Wind PTC Extension Drives Demand for Broadwind Energy (BWEN), GE Wind (GE) and Berkshire Hathaway’s MidAmerican Wind (BRK.

January 10, 2013

Wind power demand is expected to rise in 2013 after the wind production tax credit was extended last week, benefiting wind power companies like Broadwind Energy (BWEN), GE Wind (GE) and Berkshire Hathaway’s MidAmerican Energy (BRK.B), says Christopher Blansett Senior Equity Analyst at J.P. Morgan Chase & Co.

“We did raise our estimates for [Broadwind] because of the expectation that there would be more wind power demand in 2013 due to the PTC extension. And also, I think, specific to those companies that have remained in the wind industry like Broadwind, they have had a lot of their competition drop out,” Blansett said.

Blansett expects higher profit margins for the few wind power companies that remain in the game given the decreased pricing pressure after many companies exited the industry, and he says that even in decreased volumes for the industry the margins should improve incrementally. He also says foreign imports from countries like Vietnam and China are expected to have less of an impact in 2013.

One company that remains a player in wind energy and has increased its wind portfolio is Berkshire Hathaway’s MidAmerican Wind. The company acquired two wind energy projects in Tehachapi, California, from California Highwind Power last year, as reported by the International Business Times. The power produced will be sold to Southern California Edison in an agreement that extends to 2035.

GE Wind also remains as one of the few companies with exposure to wind. The company manufactures onshore and offshore wind turbines with capacities ranging from 1.5 MW to 4.1 MW, and it also provides support services like development assistance and maintenance.