Historical costs of coal-fired electricity and implications for the future

Abstract

We study the costs of coal-fired electricity in the United States between 1882 and 2006 by decomposing it in terms of the price of coal, transportation costs, energy density, thermal efficiency, plant construction cost, interest rate, capacity factor, and operations and maintenance cost. The dominant determinants of costs have been the price of coal and plant construction cost. The price of coal appears to fluctuate more or less randomly while the construction cost follows long-term trends, decreasing from 1902 -1970, increasing from 1970 -1990, and leveling off since then. Our analysis emphasizes the importance of using long time series and comparing electricity generation technologies using decomposed total costs, rather than costs of single components like capital. By taking this approach we find that the history of coal-fired electricity costs suggests there is a fluctuating floor to its future costs, which is determined by coal prices. Even if construction costs resumed a decreasing trend, the cost of coal-based electricity would drop for a while but eventually be determined by the price of coal, which fluctuates while showing no long-term trend.

Role of design complexity in technology improvement

“…We should emphasize that many factors besides design can affect costs-for example, the cost of input materials or fuels may change due to market dynamics rather than technology design (10). Furthermore, design is generally focused not just on reducing costs, but also on improving other properties such as environmental performance or reliability.…”

Unraveling the Historical Economies of Scale and Learning Effects for Desalination Technologies

“…The effect of economies of scale is a common engineering concept that describes the falling marginal costs of production as production capacity or output increases (Wilson, ). Economies of scale were assessed using the traditional formula applied in the engineering literature (equation ) (Joskow & Rose, ; McCabe, ; McNerney et al, ), whereby the costs and sizes of two plants relate as follows: where cost and size are the absolute investment cost and total sizes of plants 1 and 2 and p is the exponential scale coefficient with p < 1 denoting positive economies of scale effects; that is, specific costs decline at larger scales. Based on this principle, and in order to make a comprehensive estimation of the scale effect building upon the maximum number of projects, the scale coefficient was estimated by plotting on a log‐log scale the investment costs and project sizes for all the projects with cost data availability for each technology type.…”

Residual learning rates in lead-acid batteries: Effects on emerging technologies

“…As will be seen in Section 3, the new form of experience curve yields a superior fit to the data. Decomposition or disaggregation of the simple experience model is also studied in Nemet (2006) to unveil drivers behind cost reductions for solar photovoltaic technology, in McNerny et al (2011) for analyzing historical trends in the cost of coal-fired electricity generation, and in Koomey and Hultman (2007) to assess future costs of nuclear reactors in the United States. This paper adds to this literature by disaggregating historical lead-acid battery costs in order to determine whether any learning exists within various components in the battery.…”