Procurement

About: Procurement is a research topic. Over the lifetime, 25669 publications have been published within this topic receiving 334145 citations.

Local Content Requirements and the Renewable Energy Industry - A Good Match?

Abstract: This paper offers an initial assessment of the use of local content requirements (LCR) in renewable energy policy. It observes that in spite of free trade concerns, many countries with different levels of economic development attach LCR to their support schemes and procurement tenders. The legality and potential effectiveness of LCR are a pressing issue. Because of the financial crisis, public financing for low carbon policies and investments is more limited, especially in austerity-driven jurisdictions. At the same time, such policies and investments are needed to limit and counter climate change. The importance of analyzing opportunity costs, performing rigourous scientific research and discussing the use of LCR is thus self-evident.This paper finds that local content requirements for renewable energy are used frequently, either as a precondition to the receipt of financial support or as part of eligibility requirements in public tenders. They are often attached to mostly expensive public financial support programs to gain some local benefits from increased renewable energy deployment. Most countries using them base their policy choices on political motivations, rather than on economic and empirical analyses, which remain largely absent in the case of LCR. However, it is found that under certain conditions content requirements may be able to facilitate the development of a global innovator that is able to compete on the international market and push down technology costs. These conditions are many, country- and technology-specific and complex. While it is found that LCR will cause short-term costs to the industry and will likely inflate retail power prices alike, a medium-term benefit of increasing competition and innovation on the international market may offset those costs. It is of great importance to note that this is a theoretical possibility. To date, these potential positive spill-over effects have not been demonstrated.On the legal side, it is concluded that LCR for renewable energy are generally prohibited under WTO law. While financial support schemes with LCR attached will likely be ruled illegal, public procurement tenders are hardly disciplined by WTO law and may be permissible. From the scarse empirical literature on local content requirements, it is found that there are a number of initial basic conditions that determine the feasibility of creating domestic industries and, perhaps, subsequently innovators. In addition to a stable and sizeable market, the financial support (to which LCR are often linked) for the renewable energy sector needs to be sufficiently large not to scare off potential investors. The local content rate can also not be too restrictive, and needs to be coupled to learning benefits. Certain knowledge of the current technology increases effectiveness. Finally, when technologies are still in their infancy, the potential of LCR to create global competitors that reduce costs by learning-by-doing is higher. Many countries using LCR, however, do not explicitly target the creation of global innovators. The given basic conditions are broad and necessary, though not necessarily sufficient in the creation of innovative capacity. This paper analyzes the wind LCR in China, and gives descriptive analyses for LCR in Ontario, Quebec, Spain, Italy, France, Greece, Croatia, the US, India, Brazil, South Africa and Turkey.

An overview of the ITER project

Abstract: The ITER Project Team now coming together in Cadarache is currently being shaped from the old, preserving the legacy of technical know-how built up in the ITER Joint Central Team since 1992. It is particularly strong initially in the most urgent areas, related to long lead items – magnets, the main vessel and the buildings – as well as in work related to licensing. But it also incorporates new functional needs – financial, administrative, and procurement – and ties in the needs of future users during operation. Since the bulk of the procurement for ITER will be provided in kind, efforts have been strengthened to define better the share of responsibilities with the Parties’ Domestic Agencies. The procurement cost sharing is being transferred into realistic technical splitting of the work, with agreements between the Parties to demonstrate production of the necessary quality, and how to handle any shortcomings. The design has evolved since originally conceived and valued 5 years ago. Design reviews of specific procurements will therefore start in September 2006 to ensure the current manufacturing and design assumptions continue to satisfy requirements. This paper reviews the current status of development of the ITER project, covering organisational and technical issues.

Infrastructure Public–Private Partnerships in the Developing World: Lessons from Recent Experience

Abstract: Seeking to address inefficient and costly infrastructure delivery, governments over the past two decades have turned to public–private partnerships (PPPs) to build and operate infrastructure. The key characteristic of PPPs is the outsourcing and ‘bundling’ of project delivery components (for example, design, build, finance, operate), structured to incentivise the builder-operator to incorporate long-term operating cost considerations in the design and construction phases of a project and reduce coordination costs. This article reviews the benefits and drawbacks of PPPs and the experience to date, focusing in particular on developing economies. Relative to traditional procurement, PPPs are complex, and require governments to anticipate and plan for contingencies and conduct monitoring and enforcement of long-term contracts. We argue that institutional capacity is a key determinant of PPP success and in mitigating potentially welfare-reducing contract renegotiations evident in the Latin American exp...