Buffett Quietly Became King of Wind Power
Warren Buffett has been in the news a lot lately for all kinds of things, but the media has mostly overlooked the fact that the uber-investor is also making big green moves. While T. Boone Pickens has been screaming about wind power from the rooftops, Buffett, through his MidAmerican utility (which he owns via his Berkshire Hathaway holding company), has been making big investments in wind power, enough to become the #1 utility in the U.S. when it comes to wind.
Buffett wrote in his annual shareholder letter:
MidAmerican will have 2,909 megawatts of wind generation in operation by the end of 2011, more than any other regulated electric utility in the country. The total amount that MidAmerican has invested or committed to wind is a staggering $5.4 billion. We can make this sort of investment because MidAmerican retains all of its earnings, unlike other utilities that generally pay out most of what they earn.
In 2010, the U.S. had about 40,000 MW of installed wind power capacity, according to the Office of Energy Efficiency and Renewable Energy. Iowa, where MidAmerican has most of its installations, comes second only after Texas for wind power.
Long-Term Energy Thinking
Buffett makes a good financial point: Most utilities could make much bigger investments in clean energy if they retained more of their earnings instead of paying them out as dividends. In the short term, this might reduce their stock prices a big (as investors are chasing dividends), but in the long-term, it'll make them much better prepared to face a low-carbon future.