China making moves into the US' renewable energy industry
The US and China have embarked on unprecedented co-operation in clean-energy technologies, writes Anne Feltus
Their collaboration – which follows October meetings between presidents Barack Obama and Hu Jintao – makes sense: both countries must meet the growing power demands of large populations, while reducing their greenhouse-gas (GHG) emissions, the highest on the planet.
China already participates heavily in the alternative-energy industry, leading the world in the manufacture of solar photovoltaic (PV) cells and wind turbines, and it will probably become the largest wind power producer within a few years (PE 12/09 p7). In May, China's National Development and Reform Commission, urged the country's energy companies to expand their activities overseas. The US, with its favourable clean-energy policies and tax incentives, makes an attractive investment target.
Even before the leaders announced their green-energy programme, several projects had been announced that will boost Chinese participation in the US' renewable-energy industry. The largest involves Shenyang Power, which has formed a joint venture with Cielo Wind Power and US Renewable Energy Group to build a $1.5bn, 600 megawatt wind farm in Texas.
A-Power Energy Generation Systems will manufacture 240 wind turbines for the farm at its plant in Shenyang, marking the US' first imports of Chinese turbines. Along with financing from China's Export-Import Bank, the partners hope to receive funds through the American Recovery and Reinvestment Act of 2009. A-Power Generation Systems also plans to build a $50m factory in the US to produce wind turbines with a combined annual capacity of 1.1 gigawatts.
Chinese energy companies are also making inroads in the US' solar market. In June, Trina Solar, China's second-largest maker of PV cells, said it would open a North American headquarters in San Francisco and a warehouse in Oakland, California. The country's most populous state, California has an ambitious goal of sourcing about one-third of its electricity from renewables by 2020, making it an especially attractive market for investment.
In November, Chinese SunTech Power Holdings announced plans for a 100,000-square-foot solar factory near Phoenix, Arizona. Chairman and chief executive Zhengrong Shi called the move "the first step in a long-term, strategic investment in North America."
Following an agreement in September to work together to accelerate the development of low-carbon and clean-energy technologies, Duke Energy and ENN Group, one of China's largest privately owned, diversified energy firms, launched plans to develop commercial projects in the US. The companies will focus on utility-scale solar farms and commercial, distributed generation from solar projects.
As the world's largest coal consumers, the US and China have a vested interest in reducing emissions from coal-fired power plants. Duke Energy has formed a partnership with China Huaneng Group, the country's largest electricity producer, to find ways to capture and store carbon emitted by coal-burning power stations. In addition, Shanghai Electric has tapped Evergreen Energy subsidiary C-Lock Technology to study the feasibility of a pilot project to quantify potential GHG reductions in coal-fired power plants. The decision came after the Chinese utility received a $453,000 grant from the US Trade and Development Agency to evaluate the installation of Carbon Limiting Improvement Process technology in coal-fired plants.
Growing co-operation between the two countries on clean energy is not one-sided; several US companies, including First Solar and American Superconductor, reportedly have signed lucrative contracts to support renewable energy programmes in China. Combined, the countries' renewable energy markets will reach almost $82bn by 2013, research and consulting firm Zpryme predicts, so there is plenty of work to go around.