Offshore Wind Power Industry Getting Boost from Obama Administration

Photo courtesy of treehugger.com

Photo courtesy of treehugger.com

President Obama has always been a champion of offshore wind energy, as his administration’s comprehensive National Offshore Wind Strategy demonstrates. This month, the fledgling U.S. offshore wind energy industry got a boost with the announcement that the Obama administration would help finance seven offshore wind projects in Maine, New Jersey, Ohio, Oregon, Texas and Virginia.  The money, about $4 million initially for each project and $47 million over four years (subject to Congressional approval), will be used to launch these projects by financing the engineering, design and permitting efforts as the initial steps to eventual offshore installations.

According to a recent report commissioned by the U.S. Department of Energy, offshore wind is a viable, sustainable, abundant and largely untapped clean energy resource. The report notes that the investment in the offshore wind industry could generate and support up to 200,000 jobs in areas such as construction, manufacturing, operations and supply chain services throughout the country.

The report suggests that offshore wind could be as successful at generating jobs and clean energy as the onshore wind energy industry has proven to be.  During 2011, 32 percent of the additional electric capacity in the U.S. was generated by land-based wind power. In addition, the wind power industry is generating jobs at home for U.S. companies, based on the fact that 70 percent of the equipment installed at U.S. wind farms – things like wind turbines, gears, blades and generators.

Large cap companies like GE, Honeywell and United Technologies are investing in the wind industry, but, so far at least, the number of publicly-traded small cap companies focused on wind power is limited. We have been following several small caps, including

Newbury Park, CA-based Sauer Energy (OTC: SENY, http://www.sauerenergy.com/) is a development stage company developing vertical axis wind turbines for commercial and residential uses. Formerly BCO Hydrocarbon Ltd., the company disposed of its oil and gas interests and in July 2010 purchased Sauer Energy and in May 2012 purchased Helix Wind Corp. Its stock is languishing. In late August SENY was trading at $0.26 with a 52-week trading range of $0.10-$0.95. In late October is was trading at $0.25. It closed Dec. 24 at $0.24, no change for the day.

China-based China Ming Yang Wind Power Group (NYSE: MY, http://www.mywind.com.cn/) is a wind turbine manufacturer focused on designing, manufacturing, selling and servicing megawatt-class wind turbines. In July, MY announced it was considering a joint venture with China-based Huaneng Renewables Corp. to develop wind power and solar power projects in China and overseas markets. MY stock is also stuck in a narrow range. It was trading for $1.21 in late August,  $1.32 in late October. It closed Dec. 24 at $1.21, down 2 cents for the short trading day.

Chatsworth, CA-based Capstone Turbine Co. (Nasdaq: CPST, http://www.capstoneturbine.com/) develops and markets microturbine technologies, including technologies used to provide on-site power generation for wind power. The stock continues to trade very well, about 700,000 shares a day but is stuck around $1.00. On Aug. 23, CPST shares crossed their 50-day moving average and closed the day at $1.05 with 2.8 million shares sold. By late August it was trading at $1.01, by Oct. 31 it had moved down slightly to $0.96. It closed Dec. 24 at $0.91 with a market cap of $278 million.

Naperville, IL-based Broadwind Energy (Nasdaq: BWEN, http://www.bwen.com/) announced Aug. 23 that it was reducing its manufacturing footprint and shifting its “capacity and marketing focus to non-wind sectors.”  BWEN closed Aug. 27 at $2, Oct. 31 at $2.30 and Dec. 24 at $2.11 with a market cap of $30 million.

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