Yahoo Finance 3 Utilities in Focus Before World Wind Day 2024
World Wind Day is an annual event celebrated on Jun 15 to raise awareness about the importance of wind energy and its potential to aid in the transition to a clean energy future. Global Wind Day was first celebrated in 2007 by the European Wind Energy Association (“EWEA”). In 2009, the Global Wind Energy Council joined forces with the EWEA to organize the event. The events and activities take place in more than 100 countries.
The day highlights the advancements achieved in wind energy development, such as the growing size and efficiency of wind turbines, and urges people to support the construction of wind farms. Larger wind turbines are considered to be superior and more effective. Based on research by the Office of Energy Efficiency & Renewable Energy, the height of utility-scale land-based wind turbines climbed 73% between 1998 and 1999, to around 98 meters in 2022. Per a FIRETRACE International report, the average hub height of offshore wind turbines in the United States is anticipated to increase from 100 meters in 2016 to around 150 meters in 2035.
Land-based, utility-scale wind turbines provide one of the lowest-priced energy sources available in the market right now. Furthermore, wind energy’s cost competitiveness continues to improve with advances in the science and technology of wind energy.
Apart from being an abundant and inexhaustible resource, wind also provides electricity without burning any fuel or polluting the air. Per the U.S. Department of Energy, wind energy in the country helps avoid 336 million metric tons of carbon dioxide emissions annually, which is equivalent to emissions from 73 million cars.
The advantages of wind energy in terms of water conservation are also paramount. In contrast to traditional power stations, which need huge quantities of water for cooling purposes, wind turbines function without the need of water. This significant reduction in water usage underscores the benefits of using wind energy, especially in arid regions where water resources are limited. Per a U.S. Department of Energy report, wind energy can save up to 260 billion gallons of water by 2050.
The popularity of wind energy is rising globally. According to a Skyquest report, the global wind energy market size was valued at $87.66 billion in 2023 and is poised to grow from $95.54 billion in 2024 to $174.67 billion by 2031, at a CAGR of 9%.
U.S. federal incentives like the Inflation Reduction Act (IRA) have bolstered wind energy investments, particularly in offshore wind, which is poised for substantial growth with the expected completion of new large-scale projects. IRA extends and increases investment and production tax credits through 2024 for wind energy projects that begin construction prior to Jan 1, 2025.
Per a U.S. Energy Information Administration report, among other renewable sources, wind is expected to contribute 19% to U.S. electricity generation growth in 2024. Renewables have historically generated maximum electricity in the spring when the output from wind turbines peaks.
Wind turbines are only able to produce electricity during windy conditions, and there may be periods of several hours or even days with no wind. However, the need for electricity continues around the clock. Energy storage systems are being developed to fill this void and store the electricity produced during surplus wind production, guaranteeing a reliable power grid capable of supplying electricity at all times.
Utilities in Focus
The U.S. electric power sector is gradually moving toward cleaner sources of energy to produce electricity. Most of the companies have pledged to deliver 100% clean energy and achieve the zero-emission target in the coming years.
Among those, a few companies like CenterPoint Energy CNP, Avangrid AGR and NextEra Energy, Inc. NEE are focused on expanding wind energy operations and taking advantage of the growing demand. While CNP carries a Zacks Rank #2 (Buy) at present, AGR and NEE hold a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past six months, all three of the companies have outperformed the industry.
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CNP aims to produce 80% of its energy from wind and solar resources by 2030. It has planned investments of more than $3 billion to support renewable energy generation. Through these investments, the company expects to have nearly 1,000 megawatt (MW) of power generation from wind and solar energy sources by 2025.
It also aims to add 200 MW of wind resources by 2030, with the potential need for an additional 400 MW of wind resources by 2032.
AGR is expanding its clean energy generation capacity and adding more wind sources to its portfolio. Year to date, Avangrid has executed 251 MW onshore wind Power Purchase Agreements (PPAs) and signed PPAs for an existing onshore wind farm of 300 MW. The company has increased the presence of sustainable energy in Texas, where it produces more than 1,250 MW through six wind farms and has a pipeline of 1,300 MW projects.
It is also focused on Vineyard Wind 1 project, an 806 MW utility-scale offshore wind project in Lease Area 501. The project is expected to generate an amount of clean energy equivalent to that used by more than 400,000 households and businesses in Massachusetts and reduce carbon emissions by over 1.6 million tons per year. On Jan 2, 2024, Vineyard Wind 1 delivered the first power to the electric grid in Massachusetts.
NEE is the world’s largest generator of clean, renewable wind energy. Over the last decade, its wind energy capacity has almost tripled. The company has the largest market share of wind capacity in North America.
The company has planned to add nearly 12,000-14,600 MW of wind projects during 2023-2026.
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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
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