BuildingaNa+onalWindTurbineIndustry:ExperiencesfromChina,IndiaandSouthKorea

JoannaLewis,Ph.D.GeorgetownUniversityWashington,DC,USA

PresentedatUNFCCCMee+ngsinTianjinOctober7,2010

•  WindpowerstatusinChina,IndiaandS.Koreaintheglobalcontext

•  Op<onsforlateentryintothewindindustry:modelsoftechnologydevelopment

•  Casestudiesoffirm‐leveltechnologystrategiesfromeachcountry

•  Cross‐countrycomparisonandimplica<ons–  Forothercountrieslookingtoenterthewindindustry–  Fortechnologicalleapfrogging/technologycatch‐upingeneral

Overview

WindPowerDevelopmentinChina,India,andSouthKorea

2009Top5Countries

MWTotalCapacity

1 USA 35,064

2 China 25,805

3 Germany 25,777

4 Spain 19,149

5 India 10,926

ShareofChinaandIndiainGlobalAnnualWindCapacity

CHINA INDIA SOUTHKOREA

Totalcapacity 25.8GW 10.9GW 0.348GW

Onshoreresources 250GW(upto4000GW) 45GW(likelyfar

underes<mated)

18GW

Offshoreresources 200GW(est) 31GW(likelyunderes<mated)

Governmenttendering

X

Feed‐intariffs X X(State‐level)

X

RenewableporZoliostandards

X

Taxincen+ves X X X

R&Dsupport X X

Technologystandards

X X

ResourceContext&PolicySupportBriefOverview

•  Licensing:–  Advantages:obtainingatechnologythathasbeenfieldtested

–  Risks:o\enanolder(smaller),outdatedmodel;restric<onsonIPRuse(exports);otherscanlicensethesametechnology

•  Mergers&acquisi<ons(M&A):–  Advantages:obtaincontroloverIPR–  Risks:needsufficientfinancialresources;needabilitytointegratenewbusinessknowledgeintocurrentbusiness

•  Jointdevelopment:–  Advantages:noconcernsaboutmarketcompe<<on;lessconcernaboutIPR(o\endesignwithmul<plemanufacturers)

–  Risks:Designfirmhasnomanufacturingexperience;manufacturershavenodesignexperience

ModelsofTechnologyDevelopmentAdvantagesandRisks

•  Bothareleadingmanufacturersintheirhomecountrymarketsandhaveplansforfurtherglobalexpansions

•  Bothbeganmanufacturingwindturbinesaroundthesame<me(1990s)

CompanyCaseStudies:Suzlon(India)andGoldwind(China)

•  BothSuzlonandGoldwindbegandevelopingwindturbinetechnologywithforeignlicenses

SUZLON

GOLDWIND

SUDWIND

JACOBS/REPOWER

EarlyYears:LicensingTechnology

AERPACBV

•  Astheybecamemoresuccessfultheyreachedouttoaddi<onalforeignpartners,andacquiredmajoritycontrolofforeigncompanies

SUZLON

GOLDWIND

LaterYears:FirmAcquisi<on&JointDevelopment

HANSEN

REPOWER

VENSYS

•  Withexpandedknow‐howcameventuresintojointtechnologydevelopment

•  Suzlonhasanextensiveglobalpresence,allowingforanextensiveglobalnetworkforR&D,manufacturinganddevelopmentexperience

NETHERLANDS

SUZLON

AUSTRALIA

USA

DENMARK

AUSTRIA

GERMANY

BELGIUM

CHINA BRAZIL

PORTUGAL

GlobalLearningNetworks

•  Goldwind’sglobalpresenceismorelimited,butithasplanstocon<nueitsR&D,manufacturingandprojectdevelopmentoverseas

GOLDWIND

USAGERMANY

GlobalLearningNetworks

Legend

ModelsofWindPowerTechnologyTransferChina,India,Korea…andbeyond

Lewis,2010(forthcoming)

Legend

ModelsofWindPowerTechnologyTransferSuzlon&Goldwind

Lewis,2010(forthcoming)

Legend

ModelsofWindPowerTechnologyTransferHyundai,Doosan&Daewoo

Lewis,2010(forthcoming)

HYUNDAI

DOOSAN

AVANTIS

DEWIND

KoreanFirmWindTechnologyDevelopment

DAEWOO

AMSC‐WINDTEC

BEIJINGBEIZHONG

•  Later,largerentrantsrelyingprimarilyonjointdevelopmentandM&Aforadvancedtechnology,buts<lllicensing

Legend

ModelsofWindPowerTechnologyTransferCommonSourcesofTechnologyIPR&Know‐How

Lewis,2010(forthcoming)

•  China–  Strongpolicysupport(especiallyforChinesecompanies)–  Largedomes<cpoten<al–  Lotsofmanufacturers;limitedcompe<<on–  Relyonlicensingfortechnologydevelopment;M&Aforlargerfirms;joint

developmentformoreexperiencedfirms–  Limitedgloballearningnetworks/RD&Dac<vi<es

•  India–  Unstablepolicysupport–  Futureexpansionindomes<cmarketuncertain–  Firstdevelopingcountryindustrymover,butlimiteddomes<ccompe<<on–  Leadingmanufactureralreadyaglobalplayer,withexpansiveglobal

opera<onsandnetworks•  SouthKorea

–  Limiteddomes<cpolicysupport,butevolving–  Limitedpoten<alfordomes<cexpansion,someopportuni<esoffshore–  Late‐mover,butleapfroggingdirectlytomostadvancedtechnologies–  Buildingondomes<cindustrialbaseandmul<na<onalcompanies;havethe

capacityforM&Asandjointdevelopment

Cross‐CountryComparisons

•  Substan<altechnicaladvancesarepossibleinrela<velyshortamountsof<me–  IttookChina,IndiaandS.Korealessthan10yearstogofromno

experiencetocompletewindturbinesystems–  Exis<ngindustrialbasehelps;maynotbeapplicableforLDCs

•  Licensingisarela<velyinexpensivewaytoacquireknowledge,butfuturepoten<alislimited–  Structureoflicenseshouldinclude“know‐how,”buto\endoesnot–  Beneficialalsototransferringfirm,par<cularlyifnotac<veinthat

market–  Comeswithmarketrestric<onswhichlimitexpansion–  Licensesfrequentlycomefromthesamecompanies

•  Tappingintogloballearning/innova<onnetworkscanbehighlyvaluable–  Suzlon’snetworkofstrategicallyposi<onedglobalsubsidiaries

contributetoitsbaseofindustryknowledgeandtechnicalcapacity–  Goldwindrecognizesthisvalueaswellandisexpandingintl.ac<vi<es–  Korea’snewentrantslookinggloballyfortheirtechnologypartnerships;

lookingtoexportmarketsoutsideKoreaandposi<onedtocompetewithglobalindustryleaders

Implica<onsforLeapfrogging

•  Technologytransfersareoccurringviacommercialchannels,buts<llareopportuni<esfortechnologyimprovement–  Improvetechnicalcapacityinwindturbinedesignthroughindependentresearchandtes<ngcenters

–  KnowledgetransferalsoimportantinO&Mofprojects–  Canbuilduponinterna<onalexperience

•  Localcontentrequirementswillnotnecessarilyresultintechtransfer;coordinatedlearningclusters/innova<onnetworksmaybemorevaluable–  Examples:LowCarbonDevelopmentZones(Tianjin,Baoding)–  Largewindbaseswithmul<pleprojectsandfactories– Maybevaluabletoincludeforeignfirmsinthesenetworks

PolicyImplica<ons

•  PaymentsforlicensingIPRforcommercially‐availabletechnotnecessarilyabarriertotechnologytransfer–  Royaltypaymentsforwindlicensesaretypicallysmallpropor<onoftotalcapitalinvestment

•  Governmentcanfacilitatetechtransferswithintheprivatesector(viaprocurements,aggrega<ngdemand)–  Commercialtechnologycanbeacquiredthroughprivatesectortransfers

–  Butwithadvanced/pre‐commercialtechnology,leadersarenotwillingtogiveupIPRtocompe<tors

•  Areopportuni<esforcollabora<veR&Donpre‐commercialtechnologies–  Lesscompe<<onandconcernsaboutIPRduringthepre‐commercialstage,roleforgovernmentsupport

Implica<onsforIntl.ClimateRegime

ContactInforma<on

JoannaLewis,Ph.D.

AssistantProfessor

Science,TechnologyandInterna<onalAffairs

EdmundA.WalshSchoolofForeignService

GeorgetownUniversity|ICC305‐Q

37th&OStreetsNW,Washington,DC20057

Tel.+1.202.687.7284|Fax.+1.202.687.1431

Email:jil9@georgetown.edu