What's going on?

Vestas, the world�s largest maker of wind turbines, saw its stock jump 10% on Thursday! It made more money than expected, raised its guidance for future profit and said it would buy back a chunk of its own stock (which means the remaining shareholders will own a greater proportion of the company). It�s another sign that renewable energy companies are doing pretty darn well�

What does this mean?

It was only four years ago that Denmark-based Vestas was seriously under the coch. It began a cost-cutting campaign that involved closing factories and making workers redundant. Since then, it has turned itself around with the help of a strengthening global market for wind energy that has been driven largely by government support for green energy.

Why should I care?

The bigger picture: Price of wind power is coming down.
Wind power has been developed with the help of generous government subsidies (i.e. governments have thrown down some cash to get the ball rolling). Over time, the cost of producing power via wind has come down significantly and is likely set to fall further. The lower it goes, the less dependent wind energy becomes on government support � and the more likely it is to supplant other forms of energy (like those derived from fossil fuels).


For stocks: Changing energy consumption could really hurt �old school� energy stocks.
Who loses if our energy sources change considerably? Some commodity producers, like oil drillers and coal miners, are certainly at risk. There�s a large dependence on �cheap� energy sources like fossil fuels, in particular in developing markets (which are growing faster than their developed counterparts). But if the decades-long shift to renewable energy continues/accelerates, it could be a big issue for producers of energy-related commodities.