I am not sure how crucial this is, but I do think this piece gets some of the renewable energy analogies importantly wrong. In particular:
1. The primary drivers of making solar cheap where policies passed in the early 2000s, in particular massive deployment subsidies, not primarily R&D. So, the 30B R&D number for 2004-2012 are unlikely to be a major driver of the dramatic cost reductions in solar, at the same time countries like Germany spent 100s of B on subsidizing solar deployment (see e.g. Kavlak et al 2018, also Nemet’s book)
2. By 2010, while solar was still marginal, the cost reduction dynamic was largely triggered through those policies and the virtuous cycle of investment, economies of scale, and China becoming interested in becoming a renewables manufacturing powerhouse. It is not driven by 2004-2012 R&D and it is not really driven by things that started after 2010, more a self-reinforcing dynamic playing out.
Hopefully and plausibly, APs are an easier technology to get cheap than solar panels!
(3. Nitpick: Solar is 4% of electricity, not energy, electricity is only ~1/3 of energy.)
Thanks for the feedback and interesting info! I agree I overstated the importance of 2004-12 R&D. I chose that time period because it felt most comparable to where alt proteins are at, but I should have clarified that earlier R&D was more important.
I based my assessment of the importance of govt R&D policies to reducing solar prices on this IEA analysis—mostly the graphs showing their assessment that govt R&D policies (both publicly-funding and market-stimulating policies) drove ~two thirds of solar cost-reductions from 1980-2012.
But you clearly know more about the broader literature here than I do. And the IEA’s analysis may be consistent with yours if their “R&D: market-stimulating policies” category includes deployment subsidies. Either way, thanks for the thoughtful reply!
There is indeed no contradiction—solar got cheap through massive public support, first mostly R&D and later deployment subsidies / market creation policies in the hundreds of billions.
So the lesson from solar is definitely that public innovation support massively matters, it is more that different forms of support are most critical at different times (that is something the Kavlak paper emphasizes, how at early TRL R&D dominates and then later induced demand becames the major source of cost reduction) and that the R&D money cited is a small contributor to the cost reductions observed then.
If APs were like solar, I think we should expect things to take a lot longer and require a lot more support and maybe the current plateau would be like the 1980s for solar. (But I think there are good reasons to be more optimistic).
Great stuff!
I am not sure how crucial this is, but I do think this piece gets some of the renewable energy analogies importantly wrong. In particular:
1. The primary drivers of making solar cheap where policies passed in the early 2000s, in particular massive deployment subsidies, not primarily R&D. So, the 30B R&D number for 2004-2012 are unlikely to be a major driver of the dramatic cost reductions in solar, at the same time countries like Germany spent 100s of B on subsidizing solar deployment (see e.g. Kavlak et al 2018, also Nemet’s book)
2. By 2010, while solar was still marginal, the cost reduction dynamic was largely triggered through those policies and the virtuous cycle of investment, economies of scale, and China becoming interested in becoming a renewables manufacturing powerhouse. It is not driven by 2004-2012 R&D and it is not really driven by things that started after 2010, more a self-reinforcing dynamic playing out.
Hopefully and plausibly, APs are an easier technology to get cheap than solar panels!
(3. Nitpick: Solar is 4% of electricity, not energy, electricity is only ~1/3 of energy.)
Thanks for the feedback and interesting info! I agree I overstated the importance of 2004-12 R&D. I chose that time period because it felt most comparable to where alt proteins are at, but I should have clarified that earlier R&D was more important.
I based my assessment of the importance of govt R&D policies to reducing solar prices on this IEA analysis—mostly the graphs showing their assessment that govt R&D policies (both publicly-funding and market-stimulating policies) drove ~two thirds of solar cost-reductions from 1980-2012.
But you clearly know more about the broader literature here than I do. And the IEA’s analysis may be consistent with yours if their “R&D: market-stimulating policies” category includes deployment subsidies. Either way, thanks for the thoughtful reply!
Apologies for my delay here.
There is indeed no contradiction—solar got cheap through massive public support, first mostly R&D and later deployment subsidies / market creation policies in the hundreds of billions.
So the lesson from solar is definitely that public innovation support massively matters, it is more that different forms of support are most critical at different times (that is something the Kavlak paper emphasizes, how at early TRL R&D dominates and then later induced demand becames the major source of cost reduction) and that the R&D money cited is a small contributor to the cost reductions observed then.
If APs were like solar, I think we should expect things to take a lot longer and require a lot more support and maybe the current plateau would be like the 1980s for solar. (But I think there are good reasons to be more optimistic).