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Scotia Wealth Management

Solar, wind and water – part 2

The Ritcey Report

May 3, 2018

Part 2 of a 3-part investigation

Last month I posted a blog entitled Powering your portfolio with solar, wind and water. The response was immediate and widespread. You want to know more. Fair enough. So I have decided to expand on the i subject in more detail giving each issue – solar, wind and water – a dedicated blog.

Part 2: Wind investments

According to data produced by the American Wind Energy Association – as reported in Investopedia1 – ‘wind energy accounted for only about 5% of the energy produced in 2016, but this number will surge to 20% by the end of the next decade. By comparison, solar energy accounts for less than 1% of all U.S. energy production.’

Wind growth statistics

That 5% is, according to the same source, enough to power nearly 17.5 million homes. Here are some further statistics confirming the growth of wind energy:

  1. In 2016, Iowa produced more than 30% of its energy from wind.
  2. South Dakota and Kansas topped 20%.
  3. Globally, according to the International Energy Agency, wind is on target to deliver 18% of the world’s energy production by 2050.

It’s perhaps worth re-visiting some source material I referenced in my earlier mini blog on wind investing. I mentioned that, according to a recent report published in The Motley Fool2 (Travis Hoium, January 4, 2018):

‘Wind energy is booming in the U.S. and around the world, accounting for more than one-third of all electricity capacity installed globally in the last five years. Investing in wind energy, however, is easier said than done. Manufacturing is largely done within large conglomerates, and asset ownership often falls to utilities or corporations that have much bigger exposure to other business lines.’

New wind project investment

According to Matt Whittaker3, writing in the Money section of U.S. News & World Report (Is there an upside in wind energy stocks? April 15, 2016):

‘The last decade has seen $128 billion in new wind project investment in the U.S., with 20 states last year adding nearly 8,600 megawatts of capacity, a 77 percent increase over 2014. That represented 41 percent of all new electricity generation capacity to come online during the year, surpassing solar and natural gas.’

U.S. Energy Information Administration (AWEA)

Mr. Whittaker went on to report, citing data from the U.S. Energy Information Administration: ‘In 2015, wind power made up 4.7 percent of the electricity generated in the nation. With the extension of tax credits in addition to the growth, the AWEA thinks wind energy is on track to supply 20 percent of the nation’s power by 2030, a scenario modeled by the Department of Energy.’

Mr. Whittaker added: ‘Worldwide, the Global Wind Energy Council expects installed wind generation capacity to grow nearly 40 percent from 2016 to 2019.’

Conclusion

According to wind generation industry analysts, wind generation is gaining ground for three key reasons:

  1. It is becoming cheaper and more economical to deploy.
  2. It is clean.
  3. It enables investors to align their money with their environmental values.

I will be happy to offer you more detailed insight and advice about developing a solid investment strategy aimed at this exciting emerging investment category.

Please don’t hesitate to contact me to discuss the considerable potential associated with an investment in wind energy.

Dave Ritcey, The Ritcey Team, Scotia Wealth Management

1 https://www.investopedia.com/investing/wind-stocks/
2 https://www.fool.com/investing/2018/01/04/how-to-invest-in-wind-energy.aspx
3 https://money.usnews.com/investing/articles/2016-04-15/is-there-an-upside-in-wind-energy-stocks

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