(and a shout-out to AltEnergyStocks, thanks for the link this weekend)
Here's the headline story, from the Financial Times:
The large subsidies paid by electricity users to fund the drive towards wind power are generating profits for existing wind farm owners – without producing many new turbines.
A huge expansion of wind energy is needed to meet the government’s climate change targets, and the amount of subsidy paid to renewable power generators through consumers’ electricity bills will rise from more than £600m a year to £3bn a year by 2020.
Most customers are unaware of this, as it does not appear on bills. But the format of the subsidy system, known as the renewables obligation (RO), combined with bottlenecks in the planning system, mean these cash injections are enriching the operators of existing wind farms well beyond their expectations.
The proportion of electricity coming from renewable sources has scarcely budged in recent years – it rose from 4.2 per cent in 2005 to 4.6 per cent in 2006, the latest year for which government figures are available – mainly because of lengthy delays in the planning system.
From the WSJ's EC blog:...Peter Atherton, head utilities analyst at Citi Investment Research, said: “It’s a bonanza. Anyone who can get their nose in the trough is trying to.”
Alive to the fast returns which can be made, the big electric utilities have been snapping up wind farms from small operators, and slowly building their own. But they do not disclose how much money they make from them.
Ofgem told the FT that wind farm owners could make more than £100 per megawatt hour.
Assuming industry averages apply, RWE Npower, which owns the most onshore wind farms, could expect to turn over more than £90m a year from them at these rates.
But Npower said Ofgem’s estimate was too high, and wind farms were receiving about £75 to £85 per megawatt hour...MORE
Vestas: Wind In Their Sales
If a rising tide lifts all boats, what does a rising wind do? It lifts shares in wind-power companies, apparently.
Denmark’s Vestas gave the market some cheer today by upgrading its forecasts for 2007 after a strong fourth quarter, upping the outlook for its top-line growth and its operating margin. It will report 2007 earnings later this month. Because it is the world’s biggest wind turbine maker, Vestas acts as a bellwether for the industry, and often for renewable energy as a whole....MORE
