31 december 2015

Europe's Turbine Manufacturers Doubling in Record Year for Wind

lex Morales, Bloomberg, December 31, 2015

Vestas Wind Systems A/S, Gamesa Corp. Tecnologica SA and Nordex SE, Europe’s three publicly traded wind-turbine makers, all doubled in value in 2015 after record industry installations for the year.

With one trading day left in 2015, Nordex is up 118 percent from the end of last year. Vestas climbed 114 percent and Gamesa posted a 111 percent increase.

Turbine makers are benefiting from surging demand for clean energy. Global wind-power installations are expected to reach 63.7 gigawatts this year, up 30 percent from 2014, the previous record, according to Bloomberg New Energy Finance. New capacity next year will be comparable, with Brazil, the U.S. and India posting the biggest gains in terms of megawatts added, offsetting declines in China, Germany and Poland.

“We’re expecting 2016 to be an equally good year,” said David Hostert, a wind analyst in London for New Energy Finance. “We believe the core markets in Europe already plateaued and new growth will come from elsewhere.”

Nordex, Vestas and Gamesa posted the second, third and fourth-biggest gains on the WilderHill New Energy Global Innovation Index of 104 low-carbon energy companies, trailing only the German solar inverter manufacturer SMA Solar Technology AG.

Vestas, based in Denmark, and Spain’s Gamesa are also the fourth- and fifth-biggest risers in the Stoxx 600 Index of European companies, which doesn’t include Germany’s Nordex.

In percentage terms, those gains are still smaller than in 2013 when the three manufacturers were rebounding from near-historic lows. Vestas rose fivefold in value that year, Gamesa quadrupled and Nordex tripled. Still, with this year’s gains, Gamesa is trading near its highest level since 2009; Vestas is at levels not seen since 2008 and Nordex’s shares are trading at prices last recorded in 2007.

The International Energy Agency says renewable energy will overtake coal as the largest source of electricity by the early 2030s. In 2014, clean power accounted for 85 percent of the increase in generation worldwide, and from 2015 through 2040, the 3,600 gigawatts of new renewable capacity will outstrip additions of all other forms of generation combined, the agency forecasts.

In December, clean energy received a boost when envoys from 195 nations sealed a global deal on climate change that will see nations ratchet up pledges to limit greenhouse gases every five years. On Dec. 18, the U.S. Congress passed a budget deal that renewed incentives for both wind and solar power for five years, giving the technologies the predictability they’ve lacked in recent years.

“Santa came early this year in the U.S.,” said Hostert. “This is really a big deal: it could generate at least $25 billion in new tax incentives, plus a degree of policy certainty that until now has been unavailable to U.S. developers, investors and utility resource players.”

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