ETAPA III DISEÑO DE LA IMAGEN PROSPECTIVA

The world‘s largest wind turbine manufacturer, Vestas, is also one of the main foreign actors in China‘s wind energy sector.⁵³ Vestas started selling wind turbines in China in 1985 through Danish government-sponsored programmes to electrify rural communities. These programmes lasted for a number of years and in 2005 Vestas set up its first factory in China. Next to the United States, China is the most important growth market for Vestas and it will continue to be so for the foreseeable future. Beginning in 2007, Vestas had a rapid increase in sales in China, about 60 to 70 percent per year, which can be directly related to the Renewable Energy Law. The

53 Information about Vestas based on an interview with Andrew Knight, Director Communications, and Morton

specification that the grid companies were required to buy a specified amount of wind-generated electricity was very important as well as quota regulations for the power companies to add three percent of wind power to their energy portfolios.

Vestas has not been, and is still not, engaged in a joint venture or other kind of technology sharing cooperation with any Chinese company, nor has Vestas licensed any kind of technology to Chinese firms. The main reason is the protection of the company‘s intellectual property rights.

This is a critical and sensitive issue relating to technology transfer and support of the domestic wind industry. Clearly, the Chinese wind power companies have achieved fast and significant leapfrogging, on the technology side – Chinese competitors have done in five years what Vestas took 30 years to accomplish. Vestas China spokespeople interviewed as part of this research were not able to comment on whether there been a case where a Chinese company tried to copy Vestas turbine technologies, nor what Vestas China does to protect the company's IPRs in China.⁵⁴

Even though the company does not share core technologies, such as central computer software that runs turbine systems, Vestas is engaged in partnerships of other types with Chinese organisations, including businesses. Vestas‘ partnerships with customers include capacity building knowledge sharing and practical experience of which Vestas has much to offer through being an industry leader. For Vestas, cooperation on capacity development issues such as how to manage projects, troubleshooting and delivering within time is valuable, realistic and involves more concrete action, than focusing just on the narrow definition of technology transfer. According to senior Vestas executive Andrew Knight: ―We also have partnerships with our customers to do their training. Partnerships are moving more and more towards partnerships outside projects and contracts. It‘s often about sitting together for a few days and talking about things people might need to learn more about. Chinese companies in the long term will benefit a lot from this.‖

Vestas has stated the goal of being a positive agent for low-carbon development in China, rather than just being another provider and supplier of turbines. This includes a CSR strategy

54 Ibid.

which is currently still under development and will be linked to Vestas‘ core value propositions and will include environmental education, environmental awareness, and resources for sustainable development, to enable small-scale sustainability projects. As part of this CSR strategy, Vestas plans to cooperate with research and education institutions such as Tsinghua University as well as environmental NGOs.

For foreign wind energy companies in China such as Vestas, a positive working relationship with the government is crucial. The Chinese government has the expectation that foreign companies should provide something in return for their access to the growing Chinese market, such as technology transfer or cooperation with domestic companies. In the words of a senior Vestas manager Morton Dyrholm: ―We have to show the government what we are doing besides selling turbines, we have to show that we have value in a number of ways that can help China to develop, and that is the expectation.‖⁵⁵

Moreover, Vestas participates actively in a series of Sino-Danish bilateral activities. Vestas is in the position that it needs to associate itself positively with both the Danish government and the Chinese government. Vestas does not rule out to advocate for the Chinese government in times of political crisis or in the context of the UNFCCC post-2012 negotiating process on a selective basis. A good bilateral relationship between Denmark and China is extremely important for Vestas;

a worsening of the relationship would have very negative impacts on the company‘s business operations in China. One reason among others is that more and more wind power developments are decided through a public procurement process rather than through the open market. While the company cannot directly act as an intermediary between the two governments, the company is trying to play a role in improving the general overall relationship. This includes participation in the Danish government's climate focus discussions and other programmes to show the Chinese government that Vestas is making an effort and is willing to deliver in terms of technology transfer, at least in the ‗soft‘ skills such as capacity building and energy infrastructure related issues, e.g.

grid connection problems. In the context of climate change and the technology transfer

negotiations under the UNFCCC, a Vestas executive comments that, ―the technology questions always come up, of course, and that‘s where it becomes tricky... we are dealing with some very, very difficult questions here that Vestas needs to be aware of.‖ ⁵⁶

Through its relationship with the Chinese government, Vestas is also trying to influence policy including regulation of the wind power industry, supporting the development of a competitive market-based system, which is considered to be more advantageous for foreign wind turbine manufacturers. However, Vestas as a sole player has very limited direct influence on the regulatory decision making processes. Nevertheless, Vestas considers that it has some positive influence on the political framework through working with regulators and explaining how wind turbine technology works as part of an integrated and renewable energy system. Its influence and impact is difficult to quantify; Vestas executive Morton Dyrholm states: ―We‘re doing anything we can to support the Chinese government solving these problems. We are in the heart of this industry….we shouldn‘t just be here to make money, we should be here to help, this is also my fundamental belief. That‘s one of our goals, one of our roles we should take on. We are No. One, we are the leader of this industry, that also has some responsibilities.‖⁵⁷

6.5.3 Sino-Dutch Bilateral cooperation - facilitating business