Describing Technological Development with Quantitative Models

Abstract

Up until now, the experience curve has been used as instrument for predicting development in costs of renewable energy technologies. This feature has been used several times in long-term optimisation models, where the experience curve describes technological development in the form of cost reduction over a long period of time. Considering long prediction periods expresses the need for relatively good estimation methods. This along with the increased knowledge of innovation theory has called for a discussion of models to describe cost reduction in order to have more precise predictions. This article aims at a discussion of three methods to describe the development, using the case study of Danish wind power. Therefore, the key result is a list of different models and their pros and cons with respect to the selection of quantitative models describing technological development in the form of cost reduction.