کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
997026 936328 2009 9 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
The experience curve, option value, and the energy paradox
موضوعات مرتبط
مهندسی و علوم پایه مهندسی انرژی مهندسی انرژی و فناوری های برق
پیش نمایش صفحه اول مقاله
The experience curve, option value, and the energy paradox
چکیده انگلیسی

This paper develops a model to explain the ‘energy paradox,’ the inclination of households and firms to require very high internal rates of return in order to make energy-saving investments. The model abstracts from many features of such investments to focus on their irreversibility, the uncertainty of their future payoff streams, and the investor's anticipation of future technological advance. In this setting, the decision to invest in energy-saving technology can be delayed, providing option value. In addition, delay allows the potential investor to cash in on future experience-curve effects: With the passage of time, firms gain practical knowledge in producing and installing the energy-saving technology, enabling them to reduce the technology's up-front cost per unit of energy saved. We incorporate these fundamentals into a stochastic model where the investment's discounted benefits follow geometric Brownian motion. To demonstrate the model's capabilities, we generate simulation results for photovoltaic systems that highlight the experience-curve effect as a fundamental reason why households and firms delay making energy-saving investments until internal rates of return exceed values of 50% and higher, consistent with observations in the economics literature. We also explore altruistic motivations for energy conservation and the model's implications for both “additionality” and the design of energy-conservation policy.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: Energy Policy - Volume 37, Issue 3, March 2009, Pages 1012–1020
نویسندگان
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