Cost of Technologies
PTEC incorporates a process of endogenous technological change (TC), whereby the technology costs depend on their deployment rate. Intuitively, the more a technology is deployed, the more “learning by doing” we get, driving costs down. We have seen strong evidence of this for many key renewable technologies. This relationship is modeled using Wright’s law. More details of this methodology are given in Sections 2 and 3 of the report.
The result is that in deploying more renewable technologies can actually make the energy transition cheaper. For example, in the Decisive Transition, we see a large deployment of Solar PV and wind. Thus, we also see the costs of these renewable technologies fall significantly, as there is more learning-by-doing. This feature opens up a new “solution space”.
Below you can compare the different PTEC and IEA scenarios.