Denmark-based Vestas Wind Systems (VWS:DC) had a big week. First, the world’s largest wind turbine manufacturer announced that they would be building a tower manufacturing plant in Colorado. Second, Vestas reported a 94 percent jump in earnings in the first quarter of 2008, as compared to the same period last year.
Although they have yet to disclose the location of the new tower manufacturing facility, it would be situated to complement the company’s fist North American blade manufacturing plant, which recently opened its doors in Windsor, Colorado.
For the tower plant, the company will need a large parcel of land that is ideally served by freight rail, a combination that Northern Colorado can provide at several locations, including the Windsor location.
Healthy Profit Margins Hide Industry Bottlenecks
In the second piece of big news for the Vestas, the company reported very strong earnings on Thursday – the kind of earnings that emphasize the wind energy industry’s resilience to the slumping economy. Net income for Vestas rose 94 percent to 33 million euros ($56 million) from 17 million euros a year earlier. The company was expected to earn 35.5 million euros, according to the median estimate in a Bloomberg survey of five analysts.
Despite the strong growth in the wind energy business worldwide, the overall demand pressure on the industry persists. According to Bloomberg, there are still long lead times for a number of key components that can last as long as 15 months. Of particular concern to turbine manufacturers is a global increase in demand for carbon-fiber, the graphite composite material that moderns turbines blade use because of their light weight, and high tensile strength.
With that said, it seems that it will be a few years before supply will match demand. Even as new manufacturers pop up around the globe, they are being outpaced by the increases in global demand for clean, renewable energy.
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Photo: Vestas Wind Systems
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