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Thursday, November 15, 2007
Investments In Zero Emissions
Image courtesy of Vestas Wind Systems (www.vestas.com)

Zero Emissions

If you took a long term approach as an investor, and looked at the ten year horizon, today you would probably be investing in zero emissions renewable energy companies. The reason for this would be financial, because oil and gas are getting more expensive, global CO2 emissions are raising 'alarm bells' and zero emissions technology is becoming cheaper with more investment in this area.

Zero emissions energy is comprised of Wind, Solar, Wave and Geo-Thermal, with Hydrogen Energy being a clean energy storage media for these energy sources. Hydrogen is already being implemented as a fuel source in automobile fuel cell technology. Currently, Wind Power is growing the fastest as a zero emissions energy source, but solar power is also starting its upward ascent as an industry and future provider of energy. There are two categories of solar power and these are concentrating solar power (CSP -solar thermal energy) , and solar photovoltaic energy. In wind power, there is currently more demand for Wind Turbines than there are companies that can build them.

As a long term investor, a play in some of the leading zero emissions energy companies will pay off well because these companies will see huge growth over the next ten years, only because demand will be very high. Those companies that are already in the 'zero emissions' arena and making profits will see their efficiencies improve and gross margins increase.

An example of one of these pure zero emissions energy investments is Vestas Wind Systems (VWS) that trades on the Copenhagen exchange. Vestas is a 100% zero emissions energy company and has already installed 33,500 wind turbines since 1979. They have a 28% global share of the wind turbine business and an estimated 20-23% increase in revenues for the calendar year 2007 based upon the Q3 reported 9 month comparison of 21.1 % increase for 2007 versus 2006. The most difficult issue they have, that some companies dream of, is managing the huge growth they are experiencing. Vestas is a buy and long term hold stock for the future.

What is surprising is to see how few major corporations have invested in the the trend towards zero emissions. Part of the problem is that they are restricted from thinking long term due to the current short term mentality of the equity markets and a focus on only the next quarter's profits.

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