An imbalance in jobs created
and a desire for financing from U.S. stimulus funds had many
readers of the Green Inc. blog in a state of agitation. See the
NYTimes article
here.
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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