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4 Stocks to Watch as Demand for Wind Energy Picks Up

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Wind energy has emerged as one of the prominent forms of renewable sources of power as the world continues its battle against climate change. Per a report by Mordor Intelligence, the global wind power installed capacity is estimated to see a CAGR of more than 8% and reach an installed capacity of 1,166.73 gigawatt (GW) by 2026 versus 650.54 GW in 2019. Notably, the report stated that factors like favorable government policies and rising investment in upcoming wind power projects along with the reduced cost of wind energy which has driven adoption of this renewable energy, are set to drive the wind energy market.

Notably, the United States is continuing to shift its focus to renewable sources of power. Toward that end, the 2021 U.S. Renewable Energy Outlook Report by S&P Global Market Intelligence stated that more than 21 GW of wind capacity should come online by the end of 2021, as quoted in a Windpower Monthly article. In fact, 2020 saw the United States setting a record in terms of wind power capacity additions, highlighting the importance that renewables are garnering in the present scenario.

Notably, a Power Engineering article mentioned that data released by the Energy Information Administration (“EIA”) showed that project developers in the United States installed more wind power capacity than any other generating technology in 2019 and 2020. In fact, the article mentioned that per the EIA’s Preliminary Monthly Electric Generator Inventory, annual wind turbine capacity additions in the United States set a record of 14.2 GW in 2020, surpassing the previous record of 13.2 GW added in 2012.

Such positive developments are sure to bode well for wind energy as the adoption of environment-friendly sources of power continues to grow. Reflective of this, the EIA predicted in its recently released Short-term Energy Outlook report that electricity generation from renewable energy sources are set to rise to 21% in 2021 and 23% in 2022 from 20% in 2020. Moreover, President Joe Biden’s focus on renewables should provide a further boost to wind energy. Notably, the United States rejoined the Paris Agreement that is aimed at strengthening global response against climate change after Biden signed an executive order on his first day at office on Jan 20.

4 Stocks to Keep an Eye On

Wind energy seems poised to witness further growth as the world continues its fight against climate change. Moreover, the United States looks ready to adopt more wind energy as capacity installations are likely to rise. Hence, it won’t be a bad proposition to look at names that can benefit from this continued demand for wind energy. Notably, we have selected four such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Portland General Electric Company (POR - Free Report) , an integrated electric utility company, engages in the generation, wholesale purchase, transmission, distribution, and retail sale of electricity in the state of Oregon. The company operates six thermal plants; seven hydroelectric plants; and three wind farms. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 1.5% north over the past 60 days. The company’s expected earnings growth rate for the current year is 55.2%.

NextEra Energy, Inc. (NEE - Free Report) , through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, and fossil fuel. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has moved up 0.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 8.7%.

The AES Corporation (AES - Free Report) operates as a diversified power generation and utility company. It uses a range of fuels and technologies to generate electricity, including renewables such as hydro, solar, wind, energy storage, biomass, and landfill gas. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has risen 0.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 9%.

ALLETE, Inc. (ALE - Free Report) operates as an energy company. The company focuses on developing, acquiring, and operating clean and renewable energy projects; and owns and operates approximately 1,000 megawatts of wind energy generation facility. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has moved up 1.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 8.7%.

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