Wind turbine makers' shares up 70% this year alone

European manufacturers of wind turbines are currently among the best performers on stock markets. This has been helped primarily by a large influx of new orders, as well as cost-saving measures implemented during the economic crisis. As reported by Bloomberg, wind turbine manufacturers' shares are now highly rated, led by shares in Danish company Vestas.

Vestas in particular recorded a record volume of orders, while profits exceeded analysts' expectations. Its competitor, Germany's Nordex SE, recorded record turbine production, and Spain's Gamesa Corp Technologica SA doubled its profits.

While the renewables sector is experiencing enormous growth, conventional energy companies in Europe are suffering due to low electricity prices.

Behind these companies' outstanding results is the global shift in energy towards renewable electricity sources. Whether it is Barack Obama's Clean Power Plan or China's plans for renewables development and emissions reductions, all of this is favourable to these companies. Another major event is the autumn COP21 climate conference in Paris.

A significant factor behind these positive results has also been the reduction in costs and staff numbers over the past several years, which is now bearing fruit amid higher order volumes.

„At present, it is simply a matter of high demand for wind turbines, but companies are also being significantly helped by the savings they have gradually achieved in recent years,“
Jacob Pedersen, analyst at Sydbank A/S

After being hit by the economic crisis, Vestas had to lay off nearly a third of its employees and close some manufacturing sites. Gamesa similarly laid off around 25% of its workforce.

The question is how this segment will develop further. Germany, Poland and France will allocate support for renewable electricity generation through auctions, which could reduce demand for new wind farms.

Increase in installed wind power capacity

In the US, according to BNEF, new installations are expected to fall to 1.3 GW of capacity by 2017, from nearly 10 GW in 2016 and 9 GW this year.

Electricity from wind farms is among the cheapest renewable energy sources, and BNEF estimates that global installed capacity should reach 60 GW this year.

As a result, Vestas shares have risen by almost 70% this year alone. Nordex has gained 80%, while Spain's Gamesa has risen by as much as 90%, making it the leader on the Stoxx Europe 600.

So far, the rapid development of wind energy has not been slowed even by a more than 50% decline in oil prices.