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Energy Shortages Will Boost Wind Industry: CEO

CNBC.com
Sunday, 17 Aug 2008 | 5:55 AM ET

The surging popularity of alternative energy helped Denmark’s wind-turbine maker Vestas to post a 27 percent rise in first-half profits, and CEO Ditlev Engel told CNBC Europe he remains confident that looming energy shortages will make the wind industry more attractive to investors over the long term.

Clean energy companies experienced the fastest growth of any asset class in 2007. The total value of renewable deal activity hit $55 billion in a record year for mergers and acquisitions in the sector, according to a recent study by Deloitte.

"The shortage of energy is a big thing everywhere," Engel told "Squawk Box Europe."

Vestas Avoids Headwinds
Wind-turbine maker Vestas held its full-year earnings target Friday and sees market share rising to 25%. CEO Ditlev Engel told CNBC that the shortage of energy is providing global demand.

The company will invest $600 million this year in organic growth and expects the alternative energy sector to develop further despite the world economic woes.

"I think energy is probably a little decoupled from the other stuff," Engel said.

Vestas was able to increase its order backlog by as much as 67 percent in the last 6 months, he added.

However, a major issue facing the industry is that the supply chain is struggling to keep up with demand.

So while Vestas' backlog may seem impressive, the company has faced demand pressures and lead times of up to 15 months on some key components, resulting in price increases.

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