Gamesa the Spanish Wind Turbine Producer and Wind Farm Operator has faced the worst year of its history in 2010.Like Vestas and Suzlon,2010 has been a cruel year for the Wind Industry in the Western Markets and the WTG Players dependent on those markets.While a few like Clipper have failed to survive as independent entities,Gamesa and others soldier on with little hope of improvement.Vestas has fired hundreds of domestic Danish workers in order to compete with low cost Asian competition while Suzlon,GE are looking to expand into the huge Chinese market.Gamesa too is looking to foreign markets to offset the decline in its home European markets particularly Spain.

Spain is having difficulties with its fiscal deficit and finding it hard to sustain subsidies for Renewable Energy.The Markets in the West have also saturated themselves in terms of growth rates.Though low cost South Korean and Chinese Wind Turbine Producers have not penetrated the Western Markets yet,they could do so in the future.Gamesa which is a Top 5 Wind Energy Company has faced a turbulent year with the owners selling stakes and the share price taking a huge dive.Gamesa is one of the worst performing Wind Energy Stocks in 2010.Gamesa is looking to restructure its operations and concentrating on the offshore wind market by focusing on higher megawatt turbines.Gamesa is leading a massive Spanish Research Effort to develop a colossal 15 MW Turbine meant for the fast growing offshore wind sector.But this is a long term plan with 2020 set as the target for the complete development of this new Turbine.Meanwhile Gamesa has become the target of takeover speculation by one of the bigger Chinese Wind Turbine players like Sinovel,Goldwind etc.Gamesa has seen its revenue fall by 28% and profits by  71% with Operating Margins of 4-5%.Things don’t look too good for 2011 either though Orders have started ticking up.

Wind Energy Companies are increasingly facing competition from a host of new entrants into the industry.The dominants firms Vestas,Gamesa and Suzlon have seen their stock prices fall steeply due to declining revenues and margins.A number of  Giant Industrial Firms have entered the Wind Energy Industry to diversify from the slow growth in their own sectors.Korean Shipbuilders have invested heavily in the Wind Turbine Manufacturing en masse to take advantage of the secular growth of Wind Energy.Chinese companies have risen from virtually nothing 5 years ago to become Top 5 Global Wind Energy Players.Companies like Sinovel,Goldwind,Mingyang Power are now trying to spread their wings outside of China.India’s Wind Energy Industry is comparatively small but it has also seen a number of wind power companies setting up facilities with technology licensed from the West.The slowdown in the Western Markets has led to huge problems for dominant Western firms like Gamesa and Vestas.It has led to painful restructuring for Vestas which has fired thousands of  workers from its domestic manufacturing base in Denmark.Gamesa has also seen management and ownership turmoil as WTG Orders have evaporated and its competitive position has eroded.GE,Suzlon,Gamesa and Vestas are all investing in the Chinese market which has grown exponentially in recent times and which is expected to form 50% of the Wind Energy Demand till the next few years.

Major Wind Energy Countries from China
State-owned or State-controlled Enterprises

  1. Sinovel
  2. Goldwind
  3. Dongfang (DFST)
  4. United Power
  6. Sewind (Shanghai Electric)
  7. Windey
  8. Beizhong
  9. CSR (ZhuZhou)

Private Wind Energy Companies in China

  1. Mingyang
  2. CCWE (Huachuang)
  3. Hewind
  4. CPC New United

Major Wind Energy Countries from South Korea

1) Hyundai Heavy Industries

2) Daewoo Shipping

3) Samsung Heavy Industries

Major Wind Energy Countries in India

1) Suzlon EnergySuzlon Energy is the biggest Wind Energy Company by far with 4-5 Gigawatts of WTG Capacity per year.Its subsidiaries Hansen Transmission and RePower are also big players in the Wind Energy in Europe.The Company has seen its revenues and profits take a huge hit in recent times but has been recovering slowly.

2) RRB Energy – The company has a long history and manufactures Wind Turbines at its plants in Tamil Nadu.The Company has a capacity of 300 MW which it is expanding to 700 MW.The Company makes only 2 models with power rating of 600 Kw and 1.8 MW.Merill Lynch has made a small investment in this company.

3) NEPC India – This company was one of the wind energy heavyweights and a stock market darling earlier.However It no longer remains an active player in the Indian market .Heavy Debt and Bad Management drove to this company to the ground despite being a pioneer in the Indian Wind Power Market.

4) Auro Mira Energy – The company is more of a Green Utility rather than a full fledged WEG manufacturer.It has made plans to manufacture Wind Turbines in the future.It has attracted funds from Baring and IFC to push forward its Green Plans.

5) Regen Powertech – It is a small scale WTG Supplier like RRB Energy which recently set up a small 300 MW manufacturing facility in Tada,Andhra Pradesh recently.The company licenses technology from Vensys to manufacture 1.5 MW gearless Wind Turbines.The company has managed to supply both big and small wind farms over the last 2 years.The company is supported by the PE arm of Future Group.

6) WinWind – The company is not exactly a domestic company rather one with a Finnish Origin.It is owned by the Abu Dhabi Masdar ,Siva Group and the government of Finland.It has recently estalished a 1000 MW capacity in Venga,Tamil Nadu and also has a 500 MW plant in Finland as well.The company plans to producer 3 MW Turbines at its Indian plant as well.

7) Pioneer Wincon – The company is a JV between the Pioneer Group and Wincon of Denmark.It makes small 250 KW Turbines and is a bit player with 30 years of operations in India.The Company remains a small static player in the Wind Energy Market of India.

8) Chiranjeevi Wind Energy – A Small bit player like Pioneer Wincon which engages mostly in the sale of small 250 KW Wind Turbines.Like Pioneer Wincon it has sold a number of these Turbines to small companies mainly in the Southern Part of India.

9) Lietnar Shriram Limited – The company is a 50:50 JV betwen the Shriram Group of India and Lietnar of Italy.The company makes gearless turbines of 1.5 MW capacity and has supplied to small farms in Maharashtra.The company has a major inhouse customer in the form of Orient Green Power which is building a 300 MW farm in Tamil Nadu using Lietnar Shriram Wind Turbines.

10) Kenersys – The company is part of the Baba Kalyani Group which is a major forgings manufacturer in India.It was bought over in 2007,when the Kalyani Group and PE firm First Reserve bought over the German company RSB Consult.The Company mainly  makes 2 and 2.5 MW turbines and has production facilities both in India and Germany.It has wind design capabilities between 1-3.6 MW and with a powerful parent, it could become a success in the future.Amongst the newer wind energy companies like Lietnar,RRB Energy,Regen and WinWind,it looks like the one with most potential.

Major Wind Energy Countries from USA

1) General Electric –  GE is the only major Wind Energy Company from the USA and operates vertically throughout the Wind Supply China making it one of the most profitable Wind Energy Company in the world.It has a dominant presence in its home market of USA and is a global Top 5 Wind Power Manufacturer with manufacturing facilities located around the world.The Industrial Giant is looking to expand in China through JV with Local Companies.

2) United Technologies – UTC the Technology Conglomerate has recently bought Clipper Wind Power and is still a small player in the Wind Market.Clipper which was a small company had run into problems with the slowdown in the US Market and was facing liquidity problems

3) Northrop Gruman – The Military Contractor has recently entered the Wind Market in partnership with  Gamesa.Like other shipbuilders,it hopes to capitalize on the strong growth expected in the Offshore Wind Market

Major Wind Energy Countries from Europe


1) Siemen

2) RePower ( Suzlon Subsidiary)

3) Enercon

4) Nordex


1) Gamesa


1) Vestas

Wind Power Industry Major Trends

The Wind Energy Industry is currently facing a major period of turmoil due to a number of big changes such as

1) The entry of Asian  entrants

2) Rise of China as the dominant source of demand

3) Slowdown in European Manufacturing

4) Icreased growth in Offshore Wind

The Major Players of Yesterday may not be the top players of tomorrow as newer players jostle for the top position in the most important renewable energy market.Wind Energy Industry has changed dynamically from an oligopoly of around 10 companies to around 30 companies today.

The US Wind Industry has been facing headwinds since the beginning of 2010 due to a confluence of adverse factors.This has continued till the 3rd quarter of 2010 with AWEA reporting just 395 MW of capacity installation and a 72% fall in wind capacity since the beginning of 2010.This is a drastic fall and the main reason for the Wind Industry falling into a coma is the legislative lethargy of the US Government.Despite lots of noise,no climate change or energy legislation has passed the Congress and Senate leading to the moribund state of the US Wind Industry.Note China and Europe are pressing full throttle on Green Industry Growth with a climate laggard like UK also taking a leadership in the offshore wind industry.China will continue its strong wind growth in 2010 installing around 50% of the overall global capacity.Its Wind Companies like Sinovel,Goldwind and Ming Yang are now trying to penetrate foreign markets while US Wind Turbine makers like Clipper have sold themselves unable to survive independently.

Korean Shipbuilders,small Indian companies are also getting into the Wind Energy Market attracted by the lucrative growth possibilities.US companies on the other hand are nowhere to be found except for GE.Just like Solar Companies,even GE is building most of its factories outside the US due to lack of government subsidy and support.China is powering ahead and has a very good chance of stealing the lead in Wind Energy just like Solar Energy.Note a strong domestic industry is very important for companies to grow as can be seen in the case of Vestas where Denmark’s strong wind policies made it the  world leader.Same was the case with Gamesa and India’s Suzlon.US has failed to provide clarity on the 30% cash grant extension beyond 2010 putting wind farm project in limbo.First Wind a pure play wind farm operator failed to get its IPO done despite putting a 24% discount to its initial price.Other operators like John Deere have sold off their wind farms for a bargain given the bad and uncertain future.

UTC Bails Out Clipper – REW

United Technologies Corporation (UTC), a provider of high-technology products and services to building systems and aerospace industries, is to buy the remaining shares in the company at 65 pence (103 cents) a share, Clipper announced on 18 October.In the first half of 2010 Clipper sold only 43 turbines, down from 127 in the same period of last year. In its first-half results announcement Clipper said “the current business circumstances create a material uncertainty that casts significant doubt on the Group’s ability to continue as a going concern.”

U.S. wind power posts slowest quarter since 2007 – Reuters

The U.S. wind power industry had its slowest quarter since 2007 in the just-ended third quarter, as investors turned away from the sector after Congress did not pass a renewable power mandate, an industry group said.

The American Wind Energy Association (AWEA) said U.S. developers added 395 megawatts of electricity capacity at wind farms in the third quarter — the slowest quarter since 2007. Year-to-date installations of 1,634 MW, were down 72 percent versus the same period last year.

Ming Yang Wind Power Group is the first Chinese Wind Energy Company to list its shares in the American Stock Exchange.There are a number of Chinese Solar Companies like Renesola,Trina Solar,Suntech etc which are traded in the USA but no Wind Energy Plays.In fact the number of Wind Companies trading on US Exchanges is almost non-existent.Clipper and Broadwind are hardly big players in the global market and provide little direct exposure to Wind Energy for US investors.Ming Yang is issuing 25 million ADS at a range of $14-16 share diluting around 20% of the company and giving it a market cap of roughly around $1750 million.The proceeds will be used in capacity expansion and R&D mostly.Ming Yang is the only significant non-state owned Chinese Wind Energy Company with a 2009 marketshare of around 4%.The Company has a very short history installing its first Wind Turbine just 2 years ago and has seen an exponential growth riding on the incredible Wind Industry Growth in China.Here are the advantages and disadvantages of the Company.


1) Fast Growing Industry – China has seen a massive growth in Wind Energy Installations with ~45% of the global Wind Energy Installations of 13 GW.The Country has set up ambitious targets for further growth with an estimated 100 GW of cumulative installation planned by 2014.Ming Yang has also seen an explosive growth albeit from a small base almost doubling its revenues in 2010

2) R&D Focus – The Company is focusing on the R&D by planning to spend $80 million from its $350 million IPO proceeds to develop Wind Turbines.It has licensed SCP technology from a German Firm and plans to develop 2.5 MW and 6 MW Turbines for offshore Wind Installations.

3) Improving Margins – The company’s margins have improved over the last 2 years with GM of 20% in the first 6 months of 2010.This has been due to falling raw material costs,increasing scale and low SG&A expenses (around 5% of revenues).

4) Huge Order Book – The company has 1776 Turbines in its Order Book which implies around $2 billion in orders or around 3 years of its annualized 2010 revenues.The Orders have been increasing sequentially as its Turbines see more User Acceptance.

5) Low Debt and Return on Capital – The company has very little debt and a very good return on capital metrics.Though Working Capital Requirements are high,it is mostly funded through payables and advance customer payments.


a) Competition – The Competition in the Chinese market is intense and growing.There are almost 75 Turbine Makers in China currently and the Government has decided to stop funding the smaller players to remove overcapacity in the Wind Equipment Industry.The Bigger Players like Sinovel,Goldwind and Dangfang Electric are over 7 times the size of Ming Yang and are backed by state resources.Suzlon,GE and Gamesa are increasingly focusing on the Chinese market given its huge size.The Competition in China is leading to Price Wars forcing Chinese heavyweights in Wind to look outside of China for growth

b) Falling ASPs – The ASP has fallen by almost 22% in 2010 form 2009  to $600,000/MW which is quite drastic.As these revenues will be recognized in the future expect the GM to come under severe pressure if the company is not able to cut costs fast enough.

c) Increasing Raw Material Prices – Raw Material Prices like Steel,Glass etc have started to increase which could lead to a double whammy of falling ASPs and increasing raw material prices.This might lead to losses in the future as the company has little bargaining power with customers

d) Customer and Geographic Concentration Risk – The top 5 Utilities in China that is China Datang, Huadian, Guodian, CPIC and Huaneng account for most of the revenues and orders and the company is solely dependent on China .Thus a slowing of Chinese Economy will have a severe damaging effect on Ming  Yang

e) Increasing Capacity – The Company is set to increase capacity to around 3 GW by end 2010 which would make its capacity equivalent to the biggies like Sinovel and Goldwind.This should allow to bid for bigger orders and allow for more revenues in the future.


Ming Yang might attract a lot of investor attention given its the first Chinese Wind Power Play to list on the US Stock Markets.However given the substantial risks both macro and micro the valuation at around 20x P/E is slightly expensive in my opinion.Post IPO P/B of around 3x and P/S of 3x is also not exactly cheap.The Wind Energy Sector around the World is suffering severely in 2010 from a slowdown in the Developed Markets of US and Europe.Cyclical risks for this industry are high from the increasing competition from Korean Shipbuilders and decreasing ASPs.However Ming Yang Wind Power is a company which seems to be on the right track with its R&D Focus,Expansion Plans.Ming Yang seems a Buy despite these risks.

Renewable Energy

Green Transportation and Energy Storage

    Climate Change

    Government Policy