China has good chance in U.S. renewable energy development

As the Paris climate summit draws near, American experts hailed U.S.-China cooperation on renewable energy as an effective way to promote economic growth and tackle climate change.

The U.S.-China cooperation has made the usage of renewable technology more affordable and popular, said Phil Sharp, president of Resources for the Future (RFF), a Washington D.C.-based think tank focusing on resources and environment.

"I think it's really important to both countries and to the world... We have a lot to learn from each other," said Sharp, who served as a member of the U.S. House of Representatives for 20 years and played a leading role in U.S. energy and environmental legislation.

"The solar panels are cheaper because of the production in China. So we are beginning to see international market really grow in this area and that helps bring the cost down. Because once you can manufacture in scale, you can really control the cost," Sharp said.

In the past five years, the average costs of wind and solar power were halved, according to data from the U.S. government.

In 2014, wind became the largest source of new electricity in the United States, generating 4.4 percent of all the electricity in America and maintaining its position as the fifth largest electricity source in the country.

The solar energy brought online every three weeks last year was as much as that in all of 2008, and the solar industry created jobs 10 times faster than the rest of the economy.

Several polls have shown that more than 70 percent of Americans believe the United States should pay more attention to the development of renewable energy.

Renewable energy has shown strong potential in fighting climate change, though its role in curbing greenhouse gas emissions is currently limited due to its small presence compared with traditional coal-fired plants which produce 25 percent of all U.S. global warming emissions.

The CO2 emitted by wind and solar per kilowatt hour is less than 1.5 percent and 6 percent of that by coal respectively, according to data of the Intergovernmental Panel on Climate Change (IPCC).

The Union of Concerned Scientists found in 2009 that if America sets its renewable electricity standard at 25 percent by 2025, its power plants' CO2 emissions will be reduced by 277 million tons annually, the equivalent of the output from 70 typical (600 MW) new coal plants.

Although the United States does not have a national renewable electricity standard, most U.S. states have set up their own standards, and several states with a strong renewable energy industry have made or are making more aggressive targets.

Lawmakers in California approved a bill in September to increase the share of renewable electricity to 50 percent by 2030.

"I think renewable energy is an area that has a bright future," said Terry Branstad, governor of Iowa, a state that has been continuously supporting renewable energy over the past three decades.

"I think it's good that two countries (China and the United States) are looking at ways to cooperate in renewable energy," said Branstad. "It is something good for the environment, it's good for the economy and I think it will also enhance our trade relationship."

Iowa is an important agricultural state in the middle of the United States. Once heavily dependent on imported fossil fuels, the state has been developing wind power since 1980s based on its rich wind resources.

By January 2014, 28.5 percent of its electricity had been generated by wind, the highest penetration rate in the United States. Now the state government is making a plan to raise wind power to 40 percent by 2030.

Renewable energy can become a new growth point for Chinese investments in the United States, which have been growing fast in recent years, said Melanie Hart, director of China Policy at the Center for American Progress.

Investments from China may face fewer obstacles because "in general the renewable sector is much more open" and China and the United States "have a stronger partnership on energy," said Hart.

However, there are still some issues in the United States that may hinder the two countries' further cooperation on renewable energy. For example, the opaque process of national security review done by the U.S. government has always been a damper for Chinese investors.

In 2012, U.S. President Barack Obama blocked the Ralls Corporation, a U.S subsidiary of China's top machinery equipment maker Sany Group from acquiring wind farm projects in Oregon citing "national security risks."

Obama issued a presidential decree to block the deal, as recommended by the Committee on Foreign Investment in the United States (CFIUS).

Ralls sued CFIUS for exceeding constitutional rights and failing to provide detailed evidence. In 2014, a U.S. court ruled that President Obama and the CFIUS failed to give a constitutional due process to Ralls.

"National security review is a real concern for our company to enlarge our business in the United States," said Yang Benxin, chairman of the CSIC (Chongqing) Haizhuang Windpower Equipment, a leading Chinese wind turbine manufacturer that entered the U.S. market in 2012 and aspires to become a "mass quantity supplier" in the U.S. wind power market.

Partisan politics in Washington may also make renewable energy a victim in the future. While the Democrats generally support renewable energy, the Republicans have shown their unmistakable love for fossil fuel.

The Congress failed to extend the renewable energy Production Tax Credit (PTC) in 2012, a key policy to support U.S. renewable energy development.

Without the PTC, the U.S. wind industry suffered a cliff fall in 2013. The installations of new wind farms fell 92 percent, cutting 30,000 jobs across the whole industry in the same year.

After the Congress extended the PTC in 2013, the sector boomed again in 2014.

However, the extension expired at the end of 2014 and the Congress is still discussing if further extension should be granted.

If the Congress fails to extend the PTC, new investors in the wind industry like Chinese investors will be put at a "disadvantage position" since they cannot have the ten-year tax credit enjoyed by companies who have made investments earlier, said Kurtis Sherer, vice president of Haizhuang's U.S. subsidiary.