The Green.Inc blog at the NY Times is reporting a big fuss over the fact that the US is buying wind power technology from China instead of creating domestic jobs. The reason? After years of avoiding big public investments in future alternative energy technologies, US industries are now too small to respond to the immediate demand created by the stimulus package. By one reckoning, "84 percent of the $1.05 billion in clean-energy grants distributed by the government since Sept. 1 has gone to foreign renewable energy companies — specifically, wind companies."
[Update Nov 5: Schumer Seeks to Block Stimulus Money for Chinese-Backed Texas Wind Farm ]
Here's the full post from Green.Inc
Tempers Flare Over Chinese Involvement in Wind Farm Planned for Texas
By TOM ZELLER Jr.
NEW YORK — News last week of the first major influx of Chinese capital and wind turbine manufacturing expertise into the renewable energy market in the United States — a 600-megawatt wind farm planned for the plains of west Texas — had many readers of the Green Inc. blog in a state of agitation.
“I don’t understand why China is exporting wind energy to the U.S.,” wrote Mark from New York City. “Isn’t this exactly the kind of project a United States company could and should be doing?”
Another reader — Drew from Boston — was more blunt: “Again, China is playing the West for a sucker,” he wrote. “We send them our engineering, they get the manufacturing work and experience.”
The details of the deal known so far: Contingent on financing from Chinese commercial banks — and no small measure of funding from the U.S. economic stimulus package — A-Power Energy Generation Systems, a Nasdaq-listed company based in the Chinese industrial city of Shenyang, would provide 240 of its 2.5-megawatt wind turbines for a 36,000-acre, or 14,600-hectare, utility-scale wind farm in west Texas to be operated by Cielo Wind Power, a developer based in Austin.
The total cost of the project, which was brokered in part by the U.S. Renewable Energy Group, an American private equity company, was estimated at $1.5 billion. At an event after the announcement in Washington on Thursday, Cappy McGarr, a managing partner at the company, was beaming.
“This planned $1.5 billion investment in wind energy will spur tremendous growth in the renewable energy sector,” Mr. McGarr was quoted in a news release as saying, “and directly create hundreds of high-paying American jobs.”
The devil, though — as many observers pointed out by the end of the week — is in the details.
The group’s calculations last week put the number of American jobs at a little more than 300 — most of them temporary construction jobs, along with about 30 permanent positions once the wind farm is operating. Mr. McGarr told The Wall Street Journal that more than 2,000 Chinese jobs would be created by the deal.
That, along with the fact that the project was hoping to secure 30 percent, or $450 million, of its financing from U.S. stimulus funds, was enough to send tempers flaring.
“Why are U.S. stimulus funds being used to subsidize manufacturing jobs in China,” wrote a reader at Green Inc., who pointed out that American officials had repeatedly warned that the United States could lose its competitive edge on renewable energy manufacturing to China.
And yet, he continued, “the federal government gives stimulus monies to subsidize a project buying turbines made in China. Why?”
Part of the agitation almost certainly arises from China’s own reputation for green protectionism.
As Keith Bradsher wrote earlier this year in The New York Times, by establishing prohibitive quotas for homegrown solar and wind turbine equipment, and disqualifying bids from foreign companies on dubious grounds, the Chinese leadership has muscled out American and European manufacturers of clean energy seeking to gain a foothold in China’s burgeoning market for renewables.
As it happens, American officials made inroads in combating such trade barriers during a meeting of the U.S.-China Joint Commission on Commerce and Trade in Hangzhou, China, last week. Among the outcomes of the meeting: China agreed to remove local-content requirements on wind turbines.
Still, with the American economy struggling to get back on its feet and with an analysis last week from The Associated Press suggesting that the White House may be guilty of overstating the number of American jobs its $787 billion stimulus package has so far created, news that a Texas wind farm would create thousands of green jobs in China was, for some, a bitter pill.
“Thank you for killing the U.S. windmill industry,” wrote a reader from Chicago at Green Inc. “Thank-you, U.S. industrialists and financiers, for having us buy these things with financing and grants emanating from money borrowed from China.”
The deal, however, was no surprise to Russ Choma, a reporter with the Investigative Reporting Workshop, a nonprofit investigative journalism project attached to the American University School of Communication in Washington.
In a somewhat intriguing coincidence of timing, Mr. Choma and his colleagues published, on the same day the Chinese-American wind farm deal was unveiled, a detailed analysis of where stimulus money aimed at creating renewable energy projects and jobs in the United States was flowing.
By Mr. Choma’s reckoning, 84 percent of the $1.05 billion in clean-energy grants distributed by the government since Sept. 1 has gone to foreign renewable energy companies — specifically, wind companies. Through its American subsidiary, Iberdrola, a global manufacturer of wind turbines based in Spain, commanded most of that funding: $545 million.
“We broke down some of the numbers and found out that the program funded 11 projects that installed 982 turbines,” Mr. Choma wrote in an e-mail message, “and 695 were built by foreign manufacturers.”
To some extent, this is hardly surprising. As Mr. Choma noted, the American clean energy manufacturing base — particularly its wind turbine production capability — is tiny compared with that of Europe.
And to be sure, the dispensation of the $22 billion in stimulus funding that is supposed to go toward renewable energy projects has only just begun.
But China’s foray into the American wind power market comes alongside its dominance of the solar panel manufacturing industry, in which 95 percent of total output is exported to the United States and Europe.
And as Mr. Choma noted, when it comes to stimulating the economy, it is the manufacturing that matters. He points to a 2004 study from the Renewable Energy Policy Project, a research institute based in Washington. The institute found that every 1,000 megawatts of installed wind capacity had the potential to generate as many as 4,300 jobs, of which about 3,000 are created at the manufacturing level.
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