Evidence from RD&D spending for renewable energy sources in the EU

This paper aims at giving a critical picture of the expenditures in research, development and demonstration (RD&D) for renewable energy sources (RES) in the EU-15 Member States. By providing this objective a number of performance indicators are proposed, evaluated and discussed. RD&D performance is measured in terms of RD&D intensity, e.g. spending per unit of GDP, as well as with regard to RD&D output such as the number of patents in the different sectors of technology.The evaluation of the funds spent can help the rationalisation of the efforts made to support renewable energy RD&D and facilitate the joint investments in RD&D activities. This perspective is essential for facing the increasing competition that the EU industry meets in the international markets for RES. The knowledge and rationalisation of the RD&D spending in research activities is the starting point for a common approach to strengthen the EU industry in this field of expected strong growth.     

Resource allocation model for planning R&D on solar cells

R&D planning is important for promoting R&D effectively and efficiently. The authors formulate planning of R&D on solar cells as an optimal resource allocation problem by using mathematical programming. The optimal resource allocation model based on this formulation includes technological progress submodels of solar cells and production and market submodels of solar cells. This model is expected not only to make clear the validity of R&D strategy on solar cells in the past, but also to give us the optimal plan of R&D on solar cells in the future.     

Optimal policy of energy innovation in developing countries: Development of solar PV in Iran

The purpose of this study is to apply managerial economics and methods of decision analysis to study the optimal pattern of innovation activities for development of new energy technologies in developing countries. For this purpose, a model of energy research and development (R&D) planning is developed and it is then linked to a bottom-up energy-systems model. The set of interlinked models provide a comprehensive analytical tool for assessment of energy technologies and innovation planning taking into account the specific conditions of developing countries. An energy-system model is used as a tool for the assessment and prioritization of new energy technologies. Based on the results of the technology assessment model, the optimal R&D resources allocation for new energy technologies is estimated with the help of the R&D planning model. The R&D planning model is based on maximization of the total net present value of resulting R&D benefits taking into account the dynamics of technological progress, knowledge and experience spillovers from advanced economies, technology adoption and R&D constraints. Application of the set of interlinked models is explained through the analysis of the development of solar PV in Iranian electricity supply system and then some important policy insights are concluded.     

Status and prospects of photovoltaics in Korea

The Korean National Photovoltaic (PV) Project was initiated in October 1989 to develop technologies for the generation of economically competitive electric power by PV systems. It consists of three stages which will continue until the year 2001. The technical goals and costs targets are directed at solar cell, balance of systems and system application. The objectives are: the development of PV technology through research activities, transfer of developed technology to the industries and diffusion of PV through demonstration projects to the end users. This paper reviews the long-term plan and recent trends in the R&D technology, and shows examples of PV diffusion, demonstration projects and market outlook in Korea. Some activities designed to promote collaboration with foreign countries are also discussed.     

The case for a new energy research,development and promotion policy for the UK

This paper is a critical assessment of the current balance of efforts towards energy research and development (R&D) and the promotion of low-carbon electricity technologies in the UK. We review the UK's main technological options and their estimated cost ranges in the medium term. We contrast the energy R&D spending with the current and expected future cost of renewable promotion policies and point out the high cost of carbon saving through existing renewable promotion arrangements. We also note that liberalisation of the electricity sector has had significant implications for the landscape of energy R&D in the UK. We argue that there is a need for reappraisal of the soundness and balance of the energy R&D and renewable capacity deployment efforts towards new energy technologies. We suggest that the cost-effectiveness of UK deployment policies needs to be more closely analysed as associated costs are non-trivial and expected to rise. We also make a case for considering increasing the current low level of energy R&D expenditure. Much of energy R&D is a public good and we should consider whether the current organisation of R&D effort is fit for purpose. We argue that it is important to build and maintain the research capability in the UK in order to absorb spillovers of technological progress elsewhere in the world. Against this background, the recent signs that an energy R&D renaissance could be underway are therefore positive and welcome.     

Accounting for quality: Issues with modeling the impact of R&D on economic growth and carbon emissions in developing economies

The literature on climate policy modeling has paid scant attention to the important role that R&D is already playing in industrializing countries such as China, where R&D investments are targeting not only productivity improvements but also enhancements in the quality and variety of products. We focus here on the effects of quality-enhancing innovation on energy use and GHG emissions in developing countries. We construct an analytical model to show that efficiency-improving and quality-enhancing R&D have opposing influences on energy and emission intensities, with the efficiency-improving R&D having an attenuating effect and quality-enhancing R&D having an amplifying effect. We find that the balance of these opposing forces depends on the elasticity of upstream output with respect to efficiency-improving R&D, the elasticity of downstream output with respect to upstream quality-enhancing R&D occurring upstream, and the relative shares of emissions-intensive inputs in the costs of production of upstream versus downstream industries. We employ a computable general equilibrium (CGE) simulation of the Chinese economy to illustrate the difficulties that arise in incorporating these results into models for climate policy analysis, and we offer a simple remedy.     

Modeling endogenous technological change for climate policy analysis

The approach used to model technological change in a climate policy model is a critical determinant of its results in terms of the time path of CO₂ prices and costs required to achieve various emission reduction goals. We provide an overview of the different approaches used in the literature, with an emphasis on recent developments regarding endogenous technological change, research and development, and learning. Detailed examination sheds light on the salient features of each approach, including strengths, limitations, and policy implications. Key issues include proper accounting for the opportunity costs of climate-related knowledge generation, treatment of knowledge spillovers and appropriability, and the empirical basis for parameterizing technological relationships. No single approach appears to dominate on all these dimensions, and different approaches may be preferred depending on the purpose of the analysis, be it positive or normative.     

Uncertain R&D,backstop technology and GHGs stabilization

This paper analyses optimal investments in innovation when dealing with a stringent climate target and with the uncertain effectiveness of R&D. The innovation needed to achieve the deep cut in emissions is modeled by a backstop carbon-free technology whose cost depends on R&D investments. To better represent the process of technological progress, we assume that R&D effectiveness is uncertain. By means of a simple analytical model, we show how accounting for the uncertainty that characterizes technological advancement yields higher investments in innovation and lower policy costs. We then confirm the results via a numerical analysis performed with a stochastic version of WITCH, an energy–economy–climate model. The results stress the importance of a correct specification of the technological change process in economy–climate models.     

Clean technology R&D and innovation in emerging countries—Experience from China

This paper touches upon two key issues related to clean technology deployment in emerging countries: what is the life cycle of R&D and innovation? And where does the R&D funding come from? The paper holds that the innovation climate, system and process in emerging countries do not follow the same trajectory as those in developed countries. Crafting an innovation model that is adapted to the needs and conditions of emerging countries thus is critical. Through revealing the four phases of an innovation life cycle in emerging countries, the paper highlights the dominant role of the public sector in clean technology R&D.     

Cost-effectiveness analysis of R&D on solar cells in Japan

The purpose of this paper is to validate plan of R&D on solar cells in the (New-) Sunshine Program of Japan by using cost-effectiveness analysis and to demonstrate usefulness of the analysis for R&D planning. Based on the analysis, R&D goals and/or allocation of R&D expenditure of multicrystalline silicon (mc-Si) might not be appropriate after FY1996. And R&D expenditure for solar cells might be decided without forecasting increase of the mc-Si solar cell production by the subsidization programs.     

Directed technical change and differentiation of climate policy

This paper studies the cost effectiveness of climate policy if there are technology externalities. For this purpose, we develop a forward looking model that captures empirical links between CO₂ emissions associated with energy use, directed technical change and the economy. We find our most cost effective climate policy to include a combination of R&D subsidies and CO₂ emission constraints, although R&D subsidies raise the shadow value of the CO₂ constraint (i.e. CO₂ price) because of a strong rebound effect from stimulating innovation. Furthermore, we find that cost effectiveness of climate policy improves if it is differentiated between technologies. Even our rudimentary distinction between CO₂ intensive technologies and non-CO₂ intensive technologies lead to this result. Such differentiated climate policy encourages growth in the non-CO₂ intensive sectors and discourages growth in CO₂ intensive sectors by harnessing positive effects of technology externalities on total factor productivity in the former and letting the latter bear relatively more of the abatement burden. This result is robust to whether emission constraints, R&D subsidies or combinations of both are used as climate policy instruments.     

Current status and future prospects for the PVMaT project

The goals of the Photovoltaic Manufacturing Technology project (PVMaT) are to help the US PV industry improve photovoltaic manufacturing processes and accelerate cost reductions for PV components and systems. PVMaT is in its ninth year of implementation, and subcontracts with industry have been completed from four solicitations for R&D on manufacturing process problems. We are in the second year of subcontracts for a fifth PVMaT solicitation.Based on the latest (1998) data from ten PVMaT industrial participants, the average direct manufacturing cost for these producers has been reduced by 29% – from $4.08 to $2.91 per peak watt since 1992 – and there has also been a more than five-fold increase in manufacturing capacity – from 13.1 to 73.3 MW. We believe R&D on manufacturing processes contributes significantly to expeditious reductions in PV manufacturing costs, and we identify areas for future R&D.     

Photovoltaics in Slovakia—status and conditions for development within integrating Europe

Photovoltaics (PV) in Slovakia has a history of 20 years. While irradiance conditions are comparable with those of European countries with strongly developed PV, the applications and the results are very different. The first steps in the PV research were carried out in the 1980s at university and academic level. But in spite of this, the results of PV applications and installations has been poor. At present just over 10 kW of PV stand alone installations have been installed. At both, the Slovak University of Technology and Slovak Academy of Sciences, research activities were focussed on monocrystalline silicon, amorphous silicon, gallium arsenide PV cells, investigation of degradation processes in solar cells and modules. Barriers to supporting and funding the development of PV R&D and PV market in Slovakia result from technological, economical and regulatory causes. The possibilities for the future development of PV in Slovakia are closely connected with the cooperation within RTD activities of New Member States, Candidate States (NMSaCS) and EU-15 Member States and in more appropriate energy policy in Slovakia.     

U.S. energy research and development: Declining investment,increasing need,and the feasibility of expansion

Investment in energy research and development in the U.S. is declining despite calls for an enhancement of the nation's capacity for innovation to address environmental, geopolitical, and macroeconomic concerns. We examine investments in research and development in the energy sector, and observe broad-based declines in funding since the mid-1990s. The large reductions in investment by the private sector should be a particular area of concern for policy makers. Multiple measures of patenting activity reveal widespread declines in innovative activity that are correlated with research and development (R&D) investment—notably in the environmentally significant wind and solar areas. Trends in venture capital investment and fuel cell innovation are two promising cases that run counter to the overall trends in the sector. We draw on prior work on the optimal level of energy R&D to identify a range of values which would be adequate to address energy-related concerns. Comparing simple scenarios based on this range to past public R&D programs and industry investment data indicates that a five to ten-fold increase in energy R&D investment is both warranted and feasible.     

The status of solar energy systems in Japan

The long term national programmes on solar energy R&D were overviewed. Brief summary of recent development and current application of solar energy technology are stated with inclusion of future prediction and economic viability.     

Analysis of the relationship between international cooperation and scientific publications in energy R&D in China

Energy is important for China and for the whole world. Previously, the huge investment in energy-related research and commercialisation made it possible for China to cooperate with its international partners in various channels, and programs involving international cooperation and co-published papers increased annually. In this paper, through the review of intergovernmental cooperation programs and bibliometric analysis of the top energy journals, it was found that: (1) intergovernmental cooperation and non-governmental cooperation are two effective channels for energy R&D. (2) In these two channels, most participants of international cooperation are universities and institutes, and the most important partner countries are the US, Japan, and European Countries. (3) Industries began to be involved in international cooperation gradually. (4) For different areas, the degree of cooperation is not the same. Some areas have been more fruitful in cooperation, some are just beginning hydrogen energy, fuel energy and applied energy are the main co-publication areas with Chinese involvement; while wind energy, solar energy, fuel cells and bio-energy are new areas for China and there has not been so much co-publication until now.     

中国能源研究与发展(R＆D)投入

能源R＆D投入是能源R＆D计划政策分析研究的一个组成部分。文章研究计算了2000年中国能源R＆D的经费投入。在绝对数量上，我国与发达国家的差距很大，如仅仅为日本的1．8％。文中还分析了国际上政府能源R＆D经费在技术领域投向上的趋势。     

On the sources of technological change: Assessing the evidence

This paper uses a selective review of the economic literature on technological change to support four points that are important for interpreting and incorporating technological change into formal models of energy and the environment. The review (1) supports the notion that no single source dominates the process of technological change. It supports roles for R&D and learning-by-doing within an industry, as well as for spillovers from other industries engaged in both of these activities. The literature also (2) supports a strong role for spillovers; (3) indicates that these spillovers are often indirect, requiring own-industry activities to utilize; and (4) indicates that simple experience curve calibrations often used in formal models likely include a range of sources of technological change in addition to learning-by-doing, some of which might not be induced by the sorts of policies typically considered in the climate context.     

“Investments and public finance in a green,low carbon,economy”

The paper evaluates the impacts on investments and public finance of a transition to a green, low carbon, economy induced by carbon taxation. Four global tax scenarios are examined using the integrated assessment model WITCH. Taxes are levied on all greenhouse gases (GHGs) and lead to global GHG concentrations equal to 680, 560, 500 and 460 ppm CO₂-eq in 2100. Investments in the power sector increase with respect to the Reference scenario only with the two highest taxes. Investments in energy-related R&D increase in all tax scenarios, but they are a small fraction of GDP. Investments in oil upstream decline in all scenarios. As a result, total investments decline with respect to the Reference scenario. Carbon tax revenues are high in absolute terms and as share of GDP. With high carbon taxes, tax revenues follow a “carbon Laffer” curve. The model assumes that tax revenues are flawlessly recycled lump-sum into the economy. In all scenarios, the power sector becomes a net recipient of subsidies to support the absorption of GHGs. In some regions, with high carbon taxes, subsidies to GHG removal are higher than tax revenues at the end of the century.     

A model-based assessment of the impact of revitalised R&D investments on the European power sector

This paper presents an analysis of the effect of enhanced research and development (R&D) efforts for a set of low-carbon power technologies on the development of the European energy sector. It applies a methodology using the concept of Two-Factor-Learning, which quantitatively links trends in technology cost to both accumulated R&D investments and production volumes. The impacts of the latter on the energy sector are then simulated in a consistent manner with the POLES global energy model. On this basis, it compares the total system costs of an assumed increase in worldwide R&D investments that for the EU are in line with proposals made in its European Strategic Energy Technology Plan to a baseline development. It finds that an increase in research efforts at a global level will contribute to reducing the costs of currently less mature low-carbon technologies, thus accelerating their market entry. When comparing two scenarios that both fulfil the EU's 2020 energy and climate objectives and differing only in their R&D investment levels, the reduced technology costs allow EU support policies for renewables and carbon values to be reduced, and the cumulative (discounted) benefit of the accelerated research efforts is positive in the long term.