Made in America by China: New Turbine Factory Offers Glimpse into the Future

Nov 18, 2009

China-based A-Power's new deal to build a $50 million wind turbine factory in the United States is about helping America meet its surging demand for wind power, the company said in its announcement.

But it's about far more than that: The plant is a sign that Chinese energy firms are using America's renewables boom to establish their brands stateside — and everywhere.

The new factory will produce 1,100 megawatts of "highly advanced" wind energy turbines each year at an unannounced U.S. location. That's enough to power 330,000 homes. The facility will also generate about 1,000 domestic jobs upon completion, according to A-Power.

The venture is the second this year between A-Power Generation Systems, a subsidiary of Shenyang Power Group, and the U.S.-based Renewable Energy Group.

Their first collaboration — a 600-MW, $1.5 billion wind farm deal in West Texas — set off a firestorm in Washington when it was announced on Oct. 29.

The reason: jobs.

The Texas wind deal calls for A-Power to manufacture the farm's 240 turbines in China and export them to the U.S. Doing so would create 2,000 to 3,000 new jobs — in Shenyang, China. America would see 330 new jobs, of which only about 30 would be permanent.

This discrepancy wouldn't be a problem if it wasn't for one thing: The developers are seeking $460 million worth of U.S. stimulus money to finance the wind farm. China's banks will cover the rest, but without the U.S. contribution, the plan is dead on arrival.

In protest to the idea of a made-in-China wind farm on U.S. taxpayer dollars, Sen. Charles Schumer (D-N.Y.) sent a letter to Energy Secretary Steven Chu a few weeks back. In it, he wrote,

"The idea that stimulus funds would be used to create jobs overseas is quite troubling and, therefore, I urge you to reject any request for stimulus money unless the high‐value components, including the wind turbines, are manufactured in the United States."

The secretary is unlikely to budge. One possible solution is for the new turbine factory, with its made-in-America parts, to supply the windmills for the Texas wind farm. That too appears unlikely.

Still, Sen. Schumer responded favorably to the new U.S. factory in a statement:

"This is exactly what stimulus funding ought to do: create and strengthen green manufacturing jobs in America, even if that slightly slows renewable energy production as we play catch-up to countries like China."

China and the U.S. are the most important countries in wind power development today. Together, they account for more than one-third of total installed wind capacity.

This year, China is expected to beat out the U.S. as the largest wind turbine manufacturer in the world. Solar energy is on the same trajectory.

China currently leads the world in making solar cells. On Tuesday, China–based solar giant Suntech Power announced that it's building its first American solar factory, a 30-megawatt facility near Phoenix, Arizona.

The move is being touted as the first by a Chinese cleantech company to bring manufacturing jobs to the U.S. The factory will employ 75 Americans at launch.

Asian Nations Dominate

in a new report released today, the Oakland-based Breakthrough Institute writes that China, Japan and South Korea are all on track to blow the U.S. out of the water when it comes to reaping rewards of low-carbon technology development.

One key reason: Asia's rising "clean technology tigers" are actively supporting clean energy manufacturing centers to power their own economies and export equipment abroad.

"As this report demonstrates, the United States lags far behind its economic competitors in clean technology manufacturing. Should this gap persist, the United States risks importing the majority of the clean energy technologies necessary to meet growing domestic demand," the authors wrote.

The study is the first comprehensive comparison of public investments by the U.S. and key Asian competitors in core clean energy technologies. The researchers looked at solar, wind, nuclear power, carbon capture and storage, advanced vehicles and batteries and high-speed rail.

According to their results, China, Japan, and South Korea have already passed America in the production of nearly all of these technologies. Over the next five years, they will "out-invest the United States three-­to-­one in these sectors."

"This public investment gap will allow these Asian nations to attract a significant share of private sector investments estimated to total in the trillions of dollars over the next decade," the authors wrote.

This will be true even if the climate bill passed by the U.S. House of Representatives in June becomes law, the study said.

Of course, U.S. firms will benefit from the establishment of joint cleantech ventures overseas. But the jobs, tax revenues and other benefits of clean tech growth "will overwhelmingly accrue to Asian nations," the report finds.

Partnership and Competition?

The report comes on the heels of President Barack Obama's visit with Chinese President Hu Jintao, during which the two signed an unprecedented U.S.-China renewable energy partnership agreement.

The deal aims to accelerate joint R&D and deployment on energy efficiency, electric cars, carbon capture and storage, among other technologies.

In response to the partnership, Rep. Edward Markey (D-Mass.), an author of the U.S. House-passed American Clean Energy and Security Act (ACES), said,

"This agreement shows that economic competition and cooperation are not mutually exclusive, especially when solving the grave threat of climate change is at stake."

Similarly, in a recent report, McKinsey & Co. made the case that neither the U.S. nor China will maximize its gains in renewable energy unless the two work together to provide the scale, standards, and technology transfer for clean technologies.

"They cannot achieve separately what they could jointly," the authors wrote.

 

See also:

New US-China Energy Agreement Aims for '21st Century Coal'

Report Urges U.S.-China Cleantech Partnership, Not Competition

China's Smart Grid Ambitions Could Open Door to US-China Cooperation

Heads Up: China To Be #1 Wind Turbine Maker in '09

World's Wind Power Parts: Now Made in China

Next-Gen Vestas Wind Turbine Made in China, for China

China's Trina Solar Bets on America's Thriving Photovoltaics Market

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