LONDON – Europe’s wind turbine makers are becoming top performers in the stock market as orders surge and the industry enjoys the fruits of cost cutting in years past.
Vestas Wind Systems A/S, the biggest manufacturer of the machines, on Wednesday detailed record first-half orders as profits exceeded analyst forecasts. That followed record production at German rival Nordex SE and a doubling of profits at Spain’s Gamesa Corp. Tecnologica SA.
From President Obama’s Clean Power Plan to his Chinese counterpart Xi Jinping’s goal to halt rising greenhouse gases by 2030, leaders are rolling out policies as part of a United Nations drive to reach a global deal on climate change this year. Vestas and its rivals slashed costs and jobs in years past to pare back overcapacity that gutted margins and now are benefiting from increasing demand.
“The market is definitely strong this year, and it’s a combination of policies and political will to tackle climate change and to increase the share of renewables,” Vestas Chief Executive Anders Runevad said in a phone interview.
Obama aims for the U.S. to get 28 percent of its power from renewables by 2030, up from 5.5 percent now. The European Union’s renewable energy target for the same year is 27 percent and China aims to get 20 percent of energy from renewables and nuclear power.
Wind power is among the cheapest forms of renewable energy. Global installations will jump by a quarter in 2015 to a record 60 gigawatts, according to Bloomberg New Energy Finance forecasts.
The targets have helped Vestas shares surge about 70 percent this year. Nordex is up almost 80 percent, and Gamesa leads the pack with a 90-percent rise, the best performer in the Stoxx Europe 600 index.
Nordex Chief executive Lars Bondo Krogsgaard said in July he expects to “substantially exceed” full-year forecasts.