Every year on Jun 15, WindEurope, the Global Wind Energy Council (GWEC) and the global wind community join forces to celebrate Global Wind Day to discuss and discover the power of wind energy. Wind energy holds enormous possibility and could help to reshape the energy systems with clean energy. Ongoing research and development along with the usage of new technology has made wind turbines more efficient, larger and cheaper, making them one of the most competitive clean energy sources across the globe.
Harnessing wind power both onshore and offshore is increasing wind power energy’s contribution to the total energy generation mix. Since 2019’s Global Wind Day, 51 gigawatts (GW) of wind capacity have been installed, taking the total global tally of 91 countries to 591 GWs in 2020.
Utilities in the United States have been effectively utilizing wind power to build their renewable energy portfolio. At the end of 2019, more than 103 GWs of wind projects provided clean energy to millions of homes in the United States. Per the U.S. Energy Information Administration (EIA), 23.2 GW of new wind generation capacity is going to be added in the United States in 2020. U.S. wind power generation capacity, in contrast to global wind installed capacity, is gradually rising and currently stands at 21.3%, up from 19.1% in 2019.
Per EIA, wind power generation capacity will increase further in the United States and touch 132.9 GW in 2021, indicating a 4.9% year-over-year improvement. Courtesy of increasing investment in wind power generation, it is currently the largest renewable power generation source in the United States.
The U.S. government also provides assistance in developing and increasing power production from renewable sources like wind and solar. Per NextEra Energy Resource, the 2.3 cents-per-kilowatt hour production tax credit provided by the government to produce energy from solar and wind brings in nearly $15 billion private renewable energy investment in the United States each year.
Production tax credit (PTC), which has been used primarily by U.S. wind generation, is set to expire in 2020. However, we expect wind investment to thrive in the United States even without PTC due to a considerable decline in production costs. This will assist the utilities to meet their emission reduction goals.
Amid such a backdrop, let’s focus on a few companies from the Zacks Utility Electric Power industry, which are continuously investing in wind energy and have plans to add more wind energy in their generation portfolio over the long run.
Price Performance (One Year)
NextEra Energy NEE currently has a Zacks Rank #2 (Buy) and operates more than 15,000 megawatts (MW) of wind energy in its generation portfolio. The company has plans to add 5,000-7,800 MW of wind assets in the generation portfolio in the 2019-2022 time period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Xcel Energy XEL, a Zacks Rank #3 (Hold) stock, continuous to make investments in wind assets and is aiming to increase its wind portfolio by 70% in 2021 from 2016 levels. The company is planning to add 4,700 MW of wind energy in the generation portfolio, which will be enough to provide clean power to nearly 2.3 million homes annually.
Dominion Energy D, holding a Zacks Rank of 3 at present, has a comprehensive clean energy strategy to lower carbon emissions. The company already owns a few wind projects and is working to develop 2,640 MW offshore wind projects to further expand renewable footprint in Virginia.
Eversource Energy ES, a Zacks Rank #3 stock, is also working to add more wind assets to itsgeneration portfolio. The company, along with its partner Orsted, is developing offshore wind projects in the northeast and has already received approval to develop 1,674 MW of wind projects. These companies could eventually develop 4,000 MW of wind projects over the long run.
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