By December 30, 2016 0 Comments Read More →

Vestas’ strong 2016 finish offsets worry over Trump’s US energy policy

US energy policy

Vestas Wind Systems shareholders were concerned that US energy policy under the Trump administration would have an impact on company sales. Vestas.com image.

Under Trump, US energy policy could favor conventional fossil fuels

By Teis Jensen

COPENHAGEN, Dec 30 (Reuters) – A spate of last-minute orders from the United States has put Danish wind turbine maker Vestas on track for its highest contract intake in six years and eased some investors’ concerns over US energy policy under the incoming Trump administration.

Vestas Wind Systems and its rivals are benefiting from a new focus on renewables, encouraged by the Paris Agreement on climate change last December and a five-year extension of a key US Production Tax Credit.

But Vestas’ share price, which had more than doubled since the beginning of 2016, came under pressure after it early in November warned of a slowdown in the US market next year, coupled with the election win by Donald Trump, who had expressed support for conventional fossil fuels.

The company, however, has announced eight US orders from Wednesday through Friday totalling more than 700 megawatts of new wind power capacity.

Sydbank analyst Jacob Pedersen is “very positively surprised” about the prospect for a new order record, he said in a note, adding that it signalled 2018 could bring progress after an expected slight decline next year.

He said he saw increased uncertainty after Trump’s election win but any worsening of the conditions for wind farms would not be of significance until 2020 at the earliest.

“Wind and renewable energy have broad bipartisan support in the United States,” Vestas told Reuters by email on Friday. It said wind energy‘s natural competitiveness against other power generation sources would “help ensure its solid future”.

Trump’s presidency would “in theory” be negative for the renewables sector, Chief Financial Officer Marika Fredriksson told Reuters just before the US presidential election, but said it was too early to assess as the industry creates a lot of jobs, a main political target for Trump.

Vestas has announced wind turbine orders for a total of 8.92 gigawatts this year, up from 8.10 gigawatts at the same time last year, according to the company’s website.

Taking into account still-unannounced orders, the order intake for 2016 is projected to rise above last year’s 8.94 gigawatts.

Vestas has announced orders from the United States for over 3.1 gigawatts this year, more than a third of its total orders, up from 2.87 gigawatts in 2015.

The total for 2016, including still-unannounced orders, will be announced on Feb. 8 when Vestas publishes full-year results.

(Additional reporting by Jacob Gronholt-Pedersen; Editing by Dale Hudson)

carbon tax

Ph: 432-978-5096 Website: www.mapleleafmarketinginc.com

Post a Comment