Wind energy is not just a bunch of hot air, as many companies are looking to this as a legitimate power source, blowing new life into related exchange traded funds (ETFs).

Public Service Enterprise Group Inc. (PEG) is planning on spending $20 million to develop services that compress air to store power, giving potential for electricity production via wind turbines and solar cells, reports Jim Efstathiou Jr. for Bloomberg.

A joint venture has been announced with PSEG and Mark Nakhamkin, a North American inventor who developed a system that stores energy underground in the form of pressurized air.

While the design requires another fuel source, such as natural gas, to help heat and expand the gas, power plants using compressed air can deliver three times as much power for the same amount of gas as conventional generators

Nakhamkin’s design requires an additional fuel source such as natural gas to help heat and expand the pressurized gas. Still, power plants using compressed air can deliver three times as much electricity for the same amount of gas as conventional generators, he said.

This type of technology works like a battery and could widen the use of renewable energy plants because the power surplus is banked whenever sunlight or wind is exceptionally strong. According to Nakhamkin, the systems can be used to generate 15 to 450 megawatts of power. Keep in mind, one megawatt can be used to power 900 average U.S. homes. Now, that is not just a bunch of hot air.

ETFs that help capture the wind:

• First Trust ISE Wind Energy Index Fund (FAN), down 10.9% since July 27 inception
• PowerShares Global Wind Energy Portfolio (PWND), down 9.8% since July 8 inception

Tags | Alternative Energy, FAN, Green ETFs, PWND, Wind