, and for the time period 1989-1993, the ratio Private Total Energy
R&D/Public Total Energy R&D ranges between 1.9 and 2.9.
For the time period 1973-1992, the total sales volume of new power generation capacity has been
estimated. It was found that for the period 1989-1992, the ratio private total energy R&D/total
sales volume was remarkably constant at around 7-8% of the sales volume. We therefore
reconstructed the whole private total energy R&D flows as a share of the current sales volume of
capital equipment in the power sector.
3.5. The main POLES model as an inter-technology competition and diffusion model
In the development of projections with endogenous treatment of technology, the main POLES
model plays a double role. First it allows to calibrate, by a set of successive simulations with
different levels of carbon constraint, the expected Rate of Return of investment in R&D for one
122