Wind Energy Stocks

Investing in Wind Energy: Returns that Will Blow You Away

Most people don't know that the domestic wind energy market is currently being dominated by overseas players.

With the exception of General Electric, foreign competitors — mostly from Europe — have taken a strong position as wind market leaders.

Because of their early aggression in tackling environmental issues, it's no secret that European firms have led the way in many renewable technologies. Their cavalier attitude has led Germany to be the cradle of the solar revolution, the Scots to take the lead on wave power, and a Portuguese/Spanish/Danish tandem to lead on wind.

Last year, Energias de Portugal, the national utility, bought Horizon Wind Energy from Goldman Sachs for $2.15 billion — the highest price ever paid for a wind-only company.

For its part, Spanish company Acciona acquired rights to about 1,300 MW of wind farms in the Midwest.

But the U.S wind market isn't the only one that's booming. Europe still has billions to claim as well.

In its most recent report, the European Wind Energy Association (EWEA) said that wind became the leader in terms of new installed energy capacity.

Through 2020, wind is expected to account for 34% of new generating capacity. It'll account for 46% from 2020-2030.

And the goal of attaining 12-14% of Europe's power from wind by 2020 is well within reach.

By 2020, it's expected that 180 gigawatts (GW) of electricity will be supplied by the wind — enough for about 107 million European households.

For that to happen, wind-based capacity needs to increase 9.5 GW per year through 2020. That shouldn't be too hard, considering the EU installed 8.5 gigawatts worth of wind capacity last year.

The U.S. wind market and domestic wind energy stocks are ready to boom as well. . .

Domestic Wind Energy

Twenty years from now, wind energy could produce 20% of America's electricity.

An Energy Department study found that wind energy could generate 20% of U.S. electricity by 2030, as compared to today's one percent.

The good news: The Energy Department report finds that achieving a 20% wind contribution to U.S. electricity supply would:

• Reduce carbon dioxide emissions from electricity generation by 25 percent in 2030;

• Reduce natural gas use by 11%;

• Reduce water consumption associated with electricity generation by 4 trillion gallons by 2030;

• Increase annual revenues to local communities to more than $1.5 billion by 2030; and

• Support roughly 500,000 jobs in the U.S., with an average of more than 150,000 workers directly employed by the wind industry.

To achieve 20%, wind turbines would have to produce 300,000 megawatts of power, compared to today's generated 16,000 megawatts.

It's doable.

The Bottom Line on Wind Energy

Between 2005 and 2007, both Germany and Spain's wind power capacity experienced impressive growth (about 21% and 51%, respectively). Now look back at the U.S. growth. . .

Our capacity catapulted nearly 84%!

Don't think for a second that wind energy is about slow down. . .

Since 2000, wind power production has increased fivefold. Remember that during that period, oil prices have grown by nearly the same amount. Now that peak oil is starting to get under the global spotlight, we can expect to see a massive interest in renewables like wind energy.

Reports from the U.S. Department of Energy state that wind energy supplied in just three U.S. states could potentially power the entire nation!

Think about it for a minute. . .

We're talking about a source of energy that is a renewable, clean, has a low operating cost, and has technology that's been around for over a century (the first power-producing windmill was created back in 1887).

But it isn't just the past growth that we're impressed with. Over the next two years, the Global Wind Energy Council (GWEC) predicts that the world's installed wind power capacity will practically double to 149.5 GW. If you notice, the installed capacity in 2007 was 94,000 MW — higher than originally forecasted!

With that kind of growth, the investment opportunities will certainly be lucrative.