Wind power: everything is turning

They can be found off the coasts of the North and Baltic Seas as well as in the Bernese Jura, on the edge of the Gobi Desert, in the Tehachapi Mountains of California or in the savannahs of north-eastern Brazil - we are talking about wind turbines. According to data from the International Renewable Energy Agency (IRENA), wind turbines with a total capacity of more than 1.1 million megawatts (MW) were installed worldwide in 2024. This means that their potential has increased by around 80 percent within five years. In addition to technical progress, economies of scale are ensuring that this source of electricity is becoming increasingly affordable. IRENA also has interesting figures on this: in 2024, the LCOE for onshore wind energy was USD 0.034 per kilowatt hour (kWh). Compared to the 2010 level, this represents a decrease of 70 percent. In the offshore segment, the average cost rate fell by 62 percent to USD 0.079 per kWh in the same period.

Donald Trump obviously doesn't believe these figures. In any case, the US President uses every opportunity to rail against wind power. "Instead of building ineffective, loss-making wind turbines, we're tearing them down and not approving any new ones," he said at the World Economic Forum in Davos in January. A few weeks earlier, the US government had actually stopped the construction of five wind farms. But the judiciary did not play along. All orders were overturned by the courts. This means that the installation of a wind farm off the coast of New York, among other things, can continue. The Danish project developer Orsted wants to connect "Sunrise Wind" to the grid in 2027. The 924 MW power plant should then be able to supply almost 600,000 New York households with electricity. The White House's negative attitude does not appear to be able to stop the advance of wind power, not only on the East Coast but across the states. In an estimate presented shortly before Christmas, the consulting firm Wood Mackenzie and the American Clean Power Association (ACP) assume that new capacities of more than seven gigawatts (GW) will be installed in the USA in 2025, which corresponds to an increase of 36 percent compared to the previous year.

According to the authors of the "U.S. Wind Energy Monitor", the sector is benefiting from rising demand for electricity. In particular, the rapid expansion of data centers for artificial intelligence (AI) purposes is driving demand. "This increase in base load demand makes wind energy an ideal solution for the rising demand for electricity," explain the experts. At the same time, they do not hide the fact that turbine costs remain high due to the tariffs imposed and they outline another risk factor: "The medium-term growth of wind energy will depend on whether the uncertainties regarding approvals and political framework conditions can be resolved."

Despite such uncertainties, investor confidence in the sector is high. A look at the Solactive Wind Technology Index confirms this thesis. Over the last twelve months, this selection of themes has increased in value by around 80 percent. The index includes companies that meet certain size requirements in terms of market capitalization and share liquidity. Companies active in the oil and gas business are excluded.

The experts at Solactive AG use a special algorithm to sift through the remaining stock pool. This selects suitable representatives of the sector on the basis of publicly available information such as financial news, business profiles or company publications. In addition to developers and manufacturers of wind turbines and their components, these include wind farm operators, specialists for electricity grids and supply as well as other suppliers and service providers. Every six months, in March and September, the composition is reviewed and adjusted if necessary.

Thanks to this approach, the 20 companies included in the Solactive Wind Technology Index cover the entire spectrum of this renewable form of energy. One of the best-known members is Vestas Wind Systems, the world's largest manufacturer of wind turbines. The aforementioned Orsted is also represented in the index. Nordex is showing particularly strong momentum. Over a twelve-month period, the market capitalization of the North German manufacturer of onshore wind turbines has increased by almost 180 percent. The rally goes hand in hand with major operational progress: with sales growth of 3.5 percent to EUR 7.56 billion, Nordex more than doubled its operating result (EBITDA level) to EUR 631 million in 2025. As a result, the EBITDA margin shot up from 4.1 to 8.4 percent. In view of this development and the record order backlog of more than EUR 16 billion, management has revised its medium-term target upwards. Nordex now aims to achieve an EBITDA margin of ten to twelve percent. Previously, the target was eight percent.

In a way, the German company, which was in crisis just a few years ago, is symptomatic of the dynamics in this sector. Companies are in the process of getting to grips with many problems on the cost side or in the supply chains. As a result, they are increasingly in a position to profit from the global energy transition and the strengths of wind energy. Of course, there is still a risk of setbacks and regulatory intervention. This makes it all the more interesting for investors to take a diversified approach. The Solactive Wind Technology Index offers just such an approach. Vontobel has made the international selection investable by means of tracker certificates - more on this in the product key data.