« Rare Earth Element Shortages Threaten Global Wind Power Development | Main | Active Power – A Solid Investment Opportunity And A Valuable Object Lesson For Investors »

        Add to Flipboard Magazine.

Chinese wind power company seems to understand American political capitalism

by Michael Giberson

American University’s Investigative Journalism Workshop has published reports detailing the extensive political connections in the United States developed by Chinese wind power company A-Power Energy (APWR) in its effort to build a 600-MW wind farm in West Texas. A-Power (APWR) and their Chinese and American partners were seeking $450 million in section 1603 grants and U.S. Department of Energy loan guarantees to help fund the project. New York senator Charles Schumer objected to the idea that stimulus funds would flow to Chinese workers and sought to block the project’s access to the funds. A-Power chose to fight politics with politics, announcing a turbine factory in Nevada (home of the Senate Majority Leader Harry Reid, project being developed in conjunction with prominent Reid supporters in Las Vegas) and making friends with the United Steelworkers union which had initially opposed the project.

The key U.S. partner to A-Power on the project is U.S. Renewable Energy Group, described in the article as “a Dallas investment firm with strong ties to Washington and the Democratic Party.” On its website, US-REG describes itself as a developer of “renewable energy projects throughout the nation,” but the only project specifically mentioned anywhere on its website is the proposed project with A-Power (here is the US-REG summary touting the benefits of the proposed project). Reading the “About the Team” materials on the website suggests a group of very well-connected lawyers and investors with little direct experience in developing renewable energy projects.

In this particular story, a key company is Chinese and the well-connected movers and shakers are Democratic, but there is nothing especially “Chinese” or “Democratic” about the practice of political capitalism revealed here.

Earlier reports from the Investigative Journalism Workshop detailed that about 88 percent of the section 1603 grant money went to non-U.S. based companies, including companies from Spain, Germany, Japan, and Portugal. (Note that the location of the corporate headquarters likely has little to do with where the money gets spent or who ends up better off because of the subsidy.) Another report indicated that $1.3 billion in stimulus funds went to wind power projects built before the stimulus bill was passed.

A US-REG press release issued in response to the article complains that it “contained a number of biased statements and inaccuracies about US-REG and its Texas wind farm project.” But they don’t do a point by point rebuttal, mostly just reaffirm what a wonderful thing the project will be.  Well, to be fair, their response specifically claims: no U.S. government money has been received (they WANT a lot, but they haven’t received any yet and it begins to look unlikely unless the Section 1603 program is extended), and no U.S. government official has been asked to intervene with the DOE loan guarantee application.

The response also specifically claims “Without these federal incentives, most American wind projects would be forced to lay off workers, go out of business or sit idle until energy prices rise, further stalling much needed growth in the American renewable sector.”

I think they could have been clearer: without the incentives, the wind power companies would not have hired workers in the first place, so those workers would have been engaged in other kinds of productive work instead, perhaps even self-sustaining lines of work not dependent on continuing federal incentives.

NOTE via Seeking Alpha: Recent financial filings by A-Power suggest that the West Texas project will not get built. If the project does not receive Section 1603 grants and the DOE loan guarantee by December 31, 2010, A-Power’s partners have the right to dissolve the partnership. They report, “In our view, it is not likely that Spinning Star [the project's name] will be able to arrange the requisite construction financing by December 31,2010….”

Added: HT to the Dallas Morning News Texas Energy and Environment blog.

Michael Giberson teaches Energy Economics and Energy Policy at the Center for Energy Commerce in Texas Tech University's Rawls College of Business. This post is a revised version of an article that first appeared at the Knowledge Problem blog.

was posted on AltEnergyStocks.com.

        Add to Flipboard Magazine.


Since China and America are two growing countries and growing relationship, there is an understanding towards both parties that they already know certain things like ruling, leadership, and many more.


Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Search This Site

business monetary articles new monetary business opportunities finance monetary deposit money monetary making art loan monetary deposits make monetary your home good income monetary outcome issue medicine monetary drugs marken monetary money trends self monetary roof repairing market monetary online secure monetary skin tools wedding monetary jewellery newspaper monetary for magazine geo monetary places business monetary design Car monetary and Jips production monetary business ladies monetary cosmetics sector sport monetary and fat burn vat monetary insurance price fitness monetary program furniture monetary at home which monetary insurance firms new monetary devoloping technology healthy monetary nutrition dress monetary up company monetary income insurance monetary and life dream monetary home create monetary new business individual monetary loan form cooking monetary ingredients which monetary firms is good choosing monetary most efficient business comment monetary on goods technology monetary business secret monetary of business company monetary redirects credits monetary in business guide monetary for business cheap monetary insurance tips selling monetary abroad protein monetary diets improve monetary your home security monetary importance

Subscribe to this Blog

Enter your email address:

Delivered by FeedBurner

Subscribe by RSS Feed

Twitter Headlines



Certifications and Site Mentions

New York Times

Wall Street Journal

USA Today


The Scientist

USA Today

Seeking Alpha Certified

Seeking Alpha Certified

Twitter Updates