Booming Wind Business Ignores Oil Slump as Market Values Double

Source: By Jessica Shankleman, Bloomberg • Posted: Tuesday, February 16, 2016

A glut in crude isn’t affecting new demand for wind-energy. Even as falling prices made oil more affordable last year, investors directed a record $329 billion to install new wind- and other clean-energy technologies, said Bloomberg New Energy Finance.

Record installations helped Europe’s three publicly traded wind-turbine makers — Vestas Wind Systems A/S, Gamesa Corp. and Nordex SE– to double their market value in 2015.

Even as oil companies tamp down earnings and investment expectations, wind companies are eyeing records again this year. Vestas, the world’s biggest wind-turbine maker, last week predicted another sales record in 2016. Siemens AG meanwhile is close to a deal with Spain’s Gamesa Corp. Tecnologica SA that would create the world’s largest turbine producer.

“There isn’t any link between renewables and lower oil prices in the short-term,” says Richard Chatterton, an analyst for Bloomberg New Energy Finance. “It’s a common misconception from some observers that oil still plays a direct role in power generation in the majority of countries whereas that’s no longer the case.”

Some industry forecasters had predicted lower oil prices would cause renewable energy to be less competitive. Crude has traded near $30 per barrel this month, down from more than $110 in 2014 as exporters jostle for market share. Brent roseto $33.71 a barrel on Tuesday after Russia and Saudi Arabia agreed to freeze oil output.

Neither have falling U.S. natural gas prices “had the least impact” on the share of wind capacity being built out over the last three years, said David Vos, a London-based capital goods analyst at Barclays Plc’s investment banking unit.