Manufacturing and Services in the TPCC: Promoting the Competitiveness of the RE&EE Industry through Interagency Collaboration Ryan Mulholland Renewable

Manufacturing and Services in the TPCC:Promoting the Competitiveness of the RE&EE Industry through Interagency Collaboration

Ryan MulhollandRenewable Energy Trade Specialist

U.S. Department of Commerce

International Trade AdministrationU.S. Department of Commerce

Industry Expertise

Subsector analysisMarket researchAdvisory committeesUSG Coordination

Market Access

Country expertiseTrade agreementsBilateral dialoguesIPR protection

Trade Promotion

Export assistanceTrade missionsIn-country expertiseFirm–specific advocacy

AD/CVD

Anti-dumping dutiesCountervailing dutiesProtection against unfair trade practices

Working with the International Trade Administration

ITA is organized into four business units – each offering programs and services to U.S. companies involved in trade. The four business units include Manufacturing and Services; Market Access and Compliance, the U.S. Foreign and Commercial Service; and the Import Administration.

TPCC Officer Training, September 25, 2012Manufacturing and Services – International Trade Administration

International Trade AdministrationU.S. Department of CommerceNational Export Initiative (NEI)

ITA is focused on achieving the goals of the President’s National Export Initiative to double total U.S. exports by 2015. The NEI has redoubled efforts to promote high-growth industries like renewable energy and to focus on small-and-medium-sized enterprises. The NEI is continuing to make historic progress toward achieving President Obama’s goal of doubling exports by 2015.

The NEI is focused on five key principles:1.Improving trade advocacy2.Increasing access to credit3.Removing trade barriers4.Robustly enforcing trade rules5.Pursuing policies that promote sustainable, balanced growth

FACT #1:Most American businesses do NOT export their products or services.

FACT #2:95% of consumers live outside the United States.

FACT #3:87% of the world’s economic growth will occur outside the United States to 2015.

FACT #4:Exports supported 9.7 million jobs in 2011, an increase of 1.2 million jobs since 2009.



Targeting a Fast-Growing Sector with Strategic National Importance


Renewable energy costs more than traditional fossil fuels, but prices continue to decline.

As a result, the industry is still reliant on government policy to be competitive.

President Obama has challenged the U.S. Government to position the country as a leading exporter of clean energy technologies and has called for ending subsidies to fossil fuels.

“The nation that leads the world in creating new

energy sources will be the nation that leads the

21st-century globaleconomy.”

-- President Obama


International Trade AdministrationU.S. Department of CommerceGlobal Growth Remains Positive International Trade Administration


Bloomberg New Energy Finance predicts $7 trillion will be invested in renewable energy globally by 2030. Growth is expected in every subsector and offers the ability to support significant job creation in the United States.

Global Wind Capacity (GW)

Global Solar Capacity (GW)

Global Geothermal Capacity (GW)

Global Biofuels Capacity (Ktoe)

Source: BP Statistical Review of World Energy June 2011

Global Biomass Capacity (GW)

Global Hydropower Capacity (GW)

238 GW

70 GW

11.2GW

970 GW

56,000 Ktoe 72

GW

Global Capacity of Renewable Energy Technologies



The Global Renewable Energy Opportunity

$36 bn$43bn

$68bn

$97bn

$130bn$135bn

$188bn

$230 bn

Global Private Sector Investment in Renewable Energy

Source: Bloomberg New Energy Finance

Global renewable energy investment has grown 30% annually since 2004, even during a strong recession. As economic growth continues to expand globally, further investment is likely. Much of the industry’s growth will occur outside of the United States.

China to lead global investmentWhile the United States attracted the most global investment in renewable energy in 2011, China should attract the most investment to 2015 and beyond.

Most rapid growth to occur in developing worldThe Middle East, Africa and Latin America should see growth rates of 10-18% per year in the decade between 2010 and 2020.

Off-shore wind to lead other technologiesOn a percentage basis, off-shore wind is expected to grow faster than any other renewable energy technologies globally.



The Global Renewable Energy Opportunity

Source: Bloomberg New Energy Finance

$395bn

China to lead global investmentWhile the United States attracted the most global investment in renewable energy in 2011, China should attract the most investment to 2015 and beyond.

Most rapid growth to occur in developing worldThe Middle East, Africa and Latin America should see growth rates of 10-18% per year in the decade between 2010 and 2020.

Off-shore wind to lead other technologiesOn a percentage basis, off-shore wind is expected to grow faster than any other renewable energy technologies globally.

Global Private Sector Investment in Renewable Energy

Global renewable energy investment has grown 30% annually since 2004, even during a strong recession. As economic growth continues to expand globally, further investment is likely. Much of the industry’s growth will occur outside of the United States.



Renewable Energy and Energy Efficiency Export Initiative (RE4I)

The Renewable Energy and Energy Efficiency Export Initiative (RE4I) is a “principal component” of the larger National Export Initiative. Developed through the TPCC Working Group on Renewable Energy and Energy Efficiency, the initiative involves 8 separate agencies and includes 23 deliverables across four issues areas.

Increased Financing for RE&EE ExportersExIm Renewables ExpressOPIC energy efficiency debt productBudget support from USTDA

Improved Trade Promotion to Link Buyers and SellersAdditional RE&EE reverse trade missionsIncreased RE&EE trade missionsGreen Embassies Program

Strengthened Export Promotion Services

RE&EE Advisory CommitteeExport.gov/reee

RE&EE Exporters’ e-newsletter

Enhanced Market Access for U.S. RE&EE Products and Services

Trade Policy Staff CommitteeRE trade policy missionsUSTDA Capacity Building

RE4I



MAS’ Contribution to the RE4I – Leadership and Action

MAS leads the implementation of the interagency Renewable Energy and Energy Efficiency Export Initiative (RE4I) through the TPCC Working Group on RE&EE. In total, the RE4I includes 23 commitments from 8 separate U.S. Government agencies designed to significantly increase U.S. renewable energy and energy efficiency exports.

RE&EE Exporters Web Portal

News, information, market research from across the U.S. Government specific to RE&EE exporterswww.export.gov/reee

Monthly RE&EE Exporters’ Update

Provides links to registration for upcoming events, as well as reports and market research on export opportunities abroad

MAS’ Market Intelligence Briefs

Country-specific renewable energy market reports with detailed information on market structure, as well as opportunities and challenges for U.S. exporters.


International Trade AdministrationU.S. Department of CommerceRenewable Energy Top Prospects Study

Goals:

•Target trade promotion activities at those markets most likely to result in exports

•Provide a tool that TPCC agencies can use for all renewable energy technologies, or by subsector

•Provide an assessment tool for identifying markets on which to focus market access work

Benefits:

•In a time of limited resources, allows U.S. Government to focus on most promising export markets

•Brings a methodological approach to export promotion

•Improves the effectiveness of U.S. Government efforts

In the RE4I, ITA committed to developing a top market prospects study to aid in the targeting of trade promotion activities. The first edition of the prioritization has been presented to the Principals of the TPCC Working Group on RE&EE. ITA has begun work on the second edition of the study to be released in Spring 2013.


International Trade AdministrationU.S. Department of CommerceCombating Negative Short-Term Trends International Trade Administration


Persistent over-supply of renewable energy equipment globally and the reduction of policy support both in the United States and around the world has led to falling prices and increased competition between firms and between governments.

Key Global Trends:•Feed-in tariffs and fiscal issues in Europe causing incentives to be reduced•Growing interest in deploying renewable energy as a job-creating technology•Over 100 countries now have incentives, but many are tying incentives to domestic production requirements•Price declines in wind and solar are significant

Manufacturers are being squeezed by price declines,

causing many firms to turn to governments for support.

Many countries now act inconsistently with their trade

obligations.

Trade enforcement measures have therefore become an

important facet of the industry’s near-term calculations.

Key Domestic Trends:•Exhaustion of Section 1603 Treasury Cash Grant Program•Manufacturing Tax Credit (48c) no longer available•No national level energy policy in foreseeable future•Production Tax Credit set to expire (could severely limit wind industry)•Natural gas limiting investment in renewables



Positioning U.S. Exporters for Success Requires Coordinated Government Action


The short-term challenges faced by U.S. RE&EE exporters requires tight coordination across agencies and the nuanced understanding of how policy and promotion fit together to create opportunities for U.S. firms.

Domestic Manufacturing Capacity

Must ensure that the United States produces the technologies being bought and sold worldwide.

Open and Growing Global Markets

Markets must be kept open to U.S. products and, when possible, future markets should be seeded for growth with policy development.

Competitive U.S-Based Exporters

When markets are open, U.S. exporters must have the tools necessarily to be competitive in foreign markets.

Three Pillars of a Globally Competitive U.S. RE&EE Industry

Tax Credits (ex: 48c; 1603; PTC; ITC)State level incentive programsRenewable portfolio standardsNet-metering/interconnectionManufacturing Extension PartnershipLoan guaranteesR&D programs

Free trade agreementsBilateral dialoguesEnergy policy dialoguesTrade policy missionsTechnical assistanceFeasibility studiesMarket Access ProgramMDCP Program

Export credit loansWorking capital loansPolitical risk insuranceInvestment supportTrade missionsReverse trade missionsWebsites/Trade leadsExporters’ guides

Congress, State Governments, DOE, Treasury, Commerce (NIST), SBA

USTR, Commerce (ITA), USTDA, USDA, State, DOE

ExIm, OPIC, Commerce (ITA), USTDA, State, DOE, SBA

What and Why?

Examples of Interagency

Tool Kit

Key Agencies


International Trade AdministrationU.S. Department of CommerceCurrent RE Trade Promotion Process International Trade Administration


Unfortunately, when the competing goals of USG agencies collide, policy paralysis is too-often the result and U.S. exporters are not as empowered as they otherwise could be.

• Connect R&D to job creation in the United States

• Manage WTO challenges• Negotiate TPP, APEC EGSA

Energy USTR

• Stop LCR proliferation globally• Address IPR violations

• Maintain positive foreign relations with key markets

USTR State

• AD/CVD ruling against Chinese solar panels and wind towers

• Millions of dollars invested using Chinese panelsITA OPIC

• Desire to increase use of tied-aid war chest to aid RE&EE exports

• Maintain laissez-faire economic system globallyExIm Treasury

Policy Paralysis

Policy Paralysis

Policy Paralysis

Policy Paralysis



TPCC Role in Promoting RE Export Competitiveness through Collaboration


TPCC leadership can create a cross-government strategy centered on U.S. competitiveness. TPCC collaboration can bring disputes to resolution and can facilitate high-level engagement when necessary.

• Anchors R&D programs with domestic competitiveness goals

• Articulates global need to arrest global LCR trends

• Works with TPCC on strategy

• When AD/CVD case is finalized, alerts other agencies so others can adjust accordingly

Energy USTR

USTR State

ITA OPIC

• Works with DOE to craft policy that is defensible within WTO

• Helps develop strategy and delivers messages to local government officials

• Maintains development bent, but not at expense of trade rules

TPCC Role: • Bring parties together and push interagency process.• Provide advice to both agencies, recognizing both

importance of competitiveness and trade rules.

TPCC Role: • Develops strategy, working with all sides to gain

approval for WTO action while being mindful of commercial consequences in other sectors.

TPCC Role: • Educate OPIC on AD/CVD ruling, informing future

transactions.


International Trade AdministrationU.S. Department of CommerceThank You International Trade Administration


Ryan MulhollandRenewable Energy Trade Specialist

U.S. Department of Commerce(202) 482-4693

[email protected]


Documents

Manufacturing and Services in the TPCC: Promoting the Competitiveness of the RE&EE Industry through Interagency Collaboration Ryan Mulholland Renewable