Want to know the future of American manufacturing?
Just look to Michigan, the heart of American industry. With the auto business on the fritz from dwindling sales and rising costs, many factories are retooling to get in on the ground floor of what they think will be the next boom.
And they’re right!
Here’s what Mlive.com had to say about the situation:
The state’s manufacturing sector, struggling with a slumping automotive market, is angling for business making parts for the booming wind energy industry even as wind power generation in Michigan is in its infancy.
More than 30 manufacturing companies in Michigan have picked up business making parts or providing design or engineering work in wind, said Dan Radomski, vice president of industry services for Detroit-based NextEnergy.
Soon, the companies that made the switch early, will control one of the world’s future valuable commodities: wind turbines.
You see, wind farms are springing up so fast that established manufacturers of wind turbines are struggling to keep up with demand. In all reality, wind turbine manufacturers could be the next sheiks of the energy industry.
In a recent article about wind energy companies, I told readers that global installed capacity for wind energy has grown 482% over the last seven years, from 14,604 MW in 2000 to 84,934 MW in 2007.
I also said that the wind industry will grow 215% between 2007 and 2012, from 84,934 MW to 267,837 MW. You can check out the full article to learn more.
Now though, I want to take a look at the wind farms that are fueling that growth, and let you know how to get a piece of them.
Wind Farms: Growing Energy*
If you don’t live in an area where wind farms are being developed, it’s hard to comprehend just how many wind farms are popping up across the country.
According to research from GlobalData, there are at least 700 wind farms either planned, under construction, or active in North America with a capacity greater than 1 MW.
There are also several smaller wind parks, some consisting of as little as one wind turbine.
Let’s not concern ourselves with the little ones, but instead take a look at the five largest planned wind farms and the five largest active wind farms in an effort pinpoint emerging trends.
North America’s five largest planned wind farms are:
| Name | Capacity (MW) | Wind Farm Owner | Turbine Manufacturer | Wind Farm Developer |
| Titan | 5050 | BP, Clipper | Clipper | BP, Clipper |
| Naikun | 1750 | Naikun | Unknown | Naikun |
| Height of Land | 1000 | SUEZ | Unknown | Unknown |
| Pampa (phase 1) | 1000 | Mesa Power | GE Energy | Mesa Power |
| Shepherd’s Flat | 909 | Edison International | Unknown | Caithness Shepherd’s Flat |
Just from this little snippet of information, we can see that BP (NYSE: BP), Clipper Wind Power (LSE: CWP), GDF SUEZ (PARIS: GAZ), Naikun Wind Energy (TSX.V: NKW), and GE (NYSE: GE) will have a large stake in the future megagiant wind farms of North America.
If you look closely, you’ll see that four of those five planned wind farms have a capacity of 1 GW or greater.
If you’re interested in a little background, the Pampa wind farm is the one being developed by billionaire T. Boone Pickens as part of The Pickens Plan.
Now, let’s take a look at the five largest active wind farms:
| Name | Capacity (MW) | Wind Farm Owner | Turbine Manufacturer | Wind Farm Developer |
| Horse Hollow | 735.5 | FPL Energy | GE Energy, Siemens | FPL Energy |
| Sweetwater | 504.8 | Babcock & Brown, Catamount Energy | GE Energy, Siemens, Mitsubishi | DKRW, Babcock & Brown, Catamount Energy, M.A. Mortenson, Tower Logistics |
| Rock Run | 400 | Cambria County Recreation | Unknown | Freedom Wind, Babcock & Brown |
| Klondike | 322.6 | FPL Energy, Iberdrola Renovables | Enron Wind Corp., GE Energy, Mitsubishi, Siemens | PPM Energy, Tower Logistics |
| Maple Ridge | 321.75 | Horizon Wind, Iberdrola Renovables | Vestas Wind Systems | PPM Energy, Horizon Wind, Tetra Tech |
We now see a more clear picture emerging on who the dominant players will be. Energy investors would be wise to start a small wind portfolios as part of a diversified energy mix.
The winners in active wind farms include:
FPL Energy (NYSE: FPL)
GE (NYSE: GE)
Siemens (NYSE: SI)
Babcock & Brown Wind Partners (ASX: BBW)
Tetra Tech (NASDAQ: TTEK)
Iberdrola Renovables (MCE: IBR), which now owns PPM Energy
Right there you have a nice little diverse core of a wind energy portfolio. If you’re going to invest in wind farms, this would certainly be the way to do it.
That handful of stocks offers exposure to wind turbine manufacturers, wind farm owners, and wind farm developers.
Plus, not all of them are pure plays, so you’re actually minimizing your downside risk to wind, while gaining exposure to a utility, and several diversified industrial energy companies.
Just like the Michigan manufacturers are retooling their facilities to take advantage of a changing market, so should you retool your portfolio.
The information here is a good start, but for detailed, independent research and advice, check out the Alternative Energy Speculator.
Call it like you see it,
Nick
*Data provided by GlobalData
