Vestas, SGRE, Orsted to star in $1trn wind decade: Macquarie

Equity research team says trio set for profits growth as onshore and offshore wind expands global reach

Share analysts at Macquarie named Vestas, Siemens Gamesa Renewable Energy (SGRE) and Orsted as standout listed European prospects in a global wind sector they expect to attract $1 trillion of investment over the next decade.

Macquarie said Vestas is poised to boost its profits against the background of a growing onshore wind market and restoration of price stability in the turbine sector, plus the added potential of growth in its service business.

“We’re a big fan [of Vestas],” said Macquarie Capital alternative energy analyst Keegan Kruger, as it published new equities research that forecasts Vestas’ equipment sales to grow 6% to €9.13bn ($10.3bn) by 2021.

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The Danish group’s equipment business will benefit from more advanced turbines in the 5MW-plus segment, while its service arm will “be driven by Vestas’ ability to enhance the performance of their customers’ assets through the implementation of value-added services that asset operators are unable to perform”.

The Macquarie research – Global Windpower: Shifting Up a Gear – says strength offshore and in the service arena will drive profits at Siemens Gamesa – which like Vestas is given a ‘buy’ rating by the analysts. “We believe SGRE has a strong sales visibility in the near-term for both offshore and onshore wind,” said the research note.

Global offshore wind pacesetter Orsted is the third of the ‘buy’-rated trio, with the Macquarie analysts claiming the Danish developer’s US wind portfolio “is being undervalued”.

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Macquarie expects Orsted to win 1.35GW of capacity in the 2019 offshore wind rounds due in Massachusetts and New Jersey. “The acquisitions of both Lincoln Clean Energy and Deepwater Wind offer Orsted a solid platform for entry and growth in the US onshore and offshore wind markets,” said the researchers.

The equity analysis comes against the background of what Macquarie expects to be $1trn of global investment in onshore and offshore wind over the next 10 years.

Of the onshore sector, Macquarie said: “Onshore wind project economics continue to improve as turbine technology becomes more advanced – leading to increased yields and efficiency.

“In addition to this, greater industry experience is decreasing the risk profile of onshore wind as development and operational costs decline, lowering the cost of capital and attracting new pools of investment.”

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