Energy Systems and Technologies for the Coming Century ...

Table 4. Local Content requirements for renewable energyCountryChina (2005-2009)70% domestic content as key criterion for awarding wind farmdevelopment projects (this requirements was cancelled in Oct 2009)Brazil Brazil’s clean energy legislation, Profina program launched in 2005,also has LCR for wind energy. But due to lack of local manufacturingcapacity, the LCR is of marginal value. And due to lobbying from itswind energy industry, and LCR threshold has been lowed, but still acondition for receiving local fundingSpain Several of Spain’s provinces have independently employed LCRpolicies for market access. The Spanish wind turbine manufacturerGemesa, entered the wind technology market in 1994 and hasbenefited from the LCR, and now it is a global leader in windOntario,CanadaQuébec,CanadatechnologyIntroduce a 20-year preferential fixed feed-in tariffs program, whichincludes LCR requirements for wind equipment and solar PV. Japanfiled a WTO trade dispute against this policy in Sept 2010.Québec’s LCRs, which are a few years older than Ontario’s policies,date back to 2003. Québec’s regulations stipulate that 60% of theturbine’s costs must be incurred in Québec, with a certain percentageto be met in a particular region of the province.The WTO Agreement on Trade and Investment Measures (TRIM) generally prohibitslocal content requirements, but such requirements do not necessarily lead to tradedisputes. In 2005, China issued a regulation, requesting wind turbines used in windprojects in China should have a minimum of 70% local contents. The foreign windturbine makers quietly set up factories and built up their local supplying base, and therule does not lead to any trade dispute. In 2010, China quietly removed the 70% localcontent requirements. But one difference is that China can justify its action with itsdeveloping country status and the preferential treatment to developing countriesunder the WTO, while Canada can not. (ITCSD, 2010) 4 .It is puzzling that Japan decided to file the WTO trade dispute with Canada onOntario’s renewable energy feed-in tariff program. Ontario’s neighboring province,Quebec, has a local procurement program for years for its energy development.Other experts say they think it is puzzling that Japan has decided to make its movenow. Ontario’s neighbouring province Quebec has had a local-procurement programfor years for its energy development, they note, including rules that force powerproducers to buy equipment from specific regions inside the province. The Quebecpolicy has never drawn complaints from the Japanese, the source says.Shah (2010) pointed out that the real reason behind Japan’s filing the WTO tradedispute against the Ontario fixed feed-in tariff program because a consortium led bythe Korean company, Samsung, won a 7$ billion renewable energy contract from theOntario government to set up 2.5 GW of solar and wind energy capacity and settingup four manufacturing plants between 2013 and 2015 in Ontario. The preferential4 Bridges Trade BioRes • Volume 10 • Number 17 • 24th September 2010 ICTSD, Japan ChallengesCanadian Renewable Energy Incentives at WTORisø International Energy Conference 2011 Proceedings Page 92