Advances in renewable technologies could help fan the wind-turbine industry and sector-related exchange traded fund.
The First Trust Global Wind Energy Fund (NYSEArca: FAN) has increased 19.0% year-to-date.
FAN, which tracks 44 global wind energy-related companies, is the only U.S.-listed ETF to focus on the wind sector.
The wind energy industry may increased profitability as advances in technologies help diminish costs and make wind turbines utility scalable in all 50 states over the next decade, reports Aaron Levitt for Investopedia.
Specifically, new technologies enable advance turbines to have higher hub heights, larger rotors and improved energy capture. Additionally, these wind turbines may access stronger and more consistent wind resources at greater heights and even in areas with moderate wind resources.
For instance, taller wind turbines could unlock an extra estimated 700,000 square miles to wind power, including areas in the Southeast that lack wind turbine capabilities due to low wind speeds.
“Based on an advanced turbine concept and assuming hub heights of 110 meters (m) (which are already in wide commercial deployment in Germany and other European countries), the technical potential for wind deployment is estimated to grow to 4.3 million square kilometers, a 54% increase compared to current technology with 80-m hub heights,” according to the Department of Energy’s new Enabling Wind Power Nationwide report. “By pursuing hub heights of 140 m, the technical potential for wind deployment is estimated to grow to 4.6 million square kilometers, a 67% increase compared to current technology with 80-m hub heights.”
Wind power generation capacity has tripled over the past six years, making up 65 gigawatts of capacity or 4.5% of the nation’s total electricity, but it has only spread across 39 different states.
Fueling the growth in wind turbines, more efficient technologies have allowed wind power costs to fall from 55 cents per killowatt-hour to less than 2.5 cents.
Looking ahead, the DOE projects that advancements in turbine size, blade, electronics and efficiency will help wind power generation grow to 20% of the country’s total capacity by 2030.
First Trust Global Wind Energy Fund
For more information on the wind industry, visit our wind category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.