United States

United States

Business: US senator slams turbine imports - Protectionism row breaks out

Whispers and undercurrents of protectionism in the US boiled forth last month as a prominent US senator urged the government not to allow a wind project proposed in Texas to receive public economic stimulus funding because the project plans to use imported Chinese turbines.

The 600 MW project is a joint venture between Texas developer Cielo Wind Power, managing partner US Renewable Energy Group (US-REG), Chinese turbine maker A-Power Energy Generation Systems and a consortium of Chinese equity players called Shenyang Power Group (SPG). Scheduled to begin construction in March 2010 and begin operation by 2011, this could be the first major commercial-scale wind project in the US using majority Chinese financing and turbines.

If built on schedule, the project would be eligible for the federal government's cash grant, which provides 30% of the installed cost of a project, or around $450 million based on Shenyang's $1.5 billion projection. Funds could only be collected after project completion.

"The goal of (President Barack Obama's) stimulus was to spur job creation here, not overseas," says New York Senator Charles Schumer, from Obama's centre-left Democratic Party. "This project should not receive a dime of stimulus funds unless it relies on US-manufactured products." He adds that the Shenyang proposal is part of a larger trend, citing that 84% of the more than $1 billion in grants released in the programme's first round went to foreign companies.

"Of the 11 wind farm projects that have received grants to date, 695 of the 982 wind turbines installed were built by foreign manufacturers," he says. "Our US wind industry, including companies located in my state, is fully capable of providing these and other high-value components, and US wind farms financed with stimulus money should be buying American-built turbines and parts."

But Christine Real De Azua, spokeswoman for the American Wind Energy Association, says: "If you're using any kind of turbine, you're still going to have some of those components made overseas." On average, 50% of the range of hardware used in wind turbines in the US is manufactured there, she adds, "Which actually is pretty good compared to some other industries, where even more might be imported." There also exists no provision in the grant programme to discriminate against projects using foreign turbines, so Schumer's call to boycott foreign turbines is not backed by existing law.

New Player

A-Power, which is also a part-owner of SPG, has been building 2.5 MW turbines for about a year, using a combination of technology and components licensed through GE and German turbine maker Fuhrlander. A pair of Chinese projects already use A-Power turbines, says Walt Hornaday, president of Austin-based Cielo. "A-Power was looking for a way to demonstrate their turbine in a market outside of China," he says. "And after weighing several different options, they chose a Cielo proposal we've been working on for quite some time."

The potential for patent and import problems related to the Chinese turbines, which are being tailored to the US power grid, has already been resolved, according to Hornaday. "We've been well-assured that the patent issues are covered with licenses issued on the technology. We believe it to be a well-organised and well-licensed legal plan that we've matched up with our project."

Specific siting for the 240 turbines has yet to be decided, although the dedicated area includes nearly 15,000 square hectares. "We're weighing options between putting the project all at one site in one county or spreading it (over) a three-county footprint," Hornaday says.

The necessary transmission lines are part of Competitive Renewable Energy Zones (CREZ), an ongoing state-mandated process that calls for bringing transmission infrastructure to prime wind areas. "A part of CREZ that is already committed is what we're relying on for the project," Hornaday says. "We wouldn't be talking about this project if the Texas Public Utilities Commission hadn't authorised those CREZ circuits."

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