Is Spanish Wind Firm Full of Hot Air?

Spanish wind-power giant Iberdrola Renovables reports full-year 2008 results Friday morning, and renewable-energy investors from the U.S. to Europe and Asia will be paying attention to one of the industry's largest players.

A key conference-call question: How realistic are the company's growth expectations?
The $16 billion company ended 2008 able to generate nearly nine gigawatts of electricity from wind, enough power over a year to electrify roughly seven million U.S. homes assuming production at full capacity, according to data from the federal Energy Information Administration. Renovables' aim: to nearly double capacity by 2012.
That expansion, the company estimates, could push Renovables' profit to about €1 billion from the roughly €400 million it should report for 2008. But today's recessionary environment means financing costs are rising and risk-aversion is high among investors and alternative-energy developers, says Raimundo Fernandez-Cuesta, analyst at Credit Suisse in London. Thus, expansion plans will likely be crimped.
Indeed, analysts expect the conference call will confirm new capacity of just 1.4 to 1.5 gigawatts for 2009 -- below original expectations of two gigawatts or more. Michael McNamara, a London analyst at Jefferies International, adds that "how much confidence they can have about 2010" remains an open question, too.
Mr. Fernandez-Cuesta says he's "being conservative" and expecting Renovables ultimately will add about 1.5 gigawatts a year for the next three or four years.—Jeff D. Opdyke