NRG Energy Inc (NRG), General Electric Company (GE): The Winds of Change Are Upon Us

From the generation side of things, there is no true wind-generation company that investors can get their hands on, either. The closest company to it is NextEra Energy, Inc. (NYSE:NEE). As of April, the company had about 10,000 MW coming from wind power, about 56% of its net capacity. It’s not done, either, NextEra intends to purchase 59 of GE’s new 1.7 MW turbines, considered the most efficient turbines manufactured to date.

Not too far behind, though, are Warren Buffet’s MidAmerican Energy, part of the Berkshire Hathaway Inc. (NYSE:BRK.B) holdings, and Atlantic Power Corp (NYSE:AT). MidAmerican generates about 30% of its power via wind and plans to spend another $1.8 billion to increase that share to 40%. And while 804 MW of gross generation capacity on Atlantic’s books may not sound that impressive, it still represents 22% of total generation capacity for the company.

What a Fool believes

While this offshore auction will hopefully add a nice boost to total wind-generation capacity down the road, there is a big hurdle approaching that could bring wind-power construction to a screeching halt. In December, several of the renewable-energy tax credits that wind has enjoyed for a while will expire. The tax credits were planned to expire at the end of 2012, and almost no new projects were started in the fourth quarter of last year as a result.

Source: U.S. Wind Industry First Quarter 2013 Market Report Executive Summary, American Wind Energy Association.

The one distinct difference is that in 2012 the project needed to be completed, whereas any project that starts construction by Dec. 31 has 10 years to complete it to get the tax credit. Will we see another big drop-off in wind activity at the end of 2013 like last year? The answer, my friends, is blowing in the wind.

The article The Winds of Change Are Upon Us originally appeared on Fool.com and is written by Tyler Crowe.

Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow Tyler at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter @TylerCroweFool.The Motley Fool recommends Berkshire Hathaway and owns shares of Berkshire Hathaway and General Electric.

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