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.
EGP is the 4th company of its kind to supply paper to European investors so the demand is not high.Despite EGP having 44% Hydro Assets and 13% Geothermal Assets which is more than its European competitors dependent on Wind Energy,investors are not convinced.Even the lower band of pricing has seen only 60% demand which means that EGP may have to lower it further.Spain and Italy the home countries of Enel are reducing Feed in Tariffs for Green Energy Sources due to Budgetary Problems.Despite removing the most draconian cuts on Renewable Subsidies,the sword of uncertainty continues to hang over the Green Producers.Investors are also looking for a discount on existing companies in order to make commitments to a new issue.EGP has been trying to do an IPO sine last year and the current bullish market environment in Europe might be the best time for it to clinch the deal.
Wind Energy Companies in the Developed Markets have taken it on the chin in 2010.Companies dependent on the Wind Energy Markets in the West like Vestas,Gamesa,Suzlon,Iberdola Renewables etc. have had a very bad 2010 as their stocks price keep finding new lows.A Combination of Tough Financing Markets,Low Gas Prices and Declining Electricity Demand has made the livers of Wind Executives hellish in recent times.More competition in terms of Chinese heavyweights like Sinovel,Goldwind and Koean shipbuidlers precludes an easy recovery.Green IPOs in recent times have faced huge volatility with some managing success while others have led to huge losses.China’s Ming Yang Power which is a Chinese Turbine Manufacturer has seen a 30% erosion of its IPO stock price of $14 as it was priced a tad too aggressively.First Wind which is a bit different being a Wind Energy Developer similar to renewable energy developers like Enel Green Power,EDF Novellas might face a frosty reception as well.Its not a good time to be in the wind energy business as increasing competition and declining demand cause problems.Note John Deere sold off its Renewable Energy Arm for a bargain as US Climate Change Legislation seems stuck in an everlasting limbo.Without a Federal RPS and an expiring 30% Treasury Cash Grant for Wind Farms,2011 is very uncertain for Wind Energy in the USA.
Spanish Government Facing a Tough Fiscal Situation;Plans Green Energy Subsidy Change The Spanish Government has been facing a tough budgetary situation due to sovereign debt problems afflicting Europe.The government is trying to structurally reform its Energy Sector to make it more competitive and dynamic.Spain has one of the largest Renewable Energy Capacities in the world […]