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Asia Pacific Clean Tech Handbook 31-May-10 Clean Tech Handbook for Asia Pacific May 2010 Simon Wilson

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Clean Tech Handbook for Asia Pacific May 2010 Simon Wilson

Asia Pacific Clean Tech Handbook 31-May-10

TableofContentsFOREWORD .................................................................................................................................................. 16 1 INTRODUCTION.................................................................................................................................... 19 1.1 1.2 1.3 1.4 1.5 1.6 WHATISCLEANTECHNOLOGY? ........................................................................................................................ 19 WHYCLEANTECHNOLOGYINASIAPACIFIC? ....................................................................................................... 19 FACTORSDRIVINGTHECLEANTECHMARKETINASIAPACIFIC ................................................................................. 20 KEYCHALLENGESFORTHECLEANTECHMARKETINASIAPACIFIC ............................................................................ 20 WHOWOULDBEINTERESTEDINTHISREPORT? .................................................................................................... 21 STRUCTUREOFTHEHANDBOOK ........................................................................................................................ 21

PARTACOUNTRYREVIEW.......................................................................................................................... 22 2 COUNTRYOVERVIEW ........................................................................................................................... 23 2.1 BACKGROUND ...............................................................................................................................................23 NorthAsianCountries ...................................................................................................................... 23 SouthAsia ........................................................................................................................................23 SouthEastAsia ................................................................................................................................23 Pacific...............................................................................................................................................24 KeyDriversforCleanTehnology ...................................................................................................... 24

2.1.1 2.1.2 2.1.3 2.1.4 2.1.5 2.2 2.3 2.4

MARKETSIZE&ENERGYMIX ........................................................................................................................... 25 POLICYANDRENEWABLEREGULATION ............................................................................................................... 26 TARGETS&INCENTIVES ...................................................................................................................................27 FeedinTariffs(FiT)...........................................................................................................................27 BaseloadPowerGeneration ............................................................................................................ 29 CleanDevelopmentMechanismProjects(CDM) ............................................................................. 33

2.4.1 2.4.2 2.4.3 2.5 2.6

RESEARCH&DEVELOPMENT ............................................................................................................................ 34 FINANCING....................................................................................................................................................36

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2.6.1 2.6.2 2.6.3 2.6.4 2.6.5 3 PublicFunding..................................................................................................................................36 PrivateFunding ................................................................................................................................36 PrivateEquity/VentureCapital ........................................................................................................ 36 PublicCompanies .............................................................................................................................37 ProjectFinancing .............................................................................................................................38

COUNTRY,BYENERGYSECTOR ............................................................................................................. 40 3.1 3.2 SUMMARY ....................................................................................................................................................40 CHINA ..........................................................................................................................................................40 Background......................................................................................................................................40 MarketSizeandEnergyMix ............................................................................................................ 40 GovernmentAgencies ...................................................................................................................... 41 CleanTechnologyRegulation........................................................................................................... 42 RenewableTargets&Incentives...................................................................................................... 43 Research&Development................................................................................................................. 46 Financing..........................................................................................................................................46

3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 3.2.7 3.3

JAPAN ..........................................................................................................................................................47 Background......................................................................................................................................47 MarketSize&EnergyMix................................................................................................................ 47 GovernmentAgencies ...................................................................................................................... 49 CleanTechnologyRegulation........................................................................................................... 50 RenewableTargets&Incentives...................................................................................................... 51 Research&Development................................................................................................................. 53 Financing..........................................................................................................................................54

3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.4

SOUTHKOREA ...............................................................................................................................................55 Background......................................................................................................................................55 MarketSize&EnergyMix................................................................................................................ 55 GovernmentAgencies ...................................................................................................................... 56

3.4.1 3.4.2 3.4.3

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3.4.4 3.4.5 3.4.6 3.4.7 3.5 RenewableRegulation ..................................................................................................................... 56 RenewableTargets&Incentives...................................................................................................... 56 Research&Development................................................................................................................. 57 Financing..........................................................................................................................................58

TAIWAN .......................................................................................................................................................60 Background......................................................................................................................................60 MarketSize&EnergyMix................................................................................................................ 60 GovernmentAgencies ...................................................................................................................... 61 CleanTechnologyRegulation........................................................................................................... 62 RenewableTargets&Incentives...................................................................................................... 63 Research&Development................................................................................................................. 63 Financing..........................................................................................................................................63

3.5.1 3.5.2 3.5.3 3.5.4 3.5.5 3.5.6 3.5.7 3.6

HONGKONG .................................................................................................................................................64 Background......................................................................................................................................64 MarketSize&EnergyMix................................................................................................................ 64 GovernmentAgencies ...................................................................................................................... 64 CleanTechnologyRegulations ......................................................................................................... 64 RenewableTargets&Incentives...................................................................................................... 65 Research&Development................................................................................................................. 65 Financing..........................................................................................................................................65

3.6.1 3.6.2 3.6.3 3.6.4 3.6.5 3.6.6 3.6.7 3.7

INDIA ...........................................................................................................................................................66 Background......................................................................................................................................66 MarketSizeandEnergyMix ............................................................................................................ 66 GovernmentAgencies ...................................................................................................................... 67 RenewableRegulation ..................................................................................................................... 68 RenewableTargets&Incentives...................................................................................................... 70 Research&Development................................................................................................................. 72

3.7.1 3.7.2 3.7.3 3.7.4 3.7.5 3.7.6

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3.7.7 3.8 Financing..........................................................................................................................................72

SINGAPORE ...................................................................................................................................................74 Background......................................................................................................................................74 MarketSize&EnergyMix................................................................................................................ 75 GovernmentAgencies ...................................................................................................................... 75 CleanTechnologyRegulations ......................................................................................................... 75 RenewableTargets&Incentives...................................................................................................... 76 Research&Development................................................................................................................. 79 Financing..........................................................................................................................................79

3.8.1 3.8.2 3.8.3 3.8.4 3.8.5 3.8.6 3.7.7 3.9

INDONESIA ....................................................................................................................................................80 Background......................................................................................................................................80 MarketSize&EnergyMix................................................................................................................ 80 GovernmentAgencies ...................................................................................................................... 80 CleanTechnologyRegulation........................................................................................................... 81 RenewableTargets ..........................................................................................................................81 Research&Development................................................................................................................. 82 Financing..........................................................................................................................................82

3.9.1 3.9.2 3.9.3 3.9.4 3.9.5 3.9.6 3.9.7

3.10 MALAYSIA.....................................................................................................................................................83 3.10.1 3.10.2 3.10.3 3.10.4 3.10.5 3.10.6 3.10.7 Background......................................................................................................................................83 MarketSize&EnergyMix................................................................................................................ 83 GovernmentAgencies ...................................................................................................................... 84 CleanTechnologyRegulation........................................................................................................... 84 RenewableTargets&Incentives...................................................................................................... 85 Research&Development................................................................................................................. 86 Financing..........................................................................................................................................86

3.11 PHILIPPINES...................................................................................................................................................87 3.11.1 Background......................................................................................................................................87

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3.11.2 3.11.3 3.11.4 3.11.5 3.11.6 3.11.7 MarketSize&EnergyMix................................................................................................................ 87 GovernmentAgencies ...................................................................................................................... 88 RenewableRegulation ..................................................................................................................... 89 RenewableTargets&Incentives...................................................................................................... 90 Research&Development................................................................................................................. 91 Financing..........................................................................................................................................91

3.12 THAILAND .....................................................................................................................................................92 3.12.1 3.12.2 3.12.3 3.12.4 3.12.5 3.12.6 3.12.7 Background......................................................................................................................................92 MarketSize&EnergyMix................................................................................................................ 92 GovernmentAgencies ...................................................................................................................... 93 RenewableRegulations.................................................................................................................... 93 RenewableTargets&Incentives...................................................................................................... 94 Research&Development................................................................................................................. 96 Financing..........................................................................................................................................96

3.13 AUSTRALIA ....................................................................................................................................................97 3.13.1 3.13.2 3.13.3 3.13.3 3.13.4 3.13.6 3.13.7 Background......................................................................................................................................97 MarketSize&EnergyMix................................................................................................................ 98 GovernmentAgencies ...................................................................................................................... 99 CleanTechnologyRegulation......................................................................................................... 100 RenewableTargets&Incentives.................................................................................................... 101 Research&Development............................................................................................................... 104 Financing........................................................................................................................................104

3.14 NEWZEALAND.............................................................................................................................................106 3.14.1 3.14.2 3.14.3 3.14.4 Background....................................................................................................................................106 MarketSize&EnergyMix.............................................................................................................. 106 GovernmentAgencies .................................................................................................................... 107 RenewableRegulation ................................................................................................................... 107

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3.14.5RenewableTargets&Incentives ....................................................................................................... 108 3.14.6 3.14.7 4 Research&Development............................................................................................................... 108 Financing........................................................................................................................................109

REGIONALCOMPARISON ................................................................................................................... 110 4.1 NORTHASIA ................................................................................................................................................110 4.2 4.3 4.4 4.5 SOUTHASIA ................................................................................................................................................110 SOUTHEASTASIA.........................................................................................................................................111 PACIFIC ......................................................................................................................................................111 KEYCLEANTECHNOLOGYSECTORS .................................................................................................................. 111

PART B CLEAN TECHNOLOGY SECTOR REVIEW ......................................................................... 113 5 ENERGYSECTOROVERVIEW ............................................................................................................... 114 5.1 5.2 MARKETMAPOFCLEANTECHNOLOGY ............................................................................................................ 114 ENERGYSUPPLY ...........................................................................................................................................115 RenewableEnergy ......................................................................................................................... 115 PowerGenerationandDistribution ............................................................................................... 118 ConventionalEnergy ...................................................................................................................... 119

5.2.1 5.2.2 5.2.3 5.3

ENERGYUSAGE ............................................................................................................................................120 Building(ResidentialandCommercial) .......................................................................................... 120 Industry ..........................................................................................................................................121 Transportation ...............................................................................................................................121

5.3.1 5.3.2 5.3.3 5.4

OTHERPOLLUTANTS .....................................................................................................................................121 Wastewater ...................................................................................................................................121

5.4.1 5.5 5.6

WASTE .......................................................................................................................................................122 SERVICE&SUPPORT .....................................................................................................................................122 PrivateSectorFunding ................................................................................................................... 122 PrivateSectorServices&Support .................................................................................................. 122 GovernmentAgencies .................................................................................................................... 123

5.6.1 5.6.2 5.6.3

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5.6.4 6 Universities ....................................................................................................................................123

ENERGYSECTOR,BYCOUNTRY ........................................................................................................... 124 6.1 WIND ........................................................................................................................................................124 Background....................................................................................................................................124 Targets&Incentives ......................................................................................................................125 WindSupplyChain ......................................................................................................................... 125 Research&Development............................................................................................................... 126 China ..............................................................................................................................................128 Japan..............................................................................................................................................132 SouthKorea....................................................................................................................................134 Taiwan ...........................................................................................................................................135 India ...............................................................................................................................................135 Singapore .......................................................................................................................................136 Indonesia........................................................................................................................................137 Australia.........................................................................................................................................139 NewZealand ..................................................................................................................................140 SummaryofCompaniesintheWindSector................................................................................... 143

6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6 6.1.7 6.1.8 6.1.9 6.1.10 6.1.11 6.1.12 6.1.13 6.1.14 6.2

SOLAR ........................................................................................................................................................144 Background....................................................................................................................................144 TargetsandIncentives ................................................................................................................... 145 PVSupplyChain .............................................................................................................................147 Research&Development............................................................................................................... 149 China ..............................................................................................................................................151 Japan..............................................................................................................................................154 SouthKorea....................................................................................................................................158 Taiwan ...........................................................................................................................................159 India ...............................................................................................................................................161

6.2.1 6.2.2 6.2.3 6.2.4 6.2.5 6.2.6 6.2.7 6.2.8 6.2.9

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6.2.10 6.2.11 6.2.12 6.2.13 6.2.14 6.2.15 6.2.16 6.2.17 6.3 Singapore .......................................................................................................................................163 Indonesia........................................................................................................................................163 Malaysia ........................................................................................................................................163 Thailand .........................................................................................................................................164 Philippines......................................................................................................................................165 Australia.........................................................................................................................................165 NewZealand ..................................................................................................................................166 SummaryofCompaniesinPVSector ............................................................................................. 167

BIOFUEL .....................................................................................................................................................170 Background....................................................................................................................................170 Targets&Incentives ......................................................................................................................171 BiofuelSupplyChain ...................................................................................................................... 173 China ..............................................................................................................................................174 Japan..............................................................................................................................................179 SouthKorea....................................................................................................................................181 Taiwan ...........................................................................................................................................183 India ...............................................................................................................................................184 Singapore .......................................................................................................................................185 Indonesia........................................................................................................................................187 Malaysia ........................................................................................................................................189 Thailand .........................................................................................................................................190 Philippines......................................................................................................................................193 Australia.........................................................................................................................................195 NewZealand .................................................................................................................................196 SummaryofCompaniesinBiofuelSector(toaddUpdatedTable) ................................................ 197

6.3.1 6.3.2 6.3.3 6.3.4 6.3.5 6.3.6 6.3.7 6.3.8 3.3.11 6.3.12 6.3.13 6.3.14 6.3.15 6.3.16 6.3.17 6.3.18 6.4

BIOMASS ..................................................................................................................................................198 Background....................................................................................................................................198

6.4.1

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6.4.2 6.4.3 6.4.4 6.4.5 6.4.6 6.4.7 6.4.8 6.4.9 6.4.10 6.4.11 6.4.12 6.4.13 6.4.14 6.4.15 6.4.16 6.4.17 6.5 Targets&Incentives ......................................................................................................................198 BiomassSupplyChain .................................................................................................................... 201 Research&Development............................................................................................................... 204 China ..............................................................................................................................................204 Japan..............................................................................................................................................205 SouthKorea....................................................................................................................................206 Taiwan ...........................................................................................................................................208 India ...............................................................................................................................................209 Singapore .......................................................................................................................................211 Indonesia........................................................................................................................................212 Malaysia ........................................................................................................................................212 Thailand .........................................................................................................................................212 Philippines......................................................................................................................................214 Australia.........................................................................................................................................215 NewZealand ..................................................................................................................................218 SummaryofCompaniesinBiomassSector .................................................................................... 219

HYDRO .......................................................................................................................................................220 Background....................................................................................................................................220 Targets&Incentives ......................................................................................................................220 HydroelectricPowerProcess.......................................................................................................... 221 China ..............................................................................................................................................222 Japan..............................................................................................................................................223 SouthKorea....................................................................................................................................224 Taiwan ...........................................................................................................................................224 India ...............................................................................................................................................224 Singapore .......................................................................................................................................225 Indonesia........................................................................................................................................226

6.5.1 6.5.2 6.5.3 6.5.4 6.5.5 6.5.6 6.5.7 6.5.8 6.5.9 6.5.10

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6.5.11 6.5.12 6.5.13 6.5.14 6.5.15 6.5.16 6.6 Malaysia ........................................................................................................................................227 Thailand .........................................................................................................................................227 Philippines......................................................................................................................................228 Australia.........................................................................................................................................229 NewZealand ..................................................................................................................................229 SummaryofCompaniesinHydroSector........................................................................................ 230

WAVE&TIDALTECHNOLOGY ......................................................................................................................... 231 Background....................................................................................................................................231 Targets&Incentives ......................................................................................................................231 Wave&TidalProcess..................................................................................................................... 231 Research&Development............................................................................................................... 232 China ..............................................................................................................................................234 Japan..............................................................................................................................................235 SouthKorea....................................................................................................................................236 Taiwan ...........................................................................................................................................237 India ...............................................................................................................................................237 Philippines......................................................................................................................................238 Indonesia........................................................................................................................................239 Thailand .........................................................................................................................................239 Malaysia ........................................................................................................................................239 Australia.........................................................................................................................................240 NewZealand ..................................................................................................................................242 SummaryofCompaniesinvolvedinWave/TidalTechnology ........................................................ 243

6.6.1 6.6.2 6.6.3 6.6.4 6.6.5 6.6.6 6.6.7 6.6.8 6.6.9 6.6.10 6.6.11 6.6.12 6.6.13 6.6.10 6.6.11 6.6.12 6.7

GEOTHERMAL ..............................................................................................................................................244 Background....................................................................................................................................244 Targets&Incentives ......................................................................................................................244 GeothermalProcessandTechnologies .......................................................................................... 244

6.7.1 6.7.2 6.7.3

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6.7.4 6.7.5 6.7.6 6.7.7 6.7.8 6.7.9 6.7.10 6.7.11 6.7.12 6.7.13 6.7.14 6.7.15 6.8 China ..............................................................................................................................................245 Japan..............................................................................................................................................246 SouthKorea....................................................................................................................................247 Taiwan ...........................................................................................................................................248 India ...............................................................................................................................................248 Indonesia........................................................................................................................................248 Malaysia ........................................................................................................................................249 Philippines......................................................................................................................................249 Thailand .........................................................................................................................................250 Australia.........................................................................................................................................251 NewZealand ..................................................................................................................................254 SummaryofCompaniesinvolvedinGeothermal ........................................................................... 256

SMARTGRID ...............................................................................................................................................257 Background....................................................................................................................................257 Targets&Incentives ......................................................................................................................257 SmartGridProcess.........................................................................................................................258 China ..............................................................................................................................................260 Japan..............................................................................................................................................262 SouthKorea....................................................................................................................................265 Taiwan ...........................................................................................................................................265 India ...............................................................................................................................................267 Singapore .......................................................................................................................................267 Indonesia........................................................................................................................................267 Malaysia ........................................................................................................................................268 Philippines......................................................................................................................................268 Thailand .........................................................................................................................................269 Australia.........................................................................................................................................269

6.8.1 6.8.2 6.8.3 6.8.4 6.8.5 6.8.6 6.8.7 6.8.8 6.8.9 6.8.10 6.8.11 6.8.12 6.8.13 6.8.14

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6.8.15 6.8.16 6.9 NewZealand ..................................................................................................................................270 SummaryofCompaniesinvolvedinSmartGrid............................................................................. 271

CARBONCAPTUREANDSTORAGE .................................................................................................................... 272 Background....................................................................................................................................272 Targets&Incentives ......................................................................................................................272 CCSProcess ....................................................................................................................................275 China ..............................................................................................................................................276 Japan..............................................................................................................................................276 SouthKorea....................................................................................................................................277 Taiwan ...........................................................................................................................................277 India ...............................................................................................................................................277 Singapore .......................................................................................................................................278 Indonesia........................................................................................................................................278 Malaysia ........................................................................................................................................279 Philippines......................................................................................................................................279 Thailand .........................................................................................................................................279 Australia.........................................................................................................................................279 NewZealand ..................................................................................................................................285 SummaryofCompanies ................................................................................................................. 285

6.9.1 6.9.2 6.9.3 6.9.4 6.9.5 6.9.6 6.9.7 6.9.8 6.9.9 6.9.10 6.9.11 6.9.12 6.9.13 6.9.14 6.9.15 6.9.16

6.10 NUCLEAR ....................................................................................................................................................286 6.10.1 6.10.2 6.10.3 6.10.4 6.10.5 6.10.6 6.10.7 Background....................................................................................................................................286 Targets&Incentives ......................................................................................................................287 NuclearProcessandSupplyChain ................................................................................................. 288 China ..............................................................................................................................................293 Japan..............................................................................................................................................297 SouthKorea....................................................................................................................................300 Taiwan ...........................................................................................................................................302

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6.10.8 6.10.9 India ...............................................................................................................................................302 Singapore .......................................................................................................................................305

6.10.10 Indonesia........................................................................................................................................305 6.10.11 Malaysia ........................................................................................................................................306 6.10.12 Philippines......................................................................................................................................306 6.10.13 Thailand .........................................................................................................................................307 6.10.14 Australia.........................................................................................................................................307 6.10.15 NewZealand ..................................................................................................................................308 6.10.16 SummaryofCompanies ................................................................................................................. 309 6.11 WASTEWATER .............................................................................................................................................309 6.11.1 6.11.2 6.11.3 6.11.4 6.11.5 6.11.6 6.11.7 6.11.8 6.11.9 Background....................................................................................................................................309 Targets&Incentives ......................................................................................................................309 WastewaterProcess ...................................................................................................................... 310 Research&Development............................................................................................................... 311 China ..............................................................................................................................................312 Japan..............................................................................................................................................316 SouthKorea....................................................................................................................................318 Taiwan ...........................................................................................................................................319 India ...............................................................................................................................................319

6.11.10 Singapore .......................................................................................................................................320 6.11.11 Indonesia........................................................................................................................................321 6.11.12 Malaysia ........................................................................................................................................322 6.11.13 Philippines......................................................................................................................................322 6.11.14 Thailand .........................................................................................................................................323 6.11.15 Australia.........................................................................................................................................324 6.11.16 NewZealand ..................................................................................................................................325 6.11.17 SummaryofCompanies ................................................................................................................. 326

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6.12 WASTE .......................................................................................................................................................326 6.12.1 6.12.2 6.12.3 6.12.4 6.12.5 6.12.6 6.12.7 6.12.8 6.12.9 Background....................................................................................................................................326 Targets&Incentives ......................................................................................................................326 WasteProcess................................................................................................................................328 China ..............................................................................................................................................329 Japan..............................................................................................................................................333 SouthKorea....................................................................................................................................335 Taiwan ...........................................................................................................................................336 India ...............................................................................................................................................337 Singapore .......................................................................................................................................338

6.12.10 Indonesia........................................................................................................................................338 6.12.11 Malaysia ........................................................................................................................................339 6.12.12 Philippines......................................................................................................................................340 6.12.13 Thailand .........................................................................................................................................340 6.12.14 Australia.........................................................................................................................................341 6.12.15 NewZealand ..................................................................................................................................342 6.12.16 SummaryofCompanies ................................................................................................................. 343 7 SUMMARYOFKEYOPPORTUNITIES.................................................................................................... 344 7.1 7.2 7.3 7.4 7.5 INTEGRATIONOFGOVERNMENTPOLICYANDINDUSTRY ....................................................................................... 344 INFRASTRUCTURE .........................................................................................................................................345 COMMODITISEDSECTORS .............................................................................................................................. 346 INNOVATION ...............................................................................................................................................347 CONCLUSIONS .............................................................................................................................................347

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Foreword ThisHandbookwasinitiallyproducdtoassessthegrowthandopportunitiesintheCleanTechnology spaceinAsiaPacific.ThepaceandscaleatwhichcountriesintheAsiaPacificRegionsuchasChinaand Indiahavesettargets,alignedpolicywithindutsryandthenfollowedthroughwithimplementationis breathtaking.ThisversionoftheHandbookisfocusedonrenewableenergyandpowergenerationandis meanttoserveasareferenceguideandprovideanoverviewoftheregionbycountryandsector. Theauthorwelcomesanycommentsorsuggestionsforfutureeditions. SimonWilson [email protected] Iwouldliketothankthefollowingcontributors: Editor ConanHales([email protected]) SectorReview CarbonMarkets DavidFogarty CleanTechnology LeonoraWalet ProjectFinance MinervaLau PatentFiling SueCullenandMarkGarlinghouse CountryProfiles Japan RisaMaeda,YokoInoue SouthKorea ChoMeeYoung HK,Taiwan,China LeonoraWalet India RatnajyotiDutta/PrashantMehra Singapore DavidFogarty Indonesia SunandaCreagh Malaysia NikiKoswanage Philippines MinervaLau Thailand PiloyTenkate Australia,NZ BruceHextall AbouttheAuthor Simon Wilson is the Head of Commodities & Energy in Asia Pacific for the Markets Division of Thomson Reuters. Prior to this position, Simon worked in the ventures group in London, looking at early stage ventures in Commodities & Energy business. Prior to Reuters he worked at Environmental Resource Management, a specialist environmental consultancy, working on key environmental government and multinational studies in the Asia Pacific region.

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EXECUTIVESUMMARYThe Asia Pacific Region (APR) will be the largest Energy Market and Clean Technology Market in the world, by 2030. According to the EIA, the APR will consume over 250 Quadrillion BTU by 2030 and generate 15,000 TWh in power by 2030. Countries within the APR are already gearing up for the impact of Climate Change by setting aggressive renewable targets. Clean Technology is seen as a growth industry that generates jobs, while reducing carbon emissions and energy security in the process. What is surprising is the speed of change and the level of investment set aside by governments to ensure that countries become world leadrs in this space. According to Thomson Reuters Scientific, China and Japan lead the world in terms of patents filed in Clean Technology and this is re-enforced by the levels of investment by government. For the purpose of the country review, the APR can be divided into four sub regions: North Asian countries that include China, Japan, South Korea and Taiwan, These countries are resource poor, leaders in manufacturing and are positioning themselves the be global leaders in this space. North Asia will account for 75% of the total APR power generated in 2010 and thiis expected to increase to over 80% by 2020, mainly driven by China. India, while a potentially large market, does not have the level of investment and manufactiuring capability, as its Northern Asian neighbours. South East Asia will be as largest as the Indian market in aggregate by 2030. These countries are resource rich and focused on geothermal, hydro and biomass sectors. Pacific (Australia and NZ) which are developed, resource rich and highly innovative countries that lead the region in new technologies such as wave, geothermal and CCS technologes.

The Handbook has focused primarily on renewable energy for power generation and technologies to reduce impact from fossil fuels, such as CCS and Clean Coal. In terms of Key Clean Technology sectors, the key sectors fall into the following categories: Infrastructure. For a lot of countries in the APR, Clean Technology is simply building new power capacity to keep up with growth. The largest contributors to renewable energy will be Hydro (14%), followed by Nuclear Power (8-9%). Renewable Energy will only account for 4% of total power generation by 2030. Commoditised Sectors. Manufacturing of Wind and PV Solar are moving to North Asian countries and in particular China, where there is high quality and there is a significant cost advantage.

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Innovation. Beyond, Wind, Solar and Biomass, countries such as Australia and New Zealnd lead in new sectors, such as Wave/Tidal, Geothermal and CCS. Even with all these proposed targets, power generated from fossil fuels will still account for over 70% of the power generation mix by 2030. Other mitigation measures, such as energy efficiency such as CCS will need to be included into projections to reduce the overall energy consumption and emissions in the APR.

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1

INTRODUCTION

This Clean Tech Handbook is meant as a reference guide for people interested in investing in the Clean Technology space in the Asia Pacific Region (APR). It provides an overview of the different sectors by geography as well as highlights of the different policies and drivers for each market. The Handbook will: Define the Clean Tech market in the Asia Pacific Region by sector and geography Size the market opportunity by sector and geography Highlight the regulatory framework and the drivers across the Asia Pacific Region Highlight the key players within each sector and each geography from new emerging private companies to public companies listed on the stock market Looks at the various support structures for Clean Technology from government, private sector funding, academic institutions and highlights key technologies from universities

1.1

WhatisCleanTechnology?

There are many different definitions of Clean Technology or Clean Tech for short. Here the term is loosely applied to a number of fragmented technologies that will either replace existing supply of fossil fuels or use energy more efficiently. Part B goes into detail on each sector of the energy markets.

1.2

WhyCleanTechnologyinAsiaPacific?

The basic need for energy to keep up with economic growth will mean that renewable and Clean Technology will be required by countries to manage their energy resources for security, economic and environmental reasons. In addition Clean Technology is seen as a job creator by a key new industry which APR countries plan to dominate. With the breath-taking pace of change in the region, this Handbook will highlight some of the key issues of the APR which will provide impetus for development: In some sectors, Clean Technologies in APR could leapfrog the developed markets, particularly in infrastructure as most of the projects will be new Governments and large corporations in APR are already leading the Intellectual Property race and are leaders in patent filings (proxy for innovation) for Clean Technology Governments have set ambitious Renewable Energy targets to incentivize domestic players. This will accelerate the technology transfer and commoditization of these businesses, as they have done successfully in other markets, such as manufacturing

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1.3

FactorsdrivingtheCleanTechMarketinAsiaPacific

Largest growing market - Increase in growth of APR economies, with a corresponding increase in carbon emissions and need for Clean Technologies. It is expected that APR will make up over 50% of the global emissions and most of the economic growth 1 Intellectual Property - While Asia is seen as a follower of technology, recent research by Thomson Reuters Scientific shows that Asia leads the innovation in Clean Tech with more patents produced than any other region. There will be opportunities for Asian companies to further develop and lead the Clean Tech revolution 2 High quality/low cost manufacturing - In addition, what the last technology boom has shown, is that technology can be adopted quickly in Asia and often leapfrog developed countries, as the infrastructure put in place is new a key example will be the set-up of utilities and a smart grid. Solar, wind and marine technologies will become quickly commoditised and the move of the move to Asia, where high quality, low cost manufacturing will accelerate as with other manufacturing sectors such as cars, silicon chips, and computers. Incentives for technology transfer will further accelerate this transfer 3 Restricted International Participation - In addition, there are also regulatory or protectionist measures in place that may favour domestic players such as the wind and solar market in China. Speed of change While US and Europe overcome the credit crisis, with all the factors in place, there will be a much quicker transfer of Clean Technology to APR than many people expect.

1.4

KeyChallengesfortheCleanTechMarketinAsiaPacific

International Government Support and Policy China and India have already set renewable targets in key sectors which will be the driver for set up of domestic industries that will supply both the domestic and international markets. The Chinese government in particular has used its fiscal policy to inject investment in key sectors such as solar and wind by encouraging lending until the end of 2009 and view this economically, rather than politically. However, without a framework in place this may lead to bilateral deals, thus the expansion of Chinese products may be confined to the region rather than the US and Europe.

1

SeeFigure2.2,PrimaryEnergyDemandinAsia

2

SeeFigure2.6,NumberofPatentFilingsinCleanTechnologybycountryandSection2.5,Research& Development SeeSection2.4,TargetsandIncentives

3

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Private Sector Funding Framework- What is missing is a framework which allows new companies to grow: a gap exists in the market for early round investment. The Venture Capital and Private Equity businesses are still a nascent industry, compared with the US and European markets.

1.5

WhowouldbeinterestedinthisReport?

Venture Capital and Private Equity Funds and banks interested in which countries, sectors and companies to target their investment Government and public institutions Financial advisors Individual investors

1.6

StructureoftheHandbook

While Clean Technology involves many different sector includingenergy efficiency, this version of the Handbook will focus on renewables and other key technologies affecting power generation, notably CCS and Smart Grid.

Figure 1.1 Asia Pacific Clean Tech Market MapInternational Policy and Regulation Government Policy and RegulationSectors

Energy SupplyRenewable Energy Power Generation Distribution Conventional Energy Building

Energy UsageIndustry Transportation

Other PollutantsWater Waste

SupportServices

Wind

Generation

Coal

Design

Design

Road

Extraction

Collection

Private Sector Funding Private Sector Services

Solar

Distribution

Gas

Materials

Materials

Rail

Treatment

Recycling

Biofuel Sub Sectors

Storage Demand Management

Oil

Efficiency

Efficiency

Air

Distribution

Energy from Government Waste Agency Treatment Universities

Biomass

Nuclear

Water

Usage

Marine

Hydrogen

Storage

Wastewater

Disposal

Geothermal

Covered in report Not covered in report

Hydro

Services & Support

The Handbook is written in two parts for ease of reference by country or by energy sector: Part A - Country Review focused on country policy and incentives, such as regulation, renewable energy targets and Feed in Tariffs Part B Energy Sector Review focused on the process and supply chain of sector and key companies within each sector

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PARTACOUNTRYREVIEW

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22.1

COUNTRYOVERVIEWBackground

The Asian Pacific Region (APR) can be broken down into four sub regions:

2.1.1 NorthAsianCountriesChina (Section 3.2), Japan (Section 3.3), South Korea (Section 3.4), Taiwan (Section 3.5), Hong Kong (Section 3.6). These five lead the world in engineering and manufacturing, with strong links between government and industry. Additionally North Asian countries are resource poor, therefore are net importers of oil and other commodities, thereby raising the issue of energy security. Clean Technology is viewed as a new strategic industry where there still no dominant companies. Clean Technology has many synergies with existing industries such as electronics for photovoltaic cells (PV) and heavy industry for wind generation. Key characteristics include: Leaders in Manufacturing synergies with existing industries Net Importers of energy Largest emitters of carbon by country Close ties between government and industry means that policy has the potential to be implemented more effectively

2.1.2 SouthAsiaIndia (Section 3.7). While India will be the second largest market after China, it does not have the same drivers as it North Asian Colleagues. Key characteristics include: Large emerging market, but relatively poor compared with North Asia Net importer of energy Large emitter of carbon Follower of technology andmanufacturing Government 5-year planning, but less directive than North Asia

2.1.3 SouthEastAsiaSingapore (Section 3.8), Indonesia (Section 3.9), Malaysia (Section 3.10), Philippines (Section 3.11), Thailand (Section 3.12) and Vietnam (not included). Key characteristics include: Large emerging market but still relatively poor compared with North Asia Large geography (archipelagos), no infrastructure in place favour decentralized power system Rich in renewable resources Follower and importer of technology and manufacturing

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2.1.4 PacificAustralia (Section 3.13) and New Zealand (Section 3.14) are both OECD countries and culturally Anglo Saxon and not Asian. Howvever, due to their geographic location, are part of the APR and will be a key area in Clean Technology, due to: Developed countries Resource-rich Leaders in innovation Established capital markets

2.1.5 KeyDriversforCleanTehnologyKey drivers for Clean Technology within these countries include: Market Size & Growth Policy/Regulation Developed vs. Emerging Markets R&D/Manufacturing Capital Raising

The following figure summarises the motivation, framework, sectors and factors of the Clean Tech market in APR:

Figure 2.1 Asia Pacific Clean Tech DriversRising Energy Costs Depletion of Natural Resources Climate Change & Environmental Impacts Lowering Clean Tech Costs

International Policy and Regulation Government Policy and RegulationDeveloped vs Emerging Research & Development Capital Markets

Energy SupplyRenewab le Power Generatio County Variance Conventi onal Building

Energy UsageIndustry Transport ation

Other PollutantsWater Waste

SupportServices

Clustering of Industries

Adoption of Technologies suited to natural resources?

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2.2

MarketSize&EnergyMix

If we look at the potential market sizes for Clean Technology, then the region will contain some of the largest markets, based on energy usage rather than GDP. In 2009, Asia Pacific has three of the top ten countries in installed renewable energy, with around 2,338 TWh by 2030.

If growth factors are applied, then APR will account for three of the top five largest energy users globally: China, India and Japan. It is estimated that China will double power generation by 2020 and North Asia will account for over 75% of the total power generation for APR. According to the EIA forecasts, South East Asia in aggregate is projected to be a similar size to India by 2030.

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2.3

PolicyandRenewableRegulation

Countries in APR are undergoing a huge transformation in industrialization and urbanization. This will lead to migration from rural areas to cities and thus lead to an increase in demand for power generation in urban areas. While discussions over emissions and setting a price on carbon were not resolved in Copenhagen, APR countries have already embraced Clean Technology and put in place new aggressive targets for 2020. Countries such as China and India understand that they will be some of the most affected countries due to climate change, but politically Clean Technology is an easier sell over a reduction in emissions as it promotes the: Creation of strategic domestic industries, that can eventually export internationally Taking advantage of the high quality, low cost manufacturing base Reduction of energy usage Technology transfer and payment of credits

There is a possible risk of allocating too much resource to Clean Tech over emissions targeting, resulting in inefficient deployment of capital by government. If government sets renewable targets which drive investment, then they may misapply investment such as the Feed in Tariff for PV Solar in Germany and Japan. A case for a Carbon tax or Carbon Trading Scheme is that it internalizes the cost of carbon and thus leaves decision making to the private sector, which in theory should be more efficient.

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2.4

Targets&Incentives

Key targets and incentives for Clean Technology have been focused on intermittent wind and solar power which only affect peak loads rather than base load generation. China is already experiencing problems in managing the changes in supply to the grid4. The various Feed in Tariffs (FiT) that are primarily focused on solar and wind may distort the market and exacerbate the problem.

Figure 2.4 Summary of Renewable Energy Incentives by CountryGeneration TWh 2010/20 China Japan Korea Taiwan India Indonesia Philippines Thailand Malaysia Australia NZ 3968 1063 412 218 863 180 70 170 130 282 45 6344 1182 537 354 1463 290 115 260 150 300 50 20% by 2020 20% by 2020* 7% by 2010 12% by 2020 10% by 2012 17% by 2025 2010 20% by 2022 5% by 2050 20% by 2020 90% by 2025 Yes Yes Yes Yes Yes Yes 2010 Yes Yes State Level Yes RE Targets FiT CapEx Subsidy na Yes na na Yes Yes Yes na na Various na Tax & VAT Incentive Yes Yes na na na na Yes na na na na

Source: Government Publications, Thomson Reuters

2.4.1 FeedinTariffs(FiT)There are currently around 40 FiT programs to promote and encourage renewable sources, with Germanys FiT solar program held up as the successful model. Asian countries are in the process of applying FiTs, with a summary below:

4

Thomson Reuters

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China has put in place its Golden Sun scheme to encourage investment in the solar industry. There are plans for a FiT for China, but at the time of writing it is not clear when it will be put in place and whether it will be set at the national level or at the provincial level 5. Japan has put in place a FiT scheme specifically for grid-connected solar power systems. The initial rate paid to the owners of systems will be around 50 yen per surplus kWh ($55 per MWh) produced. Utilities will be obligated to participate in the scheme. Japan aims to have solar power systems installed on over 70% of new houses and aims to regain its top spot as the largest solar market in the world. 6 Taiwan - The MOEA announced the final FiT scheme for renewable energy at the end of 2009. The tariffs were set at TWD 11.12 (USD 35 cents) per kWh for Photovoltaic (PV) projects and TWD 2.38 (USD 7 cents) per kWh for wind projects 7. India - India's Central Electricity Regulatory Commission (CERC) in New Delhi announced new regulations for a FiT system for both wind and solar energy on Sepetember 17th, 20098. Australia does not have a national FiT, but relies on states to set their own rates. Rates range from around 20 to 60 cents per KWh.9

5 6

NDRC, Medium and Long Term Development Plans for Renewable Energy Thomson Reuters, Yomiuri Shimbun 7 MOEA, Government Publicatiion 8 Government Publication 9 Based on Government Publication and Website

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Figure 2.5 Summary of FiTs by CountryGeneral Wind Solar Biomass Hydro Geothermal

China

$0.075/kWh

$0.16-0.22/kWh

Japan Korea

$0.24/kWh Standard Price

$0.5/kWh

Taiwan

$0.07/kWh

$0.35/kWh

India

$0.63-0.89/kWh

$0.57-0.87/kWh

$0.49-0.80/kWh

Indonesia

$0.07/kWh

% of production cost

Philippines

To be set in 2010

Thailand Malaysia

See Breakdown $0.06/kWh

$0.16/kWh

$0.24/kWh

$0.08/kWh

$0.01-0.02/kWh

Australia NZ

$0.40-0.54/kWh

Source: Government Publications, Thomson Reuters

2.4.2 BaseloadPowerGenerationFactors such as the move to the electric vehicle will put further pressure on base load power generation. Currently the primary energy source for base load power generation in APR is still coal, which still accounts for over 70% of the total power generation in China, India and Australia. Addressing how to reduce reliance on coal for baseload power generation will be key to addressing the issues of carbon emissions in the APR. A key driver for Clean Technology should be to increase renewable targets for the generation of base load power instead of just the peak load. Short term investment and targets should be focused on renewables (or non-fossil), such as nuclear, hydro, biomass and geothermal which can provide reliable base load power. Key targets and incentives for Clean Technology have been focused on intermittent wind and power, that only affect peak load, rather than base load generation. China is already experiencing problem is managing the changes in supply to the grid. The various Feed in Tariffs (FiT) that are primarily focused on solar and wind, may distort the market and exacerbate the problem.

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Figure 2.6 Policy and IncentivesUrban EnvironmentPolicyBase Nuclear, hydro, biomass, geothermal Wind, solar *Targets for renewables

Peak For China, India, SE Asia Increase in industrialisation and urbanisation and migration from rural areas to urban areas

However, policy and incentives are geared towards renewables that affect peak loads wind and solar

Rural EnvironmentOff Grid Wind, solar Power will be used for electricity that will lead to increase demand on base and peak loads Electricity, Biofuel, Hydrogen

TransportRoad

In Asia, countries such as China, India and SE Asia are undergoing huge transformation in urbanisation Policy is focused on renewable targets that affect baseload and there is a focus on nuclear, hydro, geothermal and biomass that represent the major short term solutions

PowerGenerationinAsia2010 Genera tion (TWh) China Japan South Korea Taiwan India Indonesia Malaysia Philippines Thailand Australia New Zealand 3968 1063 412 218 863 180 110 70 170 282 45 177 Generat ion (TWh) 6344 1182 537 354 1463 290 150 115 260 300 50 247 2020

Capacit y (GW) 801 253 70

Therma l 81.22% 61.84% 64.32% 75.23% 77.29% 85.85% 81.85% 62.83% 93.51% 90.70% 27.00%

Nuclear 1.64% 27.37% 34.47% 17.40% 4.29% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Renew able 17.14% 10.79% 1.21% 7.37% 18.42% 14.16% 18.16% 37.17% 6.50% 9.31% 73.01%

Capacit y (GW) 1116 260 87

Therma l 76.41% 59.23% 58.24% 77.99% 71.79% 87.17% 76.91% 65.96% 94.33% 89.74% 26.21%

Nuclear 4.51% 29.27% 39.33% 16.38% 8.15% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Renew able 19.08% 11.50% 2.43% 5.63% 20.06% 12.83% 23.09% 34.04% 5.67% 10.26% 73.79%

Source: EIA, IEA, CARMA, BP Statistics, Estimates

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The key driver for power generation is cost. In the absence of an internalised Carbon Price, coal is the still the cheapest source of power generation, followed by Natural Gas and Nuclear. The following section highlights and compares the cost and intermittency of generation from renewable sources. Some technologies such as Wave technology are still 4-5 times more expensive than coal and are thus still mot commercially viable. The cost of power generation will vary by country and power station. Costs for power generation can be broken down into: Capital Costs; Operation & Maintenance; and Fuel Costs

Based on the 2005 IEA study, the average generation costs for different types of power stations (based on 5% discount rate) are: A) By Conventional Power: (i) Baseload generation Coal fired power station generation costs range between 25 and 50 USD/MWh Natural Gas fired power station generation costs range between 37 USD/MWh and 60 USD/MWh B) By Renewable Energy: (i) Baseload generation Nuclear power station generation costs range 21 and 31 USD/MWh Biomass - generating electricity range between 25 and 65 USD/MWh for most Combined Heat and Power plants (CHP) but reaches more than 120 USD/MWh for the small biomassfuelled plant. Waste to Energy and Landfill Gas generating electricity ranges from negative values (service value of burning waste) to around 24 USD/MWh Geothermal - generating electricity are 27.1 USD/MWh. Although this is based on one plant in the US and the cost are much higher for other technologies and can reach 100 USD/MWh for geothermal in Australia Hydroelectricity - generation costs range between some 40 and 80 USD/MWh for all plants except in Japan where they reach more than 140 USD/MWh. (ii) Peak generation Wind-generation costs for the wind power plants considered in the study range between 35 and 95 USD/MWh, but for a large number of plants the costs are below 60 USD/MWh.

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However, costs have fallen in recent years and should be in the lower range. The main issue for wind is intermittency and availability/capacity factors of wind power range between 17% and 38% for onshore plants, and between 40% and 45% for offshore plants and cannot be use for baseload power. Solar-generation costs of electricity were around 150 USD/MWh in 2005 and have fallen drastically, whereas they are now commercially viable without FiT subsidies at certain times in the day in sunny locations such as the Mediterranean and California. Solar also suffers from intermittency issues, with availability/capacity factors reported for solar plants varying from 9% to 24% for the solar PV plants. Wave/Tidal Technology generating electricity is still in it pilot scheme: costs can reach up to 225 USD/MWh.

Figure 2.7 - Cost of GenerationMarine Solar Wind (Offshore) Wind (Onshore) Hydro W2E Biomass Geothermal (EGS)

Availability 10-25% PEAK Availability 40-45% Availability 20-40%

BASEGeothermal Nuclear Gas Coal 0 20 40 60 80 100 $/MW 120 140 160 180 200

Source: IEA, Estimate

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2.4.3 CleanDevelopmentMechanismProjects(CDM)In the absence of a Carbon Price, CDM plays a key role in subsidising renewable energy for many non Annex I countries in the APR 10. CDM has been an additional incentive for Non Annex 1 countries 11 to generate additional revenues and encourage the generation of renewable energy. Asia accounts for over three quarters of all 5,516 CDM projects globally. China and India are the two largest markets globally, with 2,048 and 1,477 projects respectively. Chinas projects are focused on hydro, wind, biomass, EE and coal bed methane projects, while India is biomass, wind and EE projects. While no other country comes close to China and India - South East Asia - Indonesia, Malaysia, Thailand, and Vietnam- is the other sub region that accounts for the other major source of CDM credits.

AnnexIoftheFCCCliststhecountrieswhoweremembersoftheOECDin1992,11countriesundergoingthe processoftransitiontoamarketeconomy,andtheEuropeanEconomicCommunity.AnnexIpartiesarecommitted toadoptnationalpoliciesandtakemeasurestomitigateclimatechange. 10

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Figure 2.8 - CDM Projects in AsiaChina 918 418 82 57 354 3 5 168 61 4 3 2 2048

India

150

380

386

82

366

5 0

7 1

13 1 17 5

1476

SE Asia

8 9

1 0 8

321

6 8

586

S Korea 85 Key Hydro Other 80 Wind Biomass China and India dominate the CDM projects globally and in Asia China is dominated by hydro, wind and energy efficiency projects Renewables make up over 50% of CDM projects Source: UNFCC Energy Efficiency Transport Methane Agriculture/Forest Industrial Other GG

Due to the muted response at Copenhagen the question is now, What next? CDM is viewed as time consuming, project specific and thus not scalable. There are attempts to move to sector specific targets that will allow for quicker adoption of standards and best practice and thus an ability to scale more quickly. Other discussions concern a developed country fund to finance key technologies through some form of Foreign Direct Investment (FDI), although there could be strings attached such as funding of developed country technologies to be used in developing countries. Developed countries, such as Japan already employ such tactics in its dealing with developing countries and this approach is sure to increase.

2.5

Research&Development

Another key driver is the Research and Development in the Clean Technology market. In APR, this tends to be dominated in the northern Asian countries Japan, Korea, Taiwan and China because they are closely aligned to their existing manufacturing expertise. It is also interesting to note that governments have taken initiatives such as regulation, subsidies and fostering the development of domestic Clean Technology industries for example, solar in Japan, solar and wind in China even at the expense of technologies that are more aligned with countries natural resources. For instance, Japan has abundant wind, wave and geothermal resources, yet subsidizes and promotes the solar industry at the expense of other more suitable technologies. In

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some ways, this close integration between government policy and industry will act as the key driver for these northern Asian countries. A study was undertaken by Thomson Reuters Scientific on patent filings in the renewable sector and a comparison between 1997-1999 and 2006-2008. This study included 12,000 filings and focused on the three main renewable sectors, namely: wind, solar and marine technologies. Patent filings are an indicator of research and development in sector and statement of intent by a country or company to invest in a particular industry. China, Japan and Korea are the leaders of such filings globally which is bourne out by their respective positions in the wind, solar and marine sectors. It is also interesting to note Indias comparative weakness in this area. China - It may be a surprise to see China listed first, but Chinese inventions are increasing rapidly in almost every field. All 3 areas of wind, solar and marine are represented currently, with wind dominating. It is also ironic for a country that has in the past paid little respect to Intellectual Property Rights in