Wind Stocks need a new breeze

Wind-energy stocks around the world have suffered as the aftershocks of the global credit crisis limited investment in carbon-free power generation. Vestas Wind Systems, the biggest wind-turbine maker, have again cut its forecasts as banks curb loans for wind farms and its competitors gain market share. Analysts say that the forecasts may be too high in a year global turbine production capacity exceeds demand but Vestas stands by the forecasts.

Vestas cut its sales forecast for the first time this year in February, from  8 billion to 7 billion euros. A second cut in forecasts to 6 billion euros has been made; based on delay in  expected orders in the U.S., Spain and Germany. Financial analysts following the stock predict that the company will meet its sales target of 6 billion euros.

Overcapacity in the turbine industry is now squeezing manufacturers’ margins. The effect has been felt on the stock with Vestas loosing  about 29 percent this year. Rivals have not fared better with Gamesa Corporacion Tecnologica SA (Spain) and Suzlon Energy Ltd.(India) dropping by about 52 percent and 45 percent, respectively. 

What is needed is new markets in terms of new countries and offshore wind prospects (a complicated technical game) and use of old sites for new, better & more efficient turbines.  With governments’ across the globe focusing more on new renewable energy technologies such as solar and geothermal, wind can expect to be given somewhat a step-motherly treatment.

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