Download now: Cannabis Cash

Big Investments Breathe New Life into Wind Energy

Written by Meg Dailey
Posted May 21, 2017

It’s important to know when to cut your losses, no matter how big your investments are.

Of course, if they’re worth several billion dollars, the issue becomes a little more pressing.

This is the kind of problem energy industries all over the world must consider when looking into valuable but still-developing renewable technologies.

On one hand, it’s a no-brainer: more renewables equals less emissions, which is a goal countries everywhere are currently working towards.

The catch is that a single solar farm or batch of wind turbines isn’t going to cut it. Anything less than a massive investment in either, or both, is just a drop in the bucket and will have little or no effect on the outcome.

And, let’s be real here, there’s no money in something that’s not living up to its potential like that.

I’ve heard every argument about renewable energy from, “We have the technology, why isn’t everyone using it?” to, “Panels and turbines are a blight on our Earth!”

My response to both extremes: the tech isn’t up to snuff yet, but it’s coming, and fast.

Last week, we got word that Tesla’s fancy new rooftop solar panels are a go. Though the industry at large is going to need a lot more upgrading than that, solar capacity is growing at a clip worldwide.

Wind, less sensational but no less important, has been quietly following suit.

In fact, wind capacity has been growing faster than solar for years now!

Much like solar, it’s hit a bump recently that brought the market hype back down to Earth. But the next few years are looking good to give this clean energy industry a decisive push in the right direction.

Winds of Change

Let’s see where we are today and how far we’ve come in the last few years.

The Global Wind Energy Council (GWEC) estimates that at the end of 2016, around 54,600 megawatts of new wind energy capacity had been installed, bringing the global total to more than 486 gigawatts.

GWEC Wind Installed 2016

That's huge compared to solar, which is only expected to reach 85 GW by the end of this year.

The vast majority of installed wind capacity (about 34.7%, according to GWEC) is in China. No surprise there, seeing as it’s not only the world’s biggest energy market but also the country that most desperately needs clean energy solutions.

The U.S. and Germany come in second and third on this list, with more than 10% of global wind capacity each.

China takes the cake in new 2016 installation totals, but the UK has the most offshore wind additions with more than 5,000 MW installed.

However, as anyone with a hand in a major commodity knows, size isn’t all that matters.

Oil, for instance, is the backbone of a number of industries, but it’s hardly been a millionaire-making investment for the past few years. So if you’re still doubting wind’s potential, here’s one major project in the works that may change your mind.

Speaking of Oil…

If you’re Saudi Arabia, you produce and sell oil. It’s what you do.

Except when you’ve run a two-year campaign against U.S. shale and subsequently driven your own crude oil industry into the ground. Then you take a step back and rethink your strategy.

Right now, unlikely though it may seem, Saudi Arabia is trying to wean itself off of oil.

It depends on the fossil fuel not only for the usual petroleum products it makes but also for the revenues the commodity brings into the country.

More than half of the country’s GDP and government budget are made up of oil revenues, and since prices aren’t what they used to be, both are lacking.

In order to cut back on that reliance, the country is looking for investments totaling as much as $50 billion in both wind and solar tech. Minister of Energy Khalid al-Falih believes Saudi Arabia could be a “solar powerhouse,” placing the country’s initial goal at 10 gigawatts.

Meanwhile, Saudi Arabia has already begun its foray into wind energy.

Last year, the country’s mammoth national oil company, Saudi Aramco, commissioned and received the first-ever Saudi wind turbine from General Electric. The turbine will provide Aramco with 2.75 MW of energy and reduce the fossil fuel needed for regular operations by nearly 19,000 barrels of oil per year.

In fact, Saudi Aramco, despite being the biggest oil major on the market, has had a renewable energy team in place since 2010. The team has been studying the feasibility of the Saudi National Renewables Program and has set a goal of having 9.5 GW of wind energy installed by 2023.

That’s nothing compared to Asia, Europe, and North America, where countries have been building up wind capacity for more than a decade.

But it’s a start.

Moreover, it’s an important sign of how the energy industry is changing gears.

With Saudi Arabia, the quintessential oil superpower, making renewable energy a priority, it's definitely time to start looking into likely stocks.

Wind energy especially is looking to make some huge strides in both capacity and efficiency. And the viability of offshore wind means countries have even more room for growth as the tech improves.

If “buy low, sell high” is your mantra, you’ll want to be on the lookout for promising wind stocks starting now.

Until next time,

Megan Dailey
Energy and Capital

Hydrogen Fuel Cells: The Downfall of Tesla?