1. Barriers Identification for Wind Power Generation Technology Transfer in China By Li Junfeng Director of Center for Renewable Energy Development January 17-19, Cebu

2. General Wind Power Development Status in China Resources availability –total installation potential is 250 GW, which equals the total existing power installation in China; –21 wind farms have been identified Installation –total existing installation was reached 260 MW by the end of 1999 –about 200 MW new contracts have been signed, which indicated that by the end of 2000, total installation will be reached 400 to 500 MW.

3. Current Applicable Technologies Equipment –80% of them are directly imported with bilateral assistance soft loan and without any technologies being transferred; –20% of them with technologies being transferred. The transferred technologies are either backward technologies, such as phase out products (less than 500 kW system) or simple technologies, such as tower; –The suppliers mainly come from developed countries; –No designed training provided by the equipment suppliers; –very fewer local manufactures involved in the equipment supplying competition. Maintenance –no enough training provided accompanied by equipment supply; –no company can reach the designed technical performance.

4. Barriers identification for technologies transfer Recipient-side barriers Supplier-side barriers Financial barriers Technical barriers

5. Recipient-side barriers Small power market expansion: the increased power market is only concentrated in China and other Asian countries, with 10 to 15 GW per annul; Wind market grows fast, but the growth rate is small: 50 to 100 MW per annual in China; Being lack of long term development targets; Being lack of clear incentive policies for commercialization

6. Supplier-side barriers –Too many suppliers share the small piece of the market (more than 8 countries provide their wind equipment to China) –Government assistance or subsides only applied to its own company, which resulted in barriers of market competition; –No incentives for technology transfer.

7. Financial barriers Bilateral investment –Which made no choice for user to negotiate for technologies transfer, since the donors only supply subsides for their own products; International investment, such as the World Bank –the equipment procurement procedure excluded any assistance for the local producers ( 3 years of production, installation and maintenance experience required) Developer –Request reliable technologies and low cost, new & local producers could not compete with the the old ones

8. Technical barriers the manufacture skills were not provided. the supplier usually is a system integrator instead of a manufacture; the local manufacture needs to negotiate with all of the component supplier instead of the system integrator technologies being transferred should include not only equipment but also skill and know-how, which could not be transferred.

9. Case study one: Joint venture company for wind turbine manufacture As a friendship between the two governments, instead of commercial based; –As the results of long term corporation (buy 200 MW with in 5 years); –foreign side brought the majority of the shareholders –Successful registration in China; –Prototype has been produced; –Looks like a successful case for technologies transfer; –but no market, in fact it is a failure case study.

10. The barriers identification from this case Technologies transfer without market support: –After successful registration and prototype production, the donor still subsides the original suppliers in its own country; –The JVC is only transferred the equipment manufacture skill, but not transferred the design skill, which made the JVC no capability to develop the new turbine to meet the market requirement Lessons learn: –no free lunch available in technologies transfer; –no public owned technologies avaiable in wind turbine manufactures; –technologies transfer is not a equipment delivery and it should be with the design, maintenance and other skill capacity building.

11. Case study two: Buy equipment with manufacture technologies Buy 50 MW wind turbines, with system integrated design chart; Successfully installed the 500 MW turbines; the chart has been transferred; But no one can produce the turbine with the Chart, since the chart without : –any design introduction for the components; –any update skill; –even no integrated design parameters modification based on the local situation.

12. What is technology? Technology is an idea or a conception; Technology is equipment; Technology is know-how; Technology is a thing, which is always updating; Technology is innovation capacity and capability; and Technology is all of the above.

13. How to conduct technology transfer under the UNFCCC transfer technologies on concessional terms –provision of soft loans –tax incentives for the private technology owners to encourage technology transfer instead of selling the equipment only. provide special fund for training on the grant basis –to help the local entity to master the design skill when buying the new technologies or new equipment –to provide training ensuring the maintenance of the technology successfully operating –to enhance the capacity for technology development or updating –to help the local producers getting into the high-level international coach for technology R & D –To help the local partners to increase their creation capability.