Recovery Act Section 1603Renewable Energy Grant–In-Lieu    of Tax Credit Program   Detailed Background Information     Pre...
This research was prepared by Frank A. Hoffman, a partner with the law firm of KriegDeVault LLP, for the Wind Energy Manuf...
DETAILED BACKGROUND INFORMATION       Responding to the collapse of the tax credit equity market at the end of 2008, 1 Con...
Wind and solar are the fastest growing renewable energy sectors. With enactment of the1603 Grant Program in 2009, coming o...
4
5
The volatility related to the extension and expiration of the PTC is best depicted in theAmerican Wind Energy Association ...
The PTC Program and 1603 Grant Program both provide incentives to renewable energyproject developers “with few strings att...
With the wide open structure of the current 1603 Grant Program and theconcentration of foreign awardees, the program has g...
June 28, 2010 – United Steel Workers, Press Release, “Blue Green Alliance, American WindEnergy Supply Chain and Create U.S...
October 25, 2010 – The New York Times, Anne C. Mulkern, “Campaign Ads Slam StimulusBill Program For Renewable Energy;” 38O...
workers were employed in the wind industry in Europe of which 44,280 (41%) were employedin non-manufacturing jobs and 63,7...
12
Manufacturing employment in the U.S. peaked in June 1979 with 19,553,000 jobs and byJuly, 2008, manufacturing employment h...
14
The charts above indicate both rising production and rising imports of wind turbines inthe United States since 2005, thoug...
In an attempt to cast the domestic U.S. turbine manufacturing sector the best light, theInternational Trade Commission has...
Though the new method of determining the level of imported and domestic U.S. windturbine manufacturing may be aggressive, ...
In China over 87% of wind turbine manufacturing market is controlled by Chinese. InSpain over 88% of wind turbine manufact...
19
20
21
22
With only 28.2% of the 2009 installed wind turbine capacity Europe has over 56% of the2009 global wind turbine manufacturi...
GE Wind, the dominant U.S. supplier, is at best an emerging regional supplier. GE Winddominates North America with approxi...
In 2009 GE Wind only supplied 9.15%% (total 434 MW) of its total turbines supplied(global total: 4,741 MW) outside of the ...
To further confirm that all major markets are outperforming the United States inwind turbine manufacturing, the BTM consul...
It is clear that the business plan for Europe is to continue to supply the U.S. market andemerge deeper in the market in C...
The case addresses China’s illegal activities in five key areas:       •   Restrictions on access to critical materials   ...
19     Go to: http://blog.timesunion.com/nypotomac/category/energy/page/5/20  Go to: http://www.renewableenergyworld.com/r...
40      Go to: http://online.wsj.com/article/SB10001424052702304316404575580391213779782.html41     Go to: http://climatep...
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Frank Hoffman's Presentation RE: 1603 Grant Program

  1. 1. Recovery Act Section 1603Renewable Energy Grant–In-Lieu of Tax Credit Program Detailed Background Information Prepared By: Frank A. Hoffman, Partner Krieg DeVault LLP 2800 North Meridian Street Suite 300 Carmel, Indiana 46032 Direct Dial: (317) 238-6240 Email: fhoffman@kdlegal.com Date: November 15, 2010
  2. 2. This research was prepared by Frank A. Hoffman, a partner with the law firm of KriegDeVault LLP, for the Wind Energy Manufacturers Association and its “Start-Up Partners”: • Ball State University • Brevini Wind USA • City of Muncie, Indiana • Ivy Tech Community College of Indiana • Krieg DeVault LLP • Muncie-Delaware County Chamber of Commerce & Economic Development AllianceFrank A. Hoffman is president of the newly formed Wind Energy Manufacturers Association(www.wemawind.org) and a partner in the law firm of Krieg DeVault LLP with offices in Chicago, Atlantaand Indianapolis (www.kriegdevault.com). The Wind Energy Manufactures Association (WEMA) has beencreated to promote the manufacturing supply chain for the Wind Energy Industry in the United States. FrankHoffman concentrates his practice in creative and complex federal, state, and local incentive-based financingtransactions. Most recently Mr. Hoffman has assisted his clients and WEMA members in obtaining over $40million in Recovery Act, state and local economic development incentives and over $50 million in permanentfinancing for wind energy component part manufacturing in the United States.(http://www.kriegdevault.com/our_professionals/frank-hoffman).Tax Incentive Financing Experience • Created the New Markets Tax Credit Program for the Indiana Bankers Association and its 180 member banks - 2004 $50 million Allocation • Assisted in the creation of the New Markets Tax Credit Program for the city of Fort Wayne – 2008 $15 million Allocation • Assisted in the creation of the New Markets Tax Credit Program for the town of French Lick and seventeen (17) participating southern Indiana counties – 2009 $50 million Allocation • Represents ten (10) other Indiana units of government developing new market Tax Credit Programs • Combined Indiana CRED Credit, Local TIF Bond and NMTC to fund $5.5 million start-up manufacturing plant (Marion, Indiana) • Combined local TIF Bond and NMTC to fund $20 million hotel/indoor waterpark facility (French Lick, Indiana) • Closed over $150 million in NMTC financing (2004 to present) • Created the Wind Energy Manufacturers Associations, Inc. to attract capital investment under ARRA to Indiana in 2009 • Obtained over $28 million in ARRA economic development incentives and $53 million in permanent financing for Indiana start-up wind turbine component part manufactures since February 2009Education DePauw University B.A., (Economics), June, 1979 Indiana University School of Law J.D., (Taxation); January, 1982 Admitted to Indiana Bar 1983, IndianaBirth Place: Evansville, Indiana, September 1, 1957High School: Andrean Catholic High School, Merrillville, Indiana; 1975
  3. 3. DETAILED BACKGROUND INFORMATION Responding to the collapse of the tax credit equity market at the end of 2008, 1 Congresscreated a new program to promote the development of renewable electric power industry in theUnited States under Section 1603 in the Recovery Act on February 13, 2009 (“1603 GrantProgram”). 2 The 1603 Grant Program allows the renewable energy project developers that areotherwise eligible for the federal renewable electricity production tax credit (PTC) under Section45 of the Internal Revenue Code (IRC) to elect to take the federal business energy investment taxcredit (ITC) under IRC Section 48 or to receive a cash grant from the U.S. Treasury Departmentinstead of taking the PTC for new installations started in 2009 and 2010. Under the 1603 Grant program, the renewable energy developer receives a cash grantequal to thirty percent (30%) of the cost of the eligible basis of the property installed bydeveloper approximately sixty (60) days after completing construction and placing the project inservice. As of November 10, 2010, there has been $5.44 billion in 1603 Grants reported by theU.S. Treasury Department. 3 The 1603 Grant program expires at the end of 2010. Prior to the 1603 Grant Program, Congress attempted to support the renewable electricpower industry in the United States through the passage of the PTC. The PTC was initiallyenacted by Congress in the Energy Policy Act of 1992. However, after the initial 1992-2001period the PTC has incurred the following “star, almost stop and stop” congressionalsupport: 4 • December, 2001 PTC expired. • March, 2002 PTC extended through December 31, 2002. • December, 2003 PTC expired. • October, 2004 PTC extended through December, 2005. • July, 2005 PTC extended through December, 2007. • December, 2006 PTC extended through December, 2008. • October, 2008 PTC extended through December, 2009. • February, 2009 PTC extended through December, 2012. Since 2000, renewable electricity installations in the United States (excludinghydropower) have more than tripled, and in 2009 represent 53 GW of installed capacity.Renewable electricity (excluding hydropower) has grown at a compounded annual average of14% per year from 2000-2009. 5 2
  4. 4. Wind and solar are the fastest growing renewable energy sectors. With enactment of the1603 Grant Program in 2009, coming off the financial crisis and the late PTC extension inOctober, 2008, capacity installations still increased by 39% and solar grew nearly 52% over 2008levels. As reported by the U.S. Department of Treasury on November 10, 2010, the following1603 Grants have been made: Source Number Amount % Wind 196 $4,634,917,958 85.12 Solar 1,118 $396,377,178 7.28 Geothermal 22 $266,915,014 4.90 Biomass 25 $113,094,212 2.08 Other 26 $33,553,799 .62 Total 1387 $5,444,858,161 100.00 Average Project: $3,925,637 Median Project: $56,457 Projects < $20m 1318 Projects > $20m 69 Wind has been and continues to be the dominant renewable energy source. Windenergy accounted for about 92% of the annual installed renewable electricity capacity in2009 and over 85% of the 1603 Grants award through November 10, 2010. 3
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  7. 7. The volatility related to the extension and expiration of the PTC is best depicted in theAmerican Wind Energy Association (AWEA) 2009 Annual Report as to the wind power growthrate: 6 GROWTH OF U.S. WIND POWER CAPACITY The five-year average annual growth rate for the industry (2005-2009) is now 39%, up from 32% between 2004 and 2008. As annual installations have doubled twice in the last three years, the five-year annual growth rate continues to increase. The volatility in this chart in the early 2000s reflects the strong effect that on-again, off- again tax policy had on the market. Source: American Wind Energy Association U.S. Wind Industry Annual Market Report – Year Ending 2009 And the most recent AWEA U.S. Quarterly Installations (MW) Chart for the first quarterof 2007 through the third quarters in 2010: 7 6
  8. 8. The PTC Program and 1603 Grant Program both provide incentives to renewable energyproject developers “with few strings attached.” If built and placed into service, the developerwho meets the statutory requirements earns the tax credits or the cash grants associated with theapplicable program. Neither program requires the developer to compete for the tax credit or thecash grant; and neither program have an annual cap amount per program or developer. Bothprograms have limited annual reporting requirements beyond the filing of a tax return. Forexample, the 1603 Grant Program only requires a two (2) page Annual Performance Report andCertification. 8 Both programs are in stark contrast to the IRC Section 42 Low Income Housing TaxCredit Program (LIHTC Program) and the IRC 45D New Markets Tax Credit Program (NMTCProgram). The LIHTC Program and NMTC Program are both competitive performance basedprograms subject to annual cap amounts per program and per developer; and both the LIHTCand NMTC programs have extensive annual reporting requirements that provide detailedtransparency and accountability on an ongoing basis.. The LIHTC Program is implemented at the state level by each state. See California TaxCredit Allocation Committee website for an example of the LIHTC Program. 9 The NMTC Program is implemented nationwide by the Community DevelopmentFinancial Institutions Fund as a part of the U.S. Department of Treasury. 10 As of November 10, 2010, twenty-five (25) wind energy developers of the top sixty(60) 1603 Grant Program wind energy developments received 79.31% ($4,318,156,063) ofthe 1603 Grants made. Just eight (8) wind energy developers received over 55.053%($2,997,565,443) of the total 1603 Grants made through November 10, 2010. Number of Total 1603 Grants Rank Wind Energy Developments as of 11/10/10 Develop (Headquarters) 1 Iberdola Renewables (Spain) 12 $944,296,042 2 E.On (Germany) 5 $474,566,974 3 NextEra (United States) 7 $451,040,170 4 Horizon Wind Energy (Portugal) 6 $388,305,830 5 First Wind (United States) 5 $254,566,974 6 Noble Environmental (U.S.) 3 $221,422,053 7 Invenergy (United States) 3 $133,003,677 8 Eurus Energy (Japan) 2 $130,524,470 Total $2,997,565,443It is quite obvious that wind energy development in the United States is controlled by a selectfew. 7
  9. 9. With the wide open structure of the current 1603 Grant Program and theconcentration of foreign awardees, the program has gained an unusual level of notoriety whencompared to other Recovery Act Programs over the last twenty (20) months:October 29, 2009 – Investigative Reporting Workshop, Russ Choma, “Overseas Firms CollectingMost Green Energy Money;” 11November 10, 2009 – E&E News PM, Michael Burnham, “Schumer Calls for Review ofStimulus Awards;” 12November 17, 2009 – New York Times; Michael Burnham, “China’s A-Power to Build U.S.Wind Turbine Factory;” 13November 20, 2009 – Facebook Notes Department of Energy Secretary Steven Chu, “Section1603;” 14February 8, 2010 – Investigative Reporting Workshop, Russ Choma, “Most Wind Grants Go toOverseas Firms;” 15February 8, 2010 – Investigative Reporting Workshop, Russ Choma, “Foreign CompaniesControl Wind Manufacturing;” 16March 3, 2010 – U.S. Senate Press Release, Charles E. Schumer (N.Y.-D) “Schumer, Casey,Brown & Tester Urge Obama Administration to Suspend Stimulus Program Funneling BillionsOverseas;” 17March 3, 2010 – U.S. Senate Bill, Charles Schumer (N.Y.-D) Sponsor, S.3069 – AmericanRenewable Energy Jobs Act; 18March 3, 2010 – Times Union Capitol Confidential, Jennifer D. Louhy,” Schumer Seeks ‘buyAmerican’ Requirements for Wind Turbines;” 19May 25, 2010 – Renewable Energy World, Allan Chen, Berkley Lab, “Treasury Grant ProgramYields Positive Results for Renewables;” 20June 2, 2010 – Climate Change Report, Fred Greguras/K & L Gates, “Will the Recovery ActSection 1603 Cash Grant Be Extended Beyond 2010?;” 21June 10, 2010 – U.S. Senate Press Release, Sherrod Brown (OH-D), “Sen. Brown JoinsSteelworkers, American Wind Energy Association As They Announce New Partnership;” 22June 10, 2010 – PR Newswire, “USW, AWEA Announce Plan to Make U.S. Leader in WindEnergy;” 23 8
  10. 10. June 28, 2010 – United Steel Workers, Press Release, “Blue Green Alliance, American WindEnergy Supply Chain and Create U.S. Manufacturing Jobs Energy Association and USWProvide Manufacturing Blueprint to Build Out Domestic Wind;” 24July 22, 2010 – U.S. Partnership for Renewable Energy Finance, Press Release, “FinancialExpert Express Alarm; U.S. Renewable Energy Market Momentum Threatened; FederalTreasury Grant in Lieu of Tax Credits Due to Expire 12/31/10;” 25July 26, 2010 – Novogradac & Company, Renewable Energy Tax Credit Resource Center,Breaking News, “Draft of Domestic Manufacturing and Energy Jobs Act of 2010 Released;” 26July 26, 2010 – Oil Price, Gloria Gonzalez, “US Renewables Financing Set to Collapse WithoutGrant Extension;” 27September 10, 2010 – Guardian Environmental Network, Sara Stroud, “Thousands of GreenEnergy Jobs Under Threat from End of US Grant;” 28September 22, 2010 – Green Energy Reports, Breaking New, “Senate Considers Tax Refund toReplace Popular 1603 Cash Grants;” 29September 27, 2010 – Investigative Reporting Workshop, Russ Choma, “Workshop’s WindStories Kicking Up Political Dust;” 30September 30, 2010 – Solar Energy Industries Association, “The Crisis in the Tax Equity Marketand the Need to Extend the Treasury Grant Program;” 31October 14, 2010 – GreenWire, Anne C. Mulkern, “Stimulus Cash Flowed to Completed,Underway Projects;” 32October 14, 2010 – Climate Progress, Richard W. Caperton & Kate Gordon, “RecoveryProgram’s Cash Grants Create American Jobs and American Energy:” 33October 21, 2010 – Investigative Reporting Workshop, Blow Away, Russ Choma, “Millions inGrants Went to Wind Farms Built Before Stimulus Passed;” 34October 20, 2010 – American Progress, Richard W. Caperton & Kate Gordon, “Generating cleanEnergy Jobs Key Recovery Act Program Deserves Renewal;” 35October 21, 2010 – American Wind Energy Association, Newsroom, Press Release, “AmericanWind Energy Association Response to Investigative Reporting Workshop Story on Wind TaxIncentive;” 36October 25, 2010 – Greenwire, Anne C. Mulkern, “Campaign Ads Slam Stimulus billProgram;” 37 9
  11. 11. October 25, 2010 – The New York Times, Anne C. Mulkern, “Campaign Ads Slam StimulusBill Program For Renewable Energy;” 38October 25, 2010 – White House, Memo, Carol Browner, Ron K. Lain, Larry Summers,Renewable Energy Guarantees and Grants; 39November 2, 2010 – The Wall Street Journal, Paul Glader, “Campaigns Rap Wind Power and‘Failed Stimulus’; 40November 4, 2010 – Climate Progress, Daniel J. Weiss, “A Hypothetical Clean Energy Agenda- if the GOP Choose Cooperation, Rather Than Confrontation;” 41November 5, 2010 – Power-Gen Worldwide, Up In the Air, Linsay Morris, “The Big?: theFuture of Wind;” 42November 10, 2010 – Climate Progress, Richard W. Caperton, “Biden: congress should extendTreasury Cash Grants For Renewable Projects;” 43November 12, 2010 – The Wall Street Journal, Editorial, “Wind Jammers at the White House aLarry Summers Memo Exposes The High Cost of Energy Corporate Welfare;” 44November 16, 2010 – Clean Technica, Susan Kraemer, “Senator Max Baucus Might be Able toExtend Section 1603 Cash Grants for Wind Power Development;” 45November 15, 2010 – Master Resource, Lisa Linowes, “Government Gluttony at the Americanwind Energy Association (Summers/Browner/Klain memo indicates ‘Wind Fatigue’);” 46November 15, 2010 – Power-Gen Worldwide, Up In the Air, Lindsay Morris, “What LameDucks May Do For Power;” 47November 17, 2010 - Novogradac & Company, Renewable Energy Tax Credit Resource Center,Breaking News, “Section 1603 Grant Program could Be extended in Lame Duck Congress;” 48 Notwithstanding the “start, almost stop and stop” PTC policy and the rough publicperception of the 1603 Grant Program, the development of Wind as a renewable energy sourcehas been extremely successful in the United States. In 2009 the United States maintained itsglobal status as the largest wind development market at 35,159 accumulative MW. Most importantly, 85,000 Americans were employed by the wind industry by the end of2009. Approximately 66,500 (78.25%) were workers employed in construction, operations,maintenance and other non-manufacturing jobs (collectively referred to as non-manufacturingjobs); and around 18,500 (21.75%) in manufacturing jobs. While wind industry employment didnot grow in the United States in 2009, in 2008 the industry added 35,000 new workers. However,1,500 manufacturing jobs were lost in 2009. As a basis of comparison, the European WindEnergy Association recently reported in 2008 that a the end of 2007 approximately 108,000 10
  12. 12. workers were employed in the wind industry in Europe of which 44,280 (41%) were employedin non-manufacturing jobs and 63,720 (59%) were employed in manufacturing jobs 49 50The U.S. has a 30 year history of importing goods and exporting manufacturing jobs! 11
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  14. 14. Manufacturing employment in the U.S. peaked in June 1979 with 19,553,000 jobs and byJuly, 2008, manufacturing employment had fallen to 11,817,000, the lowest level ofmanufacturing jobs since April 1941. As a percent of the total labor force, manufacturingemployment fell below 9% in July 2009, the lowest level in BLS history (back to 1939). The U.S. has also had a trade deficit dating back to late 1960s that has been increasing ata large rate since 1997; and set a record high of $817.3 billion in 2005. The U.S. last had a tradesurplus in 1975. Every year there has been a major reduction in economic growth, it is followedby a reduction in the U.S. trade deficit. The U.S. wind turbine imports substantially increased after 2005, peaking in 2008 anddeclining slightly in 2009. U.S. imports of wind-powered generating sets (the provision in theHarmonized Tariff Schedule of the United States (HTS) that includes nacelles) and, if they areimported with the nacelle, other components) increased from $482.5 million in 2005 to $2.5billion in 2008, then decreased to $2.3 billion in 2009. Denmark was the leading source ofimports in 2009, accounting for 34.5 percent of imports. Japan accounted for 25.5 percent, Spain13.3 percent, India 10.7 percent, and Germany 8.9 percent. Each of these countries is home to asignificant wind manufacturing industry. Similarly, U.S. imports in the HTS provisions that include towers and blades increasedfrom 2005 to 2008, then declined in 2009. Imports of other parts of generators and other enginesand motors, which includes turbine blades and other components such as hubs, increased from$562.7 million in 2005 to $1.8 billion in 2008, then declined to $1.3 billion in 2009. The top fivesources of these imports in 2009 were Brazil (21.2%), Mexico (17.5 percent), Germany (14.1%),India (8.6%), and Denmark (8.1 %). 51 13
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  16. 16. The charts above indicate both rising production and rising imports of wind turbines inthe United States since 2005, though both were depressed by the financial crisis and recession inlate 2008 and 2009. Yet, foreign manufactures continue to play a dominant role in the United States with46.7% (per BTM Consult 2009 World Market Update) to 54% (per AWEA 2009 Wind IndustryAnnual Market Report) of the U. S. turbine manufacturing market. 15
  17. 17. In an attempt to cast the domestic U.S. turbine manufacturing sector the best light, theInternational Trade Commission has determined that the combined value of imported windpowered generating sets, blades and towers as a percentage of the total of value of the U. S. windturbine market has declined to approximately 32% in 2009. The Department of Energy has applied a similar method to determine value of theimported wind turbine component percentage to be 39%. 16
  18. 18. Though the new method of determining the level of imported and domestic U.S. windturbine manufacturing may be aggressive, it may be a reasonable estimate. With a market shareof only 17.5% of the 2009 global wind turbine manufacturing market and topping 30.0% of the2009 global installed turbine capacity, the U. S. (which dominates most of the “Americas”) couldsupply approximately 58% of wind turbine demand in the “Americas.” In any event, the United States continues to import at least of 40% of the value of itsinstalled wind turbine capacity; and foreign manufactures continue to control 46%-54% ofthe total U.S. installed wind turbine manufacturing market. No other major wind turbine market allows such foreign penetration anddominance, except Canada. 17
  19. 19. In China over 87% of wind turbine manufacturing market is controlled by Chinese. InSpain over 88% of wind turbine manufacturing market is controlled by Europeans. In Germanyover 93% of the market is controlled by Europeans; and over 76% of the wind turbinemanufacturing market is still controlled by German manufactures. In India over 80% of the windturbine manufacturing market is controlled by Indian manufactures. See charts below. 18
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  24. 24. With only 28.2% of the 2009 installed wind turbine capacity Europe has over 56% of the2009 global wind turbine manufacturing market. Obviously, Europe is well positioned to exportwith manufacturing capacity that is approximately 200% of its own demand. With five of the topten global wind turbine suppliers that have over 37% of the global market Europe has achievedglobal dominance. 23
  25. 25. GE Wind, the dominant U.S. supplier, is at best an emerging regional supplier. GE Winddominates North America with approximately 40% of the market in the U.S. and 32.8% of themarket in Canada. 24
  26. 26. In 2009 GE Wind only supplied 9.15%% (total 434 MW) of its total turbines supplied(global total: 4,741 MW) outside of the United States (total: 3,995 MW) and Canada (total: 312MW); and has only 1.59% of global market share outside the United States and Canada. 2009 Global Installed MW Total Global Market: 38,103 United States: 9,922 Global Market Excluding U.S.: 28,181 Canada: 950 Global Market Excluding U.S. & Canada: 27,331 2009 GE Wind Supplied MW Supplied MW Percentage Total: 4,741 100% United States: 3,995 84.26% Outside U.S.: 746 15.74% Canada: 312 6.58% Outside U.S. & Canada: 434 9.15% G.E. Wind Percentage of Global Market Excluding U.S. & Canada: 1.59% 25
  27. 27. To further confirm that all major markets are outperforming the United States inwind turbine manufacturing, the BTM consults 2009 Forecast of Global Manufacturing2009 Capability clearly shows that the United States (the dominate market force in theAmericas) is dead last in existing and forecasted manufacturing capacity. Announced Turbine O.E.M. Capability As a Manufacturing Percentage of 2009 Actual Installed MW Capability Installed MW Europe 10,738 21,228 197.69% Americas(US 87%) 11,433 7,729 67.76% China 13,750 13,660 99.35% India 1,172 4,750 405.29% Announced Turbine O.E.M. Capability As a Manufacturing Percentage of 2012 Forecast Installed MW Capability Installed MW Europe 18,025 38,825 215.40% Americas 18,400 10,329 56.14% China 15,400 34,980 227.71% India 3,500 8,790 251.14% The United State (with 86.7% of the Americas market) is and will be the only majormarket that has to import turbine manufacturing capability to meet its current andforecasted market demand. 26
  28. 28. It is clear that the business plan for Europe is to continue to supply the U.S. market andemerge deeper in the market in China; and that China will continue to dominate its market andseek to dramatically expand its exports to U.S. as China emerges as the lowest cost supplier withrecently acquired European technology. There are numerous reasons why the United States has lost approximately 8,000.0000manufacturing jobs over the last 30 years; and why equal or higher cost supplier countries likeDenmark and Germany or lowest cost suppliers countries like China have increased theirmanufacturing capabilities. However, one of the most recently well documented cases of “Why”has been put forth by the United Steel Workers Union. On September 9, 2010, the United Steelworkers (USW) union filed a comprehensivetrade case under Section 301 of the trade law identifying a broad array of Chinese policies andpractices that threaten the future of America’s alternative and renewable energy sector. The casealleges that China has utilized hundreds of billions of dollars in subsidies, performancerequirements, preferential practices and other trade-illegal activities to advance its domination ofthe sector. The USW filed the petition with the office of United States Trade Representative. The5,800-page submission identifies five major areas of protectionist and predatory practicesutilized by the Chinese to develop their green sector at the expense of production and jobcreation here in the U.S.. 27
  29. 29. The case addresses China’s illegal activities in five key areas: • Restrictions on access to critical materials • Performance requirements for investors • Discrimination against foreign firms and goods • Prohibited export subsidies and prohibited domestic content subsidies • Trade distorting domestic subsidies The USW case is being filed under Section 301 of U.S. trade laws. The petition wasprepared by the Washington, D.C.-based law firm of Stewart and Stewart, a well-regarded lawfirm in the customs and international trade area. 521 Go to: http://green.blogs.nytimes.com/2009/01/21/fixing-the-tax-problems-of-renewable-energy/?emc=eta1 .2 U.S Dept. of Treasury 1603 Grant Program; go to: http://www.ustreas.gov/recovery/1603.shtml .3 U.S. Treasury List of 1603 Grants Awards; go to: http://www.ustreas.gov/recovery/docs/Web%20Posting.xls4 DSIRE, Production Tax Credit; go to: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US13F5 Go to: http://www1.eere.energy.gov/maps_data/pdfs/eere_databook.pdf6 Go to: http://www2.grist.org/pdf/AWEA.pdf7 Go to: http://www.docstoc.com/docs/36497743/AWEA-3rd-Quarter-2009-Market-Report8 Go to: http://www.novoco.com/energy/resource_files/hot_topics/sample_annual1603report_082610.doc9 Go to: http://www.treasurer.ca.gov/ctcac/10 Go to: http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=511 Go to: http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas/story/overseas-firms-collecting-most-green-energy-money/12 Go to: http://www.eenews.net/eenewspm/2009/11/10/archive/2?terms=160313 Go to: http://www.eenews.net/Greenwire/2009/11/17/archive/4?terms=160314 Go to: http://www.facebook.com/notes/steven-chu/section-1603/19883099185615 Go to: http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas/story/most-wind-grants-go-overseas-firms/16 Go to: http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas/story/foreign-companies-control-wind-manufacturing/17 Go to: http://schumer.senate.gov/new_website/record.cfm?id=32273218 Go to: http://www.opencongress.org/bill/111-s3069/show 28
  30. 30. 19 Go to: http://blog.timesunion.com/nypotomac/category/energy/page/5/20 Go to: http://www.renewableenergyworld.com/rea/news/article/2010/05/berkeley-lab-treasury-grant-program-a-positive-for-renewable-energy21 Go to: http://www.climatelawreport.com/2010/06/articles/government-policy/united-states-will-the-recovery-act-section-1603-cash-grant-be-extended-beyond-2010/22 Go to: http://brown.senate.gov/newsroom/press_releases/release/?id=4b308e97-9beb-4cf6-b303-af0c477d274523 Go to: http://www.prnewswire.com/news-releases/usw-awea-announce-plan-to-make-us-a-leader-in-wind-energy-96068754.html24 Go to: http://www.bluegreenalliance.org/press_room/press_releases?id=009425 Go to: http://www.uspref.org/press-releases/26 Go to: http://www.novoco.com/energy/index.php27 Go to: http://oilprice.com/Alternative-Energy/Renewable-Energy/US-Renewables-Financing-Set-to-Collapse-Without-Grant-Extension.html28 Go to: http://www.guardian.co.uk/environment/2010/sep/10/green-energy-jobs-us-grant29 Go to: http://www.aweber.com/archive/greenenereport/1Kqre/h/Breaking_News_Senate.htm30 Go to: http://investigativereportingworkshop.org/blogs/shop-notes/posts/2010/sep/27/workshops-wind-stories-kicking-political-dust/31 Go to: http://www.seia.org/galleries/pdf/TGP_09.10.10.pdf32 Go to: http://www.eenews.net/Greenwire/2010/10/14/1/33 Go to: http://climateprogress.org/2010/10/14/recovery-program-wind-american-jobs-china/34 Go to: http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas/story/wind-farms-built-before-stimulus/35 Go to: http://www.americanprogress.org/issues/2010/10/clean_energy_jobs.html36 Go to: http://97.74.195.121/newsroom/releases/10-21-10_AWEA_Responds_to_Investigative_Report.html37 Go to: http://www.eenews.net/Greenwire/print/2010/10/25/338 Go to: http://www.nytimes.com/gwire/2010/10/25/25greenwire-campaign-ads-slam-stimulus-bill-program-for-ren-8138.htm39 Go to: http://www.ascension-publishing.com/BIZ/WH-loan-guarantee.pdf 29
  31. 31. 40 Go to: http://online.wsj.com/article/SB10001424052702304316404575580391213779782.html41 Go to: http://climateprogress.org/2010/11/04/cooperation-or-confrontation-on-clean-energy/42 Go to: http://www.powergenworldwide.com/index/blogs/lindsay-morris/blogs/pgww-blogs/lindsay-morris/post987_6614322042879783510.html43 Go to: http://theenergycollective.com/josephromm/46960/biden-congress-should-extend-treasury-cash-grants-renewable-projects44 Go to: http://online.wsj.com/article/SB10001424052748704635704575604502103371986.html45 Go to: http://cleantechnica.com/2010/11/16/senatormax-baucus-says-he-can-extend-section-1603-cash-grants-for-wind/46 Go to: http://www.masterresource.org/2010/11/government-gluttony-awea/comment-page-1/#comment-1444547 Go to: http://www.powergenworldwide.com/index/blogs/lindsay-morris/blogs/pgww-blogs/lindsay-morris/post987_3392314735020706279.html48 Go to: http://www.novoco.com/energy/index.php49 Go to: http://www.ewea.org/fileadmin/ewea_documents/documents/publications/reports/Jobs_pamphlet_lr.pdf50 Go to: http://assets.usw.org/releases/misc/bga-report-062510.pdf51 Go to: http://usitc.gov/publications/332/working_papers/ID-25.pdf52 Go to: http://assets.usw.org/releases/misc/section-301.pdf 30

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