Wind Energy Feels the Force of World Markets

Saturday, 11 November 2017, 04:36:41 PM. Vestas shares plunge and another question mark is raised over the profitability of green energy.
The prevailing wind has dramatically changed for the world's biggest maker of the swooshing blades that dot landscapes from Argentina to Mongolia. Vestas Wind Systems A/S lost about a fifth of its stock market value after the Danish company said it was squeezing less profit out of sales of equipment and services compared with a year ago because of increased competition. Before Thursday's plunge, the shares had risen 15 percent this year.   For skeptics in the energy industry, it provides fuel for their old argument that renewables just don’t make enough money. But the change in fortunes more reflects a formerly niche industry that relied on government support for so long and is now having to fight its own corner against the market forces of capitalism. “You've got Vestas competing with the Chinese and it's a bloodbath,” Bruce Huber, founder and managing partner at Alexa Capital, an advisory firm on energy and technology. Green technology such as solar panels and wind turbines are increasingly mass-produced, so basic supply-and-demand economics dictate that they get cheaper. There's also another layer of competition eating away at profitability.  As nations try to make good on their Paris climate agreement pledges, renewable energy is being installed in just about every corner of the world. But rather than governments fixing the price of clean electricity, they're now letting the market find it.  Developers must now compete against each other to win the right to build...Read more
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