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Technology Acquisition and Innovation in the Developing World: Wind Turbine Development in China and India

Abstract

Although China and India rely on coal to fuel most of their electricity generation, both countries are also home to burgeoning wind power industries. India currently leads the developing world in manufacturing utility-scale wind turbines, and China is close behind. This study examines the technology development strategies that have been pursued by the companies Suzlon and Goldwind, India and China’s leading wind turbine manufacturers. While the institutional and other barriers present in large, developing countries such as China and India certainly challenge any simplistic notions of energy leapfrogging, an examination of wind turbine development in these countries has shown that substantial technical advances are possible in a relatively short time. While both Suzlon and Goldwind pursued similar licensing arrangements to acquire basic technical knowledge, Goldwind’s technology development model lacks Suzlon’s network of strategically positioned global subsidiaries that contribute to its base of industry knowledge and technical capacity. This examination of how two leading developing-country firms have acquired and assimilated advanced technologies provides crucial insights into facilitating international technology transfers, which will be an important component of any technological leapfrogging strategy to achieve lower greenhouse gas emissions in the developing world.

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Notes

  1. Although less common, there is a growing recognition of the potential of “south-south” technology transfer (technology transfer between developing countries.)

  2. In this situation, IPR concerns are less substantial, and foreign companies can continue to sell their technology without risk of local competition. However, the major barrier to technology transfer in such situations is likely to be the technology cost.

  3. Both countries have vast wind resource potential; China has an estimated 1,000,000 MW of total exploitable wind resources, including about 250,000 MW on land and 750,000 MW offshore, although the amount that is technically and economically viable may closer to 300,000 MW overall (SDPC 2000). Estimates of India’s wind resources are less readily available; one estimate puts the range from 20,000 to 45,000 MW (WEC 2001) though this range is likely quite conservative.

  4. Local content is generally calculated according to cost, therefore 70% local content represents domestically produced components totaling 70% of the wind turbine cost.

  5. Models include 350 kW, 950 kW, 1 MW, 1.25 MW, and 2.1 MW turbines.

  6. 10,000 DM was the amount specified in the arrangement; the conversion to Euros is an estimate.

  7. In 1995, U.S. Windpower sued Germany’s Enercon for patent infringement and won, preventing Enercon—a major competitor—from selling its variable speed technology in the U.S. (WPM, May 2003:30). Since purchasing Enron in 2002, GE has filed similar patent infringement suits in Europe and Canada, and recently in China (WPM, May 2003:29).

  8. Despite some indications that the Chinese government would implement a nation-wide feed-in tariff program, it instead based the pricing structure for wind power on a competitive bidding model in the 2006 pricing regulations of the renewable energy law (WPM, February 2006:25). Certain provinces (namely Guangdong) and projects have continued to utilize fixed feed-in tariffs.

  9. An example of this fear has been realized by Vestas, the Danish company that licensed its wind turbine technology to Gamesa, a Spanish company (initially for use only in Spain) and now views them as a major competitor in the global market.

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Correspondence to Joanna I. Lewis.

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This research was supported in part by the Energy Foundation China Sustainable Energy Program and the Center for Resource Solutions. The author would like to thank all who commented on and contributed to earlier versions of this manuscript, including Ryan Wiser, Dan Kammen, Wang Yang, Simone Pulver, and three anonymous reviewers.

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Lewis, J.I. Technology Acquisition and Innovation in the Developing World: Wind Turbine Development in China and India. St Comp Int Dev 42, 208–232 (2007). https://doi.org/10.1007/s12116-007-9012-6

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Keywords

  • Energy leapfrogging
  • Technology transfer
  • Wind power industry