It’s ironic. A few months ago, there was plenty of cash available to finance wind turbine purchases, but there was a major industry backlog.
Flip to today.
Financing has dried up, and energy is down, but suddenly there’s a glut of equipment out there for the installing. In fact, the inventory build up has gotten so extreme that Gamesa, a major manufacturer, is shuttering some of its facilities (Update: a commenter points out that the initial report is incorrect, and that the facility suspensions are temporary):
Greentech Media: Spain-based Gamesa’s shares plummeted by nearly a fifth (yesterday) after announcing the production suspension, despite reporting strong earnings. Gamesa tripled its net profit to reach €288 million ($373.33 million) for the first nine months of this year, compared with the same period in 2007. Sales grew 40 per cent to reach €2.89 billion ($3.75 billion).
It wasn’t so long ago when wind farm developers had to scramble to find turbines for their projects (see SoCal Edison to Buy 909MW of Wind Power). Vestas Wind Systems in Denmark, the world’s largest wind turbine maker, said earlier this year that it had a huge backlog of turbine orders.
With politicians aggressively talking up green investments, it seems inevitable that another bubble will form. But now we’re wondering, has the bubble already formed and burst? When you’re already talking about shuttering factories from an industry glut, that’s a telltale sign — and a good indicator of how shakey the economics of this business continue to be.