A number of wind power stocks have emerged over the past few years as concern over the environment has grown.

However, like many other alternative-energy firms, wind power stocks face significant costs and risks.

For example, varying wind speeds cause a wind turbine’s electricity output to fluctuate. In many areas, the wind is stronger in the daytime, when demand is lower, and dies down in the evening, when consumers use more appliances. As well, electrical power can’t be stored efficiently, so to make economic sense it must be used when it is produced. As a result, utilities must maintain back-up power capacity that is equal to their reliance on wind power.

To cut your risk, we recommend that you focus on wind power stocks that already have a sound base of other operations. That helps offset the risks of expanding into renewable-power production.

This wind power stock’s conventional power plants give it a strong foundation

Energy producer TransAlta Corp. (symbol TA on Toronto), is good example of a broad-based renewable-power company. We’ve updated our buy/sell/hold advice on the stock in a just-published issue of The Successful Investor.

TransAlta operates over 85 unregulated power plants in Canada, the U.S. and Australia. Coal-fired plants account for about 53% of the power it generates. Natural gas accounts for 25%, and the remaining 22% comes from hydroelectric and renewable sources.

TransAlta has been adding to its wind-power assets: In November 2009, it paid $755.0 million for Canadian Hydro Developers Inc., which owned and operated 21 power-generating facilities in Alberta, B.C., Ontario and Quebec. These plants include eight wind farms and one biomass plant, which generates power by burning plant materials and wood waste from lumber mills.

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TransAlta is also expanding its Kent Hills wind farm in New Brunswick. That’s because it won a 25-year power contract from the provincially owned electrical utility.

The company will increase Kent Hills’ capacity to 150 megawatts from 96 megawatts in partnership with Natural Forces Technologies Inc., a local wind-power developer. The partners expect to finish the expansion by the end of this year. At that point, TransAlta will have a total of 1,000 megawatts of wind-power generating capacity.

Project Pioneer adds to TransAlta’s green-energy assets

TransAlta is also working on Project Pioneer, which will capture and store carbon emissions from its coal-fired power plants in Alberta. The company plans to sell the reclaimed carbon to oil producers, who would use it to extract more oil.

Enbridge Inc. (Toronto symbol ENB) recently agreed to participate in Project Pioneer. Enbridge’s pipeline and carbon-sequestration expertise should help ensure the project’s success.

Canadian Hydro Developers boosts TransAlta’s revenue and power production

TransAlta’s earnings fell in its latest quarter. That’s because of lower power prices in Alberta and the northwestern U.S.

However, cash flow per share rose 7.1%. As well, revenue rose 5.1%. These gains were largely due to the addition of Canadian Hydro Developers’ power plants. The new plants also helped push up TransAlta’s production by 9.8% from the year-earlier quarter.

You can get our latest buy/sell/hold advice on TransAlta and 20 other high-quality companies in the latest issue of The Successful Investor. Even better, if you act now, you can get this issue absolutely free. Click here to learn how.