US against local content requirements

Francisco J Sanchez, undersecretary for commerce and international trade, US department of commerce, on Thursday said his government was committed to working with India to shape a mutually-beneficial future in terms of clean energy trade missions.

“We do it because it (clean energy) holds a huge opportunity for both our countries.  Unfortunately, there are a few obstacles that prevent us from fully collaborating and deploying the solar energy technologies we all want to see succeed,” he said.

Delivering  his keynote address at Solarcon 2011 here on Thursday, Sanchez said one of the few obstacles was local content requirements.

“I fully realise that we live in an age of transformation. Globalisation and technology are changing the way we live and do business. A kid with a smartphone can do things on Thursday that world leaders and CEOs could not dream of even a few years ago. In this environment, all of us are looking to reposition ourselves for success. And all of us are looking for new ways to sharpen our competitive edge,” Sanchez said.

Stating that local content requirements keep cutting-edge technology out of the hands of project developers, limiting the deployment and ultimately forcing consumers to pay more for less, he said when countries created unnecessary barriers, they might benefit in the short-term but their consumers were eventually deprived of the world’s most cutting-edge technology.

“On the other hand, when countries open their markets to foreign goods, competition increases for everyone, driving innovation, reducing costs and attracting manufacturers whose supply chain needs create thousands of new jobs,” Sanchez said.

In the US for example, he said, tax incentives are open to any company – both foreign-flagged and domestic. The wind industry is a perfect example. on Thursday, 96 per cent of the global wind turbine market is captured by firms that have at least some manufacturing capacity in the US, he added.

Sanchez said the renewable energy market in India was estimated to be worth over $17 billion and was growing at an annual rate of 15 per cent.

“To keep the economic growth at current levels, India will need to add 150 gigawatt of capacity over the next five years, ie about one 1000-MW power plant every two weeks, or an 82 MW facility every day for the next five years,” Sanchez said.