Rising Wind
Solar energy, especially photovoltaic, is a driving force for switching to renewable energy and may even become the dominant one in the future.
Still, solar energy has some serious limitations that make it work best when combined with other technologies. These can include batteries and long-distance connections in the power grid. Another option is to adopt other forms of green energy at the same time to provide a complement of production when solar power is less productive (cloudy, winter months) or not producing at all (night).
Far ahead of all others, wind (in yellow and orange below) is the leading green energy form accompanying solar, especially as hydropower (in light blue) is expected to stagnate in the upcoming years.
Source: EIA
In 2022, global wind power generation reached 2100 TWh (up 14%). And for reaching the targets of Net Zero Emissions by 2050 Scenario, a total of 7 400 TWh is expected in 2030.
To reach this target, the production growth will need to accelerate further to a 17% compounding rate. This translates into turning the current annual addition of wind power capacity of 75 GW per year to 350 GW per year in 2030.
Of these 75 GW, 37GW were added by China alone, or more than half of the world’s total.
So how can such an ambitious objective be achieved? It likely is only possible through a mix of technological improvement, massive investments, as well as tightly coordinated energy and industrial policies.
The Existing Wind Industry
Onshore Wind
So far, onshore wind installations have dominated the industry. They represent 93% of installed capacity, largely ahead of offshore wind turbine parks.
Source: EIA
One main reason has been purely technical. Onshore wind is simply easier to implement, with the projects supplied by roads, trucks, and local concrete plants.
This easy access also converts into easier maintenance, as technicians can be living nearby and access the site by car, and can be supplied with parts and consumables by the access roads often built at the time, than the wind turbines themselves.
Source: GEvernova
Altogether, easier building and easier maintenance lead to lower costs and higher profitability. Onshore wind turbines also do not have to contend with corrosion from salty water, compared to offshore wind, reducing maintenance costs further.
Another key advantage of onshore wind turbines, compared to solar farms, is that the site can mostly still be farmed or left natural. In comparison, dual use of the land for solar power and agriculture (so-called agrivoltaics) is still only an emerging field.
Offshore Wind
As explained, offshore wind is still a minority of wind power generation.
This is because having to be built at sea makes these projects naturally more capital-intensive. Distance from inhabited areas and saltwater corrosion also increase maintenance costs and can reduce the lifespan of the wind turbine and its components.
There are, however, quite a few advantages to offshore wind as well:
- More efficient production: offshore winds are more stable, more powerful, and more frequently blowing than on land.
- This leads not only to more production but also a more predictable one, closer to baseload power production than the more intermittent onshore wind generation.
- In many regions, offshore wind picks up in the afternoon and evening, when the demand is at a maximum.
- With most of the global population living near the coastline, offshore sites are often quite close to the consumers.
- A good wind site at sea can be a lot larger than onshore. This allows for more scale.
- Less environmental impact. By reducing land use, and not disturbing the local ecosystem with access roads and traffic in remote areas, offshore wind can be more environmentally friendly than onshore.
- The restricted area of wind parks can even help marine ecosystems.
- Less opposition: the distance to the population centers, and from sight, limit greatly the opposition to wind projects when they are offshore. The NIMBY (Not In My Back Yard) reactions are that much less impactful.
Depending on depth, different types of anchoring can be used for offshore wind turbines.
Source: DoE
Once completed, the Dogger Bank wind farm in the North Sea will be the world’s largest wind farm. It will have an installed capacity of 3.6 GW, able to power up to 6 million UK homes annually.
How to Improve Wind Turbines
Always Bigger & Taller
A durable tendency in the wind industry has been to build the wind turbine ever larger and more powerful. Overall, this trend is expected to continue.
Source: DoE
A key reason is due to fundamental physics and geometry. Doubling the length of the blades increases the total swept area by 4x.
As the swept area determines the amount of wind captured and the power production, doubling the turbine size quadruples production, and doubling it again increases production by 16x compared to the initial size.
Another physics-driven factor is that the stronger the wind, the more power is generated. This is not a direct conversion: if you double wind speed, you can generate 8x the power through the turbine.
So larger turbines AND stronger winds can produce 10x times or more the power of smaller models.
Taller towers will generally mean more stable and stronger wind, boosting electricity production further.
Today the most powerful wind turbine is an 18 MW prototype by Dongfang Electric, deployed in June 2024. It has an 853-foot (260-meter) rotor diameter. A single wind turbine will be able to produce the equivalent of the annual electricity consumption of 40,000 households.
Wind turbines are becoming so big that the only realistic way to carry their blade from factory to site is airlifting. For this reason, the company Raida is building the world’s largest plant, and others like Straightline Aviation are looking at the potential of airships/zeppelins to bring the wind turbine blade on site.
Source: Straightline Aviation
Lastly, another option is not to build a giant pillar for a giant turbine, but an even bigger “wall of turbines”. Some units are in development for 40MW models and could reach as much as 126 MW.
Such a system would be most fit for areas with very strong and almost constant winds, like the North Sea.
Source: Recharge News
More Durable & Recyclable Wind Turbines
No matter how well manufactured, wind turbines are damaged over time, as they are exposed to a lot of mechanical stress from the constant movement.
This has recently caused some issues in the industry, with notably Gamesa (Siemens) announcing to the market that some turbine engines would need to be replaced much sooner than expected, causing a mini-crash in wind power stocks.
While these issues are solvable by improving the durability of the turbines, another one concerns the turbines’ blades.
Until recently, the epoxy blades ended up in landfills, making it a not-so-green situation. Vestas Wind Systems has recently unveiled a new epoxy chemistry allowing for full recycling. This allows the wind industry to become a fully circular value chain.
Source: Vestas
We can expect the rest of the industry to follow suit and solve the problem of wasting material and filling landfills with blades that reached the end of their useful product life.
Bladeless Wind Power
Giant blades like a fan have been so far the favored method to harvest wind energy. But this is by far not the only option. Quite a few others have been proposed or are in development.
The first idea is vertical axis turbines. These turbines are often less noisy, smaller, and designed to catch winds that are less strong.
This makes them more suited for urban or suburban environments, as well as rooftop installations. Some examples are the Windspire turbines or the Eddy wind turbine.
Source: Inhabitat
Another idea is to forgo the pillar holding the turbines and build flying wind turbines instead. Which is to go look for the strongest wind where they are, up to 300-600m high. So why not tie the wind turbine to a floating helium-filled balloon, like the Altaeros model:
This has other advantages, like being able to move up and down to find the stronger wind, removing entirely the cost of concrete foundations, pillar, cranes, etc. The system can also be easily redeployed to new sites in mere hours or days.
Lastly, an even more radical idea is motionless wind harvesting. This can, for example, be achieved by moving “sticks” like from Vortex Bladeless or Windstalk, using electromagnetic induction to generate power. This means the system has no gearbox or needs oil, which gives it a greater lifespan.
Other motionless systems will use the difference in air pressure created by the wind to generate power, like the Aeromine rooftop system.
Source: Aeromine
Dual and Multipurpose Wind Turbines
Another way to make wind turbines better is to use them for both power generation and other functions at the same time.
For example, offshore wind turbines already have solid anchoring to the seafloor and are relatively far at sea.
This makes them a perfect potential anchor point for other systems:
- Passive fishing, like cage trapping fish, lobsters, crabs, cuttlefish, etc.
- Sea farming, with the cultivation of seashells or seaweeds.
- Fish farming, like, for example, salmons.
- Ecological restoration projects, like artificial coral reefs.
- Harvester of tidal and wave energy, allowing the use of twice the anchoring and maintenance services for energy production.
Source: Research Gate
Onshore, dual-use opportunities are more limited, with the most current case being the addition of a cell phone antenna to the wind turbine pole.
Problems Of Wind Power
Because of their potential to produce green energy at different times than solar, wind power is a great option to decarbonize the power grid while reducing the need for expensive battery parks.
It has, however, a few issues that need to be acknowledged.
Danger To Wildlife
Wildlife can be harmed by fossil fuels and other energy generation, but also by wind turbines. This is especially true with birds, that often fly too close to the turbines and get killed by the quickly moving blades.
Depending on study and location, it seems that each turbine kills around 4-18 birds per year, or 0.45-2.8 per GWh generated. While looking high, this is dwarfed in comparison to birds killed by cats, cars, or pesticides.
Source: Sustainability In Numbers
This might however be a larger concern for specific species, especially birds of prey like eagles. vultures, etc, as well as migratory birds. Bats can also be severely harmed by wind turbines.
Among the mitigation methods proposed to reduce this problem are:
- Stopping the turbine when moving very slowly is a condition especially dangerous for bats.
- Avoid building turbines in areas used by raptors for uplifts and migration corridors.
- Favor a few large turbines over many small ones.
- Paint the turbines black, to make them more visible to the birds.
Rare Earths Supply
Another concern regarding wind power is that the turbine power generation is dependent on permanent magnets. These magnets require rare minerals like neodymium.
A large direct drive offshore wind turbine equipped with one of these generators can contain upwards of 5 tons of magnets
While rare earths only represent about 30 percent of the weight of these magnets, that can still add up to hundreds of pounds of neodymium per megawatt of electricity produced and, smaller amounts of dysprosium and terbium.
Alla Kolesnikova- data and analytics lead at Adamas Intelligence – On Grist
Producing rare earth minerals can be a very polluting process, and is done in the immense majority in China.
So not only more cleaner process to produce rare earth elements should be developed, but also a more efficient recycling process as well.
Geopolitics
Speaking Of China, the country’s total domination of the renewable energy supply chain has raised alarm in Western countries.
China produces 66% of the world’s new wind generation capacity.
Source: Enerdata
This domination is even more marked when looking at other metrics:
- 426 new models of wind turbines compared to 29 outside of China in the 2020-2024 period.
- China produces 60% of the global rare earth production and refines 85% of it, including 92% of rare earth magnet production.
So, with geopolitical tensions rising between China and the West, the wind supply chain can be at risk. This, in theory, should help local producers, although the cost difference makes it difficult to reduce the reliance on Chinese imports.
Investing In Wind Power
You can invest in wind power companies through many brokers, and you can find here, on securities.io, our recommendations for the best brokers in the USA, Canada, Australia, and the UK, as well as many other countries.
If you are not interested in picking specific wind power companies, you can also look into ETFs like Global X Wind Energy ETF (WNDY), Invesco Wind Energy UCITS ETF (WNDE), or First Trust Global Wind Energy ETF (FAN) which will provide a more diversified exposure to capitalize on the wind industry.
Or you can read our article about the “Top 10 Wind Power Stocks To Invest In”, as well as the “Top 10 Renewable Energy Stocks To Invest In”& “Top 10 Battery Metals & Renewable Energy Mining Stocks”.
Investing In Wind Companies
1. Ørsted A/S
The Danish energy producer was the first company to create an offshore wind farm in 1991, and it is currently operating the world’s largest wind farm as well.
It has undergone a massive transformation, from 2006, with 83% of the energy produced from fossil fuels, to only 8% still from fossil fuels in 2023, 3% in 2024, and on track to reach 99% renewable production by 2025.
Source: Ørsted
Ørsted has farms in Denmark, the UK, Germany, the US, Taiwan, and Vietnam.
Half of this power generation is from offshore wind farms, and the onshore generation is roughly equally split between solar and onshore wind farms.
Most of the planned growth is in offshore wind generation, followed by onshore wind. This growth plan is entirely self-funded based on the existing operations.
Source: Ørsted
As a pioneer and leader in wind power generation, Ørsted is the most prominent wind stock for investors looking for exposure to the sector on the utility side.
2. Vestas Wind Systems A/S
Vestas is a designer, manufacturer, and installer of wind turbines. With a cumulated total of 177 GW installed, it made and installed more wind turbines than any other company.
The company has a project pipeline of 29 GW. It controls 35% of the wind manufacturing market, excluding China, up from only 20% in 2010. It also has more revenues, orders, and higher EBIT (Earnings Before Interests and Taxes) margins than any of its competitors.
One of the serious problems with wind power was the impossibility of recycling the wind blade, which ended up in landfills, making it a not-so-green solution in that respect. Vestas has recently unveiled a new epoxy chemistry allowing for full recycling. This allows the wind industry to become a fully circular value chain.
Source: Vestas
Vestas has overall overcome the 2023 crisis in the wind energy industry, with a strong rebound in orders driven by Europe and Asia Pacific, despite a contraction of the American market.
Source: Vestas
Vestas is also exploring the potential of wind to power the world’s first green ammonia plant, which can then be used to transport hydrogen or produce fertilizer without natural gas.
Due to its scale, technological edge, and higher margin, Vestas is a relatively safe investment in the wind power supply chain, with its turbines the best-in-class in the industry.
3. Lynas Rare Earths Limited (LYSCF)
Rare earth metals are not technically rare on earth, although they are often hard to obtain as they are mostly present in very low concentrations instead of dense ore or nuggets like most other metals.
Rare earth metals are instrumental to computing and renewable technology, notably making a vital part of permanent magnets needed in wind turbines, as well as in electric motors (including for EVs) or advanced weaponry.
Currently, most rare earth production, and even more, the refining, is done by China. Recently, China has started to “weaponize” this quasi-monopoly, notably by limiting in 2023 the exports of germanium and gallium, 2 rare earth metals important for the semiconductor industry, in retaliation for trade sanctions by the USA on semiconductor technologies.
Lynas is a rare earth miner with mines in Australia. The company is also building a processing facility to see more of its refining operations down in Australia instead of shipping it to partners in China.
This will be achieved with the Kalgoorlie Rare Earths Processing Facility almost finished (see link for video timelapse of the construction) and associated facilities in Malaysia, as well as a project expected to be operational in Texas by 2025-2026.
In mid-2024, the first shipment from Kalgoorlie was done, with the facility expected to ramp up its production for the rest of the year.
Source: Lynas
Rare earth elements are now considered a strategic asset, with the vulnerability of depending on Chinese supply perceived as a critical risk, especially in case of military conflict.
This means that Lynas production might be able to command a premium in case of an international crisis or if China decides to restrict further the export of other rare earth metals.
It also represents a commodity market sector often uncorrelated to other metals like iron, copper, or lithium, providing diversification to investors.
