Investors, Lynn Are Tilting Toward Windmills

NY TimesInvestors Are Tilting Toward Windmills
By CLAUDIA H. DEUTSCH

It's hard to be in a business where you literally — as well as figuratively — are tilting at windmills. But that business may have just gotten its biggest tail wind yet.

Matt Higgins doing maintenance on a turbine on the Kumeyaay farm on the Campo Indian Reservation. In five years, G.E. expects alternative energy products to be more than a quarter of energy equipment revenue.When President Bush called last month for more effort in alternative energies, a business that last year attracted only about $7 billion in investment nationwide, the 300 engineers and financiers at GE Energy Financial Services were already in the game. But that does not mean they were not happy that the White House acknowledged the sector.

"The president's speech changed zero for us; it was simply a recognition of what we already knew," said David L. Calhoun, vice chairman of GE Infrastructure, the group that includes both turbine manufacture and energy financing.

For now, wind energy is the only profit star in G.E.'s alternative energy galaxy, and both the finance and equipment sides of the company know they are gambling when it comes to solar and other fledgling technologies. Still, analysts applaud their decision to move on them.

"When you get the president talking about renewable energy, it has to be turning up the dial at G.E.," said Deane M. Dray, an analyst at Goldman Sachs who has an outperform rating on General Electric shares.

Certainly, it is getting attention from Energy Financial Services. The unit recently bought a wind farm in Germany and is installing new turbines there at a rapid pace. It has invested in solar energy farms in California and is in the end stage of negotiations for a large solar project in Europe. Indeed, renewable energy projects already account for $1 billion of the unit's $11 billion portfolio and are its fastest-growing niche. "The renewables space has really heated up, and I hope it will account for 20 or 30 percent of our investments in five years," J. Alex Urquhart, the unit's president, said...

G.E. bought ENRON's Wind Turbine Unit, Goldman Sachs committed to investing $1 billion in renewable energy

Four years ago, G.E. bought Enron's wind-turbine unit, and it is now a $2 billion business, heading rapidly toward $4 billion. In five years, G.E. expects that alternative energy products will account for more than a quarter of energy equipment revenue...

The financial team members say that working side by side with the technical equipment gurus is helping them pick and choose among potential investments. They get early alerts, they say, on which blade designs and composites make for the most efficient wind turbines, on whether solar energy is gaining momentum, or whether the technologies will have any resale or reuse value if a project does not work out or a borrower defaults...

G.E. is not alone in backing renewables, of course. In November, Goldman Sachs committed to investing $1 billion in renewable energy, and it is already "well on its way" to achieving that, according to Lucas van Praag, a Goldman spokesman.

J. P. Morgan Chase, too, has said it will invest more than $250 million in wind-energy projects. And venture capitalists have for some time been investing in smaller renewable energy projects and technologies.

Over all, says Michael T. Eckhart, president of the nonprofit American Council on Renewable Energy, the $7 billion invested in renewable energy projects last year should increase by 25 percent a year over the next few years.

He and many others say they believe that, if the president's imprimatur results in new regulations or tax incentives, even more Wall Street money will be attracted to such projects.

Wind power has been the leading alternative energy source in recent years. The costs of turbines have come down even as their reliability and efficiency have increased; G.E., Goldman, J. P. Morgan Chase and others are snapping up wind farms across the world...

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Daily ItemPlan to build state's first wind turbine moves forward
By Thor Jourgensen, Wednesday, February 15, 2006

LYNN - Water and Sewer Commissioners are pushing forward a plan to build a waterfront windmill to reduce electricity costs.

Commissioners William Trahant, Wayne Lozzi, Walter Proodian and newly named commissioner Scott McPherson voted to continue studying the $3 million to $4 million project. Commissioner Frank Zipper was not present at Monday's meeting.

They want to make Lynn the first Massachusetts city to erect a wind turbine. Several towns, including Hull and some on Cape Cod, are building the modern versions of windmills and saving money on electricity costs. Ipswich plans to start building a wind turbine in September.

Sewer plant operations director Robert Tina worked with City Councilor at large Loretta Cuffe O'Donnell to develop the windmill plan and organize a feasibility study of the project.

"Two years ago I came up to Water and Sewer with just the beginning of this and received nothing but support from Bob and the commission," Cuffe O'Donnell said.

Tina hopes the commission can claim a share of $550 million in federal interest-free energy loans to help pay for the wind turbine. Initial estimates indicate the windmill could save Water and Sewer over $300,000 annually in electrical costs but Tina thinks that estimate is conservative...

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