In a move that may be more for PR rather than energy savings, Workers installed 20 wind turbines in late December Adobe Systems.  The installation is expected to produce about 50,000 kilowatt hours of electricity a year which sufficient to power 6 average homes.  In terms of Adobe’s consumption footprint however, it only represents 2% of the power used in their 1 million square foot corporate high rise buildings.

Wind "Turbines" at Adobe Headquarters

TVA said it has entered two contracts with Invenergy Wind affiliates to provide a total of up to 350 megawatts from wind projects at the White Oak Energy Center in McLean County, Ill., and the Bishop Hill Energy Center in Henry County, Ill., both beginning in January 2012.

GE has signed contracts to supply 88 wind turbines to HECIC New Energy, a Chinese wind energy developer, for three new projects in Hebei and Shanxi Provinces.  The projects will support the growth of wind energy investments in China and the wind farms expect to add 132MW of installed wind power capacity in China.   Some analysts expect China’s wind power segment to grow by 25% in 2010

Canada’s Western Wind Energy Corp (WND.V) said it received approval from the U.S. Federal Aviation Authority for 15 turbine locations for its wind and solar energy project based in Arizona. The company also said it was in the process of finalizing a turbine supplier, engineering procurement construction contractor and solar panel provider.

The UK wind farm planned is an order of magnitude larger than the picture of a wind farm near Wales above

The UK Government announced plans to build nine giant wind parks on their coasts, taking the lead in wind energy production globally and looking to provide 25% of their total energy needs.    The cost will top 110 billion euros and expected completion is in 2018.   If you have ever visited the UK coasts for any measurable period,  you are well aware of the turbulent seas and windy conditions in the land-locked country.

Broadwind Energy (BWEN) shares which we wrote about last week continue to be under pressure as T. Boone Pickens announced plans to cut back on domestic wind farms and concentrate on natural gas

“Since late 2008, we have been significantly impacted by a slowdown in our industry caused by reduced capital availability to fund new wind farm developments,” said Broadwind CEO J. Cameron Drecoll. “We have reacted accordingly, focusing on managing our expenses, improving our operations and preserving our liquidity. We are seeing early signs that capital is again flowing into wind energy project developments, and are well-positioned to take advantage of a recovery in 2010 and beyond.”

Unfortunately,  we are skidding to invest in BWEN until they can produce measurable improvement in fiscal metrics.   If operating costs can be pulled under control and the business does recover,  we need to see evidence in the upcoming Q4 earnings report.  Until then, we are on the sidelines.

UPDATE:    Since our original story in late 2009,  GCHT has drifted in the $2.30 – $2.50 range under light trading.  Today, however, the stock is up 15% on no recent news other than the fact it is presenting in 1 week at the Needham Growth Stock Conference on January, 14th.    Perhaps interest is gathering ahead of the conference or pending news is coming.

GC China Turbine (GCHT.OB) is a manufacturer of efficient 2-bladed wind turbines based in Wuhan, China . The Company holds a license to manufacture these 2 bladed turbines which meet rigorous requirements for low-cost and high reliability. The technology was developed through a 10 year European R&D effort costing in excess of $75 million dollars.   They recently launched  a 1.0 megawatt (“MW”) utility scale turbine with designs for a 2.3MW and 3.0MW utility scale turbine in development. The Company’s initial efforts have been rewarded with contracts of approximately US$128 million to-date and realistic potential for an additional $200-$400 million in additional contracts in the next 12-18th months.    The deployment savings for the 2 blade turbine vs the traditional 3 blade turbine are signficant as listed below.

At approximately a $2200 savings,  a large wind farm could see savings in the hundreds of thousands of dollars.  In addition, the units yield a 3% uptime advantage over their 3 blade counterparts yielding additional revenue in the tens of thousands of dollars per year.

The company has recently engaged Deloitte & Touche Tomahatsu as their new independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending December 31, 2009. For a small firm such as GCHT,  getting a world class auditor to validate their financials will pave the way to a listing on an exchange such as the Nasdaq Global Select Market and off the bulletin boards.   If you are unsure the relevance of such a move,  look at companies such as Gulf Resources (GFRE) to see the potential impact.   Gulf Resources,  also a public company based in China,  rocketed more than 400% on the news.  But GCHT doesn’t need hype to move its stock price,   ultimately, it will need traction in its marketplace.   If we assume that existing business trends continue for GCHT,   a revenue figure of $275-300 million for the next 12 months seems like a conservative estimate.    Given the price to sales ratio of 2 inline with its peers such as A Power Energy Limited (APWR),  that gives the stock a potential market cap of approximately $600 million or about 3.15 times its current market cap.    Consequently,  a price of $9-11 is a reasonable valuation for GC China Turbine based on these parameters.    With the current price around $2.85,  the stock looks very attractive.    The chart below shows that GCHT recently dipped below its 10 day moving average but it has bounced back through resistance each time it has done so before.  In addition, the stock is currently at the lower end of the Bollinger band and could be poised for a rebound back to the mid 3’s in the short term.   Be careful however that this is a lightly traded micro cap stock and typically exhibits greater volatility than its industry peers

Company Website : http://gccturbine.com

Author’s disclosure: long small position in GCHT

A-Power Energy Generation Systems, Ltd (APWR)

GC China Turbine Corp (GHCT.OB)

Vestas Wind Systems (VWSYF.PK)

Broadwind Energy, Inc. (BWEN)

In wind energy news in the past week, there were a number of announcements in the sector that show the wind energy market is alive and well

• PG&E announced that it has contracted with Iberdrola Renewables, Inc., the U.S. arm of the world’s largest provider of wind power, to purchase and operate a major wind generating plant to be built in Southern California to serve the utility’s electric customers.    The proposed Manzana Wind Project, with a power capacity of up to 246 megawatts, would be the first wind project owned by PG&E. It follows a proposal by the utility in February, 2009 to develop and own 250 MW of solar photovoltaic power.
• Duke Energy Corp. has begun producing electricity from its Campbell Hill WindPower Project in Wyoming. The 99-megawatt operation near Casper, Wyo., will supply wind energy to PacifiCorp under a 20-year agreement. Duke says Campbell Hill’s 66 wind turbines will produce enough electricity to power about 30,000 homes per year.
• The Criterion wind project on Backbone Mountain will be sold by Clipper Windpower Inc. to Constellation Energy Group Inc. for $140 million, the buyer reported this week.
  Constellation will purchase 28 wind turbines manufactured by Clipper that are capable of producing 70 megawatts of power and powering 23,000 homes. Projects with production capacities of more than 70 megawatts have to navigate much tougher scrutiny from the Maryland Public Service Commission.
  

We will continue to monitor the situation as there will be loads of bargains once the bloodshed is over.

Launched in July, there is a welcome of a “Pure Play” Wind Energy ETF. The ETF, named PowerShares Global Wind Energy Portfolio (Nasdaq: PWND), is based on the NASDAQ OMX Clean Edge Global Wind Energy Index. This index is comprised of companies related to the use, development, manufacturing or distribution of wind energy. Don’t expect a bunch of small cap or bulletin board stocks to comprise this ETF, Its major holdings include the major players in wind power. As indicated by the table below, the vast majority of its holdings are in major global wind companies such as Vestas and Gamesa. Many of these currently trade on foreign exchanges so this type of ETF definitely improves accessibility for the average American investor. As expected, many of the smaller volatile plays such as NCEN, WWEI and APWR are excluded for now.

The ETF justed launched in July, so there is not much history on performance of the ETF. The underlying index in which it is tracking however (NASDAQ OMX Clean Edge® Global Wind Energy Index), has been around longer and we can see that we are within 5% of the 52 week low of $22.46 which appears to be a solid buying opportunity. Unlike some other wind plays, we don’t expect this ETF to have the potential to be a 2-3 bagger, but could exhibit solid and steady growth over the next few years and wind energy becomes more prominent on the average investor’s horizon.

A-Power Energy Generation Systems Ltd said it has signed a deal, to build a wind turbine production facility, with the Chinese city government of Bayan Nur. 2,100 MW of wind power generation in the Bayan Nur region has already been approved by the government and A-Power will be poised to capitalize on this with a turbine production capacity of over 1,800MW by the end of 2009.
The 290,000 square foot plant is set to cost about $20 million and is expected to be completed in July 2009 less than a year away. This will allow A-Power to scale and manufacture wind turbines of 2.5MW and 750kW capacity. Furthermore, the company said that under the deal, the city government has agreed to tax breaks and to coordinate sales with wind farms in and around Bayan Nur region.

Currently analysts Roth Capital and Jessup & Lamont are covering the stock with Buy rating. Further more, the largest institutional holder (over 4.5 million shares) of APWR is hedge fund JLF Asset Management which happens to be a 25 minute drive to APWR US headquarters in San Diego, CA. This is quite important in my mind as I suspect JLF is having quite frequent dialog with APWR on the state of the business when company execs are stateside. I would be looking closely at movement on JLF Asset Management’s holdings as a forward indicator of the stock.

Looking at the fundamentals, APWR has over $100 million in cash and cash equivalents, over $700 in backlog and no debt. Furthermore, the company is on track to earn at least $1.5 per share and 500 million in revenue in FY 2009 giving it a forward PE of less than 20 at its current price of approx $27 per share. This looks like a stock you buy and forget about for a year and you could be well rewarded.

Below is a 3 month chart of APWR

Here is a link to a mention of APWR back in Feb on CNBC