China, U.S. should form strategic alliance in renewable energy development

It is in both China and the U.S.’ s best interest to collaborate and have strategic alliance in developing clean energy, said a U.S. expert on Thursday in Chicago.

"If the U.S. and China decide to agree and cooperate on global energy-related concerns, it can result in a positive outcome for both countries. We all breathe the same air and buy the same commodities. We can certainly coordinate our efforts in that regard," Richard Wottrich, Senior Managing Director of International Desk at a highly respected international M&A advisory firm The McLean Group, told Xinhua in an exclusive interview.

While admitting that the amazing challenges worldwide of limited resources, Wottrich pointed out, "Forming strategic alliance on clean energy technologies will take the pressure off the limited resources in the world. We should work together to clean up the air for everybody. Indeed it is in both China and the U.S.’s best interest to do that. "

Wottrich has over 30 years experience in the financial service industry, providing business owners with exclusive representation and consultation in mergers and acquisitions. He has managed over 20,000 transactions ranging from start-ups and private placements to middle market acquisitions and divestitures. Wottrich has closed transactions in 15 countries, including China and India.

The expert further explained, "We have some technologies that might be useful to China and China has manufacturing capabilities that are useful to us. U.S. energy consumption is highly efficient compared to China. The U.S. has sophisticated energy technologies that can assist China in improving its energy industry. For example, the U.S. leads the world in natural gas fracturing technologies that have unlocked vast new gas reserves in America."

When commenting on China’s energy situation, he said, "China has all the challenges of a rapidly developing economy including its inefficiency in power consumption. China is opening one new coal plant a week. China mines and consumes almost 50 percent of the coal used in the world which is not considered as a dependable and clean resource. "

However, Wottrich is impressed with the way China has handled its energy requirements to sustain its 10 percent annual growth. "China has a centralized economic model that has produced some consistency in its internal energy markets. Consistency attracts investments. This coupled with China’s rapid growth and vast population, has facilitated the construction of Wind Power Farms at a highly accelerating rate for an example," he exclaimed.

He applauded China for its leading role in the world in wind power and its excellent job in solar power. "That is where they can take pressure off the side effects of their growth," He said.

When asked his advice for China’s clean energy development, he suggested that nuclear power is an interesting option for China.

"Nuclear power plants produce an emission free power, but of course leave behind radioactive waste. Proper and safe disposal of this waste has been a political and technical problem for decades. But at least it is clean energy and can help China reduce the coal it has to use. Technologies to make nuclear power plants both safe and secure, especially from terrorist attacks, have made progress," he explained to Xinhua.

According to Wottrich, roughly 14 percent of the world’s power is nuclear with France representing the highest percentage at nearly 80 percent with 59 nuclear plants. Regarding the U.S., he said, "The political resistance to nuclear power in the U.S. and elsewhere has made the process of actually bringing a nuclear power plant on line a tortuous process that can take decades."

When commenting on the current trends in clean energy in the U. S., Wottrich explained,"The major trend in the U.S. has been in wind power and solar power, which received substantial amount of federal money from the Recovery Act. However, often overlooked in the U.S. is that Hydropower is by far the largest source of Clean Energy in America, generating approximately 7 percent of America’ s electricity. "

In addition, bio-fuels, notably ethanol, is also among those areas that get emphasis today in the U.S., according to Wottrich. "Fully 40 percent of the U.S. corn crop now goes into ethanol production, with the impact of escalating corn prices contributing to the current world crisis in food prices,"he added.

Regarding the other energy sources used by the U.S. the expert said, "All other clean energy sources put together generate barely 3.6 percent. Coal accounts for 44.9 percent and natural gas for 23.4 percent. For transportation energy the U.S. imported 225 billion U.S. dollars in crude oil and refined distillates in 2010, 66 percent of its requirements."