THE FINAL BLOW AGAINST UTILITY SCALE WIND TOWERS

No East Coast state has successfully spurred construction of an offshore wind farm.  To make the industry viable, long-term federal tax incentives are also needed, industry analyst say.

O’Malley sweetens wind farm proposal, The Washington Post, B2 “In Session” (January 23, 2013) 

The United States International Trade Commission (“Commission”) in a close vote on January 18, 2013 determined that a U.S. industry is materially injured or threatened with material injury by reason of imports of utility scale wind towers from China and Vietnam.  Two Commissioners voted affirmative on material injury, one Commissioner voted affirmative on threat of material injury, and the other three commissioners voted negative.  A tie by law means an affirmative decision.  When available, the public version of the Commission’s report titled  Utility Scale Wind Towers from China and Vietnam (Inv. Nos. 701-TA-486 and 731-TA-1195-1196) (Final), USITC Publication 4372, will have the views of the Commissioners and the information developed during the investigations.

The U.S. Department of Commerce (“Commerce”) will issue antidumping and countervailing duty orders on imports of the subject wind towers from China and an antidumping duty order on imports of these products from Vietnam.  The final margins determined by Commerce to be needed to countervail the subsidies received by the Chinese producers of these wind towers are as follows:  CS Wind China Co., Ltd. and its affiliates (21.86%); Titan Wind Energy (Suzhou) Co., Ltd. and its affiliates (34.81%); and All Others (28.34%).  See Utility Scale Wind Towers From the People’s Republic of China:  Final Affirmative Countervailing Duty Determination, 77 Fed. Reg. 75978 (Dec. 26, 2012).  The final dumping margins found against the Chinese producers range from 44.99% to 70.63%.  See Utility Scale Wind Towers From the People’s Republic of China:  Final Determination of Sales at Less Than Fair Value, 77 Fed. Reg. 75992 (Dec. 26, 2012).  The final dumping margins found against the Vietnamese producers range from 51.50% to 58.49%.  See Utility Scale Wind Towers From the Socialist Republic of Vietnam:  Final Determination of Sales at Less Than Fair Value, 77 Fed. Reg. 75984 (Dec. 26, 2012).

While the petition was filed by a Coalition composed of Broadwind Towers, Inc., DMI Industries, Katana Summit LLC, and Trinity Structural Towers, Inc., the Commission found that there are 13 producers of the types of wind towers at issue.  The products at issue include the steel towers that support the nacelle (an enclosure for an engine) and rotor blades for use in wind turbines that have electrical power generation capacities in excess of 100 kilowatts.  Specifically not included within the scope of these investigations are nacelles and rotor blades, regardless of whether they are attached to the wind tower, and any internal or external components which are not attached to any section of the wind towers.

The 13 producers were found to be located in the following 13 states:  California, Colorado, Illinois, Iowa, Oklahoma, North Dakota, Michigan, Minnesota, Nebraska, Tennessee, Texas, Washington, and Wisconsin.  None were located in an East Coast state.  The Chinese government has been outspoken in its opposition to the countervailing duty action both because it believes that the United States cannot impose countervailing duties while still treating it as a non-market economy for antidumping purposes and that the United States provides its own subsidies to this renewable energy resource.  It does seem ironic that the United States would stop imports of wind towers receiving Chinese subsidies while at the same time “industry experts” are claiming that U.S. government subsidies in the form of long-term federal tax incentives are needed to make construction of offshore wind farms viable for those states with a shoreline on the East Coast (from north to south – Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia, and Florida).  So while some in the wind farm business may be petitioning for the U.S. government to provideth subsidies, others now have successfully petitioned to have the U.S. government taketh them away, at least in the form of imported Chinese utility scale wind towers.

Gregory C. Dorris, Esq.

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