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Dallas investor, Chinese partners propose U.S. wind turbine plant

Nov 18, 2009 - Jim Landers - The Dallas Morning News

WASHINGTON Dallas investor Cappy McGarr said Tuesday that his Chinese partners in a $1.5 billion West Texas wind energy farm proposed last month have agreed to build a turbine manufacturing plant in the United States.

"It should create U.S. jobs, obviously, on an ongoing basis for production but also construction," McGarr said, "so we're pleased A-Power [Energy Generation Systems Ltd. of China] decided to do this."

McGarr offered few details, but the announcement may help the project gain $480 million in federal support from the Obama administration's economic stimulus program. Some members of Congress have criticized the wind farm project as a jobs boon for China, where thousands of workers would assemble the project's 240 wind turbines.

The 36,000-acre wind farm would create about 330 construction and maintenance jobs in Texas.

Sen. Charles Schumer, D-N.Y., wrote to Energy Secretary Steven Chu earlier this month criticizing the proposed wind farm.

"This project should not receive a dime of stimulus funds unless it relies on American-built products rather than Chinese turbines," Schumer wrote.

Chu wrote back Friday, pointing out that under the stimulus law, the project would involve tax credits "available to all qualifying entities" rather than money handed out at the discretion of the Energy Department.

Chu also wrote Schumer that "manufacturers will not build plants here and grow their production capacity here unless there is domestic demand, and, until recently, that was not the case."

U.S. Renewable Energy Group, in which McGarr is a managing partner, said the U.S.-based turbine factory would employ "approximately 1,000 American workers." McGarr said no location has been chosen.

A-Power, which trades on the Nasdaq under the listing APWR, hedged Tuesday's announcement with a long "safe harbor" statement noting that several hurdles remain, including financing and consent from A-Power's European technology suppliers.

Given those barriers, it appeared unlikely that a new A-Power factory would be built in the U.S. in time to supply the Texas wind farm project and would instead supply other future wind farms.

McGarr said the agreement to build a U.S.-based factory had "nothing to do with" winning federal support for the wind farm.

"This has been in the works for a long time," he said.

Schumer saw it differently.

"This is exactly what stimulus funding ought to do: create and strengthen green manufacturing jobs in America, even if that slightly slows renewable energy production as we play catch-up to countries like China," he said. "We still maintain no stimulus money should be used to manufacture wind turbines in China."