Methodological and Technological issues in Technology Transfer

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Executive Summary

Major objectives of the current energy supply sector are economic development and international competitiveness. Climate change objectives, particularly the reduction of carbon dioxide (CO2) emissions, do not play a significant role. Nevertheless, significant opportunities exist to reduce CO2 emissions (see Table 10.1) as well as other greenhouse gas (GHG) emissions.

Technology transfer in the oil, natural gas and electricity sectors is mainly driven by the private sector. On the other hand, coal, nuclear and renewable energy sources are often dependent on government to preserve or increase their presence in the market. Technology transfer, as presently understood, is a relatively new process since historically it was used as a euphemism for large-scale power projects financed by multilateral banks, or for limited knowledge transfer from the international oil and gas companies to national industries. The oil crises in the 1970s changed the contractual terms in the oil and gas sectors and enabled powerful national oil companies to negotiate technology transfer on terms that were more favourable to them. In the early 1990s, the process of market globalisation and the availability of private capital on a global scale triggered investments, and hence technology transfer opportunities in the electricity sector also. The private sector is now playing a bigger role in electric power generation in concert with a new set of regulations and standards.

In the energy supply sector, technology transfer comes with investment. One of the keys to the transfer of technology is to promote investment through an appropriate economic and institutional framework. For some clean energy supply alternatives technology improvement is necessary for large-scale commercialisation. In general, economic and institutional barriers rather than technology availability are more apt to be the cause of failure to transfer technology. In all energy sectors, the role of government in facilitating technology transfer is critical. Annex II countries could develop more effective policies to stimulate and finance private investments in clean energy sources in developing countries and countries with economies in transition (CEITs). Governments could initiate policies for liberalising the energy supply market, fostering and ensuring conditions to allow international financing, promoting infrastructure development, eliminating unnecessary regulatory and trade barriers, educating and training local workforces, protecting intellectual property rights, and for strengthening local research and development (R&D) and environmental management regimes. Table 10.2 lists for each major technology group the existing barriers preventing their transfer, as well as the possible policies to overcome such barriers.

It is expected that markets will respond to whatever regulatory policies are adopted to promote GHG emissions reduction. Technology transfer will be stimulated as investments are made in response to the price signals when uncertainties on policies to secure environmental goals are settled.

Fossil Fuel and Nuclear
Technology transfer in the fossil fuel sector is mature, and well-established mechanisms are in place. Technology is readily available from a wide variety of sources, such as the oil, gas, and coal industries, engineering contractors, equipment vendors, etc. Barriers to technology transfer, therefore, are primarily economic and institutional.

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

Specific measures and policies could include:

In the renewables sector, with the exception of large scale hydropower, technology transfer has been constrained by the lack of investment and high costs. Investment has been generally limited to niche (such as solar photovoltaics (PV) or wind power) or protected markets because of technical, institutional and economic barriers. Governments could promote the development of improved and more cost effective renewable technologies, provide incentives for investment and remove policies which hinder the application of renewable energy.

Measures to improve renewable technologies could include:

Measures to promote investment and broaden the market for renewables could include:

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