Chinese commercial banks to fund $1.5B for 600 megawatt wind farm in Texas

Chinese banks to fund $1.5B Texas wind farm

China took a big leap into the U.S. renewable energy market Thursday, putting up $1.5 billion for a 36,000-acre wind farm in Texas with the power to light up 180,000 homes.

The project is a joint venture with U.S. Renewable Energy Group, a private equity firm, Austin, Texas-based Cielo Wind Power LP and Shenyang Power Group of China.

The announcement Thursday shows how much China’s own wind industry has burgeoned and comes two days after U.S. Energy Secretary Steven Chu told lawmakers that the U.S. was falling behind China and others in alternative energy investment.

“With a long track record for building some of the world’s biggest wind farms, the U.S. is a real ideal target for foreign alternative energy investment,” said Jinxiang Lu, Shenyang Power Group’s chairman and chief executive.

Executives would only say that the project will be located in West Texas and built within several counties.

Chinese wind turbine manufacturer A-Power Energy Generation Systems Ltd. will begin shipping the 2.5-megawatt turbines in March 2010, built in the company’s plant in the city of Shenyang.

A-Power uses technology developed by Germany-based Fuhrlander AG and Erie, Pa.-based GE Drivetrain Technologies.

The joint venture also plans to tap into U.S. stimulus funding for alternative energy, said Cappy McGarr, managing partner of U.S. Renewable Energy.

There are growing signs that the wind industry has weathered the worst of the recession, though credit markets remain very tight.

Armed with nearly $1 billion in federal grants, wind farm developers installed 1,649 megawatts of capacity from July through September — enough to serve the equivalent of 480,000 average households and about 18 percent more than the year-ago quarter, the American Wind Energy Association said last week.

That suggests the industry is doing better than might be expected, easing fears that a lack of lending would stall new wind capacity.

“It seems to be gradually getting back, back on its feet,” Lu said. “And more important, we are getting support from Washington.”

The economic slowdown has led to the demise of some wind projects.

Over the summer, energy baron T. Boone Pickens said he was backing off plans to erect 687 giant wind turbines over four counties in the Texas Panhandle, and is now looking to sell them off.

Rob Gramlich, the wind energy association’s senior vice president public policy, said China has put in place aggressive renewable energy targets and is rapidly building up its manufacturing base. He said wind development potential is attracting investors from both within in the U.S. and from overseas.

“A look at the top ten owners of wind farms in the U.S. shows a healthy mix of U.S. and global companies,” Gramlich said in a statement.

Denmark is the biggest importer to the U.S., at 28 percent, according to the U.S. International Trade Commission. Spain, Japan, Germany and India follow.

Yang Yazhou, vice mayor of Shenyang where the turbines are manufactured, said the project would demonstrate for the first time Chinese capital and manufacturing and engineering expertise exported to the United States.

Shenyang, a diverse manufacturing city with companies in the aviation, automobile and heavy equipment industries, has been working on entering the U.S. market for a long time and the wind farm project “was just meant to be,” Yazhou said.