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Development Curves, and Renewables

|Includes: Raser Technologies, Inc. (RZTIQ)

Thanks to Raser, the geothermal company, I found a NYU Stern report on the development of renewables. It compares the rate of development of different technologies, and comes to conclusions as to their potential using classical product development theory.

A couple of outstanding numbers. In 1980, the unit cost of 1 KWh of wind energy was 47.2 cents. In 2005, it was 4.9 cents. Such is the power of technology.

The report concludes that government spending vast sums on fossil fuel research is probably not efficient, as they represent mature technologies that have little development potential.

Suggest that R&D investments in fossil fuel technologies by government is probably excessive: fossil fuel technologies do not appear to be reaping performance improvements from R&D investment.


Some technologies are better however.

The technology S-curves for both wind energy and geothermal energy show major performance gains as a function of R&D investment, and both appear to be poised to become economically comparable, if not  superior, to fossil fuels with modest investment.


They do have the usual caveats, but whilst I accept their argument, I would like to add one of my own. The fruits of research into efficiency gains may be harvested much quicker where they improve the usage of existing fuels, rather than focus on currently niche technologies.

That said, the lack of state support for technology research in this area, is shocking given the supposed importance to governments of cutting carbon emissions. It would after all be relatively cheap to solve the problem in this way.