Yellow Peril: Chinese wind turbine A-Power plans US plant

The U.S. Renewable Energy Group (US-REG) has signed a cooperation agreement with A-Power Energy Generation Systems, Ltd. under which both sides commit mutually to the development and construction of a new production and assembly plant in the United States that will supply highly advanced wind energy turbines to renewable energy projects throughout North and South America.

The state-of-the-art facility is expected to be 320,000 square feet and produce 1,100 megawatts of wind energy turbines annually, enough to power 330,000 homes. Upon completion, the facility is expected to employ approximately 1,000 American workers and will create additional jobs during the construction process. In addition to production and assembly at the new plant, the plan calls for many of the key wind turbine components to be sourced from U.S. manufacturers, further expanding the number of jobs created in the United States.

This agreement marks the culmination of a long process initiated in 2007 during which A-Power conducted economic analysis and sought strategic partners to enter the U.S. wind power market. On October 29, 2009, Shenyang Power Group (SPG) and US-REG announced plans to develop a $1.5 billion, 600MW wind farm across approximately 36,000 acres in Texas, for which A-Power has been designated as the turbine supplier.

A-Power is a shareholder of SPG. The construction of this production and assembly plant is an important step in the strategic partnership with SPG and A-Power to develop clean wind energy in the United States. The construction of the assembly and production plant is subject to further due diligence and the signing of definitive agreements between the parties, as well as various government approvals.

"US-REG and A-Power are combining investment, expertise, and resources to bring clean, reliable, and affordable renewable technologies to the marketplace," said Ed Cunningham, US-REG Managing Partner. "This planned investment will spur tremendous growth and allow many out of work Americans to re-enter the work force in the high-paying, renewable energy sector."

"We are committed to clean energy development and we are excited to partner with US-REG to build a production and assembly plant in the United States," said John Lin, A-Power’s Director and COO. "A-Power sees great opportunities in renewable energy in America and this state-of-the-art facility will be our first major step towards bringing clean, renewable energy to the world’s largest wind power country."

"The decision to construct this wind energy facility in the United States is the direct result of America’s commitment to renewable energy and the strength and skill of the American workforce," said Cappy McGarr, US-REG Managing Partner. "This project expects to create thousands of American jobs and is further evidence that President Obama’s goal of reducing our reliance on foreign oil and achieving energy independence is opening doors to increased investment and technological developments in the U.S. renewable energy market."

News of the factory comes less than a month after Cielo Wind Power LP, an Austin, Texas-based wind energy developer, announced plans to build a 600-megawatt wind farm south of the Texas Panhandle. Partners in the $1.5 billion project include U.S. Renewable Energy Group and the A-Power subsidiary Shenyang Power Group.

The wind farm would include 240 wind turbines made in Shenyang, an industrial city in northeastern China. The consortium has said it plans to secure most of the money needed to build the project from commercial banks in China, as well as seek financial assistance through the $787 billion American Recovery and Reinvestment Act.

Money for the Texas project would be available through the stimulus law’s Section 1603, which provides a cash payment in lieu of a tax credit totaling 30 percent of the qualifying cost of a project, according to the Energy Department.

US-REG is a U.S.-based private equity firm that mobilizes and facilitates the participation of international financing and investment in large-scale renewable energy projects within the United States. US-REG’s mission is to integrate renewable and environmentally sound energy technologies into the American marketplace, while generating tremendous returns with a range of smart and strategic investments in clean energy. US-REG is devoted to strengthening America’s energy independence, environmental quality, and economic vitality through investments in utility-scale projects in wind, hydro, geothermal, solar, and bioenergy.

SPG is a renewable energy industry alliance based in Shenyang, China. SPG’s member companies range from power equipment makers to engineering service providers, including A-Power. The alliance was created to integrate local resources and leverage the manufacturing, engineering and government initiatives in the Shenyang area so that SPG can pursue large-scale, international projects in the alternative energy sector.

The United States Renewable Energy Group mobilizes and facilitates the participation of international financing and investment in renewable energy projects within the United States. By facilitating the expansion and development of business strategies through managing risks and complexities associated with foreign financing and investment, USREG provides American businesses with access to international investment options, fosters economic development of the U.S. renewable energy industries and generates new high paying jobs for Americans. 

A-Power Energy Generation Systems Ltd., through its China-based operating subsidiaries, is the largest provider of distributed power generation systems in China, focusing on energy-efficient and environmentally friendly projects of 25 MW to 400 MW. In 2008, A-Power entered the wind energy market and has built China’s largest wind turbine manufacturing facility, located in Shenyang, Liaoning Province, with technologies licensed from German FUHRLANDER AG and Denmark-based Norwin, and a total annual production capacity of 1,125MW. In March 2009, A-Power entered into an agreement to establish a Joint Venture partnership with GE Drivetrain Technologies to produce wind turbine gearboxes in Shenyang. A-Power also has strategic relationships with Tsinghua University in Beijing and the China Academy of Sciences in Guangzhou to develop and commercialize other renewable energy technologies.