In recent days, there has been much debate over the announcement by a Chinese firm and a Texas wind developer that the two intend to cooperate on a 600-MW (generates the equivalent of the electricity needs of 180,000 average homes) wind farm with turbines to be manufactured in China.
Concern about this announcement, and the green manufacturing jobs it might create in China, is understandable. Still, the larger picture of wind energy and foreign imports into the U.S. tells a very different story:
* In 2008, China accounted for less than 5% of the imported value of turbine components for the U.S., according to data from the US International Trade Commission.
* In recent years, the trend has been towards more domestically manufactured components and wind turbines in the U.S. Overall, about 50% of the value of turbine components was made in the U.S. in 2008, up from less than 30% in 2005. Given the growth in the U.S. market during that same period, this means that in three years, the U.S. increased its domestic manufacturing 12-fold, from producing $450 million worth of components in America to $5.6 billion in 2008.
* Leading global wind turbine manufacturers like Vestas (#1 globally) and Gamesa (#3 globally) have opened major manufacturing facilities here in the U.S.; Mitsubishi just recently announced its intention to open a U.S. factory.
* In all, as of October 2009, there are nine original equipment wind turbine manufacturers (OEM)s (Acciona, Clipper, Dewind, Gamesa, GE, Nordic, Siemens, Suzlon, and Vestas) now operating U.S. manufacturing facilities, with Siemens and Vestas also investing in additional facilities. An additional six turbine manufacturers (Continental, EWT, Fuhrlander, Global Wind Systems, Mitsubishi, Nordex) have announced plans to open manufacturing facilities here in the U.S.
* This welcome trend toward investment in manufacturing facilities in the U.S., which creates local jobs, needs to be nurtured.
* The reality is that we need to catch up after decades of energy policy neglect in the U.S., and we are in a race to build up a wind turbine manufacturing base here in this country. The wind energy market is global, and leading companies such as Vestas, GE, Gamesa, Suzlon and many others operate on a global scale. These companies will direct their investments to where markets are certain to grow—-and that in turn is where there is a firm renewable energy policy in place.
* A strong national Renewable Electricity Standard will provide the market and policy certainty that is still needed in the U.S., and will ensure that our nation competes effectively in attracting investment and building up its manufacturing base.
* The U.S. is at a time of historic opportunity: passing comprehensive climate and energy legislation including a meaningful RES will give us the means to stay in this race, compete with other strategic markets like Europe and China, avoid carbon, and create jobs.
* It's important to understand how American Recovery & Reinvestment Act (ARRA) economic stimulus funding works: 100% of the Treasury grant funds are allocated on the basis of projects built here in the U.S. These projects create construction, engineering, operation and maintenance, and a host of other jobs here in the U.S. The ARRA process is NOT a zero-sum game—if a company is awarded a grant for a project, it does not mean that another company won’t get funding for a project for which it might apply. To protect taxpayer money, a company that applies for funding for a particular project needs to go through a detailed checklist to ensure that the project will actually be built and produce electricity. The grant funding for which a project is eligible is equivalent to the value of a 30% investment tax credit. The stimulus grant helps leverage the additional funds needed to finance a project.
* A healthy mix of global (Iberdrola, EDP Renewables) and U.S. (NextEra, AES, First Wind) companies are receiving ARRA grants or have announced their intention to apply for such grants. Nothing is keeping more U.S. utilities and companies from applying.
The economic stimulus legislation is providing the short-term support needed to keep the U.S. wind energy market alive. A strong Renewable Electricity Standard would build upon that short-term base and ensure American clean renewable energy job growth into the future. |
