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Winds of Change: Technical Progress and Learning by Doing in the Wind Industry

Author

Listed:
  • Thomas R. Covert

    (Airbnb)

  • Richard Sweeney

    (Boston College
    Boston College)

Abstract

We measure technical progress and cost declines in the wind turbine industry, accounting for large quality improvements that have occurred over time. As in many industrial settings, we do not observe costs. Instead, we infer them by modeling the turbine procurement process, and estimate the model on the near-universe of global commercial wind farms built from 2000 to 2019. We find that while commonly reported measures of price per unit of capacity fell by 30 percent during this time, latent quality-adjusted costs fell by over 75 percent. Underpinning these cost declines, we estimate substantial learning-by-doing. A doubling of manufacturing experience reduces manufacturing costs by 26 to 29 percent. Though inter-firm spillovers per unit are relatively small, in aggregate, they rationalize a significant portion of the cost reductions over time.

Suggested Citation

  • Thomas R. Covert & Richard Sweeney, 2026. "Winds of Change: Technical Progress and Learning by Doing in the Wind Industry," Boston College Working Papers in Economics 1115, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1115
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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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