Methodological and Technological issues in Technology Transfer

Other reports in this collection

10.6 Lessons Learned

General Comments: Technology transfer as presently understood in the energy sector is a relative new process, since historically it was used as a euphemistic term for large-scale power projects financed by multilateral banks or for a limited knowledge transferred from the international oil and gas companies to the national industries. The oil crises in the 70s changed this tendency in the oil and gas sector, when powerful national oil companies were able to negotiate technology transfer with better terms. In the early 90s the process of market globalisation and the availability of private capital on a global scale triggered technology transfer opportunities in the electric sector also.

Major objectives of the current energy supply technology transfer is economic development and international competitiveness. Climate change objectives and in particular the reduction of CO2 emission do not play a significant role.

Even without strong interest allocated to climate change, energy efficiency improvements and new and renewable energy sources are gaining influence but at a lower than desirable pace. Most of the projects in non-conventional energy sources are dependent on grants or subsidies, since they are small in size and unable to compete with the more economic fossil fuel based energy suppliers. Also, the number of major investors are quite small due the large capital requirement and they are quite resistant to significant changes in the sector.

The role of government in facilitating the technology transfer of GHG reducing technologies will continue to be important. Especially important is liberalization of the energy market combined with appropriate environmental regulation. Useful measures include creating economic incentives, adopting policies to ensure international financing, promoting infrastructure development, eliminating unnecessary regulatory and trade barriers, educating and training local workforces, protecting intellectual property and strengthening R&D, amongst others.

Fossil Fuels: Technology transfer in the fossil fuel sector is mature, and well-established mechanisms are in place in most countries. Technology is readily available from a wide variety of sources, such as the oil and gas industry, engineering contractors, equipment vendors, etc. Technology transfer comes with investment. Although, there is no technology transfer "magic bullet". The key to transfer of technology in the fossil fuel sector is to promote investment. Incremental improvements in technology transfer are being made and should continue to be encouraged by using policy instruments, such as education and awareness programmes and voluntary agreements. Nevertheless it is necessary to identify what incentive is there for governments of coal rich developing countries (e.g., China and India) to neglect using their cheap natural resource in favour of more expensive imported fuels such as LNG or pipeline gas.

Nuclear: Technology transfer in the nuclear power sector for water-cooled/water-moderated reactors has a well-established mechanism. To promote successful transfer of nuclear technology, major government involvement is needed. The large capital costs, public acceptance, availability of cheap domestic fossil fuel and the resolution of safety and waste disposal concerns provide significant barriers to the use of nuclear. In many cases, nuclear proliferation issues are a major problem to be addressed by governments and other international institutions.

Renewables: Technology transfer for new and renewable energy forms are not yet fully commercially established. Several pilot and demonstration projects, as well as a few commercial projects have been performed under the umbrella of the government, regional organisations, and NGOs. Examples of technology transfer within countries and even between countries exist, showing that the technology process can work provided a market is available for the products. But, in comparison with conventional sources of energy we have to recognise that technology transfer is immature. In general, renewables with the exception of hydro cannot economically compete with fossil fuels, except in some special markets (such as wind power) or niche markets (such as solar photovoltaic). Externalities (clean environment, job creation, social development, etc) should be considered. Unfortunately, the low economic value attributed to some of the benefits provided by renewables are a serious obstacle for their supply expansion. Also, most of these projects have been implemented in developing countries and CEITs where experience with innovations are not well developed and it is more difficult to add marginal technology advances - thus there is a need to promote market development.

Other reports in this collection