The move toward wind energy as an alternative energy source has also propped up its feasibility as a hot investment opportunity. According to the Progressive Investor, wind has been the world’s fastest growing energy source on a percentage basis for over a decade.
What has driven this growth are government support, the advent of renewable energy certificates (RECs) and most notably, the influx of huge investors and wind park developers, which are taking the industry to a completely new level. Renewable energy project finance is rising dramatically, from US$10.8 billion in 2004 to $18.2 billion last year. The preponderance of deals is in wind (72%), with the U.S. leading the world with $3.9 billion invested in 2005.
The current problem in wind power is the shortage of turbines. Wind has accelerated so much faster that turbine makers have had difficulty catching up because of the huge capital investment required.
Ten major companies that control almost 100% of the market dominate the world wind turbine market: Vestas (34%), Gamesa (18%), Enercon (15%), GE Wind (11%), Siemens (6%), Suzlon (4%), REpower (3%), Mitsubishi (2%), Ecotècnia (2%) and Nordex (2%). However, a growing number of independent companies develop their own wind farms and manufacture small turbines. The American wind energy industry is still underdeveloped, but with the Obama Administration’s pro-renewable energy stance, large infusions of capital will likely start flowing into American wind companies.
Analysts say that although offshore wind farming will continue to become huge, the markets are still teeming with opportunity for small turbines. Thus, wind farming will continue to flourish both as an alternative energy source and as an investment. In addition, last year’s introduction of two wind industry Exchange Traded Funds (ETFs), PowerShares Global Wind Energy Portfolio (PWND) and First Trust Global Wind Energy (FAN), have allowed American investors to diversify into global and domestic wind companies with the ease of buying and selling a normal stock.
The Department of Energy explains how wind turbines work.
Seeking Alpha is a popular site to research renewable energy stocks.
Alt Energy Stocks has a complete listing of wind energy stocks.
