Wind Power Technology Localization: A Review of International Experience

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Wind Power Technology Localization A Review of
International Experience
Joanna Lewis Center for Resource Solutions
Lawrence Berkeley National Laboratory JILewis_at_lb
l.gov
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Outline of Presentation

• What is Localization?
• Possible Advantages of Localization
• Barriers to Localization
• Leading Manufacturers Local Situations
• Policy Mechanisms
• Conclusions

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What is Localization?

• Developing a locally-based wind turbine industry
  consisting of
• Full turbine and component manufacturing
• Technology transfer, innovation, combination
• Specialization in components
• Technology transfer, innovation, combination
• Integration of components made by other companies
  to particular specifications
• May require no technology transfer or
  locally-based innovation

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Possible Advantages of Localization

• Technology cost reductions
• Domestic economic development jobs
• Export to international markets
• National achievement

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Technology Cost Reductions

• Materials
• Advanced tower design
• Labor
• Rotor blades
• Transport
• Shipping freight costs
• Productivity improvements

Sources Krohn 1998, AWEA, EWEA, CANWEA.
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Jobs in the Wind Industry
Source Paul Gipe 2004, see also EWEA 2003.
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Barriers to Localization

• Existing international competition
• Technology quickly advancing
• Limited indigenous technical capacity
• Requiring use of technology that cannot be made
  locally

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The key to successful local wind technology
industry development?

• a sizable and stable market for wind power
• How big a market?
• How to establish stability?

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Examples of Sizable Stable Markets
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Percent of Installed Turbines Made by a Domestic
Company (2003)
Source BTM Consulting, 2004.
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How Big is Big Enough?
Source BTM Consulting, 2004 IEA 2004.
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Successful Policies Leading to Sizable, Stable
Markets

• Feed-in tariffs
• Germany, Denmark, Spain
• Mandatory targets (RPS, MMS, RO)
• US States, Japan, UK, Italy, Australia
• Tax credits/rebates
• US, India, France, Netherlands, Sweden
• Government bidding/concessions
• UK, China, France, Ireland

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Policies that Specifically Support Localization

• Local content requirements
• Trade tariffs (customs duties)
• Tax policies export credit assistance
• Certification testing programs
• Research development (RD) funding

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Local Content Requirements

• Spain
• Limited licensing policy to encourage regional
  development
• Canada
• Provincially-imposed local content requirements
• China
• Local content requirements imposed on concession
  projects

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Trade Tariffs

• Placed on whole machines or components, with
  different results
• WTO implications?

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Tax Policies Export Credit

• Tax policies
• Local companies
• Foreign companies and JVs (China, India)
• Export credit assistance
• To support international sales (Denmark, Germany)

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Certification Testing

• Builds confidence in product
• Internationally recognizable
• Helps quality control
• Leaders Denmark, Germany, India

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RD Funding

• Sustained public support important
• Demonstration ? commercialization
• Many studies on key RD agendas for wind

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Conclusions

• Must clarify national goals with respect to
  localization
• Leading global wind manufacturers come from
  countries with substantial government policy
  support for wind
• Direct support for local manufacturing can be
  used to meet domestic goals for the industry

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Contact Information

• Joanna Lewis
• JILewis_at_lbl.gov
• USA 510-486-6828
• ??1368-327-4757
• Ryan Wiser
• RHWiser_at_lbl.gov
• Jan Hamrin
• JHamrin_at_resource-solutions.org