Analyzing technological change using experience curves - a study of the combined cycle gas turbine

Abstract: The aim of this thesis was to analyze and discuss the use of experience curves as a possible instrument for assessing future developments of a specific energy technology: the combined cycle gas turbine (CCGT). The CCGT technology is expected to figure prominently in future energy systems. In addition, assessing the future price developments of the CCGT technology provides an indication of the price levels that emerging technologies, e.g. renewable energy technologies, will have to reach in order to compete with it. Experience curves describe the observed phenomenon that the cost of a product decreases and/or performance increases by a certain percentage every time cumulative experience doubles. Cost is seldom publicly available and price is often used as a proxy for cost. Doing so introduces market behavior into the experience curve, which can — unless it is possible to screen for — mask the actual experience effect. The major determinants of future electricity-generation costs for the CCGT technology — specific investment price, thermal efficiency and natural-gas price — were investigated using experience curves. It was concluded that experience curves were efficient for analyzing the developments of specific investment price and thermal efficiency. The experience curve did not prove to be a feasible method for projecting future natural-gas prices since no correlation between price and experience could be established. The implications of the expected developments for the future costs of generating electricity from CCGT plants were also discussed.