Wind Energy As a Low-Risk Investment

In the mid to long term it is clear that wind energy investments will rather be strengthened due to their low-risk character and societal and additional economic benefits. Investment in a wind turbine today means that the electricity generation costs are fixed extending over the lifetime of the wind turbine. Wind energy implies no expenses on fuel while operation and maintenance costs are usually well predictable and rather marginal, in relation to the overall investment.

Global investment in renewable power and fuels increased 17 % to a new record of $257 billion in 2011. Majority of new investments were made in solar and wind energies.

Developing economies made up 35% of this total nvestment,compared to 65% for developed economies.

Alternative Energy Industry Returns Alternative energy companies posted solid gains on average for the past 12 months. Half of all the alternative energy stocks that the Roen Financial Report tracks have posted double-digit gains in price in the past year, and 15 stocks have more than doubled!

Industry Day Week Qtr Year
Energy Efficiency 1.1% 2.4% 13.0% 57.2%
Environmental 0.8% 3.0% 4.0% 6.0%
Fuel Alternatives 0.9% 3.7% 13.5% 26.0%
Smart Grid 0.7% 2.4% 2.5% 26.1%
Solar 0.8% 3.9% 22.1% 36.4%
Average 0.9% 3% 9.6% 28.2%
Data as of: 07/10/2013

WIND ENERGY IN THE PARADIGM PORTFOLIO

The combination of strong private interest and aggressive government shows wind power, and the companies that produce technology that harnesses wind power, as a compelling story for long-term investors with the potential for growth in the next ten years.

Wind generated electricity is the most developed of all the renewable energy sources. Wind accounts for over one third new investments in renewable energy development, outpacing solar, biodiesel and the like. From 2005 to 2009, wind generating capacity grew almost 4 fold, from 8.7 to 33.5 gigawatts. The 14 companies in the Paradigm Portfolio of the financial newsletter are all well positioned to benefit from this growing trend.

Wind power is not without its limitations. Some areas lack the necessary levels of wind to make turbine installations economically valid. Also, the full potential of wind power will not be realized until improvements to the electric grid are made. This was the main reason Pickens abandoned his ambitious 4,000 megawatt wind farm project in Texas. And there is opposition to wind farm construction by some local communities. Cape Cod is an example of an area that could immensely benefit from wind power, but because the public believes turbines are not aesthetically pleasing (among other things), the process of building out the project is off to a slow start.

Even with that being taken into consideration, wind power is one of the best alternative energy segments in which to invest.