American University’s Investigative Journalism Workshop has published reports detailing the extensive political connections in the United States developed by Chinese wind power company A-Power Energy in its effort to build a 600-MW wind farm in West Texas. A-Power and their partners were seeking $450 million in section 1603 grants and U.S. Department of Energy loan guarantees to help fund the project. New York senator Charles Schumer objected to the idea that stimulus funds would flow to Chinese workers and sought to block the project’s access to the funds. A-Power chose to fight politics with politics, announcing a turbine factory in Nevada (home of the Senate Majority Leader Harry Reid, project being developed in conjunction with prominent Reid supporters in Las Vegas) and making friends with the United Steelworkers union which had initially opposed the project.
A key U.S. partner to A-Power on the project is U.S. Renewable Energy Group, described in the article as “a Dallas investment firm with strong ties to Washington and the Democratic Party.” On it’s website, US-REG describes itself as a developer of “renewable energy projects throughout the nation,” but the only project specifically mentioned anywhere on it’s website is the proposed project with A-Power (here is a summary touting the benefits of the proposed project). Reading the “About the Team” materials on the website suggests a group of well-connected lawyers and investors with little direct experience in developing renewable energy projects.
In this particular story, a key company is Chinese and the well-connected movers and shakers are Democratic, but there is nothing especially “Chinese” or “Democratic” about the practice of political capitalism revealed here.
Earlier reports from the Investigative Journalism Workshop detailed that about 88 percent of the section 1603 grant money went to non-U.S. based companies, including companies from Spain, Germany, Japan, and Portugal. Note that the location of the corporate headquarters likely has little to do with where the money gets spent or who ends up better off because of the subsidy. Another report indicated that $1.3 billion in stimulus funds went to wind power projects built before the stimulus bill was passed.
Added: HT to the Dallas Morning News Texas Energy and Environment blog.
Also, via Seeking Alpha, recent financial filings by A-Power suggest that the west Texas project will not get built. If the project does not receive Section 1603 grants and the DOE loan guarantee by December 31, 2010, A-Power’s partners have the right to dissolve the partnership. They report, “In our view, it is not likely that Spinning Star [the project's name] will be able to arrange the requisite construction financing by December 31,2010….”