Difference between revisions of "Local Production: Conditions and Success Factors"
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| − | + | = Overview = | |
| + | In contrast to [[Import of Energy Products|imports]], local manufacturing of energy products can constitute a reasonable cost-efficient alternative that supports local value creation. | ||
| − | < | + | <br/> |
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| − | + | = Successful Local Production / Manufacturing = | |
| + | <u>Key Factors for Successful Local Production / Manufacturing:</u><ref name="Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.">Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.</ref> | ||
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| − | + | #'''Relevant market:''' The demand of the relevant market should match the minimum size of one production unit. If a specific niche is big enough, the probability of success is higher. In Indonesia the niche was turbines for mini- and micro-hydro power, which has a high national demand and is not the core business of incumbents like Voith Hydro, Ossberger etc. | |
| + | #'''Time factor:''' Establishing local production of hydro power components takes time (5-10 years). This is the biggest obstacle for projects which are only funded by EnDev and do not have a longer sectoral mandate like a focal area. | ||
| + | #'''Cluster:''' The production site / firm should be located within an industrial cluster, where it is easier to get qualified suppliers, employees etc. Multi-product firms are in a better position because they can compensate low demand with other product lines and transfer relevant knowledge to new technologies. | ||
| + | #'''No grants to the manufacturers.''' Better use (soft) loans or even better create trust for long-term investments like the German Feed-in Law did.<br/> | ||
| + | <br/> | ||
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| − | + | = Further Information = | |
| − | + | *[[Mini / Micro Hydropower Turbine Manufacturing in Indonesia|Example: Mini & micro hydro power turbine manufacturing in Indonesia]] | |
| + | *[[Local Manufacturing of Solar Systems|Example: Local manufacturing of solar systems]] | ||
| + | *Local Production Systems of Wood Stoves: [[Enhancing Production of Improved Cookstoves (ICS)|Enhancing production of ICS]] | ||
| + | <br/> | ||
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| − | [[Category: | + | = References = |
| + | <references /> | ||
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| + | [[Category:Hydro]] | ||
Latest revision as of 09:41, 22 January 2016
Overview
In contrast to imports, local manufacturing of energy products can constitute a reasonable cost-efficient alternative that supports local value creation.
Successful Local Production / Manufacturing
Key Factors for Successful Local Production / Manufacturing:[1]
- Relevant market: The demand of the relevant market should match the minimum size of one production unit. If a specific niche is big enough, the probability of success is higher. In Indonesia the niche was turbines for mini- and micro-hydro power, which has a high national demand and is not the core business of incumbents like Voith Hydro, Ossberger etc.
- Time factor: Establishing local production of hydro power components takes time (5-10 years). This is the biggest obstacle for projects which are only funded by EnDev and do not have a longer sectoral mandate like a focal area.
- Cluster: The production site / firm should be located within an industrial cluster, where it is easier to get qualified suppliers, employees etc. Multi-product firms are in a better position because they can compensate low demand with other product lines and transfer relevant knowledge to new technologies.
- No grants to the manufacturers. Better use (soft) loans or even better create trust for long-term investments like the German Feed-in Law did.
Further Information
- Example: Mini & micro hydro power turbine manufacturing in Indonesia
- Example: Local manufacturing of solar systems
- Local Production Systems of Wood Stoves: Enhancing production of ICS
References
- ↑ Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.
