Green Chip editor Nick Hodge examines a looming supply crunch in the wind turbine market, and presents the companies with the best chances for success.

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"Alternatives are the fastest-growing subsector in the energy space," says energy sector expert Elliott Gue (ccount/click.php?id=1696) in Personal Finance (ccount/click.php?id=1696). Here, the energy expert looks at wind power."The US Energy Information Administration (EIA) projects that wind power will grow by more than 7%, encouraged by generous government subsidies. Compare that to just 1.5% annualized projected growth in total electricity demand. "The world’s largest wind turbine producer, Vestas Wind Systems (quote.htm?sym=vwsyf) ( OTC: VWSYF (quote.htm?sym=vwsyf)), fell on hard times back in 2005. It priced some of its turbines too aggressively and saw a surge in warranty claims because of defective components. "But the stock appears back on track. Warranty provisions are down to 5% of revenues. Profit margins surged 4 percentage points year-over-year because of more rational turbine pricing. Vestas' current backlog stands at EUR4.1 billion (USD6.03 billion), up more than 30% year-over-year."Spain's Gamesa (quote.htm?sym=gctaf) ( OTC: GCTAF (quote.htm?sym=gctaf)) is second only to Vestas in the wind-turbine market. The company recently opened new factories in China and the US, expanding its manufacturing capacity to 3,000 megawatts annually, up 36% from the end of 2006.zolt; zoltek; hexcel; hxl"The firm also designs and constructs entire wind farm projects on a turnkey basis. It also offers ongoing maintenance and operation service contracts. Buy Gamesa under USD45. "Carbon fiber is a strong yet light material used to manufacture turbine blades. Fiber is in short supply amid surging demand in two key markets: advanced aerospace and wind power. Tight supplies mean rising prices for the key manufacturers of fiber, including our current buys, Hexcel (quote.htm?sym=hxl) ( NYSE: HXL (quote.htm?sym=hxl)) and Zoltek Industries (quote.htm?sym=zolt) ( NSDQ: ZOLT (quote.htm?sym=zolt))."