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China Ponies up $1.5 Billion for Texas Wind Farm

Jeff Siegel | Tuesday November 3rd, 2009 | 5 Comments
Wind Farm

Wind Farm

Last year, I sat on a panel at an energy conference where someone asked me my thoughts on China’s impact on the renewable energy sector.

My response was simple, upset a lot of people, and has since proven to be pretty accurate. . .

“They’re going to bury us!”

I know some don’t agree with this statement.  And I don’t say this to disregard all the progress we’ve made here in the United States. Certainly, we’ve come a long way over the past few years. And there are some excellent renewable energy companies operating domestically.

But the fact is China’s desperate need for more domestically-produced power that doesn’t further degrade their dwindling water supplies or pollute their air — which will give your eyes and lungs a good burn on a stagnant day — is a major catalyst for renewable energy growth in the Middle Kingdom.

This is why the Chinese government is ponying up billions in support for solar, wind, and electric vehicles. Because without these things, future growth will absolutely be stalled. They know it. . . the big money knows it. . . and if you’re a long-time reader of these pages, you know it, too. . .

In the meantime, the Chinese continue to pump out solar modules cheaper than anyone else; their largest wind turbine manufacturer, Sinovel, will likely become one of the world’s largest wind turbine manufacturers; and — as we’re finding now — if you need billions in financing for a wind farm, China may be more than willing to provide that, too.

Laying the Groundwork for Alternative Energy Development

Last Thursday, China marched into the Lone Star State with $1.5 billion for a 600+ megawatt wind farm.

The project is actually a joint venture with Cielo Wind Power, U.S. Renewable Energy Group, and Shenyang Power Group. When completed, it will provide enough power for about 180,000 homes. Chinese turbine manufacturer A-Power Energy will be supplying the turbines.

Here’s what Jinxiang Lu, Shenyang Power Group’s CEO had to say about the project:

“With a long track record for building some of the world’s biggest wind farms, the U.S. is an ideal target for foreign alternative energy investment.”

And he’s right.

But this is no secret. . .

Sure, it was just last week when Energy Secretary Steven Chu told reporters that the U.S. was falling behind China and others in alternative energy investment.

But I’ve been reporting on this for years.

And let me tell you, you don’t have to be the Energy Secretary to know that foreign corporations have been aggressively laying the groundwork for alternative energy development in the U.S.

Heck, just over the past two years, Spanish wind energy powerhouse Gamesa (MCE: GAM) has built four new wind turbine production facilities in the States. Siemens (NYSE: SI) has a rotor blade manufacturing facility in Iowa and they are currently building a turbine production facility in Kansas. And Denmark-based Vestas (CO: VWS) is now building two new manufacturing facilities in Colorado.

My friends, companies like these don’t throw down hundreds of millions of dollars to build out manufacturing in the U.S. without some certainty that there’s a big pay day involved. . .

And investors who ignore this fact will continue to miss out on one of the greatest investment opportunities of the 21st century.


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  • Fred

    Interesting article, which leaves me with one question. Given the number of foreign companies investing in the US energy sector, is there some sort of advantage that they have over their American counterparts? Perhaps some sort of tax or subsidy advantage bestowed upon them by either their own government or the US.

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  • Jeff

    Certainly there have been countries in Europe that have offered very generous subsidies, which facilitated robust growth. We’re seeing that in China now too. I suspect that the Chinese also know that despite partisan bickering, renewable energy in the U.S. is a lock. We’re just moving at a snail’s pace in comparison.

    • Fred

      Of course China will have the ability to move faster on any large project when compared to the US. The reason being that they could care less about individual rights with regard to property and liberty. Just look at how many people were displaced by the Three Gorges Dam project for an example.

      • kevdhall

        Oh come on. Every dam project in human history has been controversial, and almost invariably has displaced people. Even our US dams — every one of 'em.

  • kevdhall

    Oh come on. Every dam project in human history has been controversial, and almost invariably has displaced people. Even our US dams — every one of 'em.

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