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Difference between revisions of "Local Production: Conditions and Success Factors"

From energypedia
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(New page: '''<span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Under construction (Florian Ziegler)<o:p...)
 
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'''<span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Under construction (Florian Ziegler)<o:p></o:p></span>'''
 
 
 
'''<span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Key factors for successful local production<o:p></o:p></span>'''
 
'''<span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Key factors for successful local production<o:p></o:p></span>'''
  
<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-ansi-language: en-gb; mso-fareast-font-family: arial"><span style="mso-list: ignore">1)<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Relevant market: </span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">The demand of the relevant market should match the minimum size of one production unit. Important: <o:p></o:p></span>
+
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-ansi-language: en-gb; mso-fareast-font-family: arial"><span style="mso-list: ignore">1)<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp; </span></span></span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Relevant market: </span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">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, Ossberger etc.<o:p></o:p></span>
 
 
'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb"><o:p>&nbsp;</o:p></span>'''
 
 
 
'''<span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Example: Mini &amp; Micro Hydro Power Turbine Production<o:p></o:p></span>'''
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Seen in retrospect from those manufacturers’ point of view which made significant progress and today successfully produce good quality T14/15 turbines, the following aspects must be taken into account:<o:p></o:p></span>
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb; mso-fareast-font-family: symbol; mso-bidi-font-size: 12.0pt"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Manufacturers rather rely on “traditional” products on which they already have sufficient experience, than trying a new technology. This is a mental problem that has to be overcome by '''showing successful applications''' of the new technology.<o:p></o:p></span>
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb; mso-fareast-font-family: symbol; mso-bidi-font-size: 12.0pt"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Besides know-how transfer, technology improvement needs often investment in new '''manufacturing equipment and machinery'''. <o:p></o:p></span>
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb; mso-fareast-font-family: symbol; mso-bidi-font-size: 12.0pt"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Stock keeping of turbine parts also requires '''pre-financing'''.<o:p></o:p></span>
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Since access to investment capital to buy new manufacturing equipment (e.g. drilling and milling machine, lathe etc.) is limited, turbine manufacturers temporarily had to subcontract part of their production process to other specialised local workshops. Some parts like e.g. laser-cut side disks for the runner even had to be imported to ensure proper quality. Since 2003, the same quality of side disks is produced in <st1:place w:st="on"><st1:country-region w:st="on">Indonesia</st1:country-region></st1:place>. Subcontracting of certain parts to other local workshops was also necessary in order to keep delivery periods. Once sales of improved turbines allowed for sufficient additional profit, the risk of investing in new modern machines and even engaging additional staff was taken, in order to optimise the production process. As shown in </span><span style="mso-field-code: ' ref _ref225414576 h  * mergeformat '">''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-ansi-language: en-gb">Table <span style="mso-bidi-font-weight: bold">2</span></span>''</span><span style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt"> <span lang="EN-GB">the turbine price of the T14 was only slightly higher (compared to T12 and T13) and compared to the total investment for an <st1:stockticker w:st="on">MHP</st1:stockticker> project was not decisive. Therefore, the manufacturer who was the first to start production of higher quality turbines could easily promote his standard and consequently increase his sales because the customers were ready to pay slightly higher prices for significantly higher quality.<o:p></o:p></span></span>
 
 
 
'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Standardisation of turbine parts</span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt"> combined with '''quality control''' is a crucial precondition for '''stock production, cost reduction and spare part delivery'''. In earlier times, in <st1:place w:st="on"><st1:country-region w:st="on">Indonesia</st1:country-region></st1:place>, almost all turbine parts were lathed, whereas today due to standardisation many parts can be cast (e.g. side flanges) because the design is kept unchanged.<o:p></o:p></span>
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Requests from abroad even motivated one of the manufacturers to introduce sand blasting and pressure tests of his equipment which again illustrates how manufacturers react on market requests. The difference is that in <st1:place w:st="on"><st1:country-region w:st="on">Indonesia</st1:country-region></st1:place> the standards first had to be introduced to create a market for high quality turbines whereas these standards (and also stronger competition) already exist on the international market</span>[[#_ftn1|<span class="MsoFootnoteReference"><span lang="EN-GB" style="font-size: 8pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt"><span style="mso-special-character: footnote"><span class="MsoFootnoteReference"><span lang="EN-GB" style="font-size: 8pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-fareast-font-family: 'ms mincho'; mso-fareast-language: ja; mso-bidi-font-size: 12.0pt; mso-bidi-language: ar-sa">[1]</span></span></span></span></span>]]<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">. Summarising it can be stated that even with the limitation of simple production methods it is possible to build very reliable and long lasting T14/T15 crossflow turbines with competitive high efficiency. </span><span style="mso-field-code: ' ref _ref229366312 h  * mergeformat '"><span class="BeschriftungZchn">''<span lang="EN-GB" style="font-size: 11pt; mso-bidi-font-size: 10.0pt">'''Annex '''</span>''</span><span class="BeschriftungZchn">''<span lang="EN-GB" style="font-weight: normal; font-size: 11pt; mso-bidi-font-size: 10.0pt; mso-bidi-font-weight: bold">5</span>''</span></span><span class="BeschriftungZchn">''<span style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-bidi-font-size: 10.0pt">''' '''</span>''</span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">gives an overview on the three mostly used types of turbines and their specific features as well as the comparative advantages of the T14/T15.<o:p></o:p></span>
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">The following table clearly illustrates the significant cost savings of locally produced electro-mechanical equipment (example <st1:stockticker w:st="on">MHP</st1:stockticker> Dewata, 2001):<o:p></o:p></span>
 
 
 
[[|]][[|<span style="mso-bookmark: _toc225508000">''<span lang="EN-GB" style="font-weight: normal; font-size: 11pt; font-family: 'arial','sans-serif'">Table </span>''</span>]]<span style="mso-bookmark: _ref205792767"><span style="mso-bookmark: _toc225508000">''<span lang="EN-GB" style="font-weight: normal; font-size: 11pt; font-family: 'arial','sans-serif'"><span style="mso-no-proof: yes">3</span></span>''</span></span><span style="mso-bookmark: _ref205792767"><span style="mso-bookmark: _toc225508000" /></span><span style="mso-bookmark: _toc225508000">''<span lang="EN-GB" style="font-weight: normal; font-size: 11pt; font-family: 'arial','sans-serif'">: Cost comparison for <st1:stockticker w:st="on">MHP</st1:stockticker> equipment: local production and import</span>''</span>''<span lang="EN-GB" style="font-weight: normal; font-size: 11pt; font-family: 'arial','sans-serif'"><o:p></o:p></span>''
 
 
 
 
 
{| class="MsoTableGrid" style="border-right: medium none; border-top: medium none; border-left: medium none; width: 464.4pt; border-bottom: medium none; border-collapse: collapse; mso-border-alt: solid windowtext .5pt; mso-yfti-tbllook: 480; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt" cellspacing="0" cellpadding="0" width="619" border="1"
 
|- style="mso-yfti-irow: 0; mso-yfti-firstrow: yes"
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: windowtext 1pt solid; padding-left: 5.4pt; padding-bottom: 0cm; border-left: windowtext 1pt solid; width: 104.4pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt" valign="top" width="139" |
 
'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb"><o:p>&nbsp;</o:p></span>'''
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: windowtext 1pt solid; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 135pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt" valign="top" width="180" |
 
'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Imported<o:p></o:p></span>'''
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: windowtext 1pt solid; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 135pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt" valign="top" width="180" |
 
'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">made in <st1:country-region w:st="on"><st1:place w:st="on">Indonesia</st1:place></st1:country-region><o:p></o:p></span>'''
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: windowtext 1pt solid; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 90pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt" valign="top" width="120" |
 
'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb"><o:p>&nbsp;</o:p></span>'''
 
 
 
|- style="mso-yfti-irow: 1"
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: windowtext 1pt solid; width: 104.4pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="139" |
 
'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Turbine <o:p></o:p></span>'''
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 135pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="180" |
 
<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Pelton turbine (<st1:country-region w:st="on"><st1:place w:st="on">Austria</st1:place></st1:country-region>): 570 USD/kW<o:p></o:p></span>
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 135pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="180" |
 
<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">T14 cross flow turbine:
 
30 USD/kW<o:p></o:p></span>
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 90pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="120" |
 
<span lang="EN-GB" style="font-size: 10pt; font-family: wingdings; mso-ansi-language: en-gb; mso-ascii-font-family: arial; mso-hansi-font-family: arial; mso-char-type: symbol; mso-symbol-font-family: wingdings"><span style="mso-char-type: symbol; mso-symbol-font-family: wingdings">à</span></span><span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb"> less than 10</span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">&nbsp;</span><span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">%<o:p></o:p></span>
 
 
 
|- style="mso-yfti-irow: 2; mso-yfti-lastrow: yes"
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: windowtext 1pt solid; width: 104.4pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="139" |
 
'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Complete electro-mech. equipment<o:p></o:p></span>'''
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 135pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="180" |
 
<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Turgo turbine (<st1:country-region w:st="on"><st1:place w:st="on">Germany</st1:place></st1:country-region>): 1,000 USD/kW<o:p></o:p></span>
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 135pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="180" |
 
<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">T14 and local know how used: 407 USD/kW<o:p></o:p></span>
 
 
 
| style="border-right: windowtext 1pt solid; padding-right: 5.4pt; border-top: #d4d0c8; padding-left: 5.4pt; padding-bottom: 0cm; border-left: #d4d0c8; width: 90pt; padding-top: 0cm; border-bottom: windowtext 1pt solid; background-color: transparent; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="120" |
 
<span lang="EN-GB" style="font-size: 10pt; font-family: wingdings; mso-ansi-language: en-gb; mso-ascii-font-family: arial; mso-hansi-font-family: arial; mso-char-type: symbol; mso-symbol-font-family: wingdings"><span style="mso-char-type: symbol; mso-symbol-font-family: wingdings">à</span></span><span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb"> around 40</span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">&nbsp;</span><span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">%<o:p></o:p></span>
 
 
 
|}
 
 
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">From the experience of the MHPP project it can be concluded that technology transfer mainly has to be based on continuous and long term training measures. A singular training session without feed back cycles is less efficient and especially less sustainable. In MHPP, hardware support was very limited</span>[[#_ftn2|<span class="MsoFootnoteReference"><span lang="EN-GB" style="font-size: 8pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt"><span style="mso-special-character: footnote"><span class="MsoFootnoteReference"><span lang="EN-GB" style="font-size: 8pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-fareast-font-family: 'ms mincho'; mso-fareast-language: ja; mso-bidi-font-size: 12.0pt; mso-bidi-language: ar-sa">[2]</span></span></span></span></span>]]<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">. Summarising, the key factors for success of turbine technology transfer are:<o:p></o:p></span>
 
 
 
<span lang="EN-GB" style="font-size: 11pt; font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb; mso-fareast-font-family: symbol; mso-bidi-font-size: 12.0pt"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">continuous training</span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt"> and continuous '''feedback''' (if and where required)<o:p></o:p></span>
 
  
<span lang="EN-GB" style="font-size: 11pt; font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb; mso-fareast-font-family: symbol; mso-bidi-font-size: 12.0pt"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">parallel development and support regarding '''manufacturing workshop management''' (equipment, tools, machinery, raw material etc.) and management of stock keeping<o:p></o:p></span>
+
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-ansi-language: en-gb; mso-fareast-font-family: arial"><span style="mso-list: ignore">2)<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp; </span></span></span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Time factor: </span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Establishing local production 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.<o:p></o:p></span>
  
<span lang="EN-GB" style="font-size: 11pt; font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb; mso-fareast-font-family: symbol; mso-bidi-font-size: 12.0pt"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">number of manufacturers must fit to the '''demand at the market'''<o:p></o:p></span>
+
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-ansi-language: en-gb; mso-fareast-font-family: arial"><span style="mso-list: ignore">3)<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp; </span></span></span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Cluster: </span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">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.<o:p></o:p></span>
  
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb; mso-bidi-font-size: 12.0pt">Further local technology development is only possible if the market provides for sufficient orders which can be fostered by high opportunity costs for energy (hydropower must be competitive), a favourable national policy and regulatory framework, access to financing etc. Although the MHPP placed some smaller orders to the turbine manufacturers most of the major orders came from government, private organisations or private individuals.<o:p></o:p></span>
+
<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-ansi-language: en-gb; mso-fareast-font-family: arial"><span style="mso-list: ignore">4)<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp; </span></span></span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">No grants to the manufacturers</span>'''<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">. Better use (soft) loans or even better create trust for long-term investments like the German Feed-in Law did.<o:p></o:p></span>
  
<span class="MsoPageNumber"><span lang="EN-GB"><o:p>&nbsp;</o:p></span></span>
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<span lang="EN-GB" style="font-size: 11pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-gb">Source: Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.<o:p></o:p></span>
<div style="mso-element: footnote-list"><br>
 
----
 
<div id="ftn1" style="mso-element: footnote">
 
[[#_ftnref1|<span class="Funotenzeichen1"><span lang="EN-GB"><span style="mso-special-character: footnote"><span class="Funotenzeichen1"><span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'angsana new'; mso-ansi-language: en-gb; mso-fareast-font-family: 'times new roman'; mso-fareast-language: de; mso-bidi-language: ar-sa">[1]</span></span></span></span></span>]]<font face="Arial"><span lang="EN-GB" style="font-size: 9pt; mso-bidi-font-weight: bold"> <span style="mso-tab-count: 1">&nbsp;&nbsp;&nbsp; </span>Nowadays, for all government-financed projects the quality standard of the T14 is required although it is not formally fixed in any regulation.</span><span lang="EN-GB" style="font-size: 9pt"><o:p></o:p></span></font>
 
</div><div id="ftn2" style="mso-element: footnote">
 
[[#_ftnref2|<span class="Funotenzeichen1"><span lang="EN-GB"><span style="mso-special-character: footnote"><span class="Funotenzeichen1"><span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'; mso-bidi-font-family: 'angsana new'; mso-ansi-language: en-gb; mso-fareast-font-family: 'times new roman'; mso-fareast-language: de; mso-bidi-language: ar-sa">[2]</span></span></span></span></span>]]<font face="Arial"><font size="2"><span class="Funotenzeichen1"><span lang="EN-GB"> </span></span><span lang="EN-GB"><span style="mso-tab-count: 1">&nbsp;&nbsp; </span></span></font><span lang="EN-GB" style="font-size: 9pt; mso-bidi-font-family: arial; mso-bidi-font-weight: bold">For example a set of measuring equipment as an instrument to implement quality control was provided to a turbine manufacturer who was the most interested to make quality checks.</span></font>
 
</div></div>
 

Revision as of 11:52, 20 July 2009

Key factors for successful local production<o:p></o:p>

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, Ossberger etc.<o:p></o:p>

2)    Time factor: Establishing local production 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.<o:p></o:p>

3)    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.<o:p></o:p>

4)    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.<o:p></o:p>

Source: Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.<o:p></o:p>