A new study published today in Nature Energy, Effects of technology complexity on the emergence and evolution of wind industry manufacturing locations along global value chains, examines the relationship between characteristics of wind turbine technology and the manufacturing location for various components of the turbine—from high-complexity components, such as blades and gearboxes, to low-complexity components, such as towers and generators. The study finds that what gets manufactured and where it gets manufactured depends largely on the complexity of the turbine component and the knowledge required to manufacture that component.
Led by Prof. Kavita Surana, Assistant Research Professor at the Center for Global Sustainability, University of Maryland, with co-authors Prof. Claudia Doblinger, Assistant Professor of Innovation and Technology Management, Technical University of Munich; Prof. Laura Diaz Anadon, Professor of Climate Change Policy, University of Cambridge; and Prof. Nate Hultman, Director, Center for Global Sustainability, the paper maps the global value chain of wind energy manufacturing. The authors first developed a first-of-its-kind dataset of the 9 major components that comprise a wind turbine and traces the origins of these components to nearly 390 component suppliers and 13 original equipment manufacturers involved in the wind technology global value chain from 2006 to 2016. Using this dataset, they evaluate the relationship between the wind technology component complexity and the geographical location of manufacturing over time.
The analysis finds that many countries with installed wind capacity have developed a manufacturing base with local suppliers. However, the emergence of the supply chain, particularly in the developing world, has been for manufacturing low-complexity components. The manufacturing of high-complexity components has been limited to only a few countries, primarily industrialized countries, that tend to work with few local original equipment manufacturers (i.e., the large companies that assemble and sell the full turbine). The study also finds that low-complexity manufacturing does not necessarily lead to higher-complexity manufacturing of more advanced products over a period of 5 years.
“Countries increasingly aim to expand renewable energy generation to meet climate and energy goals, but they also must address other goals related to economic development, such as developing local supply chains, fostering new industries, and generating attractive, high-skill jobs. Our findings point towards the need for policy design that integrates clean energy deployment policy with more targeted policies for manufacturing and industry development” says Kavita Surana from the University of Maryland.
“We look at turbine components and the suppliers that manufacture them, two aspects that are central to both energy and industry,” says Claudia Doblinger from the Technical University of Munich. “The differences in the complexity of components reflect differences in the knowledge, skills, infrastructure, and financial capacity required for manufacturing them. The companies that manufacture these components are often small to medium-sized businesses, a key employer in many countries”.
“We documented the emergence of manufacturing of simpler (less complex) wind components in a wide range of countries over the 2006-2016 time period. However, during this time period, we find much less evidence of countries being able to upgrade to manufacture more complex components. Clean energy manufacturing, like many other modern technologies, involves global value chains. Yet, this has been a neglected area of research, particularly given the current policy interest on green growth and recovery. ” says Laura Diaz Anadon from the University of Cambridge. “Our research is an important first step, but it only skims the surface of implications for developing countries and how integrated policy can successfully address energy, climate, and economic goals.”
“Many countries want to encourage domestic clean energy manufacturing. But our understanding of how a country could start from specializing in something simple, like a steel tower and move into higher-value areas of manufacturing has been murky at best” says Nate Hultman from the University of Maryland. “Our analysis shows how technology complexity influences both the emergence and evolution of suppliers, as well as the location of manufacturing. The work has implications for countries interested in not only the entry points for clean energy technology manufacturing but also the potential importance of policies for those interested in moving along a trajectory toward higher-value products.”
Download the full report here.
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About CGS: Through research, education, field leadership, and collaboration, the Center for Global Sustainability (CGS) at the University of Maryland helps drive the global engine of ambition to meet goals related to climate, development, and sustainability. CGS is based at the University of Maryland, the major research university in the Washington DC area and a land-grant, sea-grant, public research university. It is ranked in the top 15 U.S. public research universities with a $2.1 billion annual budget and combined $1.1 billion in annual research awards. The School of Public Policy focuses on blending governance at local, state, national, and international levels, with roughly 80 faculty and 1600 graduate, undergraduate, and executive students.
About the TUM Campus Straubing for Biotechnology and Sustainability at the Technical University of Munich: The Technical University of Munich (TUM) is one of Europe’s leading research universities, with more than 550 professors, 43,000 students, and 10,000 academic and non-academic staff. Its focus areas are the engineering sciences, natural sciences, life sciences and medicine, combined with economic and social sciences. TUM acts as an entrepreneurial university that promotes talents and creates value for society. In that it profits from having strong partners in science and industry. It is represented worldwide with the TUM Asia campus in Singapore as well as offices in Beijing, Brussels, Cairo, Mumbai, San Francisco, and São Paulo. Nobel Prize winners and inventors such as Rudolf Diesel, Carl von Linde, and Rudolf Mößbauer have done research at TUM. In 2006, 2012 and 2019 it won recognition as a German "Excellence University". TUM regularly places among the best universities in Germany in international rankings. The TUM Campus Straubing for Biotechnology and Sustainability (TUMCS), where this research was conducted, is an Integrative Research Center at the TUM. It combines the development of sustainable technologies on the one hand and their economic implementation on the other in an interdisciplinary research and teaching environment. Based on this approach, research and teaching capacities in Straubing are being systematically expanded.
About the Centre for Environment, Energy and Natural Resource Governance (C-EENRG) at the University of Cambridge: The University of Cambridge (UCAM) is one of the world's oldest universities and leading academic centres, anda self-governed community of scholars. Its reputation for outstanding academic achievement is known world-wide and reflects the intellectual achievement of its students, as well as the world-class original research carried out by the staff of the University and the Colleges. Addressing the energy challenge is an area of intense activity across the University, with around 300 researchers involved in energy-related research and a funding portfolio of over 235 million GBP. This research was conducted at the Centre for Environment Energy and Natural Resource Governance (C-EENRG) at the Department of Land Economy. C-EENRG researchers apply the disciplines of economics, law, public policy, engineering and planning to the analysis of pressing environmental problems.
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