Schilling:Outsourcing_book_temp.qxd 26/08/2009 11:02 Page 10
Plotting Renewables and Fossil Fuels on the Technology S-curve
Table 1: Cost of Energy for Alternative Energy Sources, Expressed in Cents/kWh
a b
Renewables Fossil fuels
Geothermal Concentrating Solar Photovoltaics Wind Coal Natural Gas Petroleum Fossil Fuel
c
Composite
Year Upper Lower Upper Lower Upper Lower Upper Lower
1980 13.8 11.3 84.0 69.5 125.0 106.3 51.3 43.0
1981 13.1 10.6 74.0 57.0 119.0 100.0 47.5 40.0
1982 12.5 10.0 66.0 46.8 112.5 93.0 43.3 36.3
1983 11.9 9.4 56.0 38.3 105.0 84.5 38.8 32.5
1984 11.3 8.8 46.8 27.5 99.0 78.0 36.0 29.0
1985 10.6 8.1 36.0 24.0 93.0 72.0 31.3 25.3
1986 10.0 7.5 30.3 21.3 87.5 68.8 28.8 22.5
1987 9.7 7.2 27.0 19.0 82.0 63.0 25.3 18.8
1988 9.4 6.9 25.0 17.0 77.0 59.5 22.5 16.8
1989 8.8 6.3 23.5 16.0 72.0 55.5 20.0 14.8
1990 8.4 6.3 22.0 15.0 68.8 52.0 17.6 12.5 1.6 2.1 2.6 1.7
1991 8.1 5.9 21.5 14.0 66.0 49.0 15.0 11.3 1.5 1.9 2.1 1.6
1992 7.5 5.6 21.3 14.0 62.5 45.0 13.8 10.0 1.5 1.9 2.0 1.5
1993 6.6 5.3 21.0 13.8 59.0 43.3 12.0 8.8 1.4 2.0 1.9 1.5
1994 6.4 5.1 20.8 13.5 56.3 40.5 11.3 7.6 1.3 1.7 1.8 1.4
1995 6.3 4.9 20.0 13.3 53.0 37.5 9.8 6.9 1.3 1.6 1.8 1.3
1996 6.2 4.8 19.3 13.0 51.0 34.0 8.8 6.3 1.2 1.8 1.9 1.3
1997 5.9 4.4 18.5 12.9 48.0 31.3 8.4 5.9 1.1 1.8 1.7 1.2
1998 5.6 4.0 18.0 12.8 46.0 29.0 7.8 5.3 1.1 1.5 1.4 1.2
1999 5.3 3.8 17.5 12.8 43.8 27.0 7.5 5.0 1.1 1.6 1.5 1.1
2000 5.1 3.8 17.3 12.8 42.5 26.0 7.3 4.9 1.0 2.3 2.2 1.3
2001 5.0 3.7 17.1 12.8 40.5 24.0 6.7 4.7 1.1 2.3 2.0 1.2
2002 4.9 3.6 17.0 12.7 38.0 23.0 6.4 4.6 1.1 1.9 1.8 1.1
2003 4.7 3.4 16.7 12.7 36.0 21.0 6.3 4.5 1.0 2.6 2.2 1.4
2004 4.4 3.2 16.0 12.0 33.0 20.0 6.0 4.4 1.1 2.8 2.2 1.5
2005 4.3 3.1 15.0 11.0 31.0 18.8 5.5 4.3 1.2 3.5 2.9 1.8
a. Cost estimates constructed by the National Renewables Energy Laboratory based on data compiled from multiple sources including National Labs, Department of Energy, EPRI, PERI; GPRA 2003; and OPT Data book. Values
in constant 2005 US$. Upper and lower values reflect differences in costs due to facility types and scale.
b. From the Energy Information Agency’s Electric Power Annual, in constant 2005 US$. Costs include fuel, operations and maintenance. Data are unavailable prior to 1990.
c. Derived by multiplying the price per British Thermal Unit (Btu) of each fossil fuel by the total Btu content of the production of each fossil fuel and dividing this accumulated value of total fossil fuel production by the
accumulated Btu content of total fossil fuel production, and then converting to cents per kWh.
Figure 1: Cumulative Historical Research and Development Funding
During the same time period, governments spent somewhat more
of Renewable Energies by the Governments of Canada, Japan, The
on fossil fuel technologies than on all renewable energy alternatives
Netherlands, Norway, Spain, Sweden, Switzerland, the UK and the US
combined. They spent dramatically more on the development of
12,000
nuclear energy technologies, although investment in nuclear energy
Total solar
tapered off rapidly in the late 1980s and 1990s. The cumulative
10,000
Photovoltaics
investment in those technologies is provided in Figure 2.
Solar thermal
power and high-
8,000
temp. apps
Figure 3 shows a breakdown of spending on renewables by country.
Geothermal energy
As shown, most of the countries increased their spending on
6,000
Total bio-energy
constant 2005 US$ millions renewable energy alternatives during the period following the oil
Solar heating
4,000
and cooling crisis. US R&D investment in renewable energy alternatives was
(inc. daylighting)
greater than that in the other eight countries for all but the last two
Wind energy
2,000
Cumulative spend,
years, when Japan’s government spending on renewable energy
Ocean energy
spending surpassed that of the US. Notably, almost half of Japan’s
0
Total hydropower
R&D funding for renewable energy alternatives was for solar
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
photovoltaics, reflecting the importance of photovoltaics to Japan’s
data on investment by industry, these figures significantly understate large consumer electronics commercial sectors.
investment in those technologies that have well-established
commercial bases (most notably fossil fuels, but also to lesser extents Technology S-curves in Energy Technology
hydropower, biomass and photovoltaics). As noted previously, to examine a technology s-curve of performance
improvement, it is important to plot the performance improvement
Figure 1 shows the cumulative R&D investment of governments in against cumulative investment. Plotting performance against time
the nine countries listed above in various renewable energy can be seriously misleading since investment may not be consistent
technologies, in constant millions of dollars (2005 dollars). As over time. To accomplish this, one must first transform the renewable
shown, investment shot up dramatically following the oil crisis in the energy data from cents per kWh to kWh per dollar, so that increasing
1970s, most notably in solar technologies. As the figure illustrates, performance is expressed as an upward-sloping trend, using an
vastly more dollars have been spent on solar technologies than on average of the upper and lower values provided by the US National
the other renewable alternatives. Renewable Energy Laboratories. One then plots these kWh per dollar
MODERN ENERGY REVIEW VOLUME 1
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