Tag: Berkshire Hathaway Energy

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Berkshire Hathaway’s MidAmerican Energy Company, a subsidiary of Berkshire Hathaway Energy, will develop a new wind farm site in Adams County, Iowa, and expand a second site in O’Brien County, Iowa, in 2015.

The $280 million project will include the installation of up to 67 wind turbines and will add up to 162 megawatts of additional wind generation capacity in Iowa.

The new project comes just 16 months after MidAmerican Energy launched a $1.9 billion investment to add up to 1,050 megawatts of wind generation in Iowa by year-end 2015.

A Leader in Wind-Generated Power

MidAmerican Energy first began installing wind turbines in 2004, and is first among U.S. rate-regulated utility in wind-powered generation capacity.

The aggressive strategy has MidAmerican Energy on track to reach 3,500 megawatts of wind generation capability in Iowa by the end of 2015.

William J. Fehrman, president and CEO of MidAmerican Energy, stated that “With this proposed expansion, beginning in 2016, MidAmerican Energy’s wind resources are expected to produce an amount of energy equivalent to approximately 50 percent of the retail energy customers are expected to need.”

MidAmerican Energy’s goal is to provide renewable energy for the equivalent of approximately 1.05 million average Iowa households.

Wind’s Growing Role in Meeting Energy Needs

Wind energy is playing an increasing role in the US’s energy needs with a total installed wind capacity in the U.S. of 61,327 megawatts through first quarter of 2014. Total wind generated energy is enough to power 15.5 million homes.

On the commercial side, wind energy has found demand from companies such as Google, which in April 2014, signed an agreement with MidAmerican Energy to supply Google’s data center in Council Bluffs, Iowa, with up to 407 megawatts of wind-sourced energy.

As the cost of wind energy continues to drop, consideration also needs to be given to “hidden costs” inherent in other forms of energy production. The National Research Council identified these costs and noted that “pollutants from the burning of fossil fuels have effects on human health, grain crops, timber yields, building materials, recreation, and outdoor vistas.”

These hidden cost costs are often overlooked when calculating the cost of power generation, and make wind power all the more attractive.

© 2014 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Berkshire Hathaway’s Berkshire Hathaway Energy (BHE) has been aggressively expanding its assets with $15 billion in recent acquisitions. Now, the company could be one of the bidders for Energy Future Holdings’ Oncor.

Berkshire and several of the energy companies, including NextEra Energy, signed confidentiality agreements for the purpose of exploring the acquisition of Oncor.

What is Oncor?

Oncor is a regulated electric transmission and distribution service provider that serves 10 million customers across Texas. The company has the largest distribution and transmission system in Texas; with approximately 119,000 miles of lines and more than 3 million meters across the state.

Oncor is owned by a limited number of investors, including majority owner, Energy Future Holdings Corp.

What’s the price?

Oncor is estimated to be worth than $17.5 billion, which puts it in line with Warren Buffett’s goals to acquire more “elephants” in the $20 billion range.

In June, Buffett noted that Berkshire had already poured $15 billion into acquiring energy companies and he declared “There’s another $15 billion ready to go, as far as I’m concerned.”

Oncor fits the bill

Transmission lines have been high on BHE’s list of late. In April, the company made a $2.9 billion purchase of Canadian company AltaLink from SNC-Lavalin Group Inc. (TSX:SNC).

A Growing Energy Portfolio

Berkshire Hathaway Energy currently has $70 billion in assets, including one of the largest portfolios of renewable energy in the world.

Total revenues in 2013 were $12.6 billion, with the total generation capacity owned and contracted exceeding 34,000 MW. 25% of this energy was produced from renewable or noncarbon sources.

Berkshire Hathaway Energy’s combined subsidiaries provide energy to 8.4 million customers and end-users.

With Berkshire’s over $60 billion in cash just waiting to be deployed, there could be an Oncor performance in Berkshire’s future.

© 2014 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Warren Buffet is making big bets that the world’s future energy needs will mean big profits for Berkshire Hathaway.

Buffet Ready to Spend Billions

Speaking at the Edison Electric Institute’s annual convention in Las Vegas, Warren Buffett enthusiastically trumpeted Berkshire’s commitment to renewable energy.

“We’ve poured billions and billions and billions of dollars in retained earnings, and several billion of additional equity, Buffett said. “And we’re going to keep doing that as far as the eye can see.”

Berkshire has already poured $15 billion into acquiring energy companies and Buffet declared “There’s another $15 billion ready to go, as far as I’m concerned.”

Berkshire Hathaway’s Berkshire Hathaway Energy has been aggressively acquiring assets, including last year’s $5.6 billion purchase of NV Energy, and this April’s $2.9 billion purchase of Canadian company AltaLink from SNC-Lavalin Group Inc. (TSX:SNC).

A Growing Energy Portfolio

Berkshire Hathaway Energy currently has $70 billion in assets, including one of the largest portfolios of renewable energy in the world.

Total revenues in 2013 were $12.6 billion, with the total generation capacity owned and contracted exceeding 34,000 MW. 25% of this energy was produced from renewable or noncarbon sources.

Berkshire Hathaway Energy’s combined subsidiaries provide energy to 8.4 million customers and end-users.

© 2014 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Berkshire Hathaway’s MidAmerican Solar has reaches the million photovoltaic modules milestone on its Solar Star I and 2 projects in Rosamond, California.

Another 700,000 modules will be installed in bringing the 3,200 acre solar project to completion in 2015.

Generating Capacity

When completed Solar Star I and 2 will be the world’s largest photovoltaic power plant. The 579 megawatts of electricity it will produce at peak capacity will be enough to power approximately 255,000 homes.

Designed and constructed by SunPower Corporation (SPWR), Solar Star 1 and 2 use the company’s Oasis® Power Plant technology. The solar panels will track the sun during the day, increasing energy capture by up to 25 percent over fixed panels.

Positive Environmental Impact

The environmental benefits of the Solar Star I and 2 projects will be significant. When completed, it will replace 570,000 tons of carbon dioxide emissions each year that would have been produced by burning fossil fuels– the equivalent to taking over 2 million cars off the road over 20 years.

Committed Power Purchaser

Solar Star I and 2 have a guaranteed customer for its power production. Two long-term power purchase agreements have been signed with Southern California Edison.

Decreasing Cost of Construction

The cost of producing solar power is declining rapidly. According to PV Magazine, the cost of producing solar power fell 60% in just an 18 month period, and the overall cost of producing solar power in 2013 was 60% cheaper than in 2011.

Low Cost of Operation

One of the advantageous of photovoltaic power production is its low cost of operation. Despite the enormous 3,200 acre size of the Solar Star I and 2 projects, only 15 full-time site positions will be needed to run the facility.

Other Berkshire Photovoltaic Projects

The Solar Star I and 2 projects are not the only photovoltaic plants Berkshire has under construction. In 2015, it will also complete the Topaz Solar Farms—a 550-megawatt solar photovoltaic project in San Luis Obispo County, California. And, MidAmerican Solar has a 49 percent interest in the Agua Caliente solar farm in Yuma County, Arizona, in partnership with NRG Energy. The 290-megawatt solar photovoltaic power plant came online in 2013.

Berkshire Hathaway and Renewable Energy

Berkshire Hathaway’s Berkshire Hathaway Energy has one of the largest portfolios of renewable energy in the world. It currently has 2,593 megawatts of contract capacity owned and under construction. Its MidAmerican Solar unit is a subsidiary of MidAmerican Renewables, which is owned by Berkshire Hathaway Energy.

MidAmerican Renewables includes MidAmerican Solar, MidAmerican Wind, MidAmerican Geothermal and MidAmerican Hydro. MidAmerican Renewables manages unregulated solar, wind, hydro and geothermal projects.

© 2014 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.