Explaining experience curves for LNG liquefaction costs: Competition matter more than learning
AbstractIn this paper we seek to identify different driving forces behind the fall in LNG liquefaction unit costs. Our focus is on organizational learning including process specific R&D, but we also seek to account for autonomous technological change, scale effects and the effects of upstream competition among liquefaction technology suppliers. To our surprise we find that upstream competition is by far the most important factor. This may have implications for the future development in costs as the effect of increased upstream competition is temporary and likely to weaken a lot sooner than effects from learning and technological change. On the other hand, the increased competition could also spur more innovation, and induce a new drop in future unit costs.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 393.
Date of creation: Oct 2004
Date of revision:
Learning curves; Mark-up pricing; LNG costs;
Find related papers by JEL classification:
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
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- Knut Einar Rosendahl & Eirik Lund Sagen, 2007. "The Global Natural Gas Market. Will transport cost reductions lead to lower prices?," Discussion Papers 523, Research Department of Statistics Norway.
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