the United States, Berkshire Hathaway's annual shareholders'meeting (also known as Buffett's shareholders' meeting), the annual "gluttonous feast" of the investment community, was held in Omaha, the hometown of Warren Buffett.
At the meeting, Buffett, 92, had an interactive question-and-answer session with his "golden partner", Charlie Munger, 99, and investors from around the world for more than five hours. Roughly speaking, there were 40 references to energy, and in 47 interactions, two questions focused on energy transformation, with his questioners coming from high school students in Iowa and China.
" There is no doubt that we are in the midst of an energy revolution, globally, " Greg Abel, CEO of BHE, added in the interaction, "We have three American utilities below, which operate in different States, and each state has a different plan. We hope to integrate these plans, which has great opportunities, because this (energy) transformation is taking place, and we are also synchronizing our goals.
Speaking about the company's future plans, Abel said, "We are now making more corresponding plans based on BHE's energy companies, and we now have tens of billions of known projects in progress." "So, in the next ten years, we now have a team to solve all the challenges now."
Whether to accelerate investment in new energy sources?
BUFFETT: We will continue to invest
in the next 20 years. In response to the slow progress of the energy transformation in the United States, a high school student from Iowa in the United States raised this question: "Are we investing enough in these new and renewable energy sources now?"? Why does our government not continue to strengthen these supports? Are Berkshire's energy companies really starting to be able to accelerate their investments in these new energy sources? According to the
data, as Buffett's main new energy investment company, Berkshire Energy Company (BHE) has a layout in the main areas of new energy. Among them, wind power accounts for 63%, photovoltaic 24%, water power 9% and geothermal 4%.
By the end of 2022, Berkshire Hathaway Energy had invested more than $31.6 billion in its own wind, solar and geothermal energy projects. Of this, 52% of owned and contracted generation is from renewable and non-carbon sources. In terms of
photovoltaic power generation , as of December 31, 2022, BHE has invested $7.3 billion in photovoltaic power generation, with an installed capacity of 1
. NV Energy plans to invest 525 MW of contracted solar resources in commercial operation by August 2023, and plans to have another 400 MW of its own solar resources
by August 2024. Buffett praised it as unmatched in the U.S. utility industry and described it as his "last giant" in new energy investment.
"Any resources in the United States, whether wind, energy or other power generation, we also hope to have 70%, 80% of the revenue," Buffett said, " We will continue to invest in the next 20 years, maybe 200 million or 4 billion .
My question is that now more people are paying attention to environmental protection, and the government is also encouraging the new energy industry. What kind of prospects do you think the development of new energy has? How can development of new energy be better in the future? We bought Berkshire Energy before, and we prepare this annual report every year, hoping to help solve many environmental problems. And in this regard, our investment is actually very large. It's really not easy
to do all this. Our industry has to cross many jurisdictions and many States. I think the United States should do better in this respect than it is now, that is, the change from traditional energy to new energy. And we have made a lot of achievements in this respect.
Greg, can you explain it in detail.
Greg Abel: Yes, there is no doubt that we are now in the midst of an energy revolution, globally. Warren just mentioned that in the United States, we hope to solve this problem at least in every state in the country. Berkshire Energy, there are three American public utilities under it. They operate in different States, and each state has different plans. We hope to integrate these plans. There are great opportunities in this respect. Because this transformation is happening .
We are also synchronizing our goals. We hope to reduce our carbon footprint by 50% by 2030 compared with 2005. This is what we hope to achieve in public utilities. We are on the way. But this process is really not easy.
We bought Pacific Power around 2005, hoping to invest in the development of renewable energy. We have done this in particular in Iowa. Pacific Power operates in six States, and now we have a good construction plan, that is, how to build it and what kind of return it can bring to our customers.
Now that we have come to 2023, we have invested in a 60 billion transformation plan, the transmission plan , which is good for our customers, but in transmission. We must consider how to use more renewable energy.
Warren mentioned that we can't wake up every day and solve this problem overnight. We need to invest resources in this transmission network. We are now making more corresponding plans according to BHE's energy company. We now have tens of billions of known projects in progress. But also to obtain more agreements for the right services. So, in the next ten years, we now have a team to solve all the challenges now.
These are some very good business opportunities for any company and our shareholders. We have now allocated these funds, and it is clear that we have been rewarded financially.
But this is a long-term path, and it is not something that can be achieved at the beginning of the change. According to our future evolution, there are some different technologies, but this process is definitely going to happen.
BUFFETT: You've touched on a very important issue. Now I don't know what form and idea our government is taking to solve these existing problems. We have solved a problem
before. During World War II, all the resources of the United States were integrated, and Ford stopped making cars and started making tanks and so on. So these auto industry companies, as well as other consolidation phenomena in the United States, can not be ignored, because under the leadership of the government.
The United States also has the corresponding technology, and also has such facilities. As you have seen in World War II, as long as people feel that there is such a demand, we can integrate these together, and we can integrate all industrial capacity to plan accordingly, and we can have effective activities to defeat everything.
But how can we start creating the same mechanism again? There seems to be no way.
Thank you for your question.
When we entered Iowa, it was very popular, and most people wanted to be able to use these wind power products. Of course, there are many people who think that my backyard can generate electricity accordingly. What's wrong with that? Iowa is an example, and there are other major companies, and of course there are more cooperative mechanisms, and there are different things that come together to start selling electricity.
But there are a lot of major competitors, in terms of price and other things, that are going to be lower in some places, but in Nebraska, maybe around 1930, but in some ways, the wind has started north of Iowa, but our competitors are also making some corresponding resource changes. Any resource in
the United States, whether it is wind, energy or other power generation, we also hope to have 70% or 80% of the revenue. But we will continue to invest in the next 20 years. Maybe it's 200 million or 4 billion . These are all things that require a lot of investment. We also hope to continue to invest and put our assets on these new energy sources. I also hope Greg can tell you more details today. I can tell you that Berkshire's energy companies are already making these technological changes, at least in the United States.
Munger: As I said, I personally don't know what will happen to global warming in the future. I don't think anyone knows if there will be a change of 2 inches or 20 feet in the future. Is it possible? I really can't say that.
BUFFETT: Yes, that's right. For example, in Wyoming, where the wind is particularly strong, we started the transmission line there and extended it to the west.
During World War II, we told ourselves and told many people that Henry Ford was also doing shipyards or other things at that time, but we didn't believe that this could be extended for such a long time, but we had the money to make such investments, and we spent some money on these public utilities. There may be more than 4 billion investment, and we have more than 3 billion budget in it. So, in total, we spent 7 billion. Among
these companies, in the public utilities industry, we have spent such money, but will we continue to invest? Or how to redeploy the money? If the whole country can have such rules, we must have a system in each state.
Munger: If the phenomenon of global warming continues to occur, we will certainly shift to new or renewable energy sources, which can store more hydrogen now. It is necessary and not wrong for us to reserve our attitude and cautious attitude now.
BUFFETT: That's right. When we talk about cost, how can we do more effective work? That's what we want to do now. Wind is what we want to do now. A lot of people are talking about what can be done or what can never be done. Of course, there are also some nonsense in the middle, which is also happening. So, yes, we are already in it.
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