Investors are usually looking for two things: strong returns and low risk. From what I heard during the first day of AWEA’s Finance and Investment Conference, wind energy checks both boxes.
Indeed, if there was a common refrain heard during panel after panel, it’s that the Wall Street world considers wind power “mainstream.” Some choice quotes from yesterday’s speakers, who hailed from institutions like Bank of America, Goldman Sachs, JP Morgan and some of the country’s largest utilities among others:
- “We’re quite happy with project performance as a return in investment.”
- “We have an industry that’s growing and folks want more wind.”
- “Wind is now a mainstream resource that can be used in a big, central generating capacity.”
- “The future is bright for developers and utilities.”
- “Wind is a mainstream resource that utilities are going to rely on.”
- “Investment in renewables is a good business opportunity… There is a tremendous appetite for renewables.”
One of the reasons the appetite for renewables is so high is because our country’s energy fleet is in the midst of a replacement cycle. Primarily, much of the U.S. coal fleet will be retired in the coming years because it’s not economical to perform upgrades necessary to extend the lifespans of 50 or 60-year old plants, according to David Owens, Executive Vice President of Business Operations and Regulatory Affairs for the Edison Electric Institute (the largest U.S. trade association for utilities). Owens said as many as one-third of the U.S. coal plants could be retired by 2024, and he expects renewables to pick up much of the slack as utilities look to clean their fleets.
All of this is good news for the U.S. wind industry. The finance and investment crowd plays an key role in helping to get projects built by securing the necessary capital to fund construction. So it’s important they view wind energy as a high-reward, low-risk opportunity. With a near-record amount of new wind projects under construction or in the advanced stages of development, it’s clear that’s exactly how investors see it.