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WIND ENERGY ARTICLES

THE POTENTIAL FOR WIND ENERGY

Realities such as peak oil, global warming, and oil spills force every level of consumer to analyze how they approach their energy consumption. New eyes are constantly being turned to alternative energy sources, and these alternate sources featured in our financial newsletter have high potential for future earnings. One of the most promising of these is the harnessing of wind to meet energy needs ranging from individual house sites, to communities. These combined aspects also contribute substantially to the overall electric grid.

Robust private sector investment is confirmed by a healthy outlook from the US Department of Energy. The DOE predicted that 20% of the United State’s energy could be supplied by wind by the year 2030. In 2010, Energy Secretary Steven Chu provided vocal support for the wind sector, including praise for a University of Maine wind system.[1] This is one of many projects showing the way forward to increase wind production in the U.S.

BIG INVESTMENTS IN WIND ENERGY

In 2008, $51.8 billion was spent on wind generation projects, accounting for over 20% of all new power capacity built for that year.[2] The executive director of the American Wind Energy Association said, “We are no longer a boutique industry, a small niche. This industry has graduated to the next level.”[3] Investor T. Boone Pickens says in his Pickens’s Plan that, “Any discussion of alternatives should begin with the 2007 Department of Energy study showing that building out our wind capacity in the Great Plains – from northern Texas to the Canadian border – would produce 138,000 new jobs in the first year, and more than 3.4 million new jobs over a ten-year period, while also producing as much as 20 percent of our needed electricity.”[4]

Several companies in the Paradigm Portfolio of the financial newsletter have understood the potential of wind power, and are seeing strong returns on their investments.

HISTORY OF WIND POWER

While wind energy has been used since the time of the Egyptians, it was the Danish in the post-industrial period that began harnessing the wind’s power on a larger scale.  During World War II, interest in wind energy grew as methods apart from traditional wind turbine collection units grew in availability. It was not until recently that cutting edge technology and manufacturing efficiencies have made wind power economically viable, as evidenced by large projects around the globe.

WIND ENERGY IN THE PARADIGM PORTFOLIO

The combination of strong private interest and aggressive government shows wind power, and the companies that produce technology that harnesses wind power, as a compelling story for long-term investors with the potential for growth in the next ten years.

General Electric (GE)

GE is one of the largest U.S. based turbine equipment companies. GE has supplied over 13,800 wind turbines worldwide[5]. Their web site proudly states:

For over a century, our world has been powered primarily by carbon fuels. In recent years, concern about global warming and the harmful effects of fuel emissions has created new demand for cleaner and sustainable energy sources, like wind. [6]

Current wind projects include partnering with NextEra (NEE) to provide “windBOOST” software to increase output from NextEra’s fleet of 800 turbines.  Also, in early 2010 GE announced a $450 million dollar expansion in its European offshore wind business.[7]

Siemens (SI)

Siemens (SI) is another corporation strongly investing in wind technology and systems. Siemens says of their wind technology efforts, “With highly efficient, robust and reliable wind turbines, Siemens has a demonstrated history in delivering proven solutions to onshore, coastal and offshore sites.”[8] Siemens participation in wind technology ranges from manufacturing turbine blades, to the hardware needed to run the electricity collection points.

Regional wind power generation companies also are compelling. Western Wind Energy (WND) has high growth potential in the Western United States. Western Wind Energy currently owns over 500 wind turbines with 34.5 MW of rated capacity, and a further 131MW of expansion power purchase agreements in the States of California and Arizona.[9]

RECOMMENDATION

Wind generated electricity is the most developed of all the renewable energy sources. Wind accounts for over one third new investments in renewable energy development, outpacing solar, biodiesel and the like.[10] From 2005 to 2009, wind generating capacity grew almost 4 fold, from 8.7 to 33.5 gigawatts[11]. The 14 companies in the Paradigm Portfolio of the financial newsletter are all well positioned to benefit from this growing trend.

Wind power is not without its limitations. Some areas lack the necessary levels of wind to make turbine installations economically valid. Also, the full potential of wind power will not be realized until improvements to the electric grid are made. This was the main reason Pickens abandoned his ambitious 4,000 megawatt wind farm project in Texas. And there is opposition to wind farm construction by some local communities. Cape Cod is an example of an area that could immensely benefit from wind power, but because the public believes turbines are not aesthetically pleasing (among other things), the process of building out the project is off to a slow start[12].

Even with that being taken into consideration, I believe wind power is one of the best alternative energy segments to invest in.

DISCLOSURE

Individuals involved with the Roen Financial Report and Swiftwood Press LLC owned or controlled shares of NextEra Energy Inc.

It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice.  Individuals should seek advice from their investment professional before making any important financial decisions.

REFERENCES


[1] http://www1.eere.energy.gov/windandhydro/news_detail.html?news_id=16108

[2] http://www.marketwatch.com/story/wind-industry-movers-more-bullish-on-financing

[3] http://www.ktvu.com/news/9351662/detail.html

[4] http://www.pickensplan.com/theplan/

[5] http://www.gepower.com/businesses/ge_wind_energy/en/index.htm

[6] http://www.gepower.com/businesses/ge_wind_energy/en/about_wind_ener.htm

[7] http://www.businessweek.com/ap/financialnews/D9GL06G80.htm

[8] http://www.energy.siemens.com/hq/en/power-generation/renewables/wind-power/

[9] http://www.westernwindenergy.com/s/News_Releases.asp?ReportID=397530&_Type=News-Releases&_Title=Western-Wind-Energy-Corp.-Announces-a-10-Increase-in-Electricity-Production

[10] http://www.marketwatch.com/story/wind-industry-movers-more-bullish-on-financing

[11] http://www.eia.doe.gov/cneaf/solar.renewables/page/table4.html

[12] http://www.courthousenews.com/2010/06/29/28454.htm

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Wind Companies
Ticker Day Week Qtr Year
ABB 0.5% -2.0% -4.2% 13.9%
AES 0.1% 0.3% 0.3% 11.5%
ALTI -2.1% -16.7% -31.7% 65.0%
AMRC 1.3% -3.9% -35.6% -6.9%
AMSC 1.4% -7.6% -17.6% -38.3%
ANSS 1.5% -1.4% -12.1% -3.8%
AVX 0.7% -2.7% -3.8% 14.9%
BGC -1.3% -0.7% -15.0% -24.5%
BWEN 7.0% -3.7% 12.7% 186.8%
DUK 0.6% 2.0% 8.7% -0.5%
EEI -0.9% -0.7% -14.9% -27.2%
EIX -0.1% 0.4% 21.2% 9.8%
EXC 0.7% 2.7% 32.2% 0.7%
GE 1.2% 0.7% -4.0% 13.1%
GLW 0.9% -2.0% 12.0% 57.3%
GOOGL 2.8% -0.6% -2.5% 42.2%
HXL 2.4% 2.5% -5.3% 52.7%
ITC 1.3% 3.3% 17.8% 23.0%
IXYS -0.1% -5.7% -23.1% 17.7%
JST 1.2% -3.6% -8.1% 48.0%
MITSY 1.4% 1.7% 2.4% 5.7%
MTZ 0.7% -3.7% 17.6% 47.0%
MXWL 4.2% -0.9% 75.9% 177.9%
MY -1.2% -13.1% -1.9% 93.1%
NEE 0.7% 1.5% 11.8% 22.8%
NRG 0.9% -0.7% 16.3% 22.0%
NYLD -1.1% -2.6% % %
OTTR 0.3% -1.6% 4.6% -3.8%
PEGI 0.2% 1.2% % %
PH 2.4% 1.4% -3.8% 41.1%
PIKE 0.7% -3.8% -9.1% -31.2%
QTWW 4.2% -7.9% -9.3% 266.2%
RWEOY 2.3% -2.7% 3.4% 6.1%
SI 1.8% -2.0% -0.8% 28.2%
SPW 2.4% 1.3% -3.5% 34.6%
SRE 1.6% 1.6% 6.8% 21.0%
TKR 1.5% -1.5% 5.8% 11.9%
TRN 3.1% 0.7% 23.1% 75.7%
TTEK 0.6% -5.1% -5.5% 11.2%
UTX 1.9% 0.9% 3.4% 24.9%
VMI 0.2% -1.7% -1.7% 4.2%
WCC -0.8% -2.0% -8.5% 26.7%
XEL 0.6% 3.0% 12.1% 3.7%
ZOLT 0.0% 0.0% -0.1% 33.2%
Average 1.1% -1.7% 1.6% 32.8%
Data as of: 4/17/2014
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