Iran's Gas Turbine Industry

View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Sussex Research Online A University of Sussex DPhil thesis Available online via Sussex Research Online: http://sro.sussex.ac.uk/ This thesis is protected by copyright which belongs to the author. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the Author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the Author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Please visit Sussex Research Online for more information and further details The Dynamics of Technological Catching-up: The Case of Iran’s Gas Turbine Industry Mehdi Majidpour A thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy SPRU - Science and Technology Policy Research University of Sussex December 2010 ii I hereby declare that this thesis has not been, and will not be, submitted in whole or in part to another University for the award of any other degree. Signature: ……………………………………… Mehdi Majidpour iii Are those who know equal with those who know not? iv Acknowledgements My deepest intellectual debts are owed to my supervisors, Jim Watson and Rumy Hasan, for their support and professionalism. They always encouraged me to explore new directions in my thesis and they taught me how to develop my own ideas. They also taught me how to capture the reality. Their intellectual sharpness has shaped this research in numerous ways. I would like to express my deep gratitude to MAPNA and PARTO people who helped to acquire reliable and accurate data. PARTO CEO and PARTO R&D were very supportive for this research. Thank you so much. I would also like to readily acknowledge my indebtedness and gratitude to Professor Edward Steinmueller for his fruitful and constructive feedback in the all stages of my thesis. I would also like to express my special thanks to Prof. Gordon MacKerron, who included me in the Energy Policy course as an associate tutor and helped me to enhance my knowledge of this field. Thanks also to the other colleagues of the Sussex Energy Group. I have learned a lot from working with this professional group of people. During this thesis, I have greatly benefited from stimulating discussion with a number of academics, Professor Nathan Rosenberg of the University of Stanford, Professor Richard Nelson of Colombia University, Professor Carlota Perez of SPRU, Professor Mike Hobday of the University of Brighton, Professor Slavo Radosevic of London’s Global University, and Professor Jan Fagerberg of the University of Oslo. I also owe special thanks to Professor Mehran Ebrahimi of the University of Quebec at Montreal, who not only encouraged me to come SPRU but also was a source of immense inspiration for me. Similar thanks go to Professor Ali Paya, the University of Westminster, who helped me in understanding the philosophical basis of this thesis. I would also like to thank all my SPRU friends; Oliver Johnson, Jenny Lieu, Jonathan Dolley, Florian Kern, Bruno Turnheim, Timothy Karpouzoglou, Robert Byrne, Ebrahim Souzanchi, Jeongseon Seo, Sangwoo Shin, Katie Smallwood, and all the other students who made an interactive environment in SPRU. Finally yet importantly, I would like to thank my wife and my parents for their love and support. Their encouragement and emotional support helped me very much to complete this thesis. I love you all. Mehdi Majidpour Brighton, December 2010 v UNIVERSITY OF SUSSEX Mehdi Majidpour, DPhil in Science and Technology Policy Studies The dynamics of technological catching-up: The case of Iran’s gas turbine industry Summary Today, fostering gas-fired power plants is recognised as a significant step towards a low-carbon economy. Gas fired-power plants are favoured over other types of fossil-fuelled power plants due to their various advantages, including lower emissions, flexibility of technology, higher efficiency, short construction times and lower capital investment. The gas turbine is the main machine and the most technologically advanced part of a gas-fired power plant. There have been a limited number of companies in industrialised countries that have developed these sophisticated technologies over the last 50 years. The global market for land-based gas turbines has an oligopolistic structure. The evolution of these technologies has been greatly influenced by countries’ government policies, and in particular energy policies. In this light, one question is: to what extent have industrialising countries built their technological capabilities in gas turbines? Consequently, one focus of interest here is the way in which, and the extent to which, industrialising countries have synthesised their indigenous technology development efforts with overseas technology inflows. Countries such as Iran, India and China, which have large and growing domestic electricity markets, are appropriate candidates for research in order to understand the possible technological gaps and associated dynamics between the industrialised and industrialising worlds. To answer these questions, this thesis research deals with Iran’s gas turbine industry and, for the first time, systematically examines this industry in the context of a developing country. The study delves deeply into the dynamics of interactions between indigenous technology development and overseas technology inflows. It casts light upon the influences, challenges, and difficulties associated with technological catching-up processes. The framework of the analysis is based on an extensive literature review on technological catch-up, the substitution/complementarity debate, and the gas turbine industry. The framework was operationalized through qualitative interviews as well as supplementary documents. The thesis uses a ‘dynamic approach’, and argues that understanding the interaction processes cannot be reduced to examining only the type of relationship between the two technology sources. Instead, far more attention needs to be devoted to analysing the complexity and associated influences on this relationship. The thesis also provides empirical insights into the development of gas turbine capabilities in India and China, the two largest emerging economies. It reveals that a high level of state involvement in developing countries is a prominent feature of the industry. It also demonstrates that the evolution of the industry also in both developed and developing countries is closely interrelated with each country’s national energy policies. vi Table of Contents Chapter 1: Introduction .......................................................................................................... 1 1.1 Purpose of the Study .............................................................................................. 1 1.2 Research Questions................................................................................................ 3 1.3 Overview of the Thesis .......................................................................................... 4 Chapter 2 : The Research Context and Background .............................................................. 8 2.1 Introduction............................................................................................................ 8 2.2 Iran: A Source of Energy ....................................................................................... 9 2.3 Fostering Natural Gas Utilisation: A National Policy.......................................... 15 2.4 Iran’s Power Generation Industry ........................................................................ 19 2.4.1 National Power Plants: Statistics and Combination......................................... 22 2.4.2 Why Gas-fired Power Plants? .......................................................................... 24 2.4.3 Privatisation in the Power Generation Industry: An Ongoing Policy.............. 28 2.4.4 Actors in Iran’s Gas Turbine Industry ............................................................. 30 2.5 Conclusions.......................................................................................................... 35 Chapter 3 : The Theoretical Framework .............................................................................. 37 3.1 Introduction.......................................................................................................... 37 3.2 The Basic Arising Concepts................................................................................. 38 3.2.1 Technological Catch-up ................................................................................... 38 3.2.2 Technological Catch-up and International Technology Transfer .................... 46 3.2.3 Technological Catch-up and Innovation Systems............................................ 50 3.2.3.1 Technological Catch-up and National Innovation System....................... 50 3.2.3.2 Technological Catch-up and Sectoral Innovation System ....................... 54 3.3 Interactions between Indigenous Technology Development and Overseas Technology Transfer ........................................................................................................ 57 3.3.1 Emerging Literature: Substitution and Complementarity................................ 58 3.3.2 The Dynamics of Interactions: A New Approach...........................................

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