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Glimmers of hope despite tough times

With annual accounts filed, the state of the businesses in the wind industry is there for the scrutiny, and the dealings with the new financial year can start in earnest.

And as our Windicator pages show, this quarter's Feelgood Factor on wind is showing a slight upturn. This is based on the achievements of wind in 2012 in relation to the cost of shale gas and solar power and, with overall gas prices rising even in the US, that upturn could hold for some time to come.

Despite the industry suffering from overcapacity and falling subsidies, well-established wind businesses are showing that their efforts to retrench have made some difference - a snapshot of key company shares elicited more recommendations from analysts to buy than to sell.

Having streamlined its business, the balance sheet of Spanish manufacturer Gamesa is showing a company better placed to handle the challenges of the industry. The uncomfortable tasks of closing offices and cutting jobs may be starting to deliver benefits. Vestas, with a very difficult year behind it, showed a turnaround in the direction of share prices - but still a long way from two years ago. Nordex, one European company that managed to avoid the major headlines of falling profits last year, starts the new financial year with revenues up, income up and strong business in Europe and Middle East and Africa. Even Indian firm Suzlon, with a major liquidity problem, has a healthy order book.

The efforts that have been made over the past 12 months to dig down and survive are clear and the industry is looking fitter and better prepared - slightly - for this year.

Looking at a wider, five-year growth rate, our analysis suggests that if the industry continues on the same path, installed capacity would grow from 270GW at the end of 2012 to 350GW globally by the end of 2013.

Growth in China is expected to pick up again, with the government planning to connect 18GW to the grid this year. China's aggressive pursuit of wind will help to address the country's need to slash pollution from coal and diversify its energy sources to reduce reliance on foreign suppliers of natural gas. But the government has also tightened regulations to prevent swathes of capacity from being left off the grid, forcing domestic suppliers out of their home market. This is demonstrated by Goldwind's plans to look outside its home country for growth.

Looking to new regions is, of course, a growing trend. Countries that started 2012 with less than 1GW of wind-power capacity have collectively added 4.6GW since then, demonstrating an ability to compensate for a drop-off in future new capacity from traditional powerhouse US.

Eastern Europe is one of the biggest areas of potential growth, and, as we report on page 35, finance options are proving changeable, as these regions face a new learning curve. Experience from the established markets will be sought.

Awards

All this experience confirms that the wind-power sector is no longer a fledgling industry. And to celebrate the achievements of the industry, Windpower Monthly is introducing the Windpower Monthly Awards. This is our chance to honour the companies that have made and are continuing to make the industry great. Look out for details on page 63 in this issue on how to enter.

Jacki Buist is editor of Windpower Monthly

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