Iowa: Investors see bright future in wind energy

There has been a spike in 'green' revenue, and the federal government is exploring alternative energy sources.

BY DAVID PITT THE ASSOCIATED PRESS

Saturday, May 2, 2009

DES MOINES -- When President Barack Obama stood in front of wind turbine towers in a Newton, Iowa, factory last week he was not only pushing his green energy policies but promoting an industry that has been growing rapidly and gaining favor with investors.

Revenue from solar, wind power, ethanol and biodiesel fuel grew 50 percent to about $116 billion last year, according to Clean Edge Inc., a research firm. The spike in green revenue, and the backing of the federal government to explore these energy sources has excited investors.

"They favor green investment right now because they think that's the way the world is going," said David Wood, director of the Institute for Responsible Investment at Boston College's Center for Corporate Citizenship.

The federal stimulus package includes $17 billion for the current fiscal year to upgrade and expand the antiquated national power grid. It also allocates $11 billion to develop a smart grid -- an electronically controlled distribution system that will be much more efficient.

All told, last year global investments in energy technologies expanded by 4.7 percent to $155 billion, according to research and consulting company New Energy Finance Ltd.

"The smartest investors put their own personal prejudices aside," said Jeff Siegel, managing editor of Green Chip Stocks, an investment advisory service. "Many people think global warming is propaganda, but they're aware that the bottom line is climate change legislation is going to happen. Investors smart enough to realize this know there's an opportunity there."

THE WIND INDUSTRY

Investors looking to put their cash into an area that's seen tremendous growth might look to wind energy, said Ron Pernick, a spokesman for Clean Edge Inc. Wind has jumped ahead of other green energy sources because innovations in turbine technology (think: windmills) have improved the efficiency and made systems the most cost-effective alternative. Turbines can generate electricity with wind speeds starting at 8 to 16 miles per hour according to the U.S. Department of Energy.

Turbines are typically built in groups on wind farms where the wind is the strongest. The largest U.S. wind farm is near Abilene, Texas, with 421 turbines scattered across 47,000 acres.

"Of all renewable energy sectors, this is the one reaching the largest scale right now," Pernick said.

THE PLAYERS

Because it's an emerging technology, investors might choose to get involved by owning a piece of larger conglomerates such as General Electric Co. Its energy division lead the industry in newly installed turbines in the U.S. last year. It provided roughly 48 percent of the more than 5,000 turbines installed according to the American Wind Energy Association. This added an additional 3,657 megawatts.

In its 2008 annual report, GE said its energy division brought in 21 percent of revenue for the year. That includes technologies developed to harness wind, oil, gas and water.

Trinity Structural Towers, the Iowa company President Obama visited last week, is a division of Dallas-based Trinity Industries Inc. (TRN), a diversified company with railroad car, highway construction materials and wind turbine tower divisions.

Shares of the company have gained nearly 18 percent since Obama's visit.

Many are traded in the United States including Vestas Wind Systems (VWSYF), which was second only to GE in terms of the wind power it supplied last year -- some 1,120 megawatts.

Siemens AG (SI), the German industrial conglomerate, with 791 megawatts, was third in terms of installed capacity.

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