Deny it all you want, but change is coming. Global warming doesn't really care if you believe in it or not. It's just going about its business wreaking havoc, and the choice to prepare is yours alone. Just this month, Greenpeace released a nightmare-inducing report about what we could be facing if we don't get our carbon emissions in hand.
I know, I know, you're thinking that the people in Greenpeace are just a bunch of radical psychos. But what about Warren Buffett? Or BP plc (ADR) (NYSE:BP) ? Can you dismiss them so easily? Because they're starting to sound the same alarm. Buffett plans to profit from all this, and perhaps you could, too.
Buffett goes beyond coal Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) owns MidAmerican Energy, a utility that until this week was fighting The Sierra Club in court. The Sierra Club's Beyond Coal campaign has succeeded in closing one-sixth of the United States' coal-fired power plants since 2010. It went after MidAmerican Energy for exceeding its Clean Air Act pollution permits at three of its plants. The two sides reached a settlement this week, under which MidAmerican will phase out seven coal-fired plants, install pollution controls at another two, and build a large solar installation in Iowa.
While the stick of legal action may have prompted this settlement, MidAmerican Energy also knows a good carrot when it sees one. Just one year ago, the company created its MidAmerican Renewables division. It currently has a 1,830 megawatt (MW) portfolio in wind, solar, geothermal, and hydro. MidAmerican will have 2,284 MW in the wind sector alone when current projects are completed, making it the largest owner of U.S. wind farms by an investor-owned utility.
MidAmerican is also investing heavily in solar. The company announced this month that it will pay SunPower Corporation (NASDAQ:SPWR) about $2.5 billion for its 579 MW Antelope Valley Solar Project (AVSP) in California. The deal represents a strong sales pipeline for its solar panels; AVSP will be the largest solar photovoltaic (PV) plant in the world, with construction scheduled to begin early this year for a 2015 completion. SunPower already has 1 gigawatt of operational solar plants, with another 250 MW under construction.
MidAmerican had previously bought two solar PV plants, one in California and one in Arizona, which together will generate 840 MW. First Solar, Inc. (NASDAQ:FSLR) is building both projects, which are scheduled for completion in 2014. First Solar has a long-term strategy to supply sustainable markets, to move away from subsidized markets, and to grow its construction projects relative to module sales.
Carbon bomb The long-term drivers behind clean-energy growth are undeniable. Consider the report Greenpeace released just this month called "Point of No Return: The Massive Climate Threats We Must Avoid." I had to sleep with the light on after I read it. The report details the horrific consequences the world will experience if we allow the planet to continue on its current warming trajectory. According to Greenpeace, "The world is clearly at a Point of No Return: Either replace coal, oil and gas with renewable energy, or face a future turned upside down by climate change."