America's Wind Power Jobs Could Be Heading To China (VIDEO)
As America's manufacturing base erodes year by year, one sector has remained seemingly impervious to outsourcing: renewable energy.
Giant wind turbines have popped up all over the country to fuel the demand for alternatives to fossil fuels, and manufacturers such as General Electric and the industry's trade group, the American Wind Energy Association (AWEA), have touted the turbines as a clean source of manufacturing jobs. The line has been that wind power jobs can't be sent abroad because of the prohibitively expensive cost of shipping giant blades and towers over long distances. That argument proved a political winner in Washington, D.C., where the American Reinvestment and Recovery Act and other laws created cash grants and tax credits for renewable energy projects.
The result, AWEA says, has been a dramatic expansion in megawatts of generating capacity and an industry that supported about 75,000 jobs at the end of 2010, even after a slowdown caused by the recession.
Now, however, the declining price of turbines made in China means that it may soon be economical to ship more and more turbine parts to the U.S.
China accounted for 48 percent of the global wind power installation market in 2010, according to Navigant Consulting, and the country now has more wind capacity than the U.S. -- 45 gigawatts there versus 40 gigawatts here.
Lisa Frantzis, the managing director of the Renewable and Distributed Energy division at Navigant, told HuffPost that American turbine and parts makers don't necessarily have to worry just yet.
"If you look at the turbine pricing in China, it's about two-thirds of what it costs to manufacture in the U.S.," she said. "They have a lot of government support that's provided," she noted.
That support has prompted concern from the Obama administration and other politicians.
At the same time, Frantzis said, "The quality of those turbines is still yet to be tested on the U.S. market."
For now, American wind power manufacturers say they're much more concerned about expiring government tax credits than competition from China or European countries such as Denmark and Spain. A critical stateside production tax credit is set to expire at the end of 2012, and while the industry is clamoring for an extension from Congress, the resulting uncertainty has made financing new projects more difficult.
Representatives from the industry group AWEA, along with General Electric and Vermont-based wind measurement maker NRG Systems, discuss the tax credit and competition from China.
"Time will sort of tell in terms of the performance and the quality," Frantzis said of the Chinese turbines. "If in fact their turbine pricing is as aggressive as it is in China, it'll definitely create more pricing competition in the U.S.," she added.
Manufacturing competition might not be politically popular in the U.S., so at least one major Chinese turbine maker, Goldwind, is taking a cue from Japanese automakers and setting up shop in the American heartland.
Goldwind's U.S. headquarters are in Chicago, and the company is working on a 109.5MW project in Lee County, Illinois, which it says will support 100-140 manufacturing jobs in North Dakota, Wisconsin and Texas, along with 70 construction jobs in Illinois. Many parts for the turbines will still be made in China, and the company receives support from the Chinese government.
Goldwind's Illinois project, called Shady Oaks, will be something of a test case to see if Chinese manufacturers can make it in the U.S.
"Goldwind’s entry into the Americas has been a needed injection of jobs, activity and capital into the domestic industry," company spokesman Colin Mahoney said.
Goldwind also recently signed a memorandum with Timken -- an American company based in Canton, Ohio, with operations there and in China and India -- to work together developing future wind projects.