Category: Economics
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How much does it cost a wind turbine?
The easy answer to this question is “Today it costs less then yesterday. And probably tomorrow it will cost less than today”. Today (April 2019) the average price is around 700.000€ per MW – that is, expect to pay around 3 ML€ for a 4 MW wind turbine. That’s a huge reduction when you consider…
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Invest in wind energy option #1 – buy wind turbines
This is the first of several post that I’d like to write in the next weeks about investing in wind energy. There are several possible alternatives to invest in wind energy, or more broadly in renewables: stocks, managed funds, ETFs or even direct investment in the development of a project. The option described in this…
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Invest in wind energy option #2 – stocks and ETFs
A second alternative to invest in wind energy is given by stocks and ETFs of companies in the energy. There are many “renewable energies” ETF and a bunch of solar ETFs. However the choice for wind ETF is much more limited. There used to be one ETF form Invesco (PWND) specialized in pure wind players…
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Target Price for BoP: a basic introduction to a complex topic
There is an old joke that say something like “What happens when you put 10 economists in a room? You’ll get 11 opinions.” My experience with Target Price is similar: I’ve heard many opinions in favour and against it and probably in general it’s not “right” or “wrong”, but it’s a strategy that, depending on the…
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Google: powered by wind
One interesting fact that you might not know is that the Big G (that is, Google) decided several years ago to power 100% of its activities using renewable energy. They reached their objective in 2017: what is surprising is that they started only in 2010, with a wind farm in the USA. Basically the strategy…
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The quest for scale: mergers and acquisitions in the wind industry
Mergers and acquisition are not a recent phenomenon in the wind business. My former manager Luis Miguel still remember vividly the merger in ’97 between Nordtank Energy Group (NEG) and Moerup Industrial Windmill Construction Company (Micon) – and the subsequent merger between NEG Micon and Vestas in 2004. While in ’97 I was still enjoying…
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Payment Security: an overview
In another post I have presented several types of financial securities. In this post I would like to describe more in detail an important subcategory, the Payment Securities. A Payment Security is usually requested by the seller from the buyer of wind turbines. It is a mechanism to compensate the seller, entirely on partially, if…
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Financial securities: what’s that all about?
A financial security is an instrument to give a party (for instance, the buyer of a wind turbine foundation) an assurance that the seller (in this case, the company that build the foundation) will perform according to his obligation (that is, will comply with the technical and commercial requirements). They can have different names –…
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Key milestones in wind farm development
The development of a wind farm project is characterized by several milestones linked to contractual obligations of the parties. The most relevant milestones are marked below. They are in chronological order, and some of them could not appear in a specific project (for instance, not all projects have a limited notice to proceed or the…
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Wind derivatives: is hedging the risk the next step for wind energy?
Weather derivatives are not a new product. The first contract were traded over the counter in the ‘90s, with the Chicago Mercantile Exchange (CME) introducing from 1999 a broad set of products like futures and options that are widely traded today. They are a financial product that can help hedging the risk associated with the…