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The costs of hydro power: Evidence on learning‐by‐doing, economies of scale and resource constraints in Austria
Author(s) -
Pfeiffenberger Hannes,
Wirl Franz
Publication year - 1990
Publication title -
international journal of energy research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.808
H-Index - 95
eISSN - 1099-114X
pISSN - 0363-907X
DOI - 10.1002/er.4440140811
Subject(s) - resource (disambiguation) , economics , economies of scale , power (physics) , scale (ratio) , hydro power , industrial organization , microeconomics , natural resource economics , environmental economics , econometrics , engineering , computer science , environmental engineering , geography , physics , computer network , quantum mechanics , cartography
The paper investigates the costs of hydro power plants. Expansion of hydro power is accompanied by two contrary tendencies. First, learning‐by‐doing and technological progress for the industry as a whole which reduce costs over time, and second, resource constraints which tend to increase costs as more and more hydro power capacity is installed. Hence, a U‐shaped cost curve should apply. In particular, hydro power expansion becomes increasingly costly once a substantial fraction of potential hydro power supply is exploited. This hypothesis is empirically applied to Austrian data.