MORE NEWS, 11-18: THE CHINA CHALLENGE IN SUN AND WIND; CHINA’S BIG AZ SUN PLANS; CHINA BUILDS U.S. WIND; A REVIEW OF U.S. ENERGY SUBSIDIES

THE CHINA CHALLENGE IN SUN AND WIND
China pushes solar, wind power development
Julie Schmit, November 16, 2009 (USA Today)

"…China leads the world in making solar cells, the key component in solar panels, many of which are exported to the U.S…But China is setting itself up to do more than just manufacture components for renewable energy, such as wind and solar. It's also spending heavily to build its own domestic market as it attempts to battle its greenhouse gas emissions, electrify its nation of 1.3 billion people and curb its massive pollution problem.

"The buildup of a huge market in China for renewable energy is luring global manufacturers and research teams to China, energy executives say. That's causing concern in some corners that China – not the U.S. – will emerge as the hub of the new industries, leaving the U.S. as dependent on foreign nations for solar panels, wind turbines and other green-energy equipment and technology as it is on the Mideast for oil…"

NewEnergyNews challenge #1: Spot the trend. (click to enlarge)

"…[T]he U.S. hasn't been as clear or as determined as China…[according to] Energy Secretary Steven Chu…While China spends about $9 billion a month on clean energy development, the U.S. [is falling behind]…[T]he world's largest turbine-making company is headquartered in Denmark…99% of batteries for America's hybrid cars are made in Japan….[and] the U.S. has lost most of its solar cell manufacturing industry…Although Chu said he remained confident…China is shaping up as a formidable competitor.

"China's government has set ambitious targets for renewable energy, which is scheduled to account for 15% of its fuel by 2020…The U.S. has no national target. Two dozen states have their own – some more aggressive than China's – but they don't carry the cachet of a national standard, says Denise Bode, CEO of the American Wind Energy Association. That has hindered the U.S. in attracting wind manufacturers and investments, she says…"

NewEnergyNews challenge #2: Spot the trend. (click to enlarge)

"Already, China has made rapid gains in building up its domestic renewable-energy industries…This year, it's expected to install more new wind-generation capacity than any other country, a spot occupied by the U.S. last year…By 2013, China is expected to become the world's biggest producer of wind energy…Recently, it eclipsed everyone in wind-turbine-making capacity…

"China is muscling up on solar, too. Within five years, it's expected to be the No. 1 solar market…Once [China’s] central government decides on a policy, it can execute quickly through the nation's handful of state-owned utilities…In the U.S., there are thousands of electric utilities and a barrage of regulatory and environmental hurdles to starting new projects...[U.S. companies have] stepped up profiles and investments in China…The U.S., under the Obama administration, has stepped up its renewable energy investments….[It is possible the] isn't too late…"


CHINA’S BIG AZ SUN PLANS
Suntech could serve 8% of U.S. solar market; China-owned firm deciding whether to locate in East or West Valley
Ryan Randazzo, November 16, 2009 (Arizona Republic)

"Suntech Power Holdings Co. could serve about 8 percent of the U.S. solar-panel market from the factory it plans to open in the Phoenix area next year, officials said…

"The Chinese solar-panel maker, which shipped more traditional solar panels last year than any other company in the world, announced it is deciding…[where in the area to locate] a 100,000-square-foot U.S. factory…[This] means two solar powerhouses will have a presence [in the Phoenix area]…"

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"First Solar Inc., which makes "thin-film" solar panels using different semiconductor materials than traditional solar panels, is based in Tempe. It produces has the highest factory capacity in the world in addition to boasting the lowest cost in the industry...First Solar makes its panels in Ohio, Germany and Malaysia…Other solar companies are considering opening factories in Arizona, and if they do, it could prompt glass companies or other suppliers to open facilities…

"The Arizona Suntech plant should open with the capacity to produce enough panels each year to generate 30 megawatts of electricity, or enough for about 7,500 homes while the sun is shining…In 2008, Suntech's existing factories produced 498 megawatts of solar panels, most of which were sold to Europe."

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"Suntech sells about 8 percent of its panels in the U.S. and intends to grow its market share with the new plant…The U.S. installed 342 megawatts of solar panels in 2008…mostly in California, New Jersey, Colorado and Nevada…If the U.S. market grows to 400 megawatts or more a year, as expected, Suntech will be able to produce 7.5 percent of the U.S. supply in Arizona and supplement that with panels from its plants in China while expanding…

"Solar panels [are] made with silicon as a semiconductor that turns sunlight into electricity…Suntech will continue to process its silicon, most of it imported from Texas, into solar cells at its Chinese facilities…[and] will import the processed solar cells to Arizona, where they will be mounted with aluminum frames on glass panels and wired for installation…"


CHINA BUILDS U.S. WIND
Chinese wind turbine firm plans U.S. plant
Steve James (w/Kim Coghill) November 16, 2009 (Reuters)

"China's A-Power Energy Generation Systems has signed a cooperation agreement with equity firm U.S. Renewable Energy Group (US-REG) to build a plant in the United States to supply wind energy turbines to renewable energy projects in North and South America.

"The joint announcement…came three weeks after A-Power said it planned a $1.5 billion wind farm project in West Texas along with U.S. companies..."

A-Power - first a project developer and now a manufacturing facility builder and U.S. job generator. (click to enlarge)

"…[T]he turbine plant is expected to produce 1,100 megawatts of wind energy turbines annually, enough to power 330,000 homes. It will employ about 1,000 workers and create additional jobs during construction, the companies said.

"In addition to production and assembly at the new plant, the plan calls for many wind turbine components to be sourced from U.S. manufacturers."

Time after time, in the last few years, foreign wind companies have started building projects in the U.S. and ended up building manufacturing facilities and creating U.S. jobs. (click to enlarge)

"…Shenyang Power Group (SPG) and US-REG announced plans to develop a $1.5 billion, 600MW wind farm on about 36,000 acres in Texas, for which A-Power [an SPG shareholder] has been designated as the turbine supplier…

"The construction of the assembly and production plant is subject to signing of definitive agreements between the parties, as well as various government approvals…"


A REVIEW OF U.S. ENERGY SUBSIDIES
Estimating U.S. Government Subsidies to Energy Sources: 2002-2008
September 2009 (Environmental Law Institute)

"…Applying a conservative approach, [the Environmental Law Institute, ELI]…found that…[1] The vast majority of federal subsidies for fossil fuels and renewable energy supported energy sources that emit high levels of greenhouse gases…[2] The federal government provided substantially larger subsidies to fossil fuels…a mature, developed industry that has enjoyed government support for many years…approximately $72 billion…a direct cost to taxpayers…

"…[3] Subsidies for renewable fuels, a relatively young and developing industry, totaled $29 billion…[3] Subsidies to fossil fuels generally increased over the study period (though they decreased in 2008), while funding for renewables increased but saw a precipitous drop in 2006-07 (though they increased in 2008)…[4] Most of the largest subsidies to fossil fuels were written into the U.S. Tax Code as permanent provisions. By comparison, many subsidies for renewables are time-limited initiatives implemented through energy bills, with expiration dates that limit their usefulness…"

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"…[5] The vast majority of subsidy dollars to fossil fuels can be attributed to just a handful of tax breaks, such as the Foreign Tax Credit ($15.3 billion) and the Credit for Production of Nonconventional Fuels ($14.1 billion). The largest of these, the Foreign Tax Credit, applies to the overseas production of oil through an obscure provision of the Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial tax treatment…[6] Almost half of the subsidies for renewables are attributable to corn-based ethanol…[which has questionable] effects on climate.

"The subsidies examined fall roughly into two categories: (1) foregone revenues, mostly in the form of tax expenditures…and (2) direct spending, in the form of expenditures on research and development and other programs…[The ELI definition] of fossil fuels…petroleum and its byproducts, natural gas, and coal products…[R]enewable fuels include wind, solar, biofuels and biomass, hydropower, and geothermal energy production."

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"Nuclear energy, which also falls outside the operating definition of fossil and renewable fuels, was not included…[T]he study did not identify the precise greenhouse gas emission profile…ELI examined only fuel-specific subsidies, not those that are available to all industries…[T]he analysis does not include…energy efficiency measures…non-fuel-specific transportation spending…non-fuel-specific subsidies to the electricity sector…the subsidizing effects of regulatory or procurement standards; and… other measures that either are not fuel-specific or do not affect the federal budget…

"…The study…does not seek to determine how these subsidies affect energy production or consumption, or whether they ultimately benefit consumers or industry…Similarly, the study counts funds used to support carbon capture and storage programs as a fossil fuel subsidy, despite their potential to reduce the emissions associated with burning coal…[and] subsidies to corn ethanol were tallied as a renewable fuel subsidy, although whether the production of corn-based ethanol constitutes a net subtraction of greenhouse gas emissions has been subject to significant debate."