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A-Power Flexes Its Political Muscle

Chinese alternative energy player A-Power Energy answers political pressure to create jobs in the U.S. by selecting Nevada for a wind-energy plant.



) -- Who says Chinese alternative energy players can't rival U.S. senators in political gamesmanship?

Chinese wind power provider

A-Power Energy Generation Systems

(SPWR) - Get SunPower Corporation Report

and its U.S.-based partners announced on Thursday plans to build a wind turbine production and assembly plant in Nevada that will create up to 1,000 permanent jobs for the state and more jobs during the construction phase.

The announcement about the Nevada plant was notable for two reasons: the selection of Nevada as home state for the wind energy plant, and the political power broker who is associated with the state.

A-Power and its main U.S. partner -- the

U.S. Renewable Energy Group

-- have previously said that they would build a plant in the U.S. to supply wind turbines to the huge West Texas wind farm for which A-Power was selected as the turbine provider. The companies had never mentioned a location, though.

Last week, New York

Senator Charles Schumer continued his attack against the West Texas wind farm and A-Power Energy. It has been a grandstanding senatorial broadside against China stealing U.S. jobs that Schumer has been beating since last November and the original announcement of A-Power's selection to build the wind farm.

Schumer had previously asked the Obama administration to pull any funding for alternative energy projects that did not create jobs in the U.S. In last week's extension of Schumer's attack, the New York senator introduced legislation to block funding.

The announcement from A-Power and its U.S. partner on Thursday could be seen as bowing to the political pressure voiced most loudly and consistently by Schumer. However, the alignment with Nevada and its senator -- Senate Majority Leader Harry Reid -- could prove the cleverest and most calculated political move of all.

Nevada may be most obviously regarded as a sunny desert state ripe for solar energy, but it is also in the path of major wind corridors. The state's wind profile grew by leaps and bounds on Thursday. What's more, A-Power's political clout grew by leaps and bounds with its link to Reid. It is Reid, after all, and not Schumer, who runs the Senate.

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"When Senator Reid found out US-REG and A-Power wanted to build a wind turbine manufacturing plant in the United States, he told us that Nevada was poised to be at the epicenter of America's commitment to renewable energy technology," said Ed Cunningham, US-REG Managing Partner. "This multimillion dollar investment in Nevada will further advance the Senate Majority Leader's clean energy initiatives while allowing out of work Nevadans to re-enter the work force in high-paying, stable, green jobs."

A-Power has its own political rhetoric now to match Senator Schumer's.

Investors like what they heard, too. A-Power shares were up 8% at midday on Thursday and the alternative energy company had already eclipsed its average daily volume of shares traded.

Of course, the Thursday news that A-Power had selected Nevada for its plant still left out some important details -- the timeline for the plant's construction and how it would raise the financing -- although A-Power said in the release it will finance the plant's construction itself.

What's more, it's still not clear exactly how the financial formula of manufacturing wind power parts in the U.S. offsets the elimination of the benefit of lower cost Asian labor. On the transportation side of the equation,

it has been noted that wind jobs may be much harder to export than solar jobs because of the size and weight of wind turbines and wind towers, which makes overseas shipping costs prohibitive. In addition, some critical wind manufacturing parts are not even readily available in China, and would have to be shipped there.

Ultimately though, manufacturing efficiencies in the U.S. must be weighed against Asia's manufacturing trump card: lower wages.

At least for the moment, A-Power has taken a step toward satisfying the lingering political dimension in the development of its West Texas wind farm.

In other words, Mr. A-Power went to Washington, and found a friend who runs the Senate.

-- Reported by Eric Rosenbaum in New York.


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