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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">Key factors for successful local production</span>'''
| + | = 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. |
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| − | <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'"> </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 Hydro'', ''Ossberger ''etc.</span> | + | <br/> |
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| − | <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'"> </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.</span>
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| − | <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'"> </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.</span>
| + | = 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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| − | <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'"> </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.</span>
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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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| − | <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.</span>
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| | + | = Further Information = |
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| | + | *[[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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| − | <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"><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-fareast-font-family: 'times new roman'; mso-fareast-language: de; mso-bidi-language: ar-sa" /></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; mso-fareast-font-family: 'times new roman'; mso-fareast-language: de; mso-bidi-language: ar-sa">'''[[|]]'''</span>[[|]]
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| | + | = 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
References
- ↑ Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.
