(Updates throughout with details, background, company information and officials' comments.)
By Ian Talley
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A joint venture between Chinese and U.S. companies Thursday announced plans for a $1.5 billion, 600-megawatt wind farm in west Texas.
Although much of the funding will come from Chinese financiers, part of the project's capital will also come from the Obama administration's stimulus package in the form of loan guarantees and grants.
The wind farm, expected to be one of the largest in the country, may help to highlight a recent administration talking point: the U.S. risks losing the competitive edge in the renewable energy sector if Congress doesn't approve climate and clean energy legislation.
The 240 2.5-megawatt wind turbines will be manufactured in China, with shipments starting in March. The farm is expected to be online in 2011.
While financing and major parts will come from China, the technology will come from U.S. and European firms. The venture's main firms include the private equity group U.S. Renewable Energy Group, Texas-based Cielo Wind Power LP, China's Shenyang Power Group and A-Power Energy Generation Systems (APWR). It will use technology from General Electric Co. (GE), FUHRLANDER AG, and Norwin.
The city of Shenyang's vice mayor, Yang Yazhou, said the project "would demonstrate for the first time Chinese capital, manufacturing and engineering expertise exported to the U.S."
Joe Stark, vice president of finance and business development at Cielo, said without the stimulus funding the joint venture wouldn't be possible. "Thanks to the strong policy push and a recovering financing environment, wind projects in the U.S. are attracting developers and investors alike once again," he said.
Financing for wind power all but dried up in the credit crunch and subsequent recession. Since many U.S. wind financiers and developers were running losses on their balance sheets, they couldn't take advantage of tax credits for renewable energy production.
-By Ian Talley, Dow Jones Newswires; 202-862-9285; Ian.talley@dowjones.com