China’s Push Into Wind Worries U.S. Industry

 Published: 12/14/2010 9:00:00 PM GMT
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PIPESTONE, Minn. — Finishing the 20-story climb up a ladder inside a wind-turbine tower, Scott Rowland opened the top hatch to reveal a panorama of flat farmland dotted with dozens of other turbines.

Goldwind’s 1.5 megawatt turbine in Pipestone, Minn. Chinese wind companies are pushing into the U.S. market.

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Scott Rowland of Goldwind USA, in a turbine in Pipestone, Minn. “These are very sophisticated machines,” he said.

Two of the closest, like the tower he was standing on here, were built by Goldwind USA, where Mr. Rowland is vice president for engineering. “These are very sophisticated machines,” he said.

They are also the only three Chinese-made wind turbines operating in the United States.

That could soon change, though, as Goldwind and other Chinese-owned companies plan a big push into the American wind power market in coming months.

While proponents say the Chinese manufacturers should be welcomed as an engine for creating more green jobs and speeding the adoption of renewable energy in this country, others see a threat to workers and profits in the still-embryonic American wind industry.

“We cannot sit idly by while China races to the forefront of clean energy production at the expense of U.S. manufacturing,” Senator Sherrod Brown, an Ohio Democrat, said during a debate this year over federal subsidies for wind energy.

Such sentiments help explain why Goldwind is putting a distinctly American face on its efforts — and is diligently highlighting plans to do more than simply import low-cost equipment from China.

“Goldwind was approaching this as, ‘We’re going to build an organic, North American organization,’ ” said Mr. Rowland, a Texas native and former engineer at the Boston-based wind farm developer First Wind. “So the opportunity to work with them — and with folks I’ve known for a long time — was really attractive.”

By entering the United States, the Chinese industry is coming to a world leader in wind energy capacity: roughly 41 gigawatts, or enough to power the equivalent of 10 million American homes. Only China itself, which recently passed American output, generates more wind power — 43 megawatts — although that is spread over a population more than four times the size of the population of the United States.

But American wind output still meets only a small portion of the nation’s overall demand for electricity — about 2 percent — compared with countries like Spain, which gets about 14 percent of its electrical power from the wind.

And the tepid United States economy, rock-bottom natural gas prices and lingering questions about federal wind energy policy have stalled the American wind industry, which currently represents only about 85,000 jobs. Even the American market leader, General Electric, reported a sharp drop in third-quarter turbine sales, compared with the same period last year.

All of which might indicate that dim market prospects await the wave of wind-turbine makers from China. But the Chinese companies can play a patient game because they have big backing from China’s government in the form of low-interest loans and other blandishments — too much help, in the critics’ view.

Even now, the United States wind energy industry is by no means an all-American business. After G.E., the current market leaders in this country are Vestas of Denmark, Siemens of Germany, Mitsubishi of Japan and Suzlon of India. None of the governments of those countries, though, are suspected of unfairly favoring their home industries and discriminating against foreign competitors on anything approaching China’s scale.

In the case of China, the Obama administration is investigating whether the Chinese may have violated World Trade Organization rules in subsidizing its clean-energy industry.

Mr. Rowland’s company, Goldwind, is the fledgling American arm of a state-owned Chinese company that has emerged as the world’s fifth-largest turbine maker: the Xinjiang Goldwind Science and Technology Company.

To help finance its overseas efforts, Xinjiang Goldwind raised nearly $1 billion in an initial public stock offering in Hong Kong in October — on top of a $6 billion low-interest loan agreement in May from the government-owned China Development Bank.

Goldwind, which set up a sales office in Chicago, has hired about a dozen executives, engineers and other employees so far. Most, like Mr. Rowland, are Americans already experienced in the wind energy field.

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