The wind business continues to suffer from a lack of credit and government policy.
This was evident in a disappointing earnings report from wind turbine market leader Vestas Wind Systems. The Danish company on Wednesday responded to the downturn by cutting its annual sales forecast to 6 billion Euros from 7 billion and said it expects an EBIT margin (before interest and taxes) of about half of its previous estimate.
Its explanation was that turbine shipments to projects in Germany, Spain and the United States were delayed.
Here are several details from the financial report:
*Second-quarter shipments of 283 turbines were down 54 percent;
*Second-quarter revenue was off 17 percent;
*The company swung to an after-tax loss of 119 million Euros from a profit of 43 million Euros a year ago;
*The company laid off 300 people in Denmark. It still expects to add 3,000 employees in 2010, down from previous target of 3,400.
“The decline in revenue and earnings reflects the very low level of activity in the wake of the credit crisis and Vestas’ decision not to adjust its capacity further because of short-term market developments,” the company said in a press release.
Vestas tempered the news by pointing out that second-quarter orders rose to 3,031 megawatts of turbines, a record. Banks are more critical of projects than they were before the credit crisis began, but now more are venturing into the market, the company said.
And yet, there is no doubt this burgeoning industry is being held back by a lack of finance. The European Wind Energy Association acknowledged the same in early July as it reported that 118 offshore wind turbines were installed in Europe during the first half of 2010. “Developers are severely constrained.”
A more dire report came from the American Wind Energy Association late last month. The trade association said wind power installations so far this year were off 71 percent from 2009. Only 700 megawatts of equipment was added in the second quarter – below levels from 2007.
The trade association blamed the lack of national renewable portfolio standards mandating the use of renewable energy.
While the second half of the year could be better, installations for the full year will likely be 25 percent to 45 percent below last year, it said.
It could be some time before this boom and bust industry regains its once lofty status.
Posted by Mark Boslet 
