General Electric and Vestas Wind Systems are reaping the benefits as U.S. utilities assertively add generating capacity from renewable/alternative energy sources, Bloomberg News reported Wednesday.For example, XCel Energy (NYSE: XEL), the U.S.'s largest provider of wind power, is buying 67 General Electric (NYSE: GE) turbines for a Minnesota wind farm, and GE expects its turbine sales to increase 25% to $6 billion this year, Bloomberg News reported. GE was the largest supplier of wind turbines in 2007, with a 45% market share. Siemens AG (NYSE: SI) and Vestas are two other major global manufacturers of wind turbines that should continue to benefit as wind power usage increases: each is opening manufacturing plants in the U.S. to accommodate increased wind energy-related sales.
GE's shares gained 89 cents to $34.29, while Siemens AG rose 20 cents to $128.20 in Wednesday afternoon trading.
Ideal wind states
The American Wind Energy Association estimates that wind could supply 20% of the U.S.'s electricity, citing a study by Battelle Pacific Northwest Laboratory, a federal research lab. Nearly every state has wind energy potential, and the top 'wind potential' states are: North Dakota, 1,210 billion kwh / year; Texas, 1,190 billion kwh / year; Kansas, 1,070 billion kwh / year; South Dakota, 1,030 billion kwh / year; Montana, 1,020 billion kwh / year, and Nebraska, 970 billion kwh / year.
Nearly all of GE's U.S. orders in 2007 went to states that had standards for renewable energy, Victor Abate, GE's wind energy unit director, told Bloomberg News.
Further, in 2007, U.S. utilities added wind turbines producing an estimated 5,244 megawatts, an increase of 45%, according to AWEA. A similar increase in turbine installation is expected in 2008.
Nevertheless, that's not to state that wind does not have drawbacks. Wind's major drawback: the wind doesn't blow at a sufficient speed continually, making it a less-preferred energy source for utilities' base load power. Second, wind environmental regulations are becoming more restrictive in many localities, hence not all 'ideal' wind power sites are 'capturable' power locales. Cape Cod, Massachusetts is a prime example. An area which far exceeds the threshold for viable wind projects, Cape Cod is also home to miles of recreational sea shore and breath-taking vistas, and several groups/municipalities have mounted successful campaigns to prevent the construction of wind farms, which they argue spoil the landscape.
Still, long-term factors outside wind power's operational limitations and drawbacks may very well propel increased use of the energy source. Namely, the price of oil, natural gas and coal. With oil above $100 per barrel, and with natural gas and coal prices marching higher, the cost gap between traditional energy and wind has narrowed. Additional commodity price rises will only increase wind power's attractiveness, many analysts argue, as wind's moniker shifts from one of "wind as renewable energy" to "wind as more-affordable energy."
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