If you thought Interior Secretary Ken Salazar’s announcement Wednesday of an offshore wind farm was big news for alternative-energy investing, then you must have missed the far bigger news from his Cabinet colleague, Energy Secretary Steven Chu.

While Salazar was standing behind a rostrum touting a 130-turbine wind-energy project in Nantucket Sound, Chu was quietly testifying before the Senate Energy and Water Subcommittee. This testimony did not make the front page, but its impact will prove to be far more important.

As the editor of Government-Driven Investing, the only newsletter focused solely on leveraging government action for portfolio gain, I pay very close attention to Dr. Chu. He’s one sharp cookie, probably the smartest and savviest member of Mr. Obama’s Cabinet. He’s no mere grandstanding political appointee; he really is the nation’s leading energy expert.

Here’s part of what Dr. Chu said before the committee:

“China is investing $44 billion by 2012 and $88 billion by 2020 in ultra high-voltage transmission lines,” he said. “These lines will allow China to transmit power from huge wind and solar farms far from its cities. [T]his is a clear sign of China’s commitment to developing renewable energy.”

The Massachusetts wind farm, despite its coverage in the august pages of The New York Times, is really a teeny project. It’s 130 turbines that can produce 468 megawatts at a cost of $1 billion. (Roughly equal to one small coal-fired power plant.) But China is spending $44 billion on power lines alone to plug alternative energy sources into the grid.

Smart move. All the power in the world is worthless if it can’t be zapped onto a power grid.

Last July, oilman T. Boone Pickens had to cancel his West Texas wind farm, which was slated to be one of the world’s largest, when it became clear no transmission lines were available.

China, the secretary said, sees “the economic opportunity that clean energy represents. [It] largely missed out on the IT revolution, but it is playing to win in the clean energy race.” In case any of the Senators missed his point, he hammered it home. “America’s competitiveness,” he said, “is inseparable from our energy policy.”

Secretary Salazar’s little wind farm is a good step in the right direction, but the Nantucket project is notable merely because it is the first wind farm to be placed on the Outer Continental Shelf. In and of itself, the news of a mid-size wind farm would be left to the trade journals. It won’t have any significant effect on the world’s major wind-industry companies.

What Dr. Chu said about China‘s activities, however, will affect the green-energy market. That nation will have 100,000 megawatts of wind energy in 2020, up from about 20,000 now. And it’s not only the Chinese who are getting with the program. It’s us, too. The Obama Administration has put the full weight of the federal government behind a game-changing initiative to upgrade the U.S. electrical grid so as to more efficiently use power and fold alternative power sources into the mix.

The President has already allocated $3.9 billion to smart-grid projects. U.S. power producers installed 10,000 megawatts of wind assets last year. China continues to spend money hand over fist to expand and modernize its grid. What’s more, wind has long been embraced by Europe, which already has roughly 2,000 megawatts of wind capacity but is forecast to have 40,000 megawatts by 2020. That’s enough to power 25 million households, far more than the 200,000 that the Nantucket project can support.

With +1,900% growth forecast for Europe, at least +400% growth in China and continued development in the United States, wind turbine manufacturers will be busy for the next decade. That’s great news for the two companies that dominate the market, General Electric (NYSE: GE) and Denmark-based Vestas (OTC: VWDRY). Vestas, despite the strong earnings potential of the wind-energy sector, trades at less than 15 times its future earnings — estimates that the company is likely to exceed given the worldwide demand.

Vestas shares have offered lackluster performance during the past year as the wind story seemed to fade and some projects were put on hold during the recession. Now, as spending resumes and is appearing to resurge, the demand picture seems to grow rosier with each new project announcement. This undervalued stock appears poised for real broken-field running.