Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Economics

No 16-2020: Experience Rates of Low-Carbon Domestic Heating Technologies in the United Kingdom

Renaldi Renaldi (), Richard Hall, Tooraj Jamasb () and Anthony P. Roskilly ()
Additional contact information
Renaldi Renaldi: Department of Engineering Science, University of Oxford, Postal: Parks Road, Oxford OX1 3PJ, UK
Richard Hall: Energy Transitions Ltd., Postal: Taffs Fall Road, Treforest Industrial Estate, Pontypridd, Cardiff, CF37 5TF, UK
Tooraj Jamasb: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Anthony P. Roskilly: Department of Engineering, Durham University, Postal: Durham DH1 3LE, UK

Abstract: This paper presents the experience curves of low-carbon domestic heating technologies in the United Kingdom between 2010 and 2019. The deployment of these technologies has been acknowledged as one of the main actions toward decarbonising the heating sector. In the UK, several deployment oriented policies have been implemented, such as the Renewable Heat Incentive (RHI). In this study, we focus on the following domestic heating technologies: air-source heat pumps, ground-source heat pumps, solar thermal collectors, and biomass boilers. Condensing combination gas boilers are also included to act as the baseline/incumbent technology. Using UK installation cost data for 2010 to 2019, we found that low-carbon heating technologies had experience rates of; air source heat pumps -2.3± 5%, ground source heat pumps -0.8±4%, biomass boilers 0.1±2%, and solar thermal 13±5%, all significantly lower than the re-ported learning rates of similar technologies in the literature. Furthermore, we found that gas boilers have reached the floor price at approximately £30/kW. The resulting experience rates can be used in energy economics models and to inform policymakers in developing further deployment programs.

Keywords: Experience curves; Learning curves; Experience rates; Low-carbon heating; Heat decarbonisation

JEL-codes: O33; P18; Q55

25 pages, October 5, 2020

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