A Dispatch from SSC Intern Matt Logan
On Thursday a group of Chinese companies and US announced plans to construct a $1.5 billion wind farm in West Texas. The farm will cover 36,000 acres with 240 2.5 MW turbines, for a total capacity of 600 MW. Chinese financiers will largely finance the farm, with some help from the US government in the form of loan guarantees and grants offered through the stimulus package.
The project will create 300 temporary construction jobs and 30 permanent jobs in Texas. It has the potential to create significant economic activity in China as well, because the turbines are being imported from China. However, the Chinese manufacturers will use technology developed in the United States and Europe, including a gearbox designed by General Electric.
Using Chinese turbines is somewhat controversial because of protectionist measures that China has placed on its renewable energy industry. For example, it implemented an 80 percent local content requirement when its first solar power plant was constructed earlier this year. Moreover, some Americans are distraught that stimulus funds are going to end up fueling Chinese, rather than American, economic growth. However, it does appear that American and European pressure on Chinese manufacturers has had an impact, as Energy Secretary Steven Chu recently announced that China would remove local content requirements on wind turbines after a meeting with Chinese Vice Premier Wang Qishan.
This development will put a new spin on the conversation regarding international competitiveness and cooperation approaching the talks in Copenhagen this December. Some have feared that acting domestically would hurt the US economy because of the perception that China is not doing anything to curtail its own emissions. However, this will provide a concrete example that we are in fact losing out to China and other countries because our own domestic policies have not ensured the long-term consistency that is necessary to drive investment in renewable energy technology.
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