Alcoa Inc., the biggest U.S. aluminum producer, agreed with China Power Investment Corp. to work on $7.5 billion of clean-energy and smelting projects, as China seeks to cut pollution and energy costs.
The companies plan to develop wind- and solar-energy projects and “state-of-the-art” aluminum-smelting plants in China in the “coming years,” New York-based Alcoa said in a statement yesterday. The companies may also look at opportunities to collaborate outside China.
China, the world’s largest polluter, wants non-fossil fuels to contribute 15 percent of its energy needs by 2020. The nation’s incentives to encourage low-carbon generation such as solar and wind power are almost triple those in the U.S., according to a report by the Climate Institute.
"It’s very difficult for China to buy state of the art technology from the U.S., as there are many restrictions, but clean energy is an area where both U.S. and China love to cooperate,” said Owen Liang, a Shenzhen-based analyst with Guotai Junan Securities Co. “The question is why Alcoa? One reason could be China wants to promote the use of clean energy in aluminum smelting to reduce pollution, and improve the efficiency of power utilization to save energy.”
China, whose President Hu Jintao arrived yesterday in Washington for a state visit, is the largest consumer of aluminum, used to make beverage cans and window frames.
Global Demand
Alcoa and China Power haven’t yet decided on specific projects and the exact amount they will spend will depend on the ventures they choose, Mike Belwood, a spokesman for Alcoa, said by telephone.
Global aluminum demand may rise 8 percent this year, with Chinese consumption likely rising 12 percent, United Co. Rusal, the world’s biggest producer of the light metal, said on Jan. 18.
Chinese aluminum smelters shut down 1.6 million metric tons of production capacity since July due to power restrictions, of which 1.2 million tons is likely to come back on line in the first half of 2011, Wan Ling, a Beijing-based analyst at consultant CRU International Ltd., said Jan. 15.
China Power plans to increase production of renewable energy to 40 percent of its total electricity generated in 2015 from the current 30 percent, its president Lu Qizhou said in December.
China Power’s units, including CPI Xinjiang Energy Co., in October won the right to build seven of the 13 solar projects in the nation’s western regions in a tender, according to Bloomberg New Energy Finance data.
