Berkshire Hathaway is a diversified company with energy, rail, insurance, manufacturing, and retail businesses. For example, Progressive and Geico insurance companies, BNSF, Union Pacific, and CSX rail transporters. Meantime, NextEra Energy, NV Energy, Sierra Pacific Power, and MidAmerican are among its energy companies. All fall under the broad Berkshire umbrella. Its insurance business generates the most revenue, although its manufacturing companies do so before taxes.
Under its founder Warren Buffett, the company took a decentralized approach, letting each unit choose how it would decarbonize. Generally, the conglomerate places a high value on environmental concerns and plans to be net zero by 2050. As of year-end 2021, the company invested $30 billion in wind, solar, and geothermal energy projects. For example, it has a mammoth $4 billion wind and solar project on the map in Iowa.
“We will perform audits to evaluate our environmental compliance and use the results to improve our operations and impact the environment,” the company says. It adds that it will do so in a way its customers can afford while still satisfying regulatory requirements.
Letting the Sun Shine On Berkshire
To that end, Berkshire Hathaway is growing its renewable energy portfolio whiles striving to be carbon neutral by 2050. As of December 2021, 90% of its investments were unrelated to coal or natural gas generation. And PacifiCorp, MidAmerican Energy , and NV Energy are expanding their electric vehicle charging infrastructure along major highways. Berkshire Hathaway is also transitioning to electric vehicles.
Warren Buffett has chosen Greg Abel to follow him. Able, now Berkshire Hathaway Energy’s chief executive, says he will continue the decentralized model, although his energy units are taking an aggressive approach. Abel appears to have a very good grasp of climate change risks,” Youmans said. “We’re hopeful … he will implement the parent company level climate reporting that we’re asking for,” says Timothy Youmans, engagement lead for North America at EOS, in Reuters.
It will retire 16 coal units between 2022 and 2030 — not counting the 16 it has already mothballed. That will cut the subsidiary’s greenhouses in half by 2030 from a 2005 basebline. It will shut down the remaining coal units by 2049 and says its natural gas fleet will close by 2050.
Berkshire’s rail units are also major emitters. The company is adding efficiencies and using diesel fuel, all to reduce its greenhouse gases and hit its goal of carbon neutrality by 2050.
Consider Berkshire’s PacifiCorp, which does business in six western states: It outlines its need for 1,345 MW of new wind and solar generation resources, combined with 600 MW of co-located energy storage resources within the next six years. That will result in a 74% reduction of greenhouse gas emissions from 2005 levels by 2030.
It also includes an advanced nuclear project — a small modular reactor developed by TerraPower. It will replace a retiring coal plant. The utility is shedding all of its coal plants by 2037 and converting two to natural gas. The state’s Clean Energy Transformation Act eliminates coal and requires the grid to be decarbonized by 2045.
Meantime, Northern Powergrid Holdings Company — another Berkshire unit in England — will invest $1.2 billion in its electric network by 2028 to meet the challenges posed by the New Energy Economy; it needs to handle additional wind and solar resources as they become more prevalent.
“Berkshire’s businesses are exceptionally well positioned to deliver on ever-changing customer expectations regarding sustainability, in both resources and attitude, while also driving value for Berkshire’s shareholders,” writes Greg Abel, as referenced in Bloomberg. “I am supportive of these outlined objectives and fully committed to Berkshire’s ongoing journey of delivering sustainable solutions.”
“We’ve invested in excess of $30 billion into renewables, and have really completely changed the way our businesses do business, i.e. our utility businesses. They have been decarbonizing and delivering a valued product to our stakeholders, to our customers,” adds Warren Buffett, in previous statements.