In the First Trust ISE Global Wind Energy Index Fund, pure-plays, or companies that provide goods and services only to the wind energy industry will make up two-thirds of the index. Companies getting a portion of their sales from wind will make up the other third. It will include stocks of all sizes including microcaps.
The global wind power market grew 27% to 94 gigawatts installed capacity, according to the Global Wind Energy Council. It projects total global capacity to increase by 155% to 240.3 gigawatts by 2012 with China leading the growth. Chinese firms plus one Indian firm produced 18% of the wind capacity in 2007.
Growth Industry
In the U.S., wind power made up nearly 30% of all new electricity-generating capacity added in 2007, up from less than 1% in 2002, according to the American Wind Energy Association. Energy generated by wind could supply 20% of U.S. energy needs by 2030, according to the Department of Energy.
Wind energy reduces carbon dioxide emissions and cuts natural gas and water use. But the greatest beauty of wind for power plants is that it is unaffected by price swings in natural gas, coal and uranium — all of which heated up this year.
The major risks? Like solar, it's dependent on production tax credits and incentives.
Some environmentalists have sued to block wind energy developments because of their alleged danger to birds and threats to habitat. Neighbors complain wind farms sink property values and say they are ugly and noisy.
$28.01 (07/03/08)
