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Measuring the Impact of Own and Others’ Experience on Project Costs in the U.S. Wind Generation Industry

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  • John W. Anderson
  • Gordon W. Leslie
  • Frank A. Wolak

Abstract

We investigate the relationship between accumulated experience completing wind power projects and the cost of installing wind projects in the U.S. from 2001-2015. Our modeling framework disentangles accumulated experience from input price changes, scale economies, and exogenous technical change; and accounts for both firm-specific and industry-wide accumulated experience. We find evidence consistent with cost-reducing benefits from firm-specific experience for that firm’s cost of future wind power projects, but no evidence of industry-wide learning from the experience of other participants in the industry. Further, our experience measure rapidly depreciates across time and distance, suggesting a stable industry trajectory would lower project costs.

Suggested Citation

  • John W. Anderson & Gordon W. Leslie & Frank A. Wolak, 2019. "Measuring the Impact of Own and Others’ Experience on Project Costs in the U.S. Wind Generation Industry," NBER Working Papers 26114, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26114
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    References listed on IDEAS

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    1. Pillai, Unni, 2015. "Drivers of cost reduction in solar photovoltaics," Energy Economics, Elsevier, vol. 50(C), pages 286-293.
    2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    3. William D. Nordhaus, 2014. "The Perils of the Learning Model for Modeling Endogenous Technological Change," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    4. Barradale, Merrill Jones, 2010. "Impact of public policy uncertainty on renewable energy investment: Wind power and the production tax credit," Energy Policy, Elsevier, vol. 38(12), pages 7698-7709, December.
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    Cited by:

    1. Schauf, Magnus & Schwenen, Sebastian, 2021. "Mills of progress grind slowly? Estimating learning rates for onshore wind energy," Energy Economics, Elsevier, vol. 104(C).
    2. Lee, Jonathan M. & Howard, Gregory, 2021. "The impact of technical efficiency, innovation, and climate policy on the economic viability of renewable electricity generation," Energy Economics, Elsevier, vol. 100(C).

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    More about this item

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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