On behalf of his own utility company, MidAmerican Energy Holdings, Co., Warren Buffet has made the largest land-based wind power investment when he purchased $1 billion worth of wind turbines recently. In a statement issued yesterday, the utility company announced that it had made a huge order for 448 wind turbines, which will be run at a capacity of 1,050 megawatts in Iowa, a windy state.
The figures may appear to be staggering but the empirical benefits from said purchase compared to those of other more pricey energy sources makes the deal a practical investment after all. When set by side with coal and fossil energy materials, wind is undoubtedly the least expensive power source today, especially in Iowa. Furthermore, the $1B wind turbine acquisition has a higher procurement value inasmuch as prices of turbines have gone down by 26% since 2009 in the global market.
The turbine manufacturer from where Buffet’s company acquired the turbines is Siemens, a German multinational engineering and electronics corporation. According to Siemens, the purchase made by MidAmerican Energy Holdings Co. is an indication that wind as power source is getting to be widely known despite absence of government funding.
The decision to obtain the 448 wind turbines for Iowa, is part of MidAmerican Energy Holdings’ long-term plan. At this point, Buffet’s company is thinking of closing down a number of its coal-powered plants in the next two years as soon as the new wind turbines start operating. Buffet already anticipated this scenario before when he mentioned that utility providers could readily switch to environment-friendly energy sources if they save up to fund such future venture. Apparently, Buffet has lived up to this example when he placed his massive order for wind turbines.
Cheaper, in the long run
The marked down price of wind turbine makes it possible for utility companies to save more when they place their orders. According to statistical study however, the monetary cut in such investment is not the only advantage to be considered. Although coal power is less expensive, wind power is perceived to be cheaper to maintain in the long run because of its environmental benefits.
Problems on air pollution and water poisoning are the main issues with coal mine. With coal power plants to maintain, massive coal production must be sustained in order to meet the demand. The process of coal mining is clearly detrimental to the surroundings while coal power emission is another case to contend with as the smoke billowing from the chimneys directly hit the atmosphere and pollutes the air that people breathe.
Billionaire philanthropist and investor
Warren Buffet is a billionaire philanthropist and investor who heads his Berkshire Hathaway conglomerate, the MidAmerican Energy Holdings. He is known for his frugality policy in his investments despite that he is already a billionaire. His frugal practices have redounded to the advantage of his company on account of its earned capacity to make huge spending such as the recent wind turbine purchase.
According to MidAmerican Energy Chief Executive Officer Bill Fehrman, the increasing demand for wind power will counterbalance the declining use of fossil fuels. The purchase of 448 wind turbines is a follow up of the contract for the operation of 258 turbines in Iowa. The 44-megawatt power enterprise in Iowa, called the Vienna II, is already working. By 2015, all the 1,050 megawatts of wind turbines are expected to fully operate.
Photo Credit: Wind turbines