Enabling environment and policy principles for replicable technology transfer: Lessons from wind energy in India
This article, Enabling environment and policy principles for replicable technology transfer: Lessons from wind energy in India, examines private-sector wind energy technology transfers from Denmark and Germany to India between 1990 and 2005. The topic was chosen because the sector has a record of international privatesector partnerships between European and Indian companies. Special attention was paid to: 1) the roles and effects of government policy and institutional settings; and 2) enabling environment for technology transfer in order to learn lessons for how developing countries can build favorable environments for replicable technology transfer involving climate change mitigation technologies and catch-up industries.
India began to be serious about wind energy development during the 1980s in order to establish an indigenous industry and exploit further its wind energy potential. Its efforts in the 1980s were mainly technology-push (development of indigenous turbine prototypes; demonstration programs from 1985) and wind data collection (wind resource assessment program from 1983) at the federal level.
The situation changed significantly in the early 1990s. By the beginning of that decade, India had amassed an unsustainable level of public debt and was facing an unprecedented level of economic crisis. This led the country to embark on a massive economic reform program in 1991. This Economic Reform of 1991 changed the wind energy policy picture greatly; as in other sectors, the federal Government of India (GOI) shifted the focus of wind energy policy to stronger private-sector involvement, extended public finance to private-sector wind-power projects and provided fiscal and financial incentives to encourage private investments. Investment assistance with soft loans and tax benefits for wind project investments started in 1992 at the federal level, although these tax benefits (rates and types of various taxes, tax holidays, rates of depreciation, etc.; see Annex 1) and the interest rates on soft loans changed quite frequently over the years.
The article, from Climate Strategies, is structured as follows. After this introduction, section 2 describes Indian policy on wind energy development. Section 3 examines the technologies that have been transferred to India from the technology frontier of Denmark/Germany. Section 4 investigates the causal factors which created the technology transfer results. Lastly, Section 5 summarises the lessons learned from these experiences and makes policy recommendations.