CHINA & U.S. STEEL TO BUILD WIND

Wind Farm Deal Assures Bigger U.S. Role
Mathew L. Wald, August 8, 2010 (NY Times)

"The United Steelworkers and two Chinese companies…[have] signed an agreement assuring that major components of machines for a $1.5 billion wind farm in Texas would be made in the United States…The deal potentially defuses a conflict over American stimulus dollars being used to subsidize foreign companies.

"…[T]he union said that the steel for the wind towers, enclosures for working parts atop the towers and reinforcing bars for the bases would be sourced in the United States. So will the blades, which are not made of steel but are often made by steelworkers…The agreement was brokered with the Shenyang Power Group [SPG]…and a subsidiary…A-Power Energy Generation Systems, which…with the American investment firm U.S. Renewable Energy Group [will] build the wind farm in West Texas."

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"United Steelworkers officials did not say what fraction of the machines’ value would be from domestic manufactured parts. The Chinese companies will also work to develop a domestic American supply chain for wind machine manufacture beyond the Texas project…[Word that] federal stimulus grants and loan guarantees for clean energy projects…might flow to the project led to calls from members of Congress for the Obama administration to deny federal aid…[because] the turbines would be manufactured in Shenyang, China, rather than in the United States…[The agreement] seems likely to allay some of those objections…

"The two Chinese companies anticipate buying 50,000 tons of steel from unionized American mills for the 615-megawatt Texas project…Leo W. Gerard, president of the United Steelworkers, said his union had been prepared to initiate antidumping actions against Chinese manufacturers on imported steel for wind machines, as the union has in the past for tires, paper and steel for other uses…The Chinese companies had initially estimated that the project would create 2,000 steelworker jobs in China, Mr. Gerard said, but about only 1,000 jobs in the United States…"

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"The announcement reflects the expanding globalization of the wind machine industry, with parts made in scattered countries. Robert E. Gramlich, policy director at the American Wind Energy Association, said that the “big heavy stuff” like the towers and the blades, were generally the most likely to be locally sourced and that smaller, higher-value components were more likely to be imported…[T]he gear box, a high-value component, was always to be manufactured by General Electric [for the Texas project]…

"To some extent the flow seems to run in both directions. In May, the American Superconductor Corporation of Devens, Mass., said it had received a multiyear order worth $445 million from Sinovel Wind Group Company of China, with shipments to begin in early 2011. The company is already shipping components under an earlier contract…Mr. Gramlich’s group has been lobbying for greater federal support for American companies that could build wind machine components. The Commerce Department has identified wind technology as a major potential export industry…"