Investing in Wind Power?
Tom Konrad at AltEnergyStocks.com emailed me to let me know of a new post he has on a Wind ETF called FAN. Personally I have some issues with wind power. The turbines are louder than you think and can shred a bird pretty bad. On the other hand though, wind power farms aren’t usually in densely populated areas. If you are interested in energy investing, an ETF is a good way to go because it spreads your risk in a basket of stocks, similar to a mutual fund, but not quite the same thing. There just aren’t that many alternative/clean energy investments out there unless you go with some smaller riskier companies or large conglomerates that only make a small fraction of revenue from this sector as Tom points out.
I especially liked the post because there is a model portfolio at the bottom with a sample of dollar allocations. Sure I don’t have that kind of money to invest, but it’s interesting that he’s put CREE in there as a power company. I’ve been watching CREE for years because they were the first to make a blue LED. I just never bought it because I never had the money at the right time. To me, it’s a stock to buy only when it’s priced right. I’m glad that he thinks it’s a winner too.
The LA Times recently ran an article on other low-carbon emissions power efforts. There’s geothermal & solar/mirror/steam power. Some of these companies are worth noting because they have super star backers like the founders of Google. A lot of the mainstream energy companies are dipping their toes into these technologies so keep an eye out for some of these technologies to emerge over the next decade.
FWIW, a friend of mine told me that rail transport uses less fuel than trucking for freight transport. Apparently Warren Buffett has put more money in rail stocks as well. Some food for thought.
For disclosure, I’m still holding AMAT in a long position. It’s considered an alternative energy stock since they make capital equipment for making solar cells. And man, I’m glad that oil fell $4 a bbl yesterday!
Tom Konrad wrote:
Thanks for the link, mapgirl, but I have to take issue with “The turbines are louder than you think and can shred a bird pretty bad.”
This was certainly true for first generation turnbines, but the new turbines are larger and spin much slower. Because of this, they kill few birds (skyscrapers and domestic cats, not to mention Global Warming and conventional pollution from coal) kill many more. Siting with respect to nesting areas and flight paths is an issue, but no more than siting coal plants or mines.
Also, do to turbine size, most wind farms are in very rural areas, so noise (even if it had not been reduced) would not be important. We’re talking about a wind farm on the horizon, not in your backyard. I personally think they’re pretty.. like ballet dancers.
One other advantage is water usage… thermal plants such as coal an nuclear evaporate about 1 gallon per 3 kWh produced for cooling. When water is scarce, as it is becoming everywhere, the fact that wind uses none becomes a big deal.
Posted on 23-Jul-08 at 2:31 pm | Permalink
Ted wrote:
One issue I read about concerning wind farms are the way that the microclimate directly behind them is affected. The area directly downwind from a wind farm experiences drought conditions because of the constant atmospheric disturbances. Not good, especially since these wind farms are in rural areas.
Posted on 24-Jul-08 at 7:33 am | Permalink