Wind stocks caught in market melee as Vineyard Wind project approved

By David Callaway, Callaway Climate Insights

Most hurricanes in the past century tracked past or close to Martha’s Vineyard, so one thing the new Vineyard Wind project announced by the Biden Administration today won’t have to worry about is wind power.

The announcement marks the U.S. debut in the offshore wind market, with 84 turbines projected to create enough electricity to power 400,000 homes, and create 3,600 jobs. Coming only days after hackers shut down the largest U.S. oil pipeline, the investment in renewable energy is a welcome, er, shift. More than a dozen other new offshore projects are expected to be approved in coming months.

Of course, hackers can threaten wind projects as much as hurricanes. And even though Vineyard Wind is estimated to be up and running in two years, the U.S. is still far behind Europe in its wind aspirations (See Tuesday’s insights). The Biden national infrastructure plan calls for 40 times the power from offshore wind by 2030 that the Martha’s Vineyard project projects it can create when it launches in 2023.

But short term, the ill winds are in the markets, where the world’s biggest wind stocks have been buffeted by the renewable energy selloff this year, itself part of a wider market correction. Big players such as Vestas Wind Systems (VWDRY), Orsted (DK:Orsted), and Siemens Gamesa (GCTAY) are all down 20% to 30% from their January peaks after a monster 2020.

The same selloff that has hit ESG exchange-traded funds, as well as electric vehicle stocks, is hurting the wind play just as the U.S. is adopting it. Of course, these are long-term projects, and cheap money markets will ensure they get completed. But investors in the great renewables shift could be forgiven for noting that the price of oil is currently moving in the opposite direction.
More insights below. . . .

Tuesday’s subscriber insights: A sample of our best offerings

. . . . The great American shift to renewable energy and electric cars comes with a hefty — and dirty — price tag. Prices of minerals needed for the technology are hitting record highs, and the cost of extracting them could be more pollution. Read more here. . . .

. . . . The Vineyard Wind project off of Martha’s Vineyard was formally announced Tuesday, kicking off America’s entry into the offshore wind market. It’s even better for the European investors behind it. Read more here. . . .

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