Wind energy has been growing rapidly as a source of renewable power around the world. This creates interesting investment opportunities in windmill manufacturing and wind farms. Key players in windmill investments include major manufacturers like Vestas, Siemens Gamesa, and GE. At the same time, many countries are pushing wind energy through subsidies and targets. For investors, this creates chances to profit from building and operating wind farms. Overall, windmill investments offer growth potential thanks to technology improvements, cost declines, and strong policy support.
Global Wind Power Capacity Expanding Rapidly
Wind power capacity has expanded at a rapid clip over the past decade. Global installed capacity has gone from around 120 GW in 2008 to over 740 GW by the end of 2020. Leading markets are in Europe and Asia, especially China. But other regions like North America are also seeing more windmill investments. Governments provide incentives for wind through targets, subsidies, and supportive regulations. With costs falling, wind energy is increasingly competitive with fossil fuels on an unsubsidized basis.
Investing in Wind Turbine Manufacturers
As wind power expands, the major wind turbine manufacturers see growing demand. The global leaders are Vestas, Siemens Gamesa, and GE. Their revenue has risen substantially along with the growth in windmill installations. These stocks offer exposure to continued growth in wind. There are also some specialized turbine makers focusing on offshore wind. Investing in wind turbine manufacturing provides broad exposure to wind energy growth.
Returns from Developing Wind Farms
Beyond manufacturing, windmill investments can also involve developing and operating wind farms. This requires large upfront capital outlays but can generate attractive long-term returns. Wind farm investors include major utilities and independent power producers. Institutional investors have also provided capital for wind projects. Government policies that offer guaranteed pricing through power purchase agreements provide income stability.
Falling Costs Improving Economics
A key driver for windmill investments is that costs have fallen dramatically in recent years. According to Lazard data, the levelized cost of energy for wind declined by about 70% over the 2009 to 2020 period. This makes wind highly competitive with fossil fuel power on a cost basis. Continued technological improvements and economies of scale should lead to further cost reductions.
Strong Policy Support Around the World
Policies to promote renewable energy have been crucial for growth in windmill investments. Many countries have targets for renewable energy as a share of electricity mix, along with various subsidies. The Paris Agreement and net zero carbon goals are encouraging further wind deployment. With wind now cost competitive, growth may continue even if subsidies decline somewhat from peak levels.
In summary, windmill investments offer attractive growth potential thanks to expanding wind power capacity, falling costs, and supportive government policies around the world. Investors can gain exposure through wind turbine manufacturing stocks and participating in wind farm development. Key players to watch include Vestas, Siemens Gamesa, GE, and leading utilities developing wind projects.