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rofgile (99.10)

Atlantic wind power backbone plan expands.

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6

April 01, 2011 – Comments (6) | RELATED TICKERS: VWDRY , GOOG

NYTimes reports that the application from the Atlantic Wind Connection to develop an offshore wind backbone in the Atlantic was filed on Tuesday.  It appears that the plan has grown in scope, both with more area involved and a possible connection to Manhattan.

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There is also an alternative wind power plan by a group called Blue Water Wind that is expected to file soon.  Now the government will solicitate alternative plans.

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Offshore wind is one of the most expensive forms of power right now, even as land based wind is one of the cheapest (less expensive than nuclear).  It is possible that the establishment of an offshore transmission system making it easier and cheap to add wind capacity could greatly affect this disparity.  Several large wind companies are now actively competing in designs of large offshore wind turbines.  Vestas recently unveiled the "Goliath of Wind Turbines" this last week.   

This turbine will rise 135 meters (443 feet) above the waves, and feature a rotor blade that measures a full 80 meters (262 feet) (EnergyWise).  It would be a 7 MW turbine, where existing offshore turbines max out at 5 MW.

 Vestas now has built a total capacity of 1407 MW in offshore wind. This accounts for about 43 percent of the world market.

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 I think renewables are going to have a big move up over the next 2 years.  The combined effects of less austerity programs, larger tax revenues, anti-nuclear and anti-coal = lots of funding for renewables and subsidies to drive development, along with permits to use land and water to build new sites.

 -Rof 

6 Comments – Post Your Own

#1) On April 01, 2011 at 12:54 PM, mhy729 (41.43) wrote:

It would appear that VWDRY.PK was a steal back when it was sub-10.  Did you manage to pick up any shares during that time?

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#2) On April 01, 2011 at 1:12 PM, rofgile (99.10) wrote:

mhy729:

 Well, I bought a large position (currently 18% of my portfolio in real life) at about $10.40/share.  It has risen since then about 40% this year.

 I am looking to pick up some FSLR soon to make this a larger position too, just waiting for a dip. 

 -Rof 

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#3) On April 01, 2011 at 11:41 PM, mhy729 (41.43) wrote:

Nice entry on Vestas!  I really do like the idea of supporting/investing in alternative/renewable energy, but have been hesitant due to development costs and paring of funding/subsidies (which you mention might be a trend about to reverse in the near future).

Thanks for the investment ideas in the field, some of which I never knew about (e.g. Acciona, from a previous comment elsewhere).  I'm keeping a watchlist and reading up on the companies as I find the time.

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#4) On April 04, 2011 at 9:52 AM, IrishAlum1993 (< 20) wrote:

Thanks for the insight on Vestas.  I've been looking at it, too, and am having a hard time getting over the accounting problems that they've had (now with subsquent legal action).  

What do you Fools think of all of this?  Am I making a mountain out of a molehill, or is there something to this one?

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#5) On April 05, 2011 at 9:23 AM, rofgile (99.10) wrote:

tdfellrath: 

  There are three things going on:

  Class action lawsuits:  I think the lawsuits are BS and nothing will come of them.  You see similar class action suits targetting other popular stocks that lose share price.  I find the whole idea of a suit for loss of share price to be quite funny.  Anyone investing is responsible for their own risk if the business doesn't do as well as expected, etc.

  Italy tax charges: " The paper said investigators believe Vestas has been misusing a VAT provision to escape paying tax. The rule allows companies to store products, without payment of tax, on the provision they are not to intended for retail sale.  In response Vestas has denied any wrongdoing and said the situation related to products intended for export. It has described it as a ‘misunderstanding’ and said it was using a standard VAT model used by other international companies operating in the country."  - This isn't too unusual either, happens when corporations are in multiple countries.  Eventually some country tries to get more taxes from the corporation and they have a dispute about interpretations of tax law. 

$1M stolen by manager in Colorado:  The woman is fired, but it casts some doubt on how well things are managed.  An employee Denna Rendall stole money through a credit card over the last three years.  She's busted and going to jail.  

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 tdfellrath:  Overall, I like the business, which is why I am an investor.  But - I don't like that multiple scandles/legal issues happened at a similar time.  That should be a red flag for anyone thinking about a company.  At this point, I am still giving them the benefit of the doubt, because they also have pretty open and detailed accounting in their 10k forms, including things like injuries, energy usage, carbon released, etc.  

 -Rof 

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#6) On April 05, 2011 at 2:16 PM, IrishAlum1993 (< 20) wrote:

Thx Rof - I, too, like the IDEA of Vestas...but all of the back office turbulence that you described has me thinking it best to wait for dust to settle a little more.  That, and its dropping again today.

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