CHINA COMING FOR U.S. WIND

China’s Push Into Wind Worries U.S. Industry
Tom Zeller, Jr., and Keith Bradsher, December 16, 2010 (NY Times)

"…Goldwind and other Chinese-owned companies plan a big push into the American wind power market in coming months…[P]roponents say the Chinese manufacturers should be welcomed as an engine for creating more green jobs and speeding the adoption of renewable energy in this country…[O]thers see a threat to workers and profits in the still-embryonic American wind industry…[so] Goldwind is putting a distinctly American face on its efforts…[and] highlighting plans to do more than simply import low-cost equipment from China…

"…[T]he Chinese industry is coming to a world leader in wind energy capacity…[The U.S. capacity is] roughly 41 gigawatts…Only China itself, which recently passed American output, generates more wind power — 43 gigawatts…spread over a population more than four times…the [U.S.] population…[T]he tepid United States economy, rock-bottom natural gas prices and lingering questions about federal wind energy policy have stalled the American wind industry, which currently represents only about 85,000 jobs…[D]im market prospects [might] await…the Chinese companies…[but] they have big backing from China’s government in the form of low-interest loans and other blandishments [and can be patient]…"

The intention is to increase the percent of locally sourced equipment as the market expands. (click to enlarge)

"…[T]he United States wind energy industry is by no means an all-American business. After G.E., the current market leaders in this country are Vestas of Denmark, Siemens of Germany, Mitsubishi of Japan and Suzlon of India. None of the governments of those countries, though, are suspected of unfairly favoring their home industries and discriminating against foreign competitors…[while] the Obama administration is investigating whether the Chinese may have violated World Trade Organization rules in subsidizing its clean-energy industry.

"…[Goldwind] is the fledgling American arm of a state-owned Chinese company that has emerged as the world’s fifth-largest turbine maker: the Xinjiang Goldwind Science and Technology Company…[which] raised nearly $1 billion in an initial public stock offering in Hong Kong in October — on top of a $6 billion low-interest loan agreement in May from the government-owned China Development Bank…Goldwind… set up a sales office in Chicago…[and hired] Americans already experienced in the wind energy field…"

Don't miss the asterisked items at the bottom of the list. (click to enlarge)

"…[L]ate last year…a Chinese energy conglomerate, A-Power Energy Generation Systems, joined an American investment firm and a Texas developer, Cielo Wind Power, to announce plans for a $1.5 billion wind farm, using 240 to 300 turbines, in West Texas…Critics argued that the project — which was eligible for about $450 million in federal stimulus funding set aside by the Obama administration for renewable energy projects — would support thousands of manufacturing jobs in China, while creating only a few hundred less valuable construction and maintenance jobs in the United States…[They] brokered a deal…with the United Steelworkers union…to ensure that major components for the planned Texas wind farm — including the towers, some enclosures for the turbine and the giant turbine blades — would be supplied from the United States…[and it would use] as much as 50,000 tons of steel from American mills…[China-made] turbines…sell for an average of $600,000 a megawatt, compared with $800,000 or more for Western models made from Chinese parts, and even higher prices for European and American machines. Yet, Western banks have been leery of lending wind farms money to buy the Chinese equipment because of concerns about its reliability…But with the American wind industry in the doldrums, there are few other big investments pending…

"Proponents of the Chinese push say the availability of inexpensive turbines from China — and ample customer financing from its state-owned banks — could help put wind energy back on a growth track by making it more affordable for American utilities and developers… [M]uch of the manufacturing for American wind energy is [already] done offshore…Even G.E. now buys gearboxes from China…[A]bout 50 percent of a typical wind turbine being erected today in the United States is imported…But with the Chinese market starting to level off even though Chinese factory capacity keeps surging, Goldwind and other Chinese companies will still have a powerful financial incentive to avoid idling new assembly lines in China. And labor is much cheaper in China — $300 a month for blue-collar workers and $500 a month for engineers. Workers and engineers in the United States could expect to make at least 10 times as much…Nonetheless, Goldwind’s team [and some U.S. observers see] room for American jobs…"