Stoel Rives Partners to Present Wind Project Development Case Study at Chinese Wind Conference in Beijing
Stoel Rives Partners Alan Merkle, Ed Einowski and Michael Mangelson will participate in the upcoming Workshop on Investment in U.S. Wind Energy by Chinese Companies, held in Beijing, China on June 30, 2011.
The opportunities for mutually beneficial cooperation between U.S. and China wind power industries have become increasingly profitable. Now more than ever it’s important for key players on both sides to understand and evaluate where their best prospects lie, as many basic business assumptions can become lost in translation.
This workshop, organized by the Chinese Wind Energy Association (CWEA), the U.S.-China Energy Cooperation Program (ECP) Wind Power Working Group (WPWG), and the National Energy Administration (NEA), gathers wind experts from across the U.S. and China to discuss the globalization of the Chinese wind energy industry, strategies for undertaking M&A transactions in the U.S., and a variety of case studies based on wind energy development projects.
Stoel Rives attorneys prepared their own case study, which will be presented during the workshop by Alan Merkle. Case Study: Development of a Wind Project in California, is based on a hypothetical 200 MW wind development project in Southern California. The case study covers the legal framework for a project of this scale, including real estate, permitting, transmission and interconnection, power purchase agreement, renewable energy credits, turbine supply and balance of plant agreements, and financing. It is available as a PDF for download in English and Chinese.
Ed Einowski will provide workshop attendees with a presentation titled Setting the Stage for Investing In U.S. Renewable Energy Projects: The Business and Legal Environments. The PowerPoint presentation is available as a PDF for download in English and Chinese.
The Stoel Rives Law of Wind Energy (now in its 6th edition) is also available for download in both English and Chinese editions here.
Chinese Language Edition of Stoel Rives Law of Wind Guide Now Available
We are pleased to announce for our Chinese readers the publication of a new Chinese translation of the Stoel Rives Law of Wind guide. Purposed for Chinese investors and companies exploring business opportunities in the U.S. wind energy market, the guide covers such issues as real property procedures, permitting requirements, EPC agreements, project finance, tax, interconnection, transmission and power purchase negotiations, labor management, U.S. Securities regulations and U.S. Foreign Corrupt Practices Act compliance. The translation was prepared in cooperation with our friends at the U.S.-China Energy Cooperation Program (“ECP”) Wind Power Working Group, the only non-governmental organization with bi-lateral government recognition in the U.S.-China sustainable energy sector.
Download a copy (registration required)
Read the Stoel Rives/ECP press release: English version | Chinese version
Bar on Military Purchases of Chinese Solar Panels
In a blow to China’s position as the world’s dominant producer of solar panels, the new military authorization law prevents the Defense Department from buying Chinese-made solar panels, but allows it to buy solar panels from any country that has signed the W.T.O.’s side agreement on government procurement.
The W.T.O. Government Procurement Agreement, which requires free trade in government purchases, has been signed by virtually all industrialized countries. China agreed to sign it on joining the W.T.O. in November 2001, but still has not done so, possibly because of internal pressure that strongly favors steering lucrative government contracts to domestic companies.
Chinese leaders have strongly criticized provisions like the “Buy America” provision in the 2009 economic stimulus legislation, despite having similar restrictions on the use of its own stimulus funds.
China accounted for at least half the world’s production of solar panels in 2010 and its market share is rising. While the United States and Europe have focused on subsidizing solar panel purchasers, China has focused on subsidizing its solar panel manufacturers. It then exports virtually all of its panels to the United States and Europe, taking advantage of American and European consumer subsidies.
Industry experts predict that the new legislation will boost the American solar panel market, partly by requiring future military contracts to specify American-made panels and partly by encouraging Chinese solar panel manufacturers to establish factories in the United States, with the concomitant higher labor and overhead costs.
Show Me the RMBs: Analysis of Foreign Investment Opportunities in China's Stimulus Package
Stoel Rives attorneys Geoff Revelle and Jerry Chiang have written a detailed analysis of how foreign investors and companies can take advantage of China’s $4 trillion RMB stimulus package. Enacted in November 2008, the package focuses on 10 sectors of the Chinese economy, including rural infrastructure and health care, with the goals of creating jobs and increasing China’s GDP.
Revelle and Chiang note that while the main beneficiaries of the stimulus funding are government-owned or privately-owned Chinese companies, opportunities for foreign companies will still emerge in areas such as high-tech products and value-added services that Chinese firms cannot provide. In his analysis, Revelle provides an overview of investing in China, a review of the major sectors of the Chinese economy targeted by the stimulus package, and best practices recommendations for foreign companies interested in China's stimulus funding.
Revelle has also prepared a PowerPoint on the topic, which can be found at http://www.stoel.com/showarticle.aspx?Show=5678.
Western Governors Consider Regional and National Polices Regarding Global Climate Change
At the Western Governors' Association Annual Meeting on June 15, 2009, the Western Governors heard a sobering and candid report from Secretary of Energy Steven Chu, which, at its core, indicated that climate change is real and happening faster than scientists previously warned. According to Secretary Chu, "the news is getting scary . . . but the most scary thing in my mind is the [scientific] observations. People can be entitled to their own opinions, but they are not entitled to their own facts." A few of the observations cited by Secretary Chu included the following:
- Loss of 1/2 of the Northern polar ice cap in the last 10 years
- Sea level rise
- 40% of the British Columbia pine is dead
- Extreme water stress in the Western United States (with exception to the Pacific Northwest) as a result of decreased snow pack and changing weather patterns
Secretary Chu was particularly concerned with the continued melting of the permafrost in the Northern Hemisphere, which he predicted could have "runaway effects" due to the massive release of CO2 and methane from the biomass that has accumulated over time.
President of the World Bank, Robert B. Zoellick, also participated in the discussion on climate change, indicating that the rule making that will be necessary for implementing climate change policies will stay with us for decades and will be some of the "toughest negotiations" he has ever seen. Mr. Zoellick stressed the importance of having the Governors plugged into the rule making process since this will be the framework that the states will have to live with. There was also an acknowledgment among the group that the farmers and ranchers are skeptical about climate change, but that this is a key stakeholder group that needs to be part of the equation. Governor Bill Richardson commented that the key will be the creation of a carbon offset market that will work. Secretary of Agriculture, Tom Vilsack, concurred indicating that a carbon offset market will be critical to the survival of rural communities.
The climate change discussion continued during the morning session on June 16, 2009, following presentations from Dr. Susan Shirk, Director of the University of California Institute on Global Conflict and Cooperation, University of California, San Diego, and Eric Heitz, President of The Energy Foundation. The presentations focused on the potential for the United States and China to jointly lead the way forward in Copenhagen and beyond with respect to global climate change policies. However, some of the challenges cited by Dr. Shirk and Mr. Heitz included:
- China and the U.S. have used each other as reasons not to commit to climate change policies
- China believes the U.S. and other developed countries should lead the way in implementing climate change policies
- While there is an opportunity for increased relations between the U.S. and China, we could also see China balk due to suspicions that the U.S. is trying to slowdown the Chinese economy
- Both countries have domestic policies that will need to be managed
- Some of China's provincial governments prefer to concentrate on economic growth versus policies that will slow that growth
- China is trying to bring 1 billion people out of poverty
Despite these challenges, the key in achieving success with China will be to understand and build on China's motivations, which include, among others, resolving local water and air pollution issues that have given rise to health concerns and China's desire to be the world leader in green technology development.
Eric Heitz debunked the myth that "China is not doing anything on clean energy or climate change" by demonstrating that China has already adopted an ambitious suite of clean energy policies. According to Mr. Heitz:
- China made a $12 billion investment in renewable energy in 2007
- In 2005, China initiated a renewable portfolio standard that resulted in doubling installed wind capacity in 2006, and which doubled again in 2007
- China has initiated its own "green stimulus" package by commiting $221 billion (which of 5% of China's 2008 GDP) in furthering "green technology"
- China is positioning itself to be a competitor in the world auto market through the manufacture of electric vehicle
During this discussion, the Western Governors identified a WGA initiative aimed at working with the Chinese provincial governments and an organized trip to China to engage in those efforts. President Obama's appointment of Governor Jon Huntsman as the ambassador to China, will certainly be instrumental in setting the ground work for the WGA's work in China.
On a final note, the Western Governors adopted two important policy resolutions aimed Global Climate Change Policies:
- Western Governors' Association Policy Resolution 09-2 (Supporting the Integration of Climate Change Adaptation Science in the West)
- Western Governors' Association Policy Resolution 09-3 (Regional and National Policies Regarding Global Climate Change)
