An underground circuit fire is being blamed for a blackout that struck parts of downtown Vancouver on July 14, shutting off traffic lights, nixing automatic banking machines and even affecting the Internet.
BC Hydro spokeswoman Susan Danard said there was a circuit failure and fire in a major underground cable on the 500 block of Richards Street just before 9 a.m. that day.
The power supply to 20,000 customers was knocked out, CTV reported.
“We're not sure if the fire caused the circuits to fail or the circuits caused the fire,” she said.
Deputy fire chief Tom McEwen said the fire caused toxic fumes to be released into the underground vault.
“There would have been health risks to hydro workers if they had entered into the vault,” he said.
He said firefighters ventilated the dead air in the vault to make it safe for BC Hydro workers to enter, but they were unable to inspect the vault until about 4:30 p.m.
By suppertime, about 2,200 BC Hydro clients in the downtown core were still without power, representing 20 per cent of downtown clients, Ms. Danard said. She said some buildings had power while their neighbours on the same block did not.
“It's like pockets of outages.”
There was no estimate on the time required to return power to Vancouver's core. “Obviously, it's not going to be a quick fix,” she said. As of 9 p.m. Monday night, the traffic lights were still out at Hastings, Pender and Dunsmuir from Richards to Hornby.
The blackout in the area bounded by Beatty, Burrard, Hastings and Robson brought extra police into the streets for the day with the promise they would stick around through the night to protect property and help traffic flow safely.
“We worked very quickly. We recognized it was a major impediment and drew on existing, on-duty resources as well as calling in additional officers,” said Constable Tim Fanning of the Vancouver Police Department, declining to provide specific numbers for security reasons. “It worked out well from a policing point of view.”
But things were not so easy for others.
Jess Franco, 30, was driving downtown along Georgia and Robson Streets with her six-month-old son and friend Dayna Evanow, 24, shortly after the power went out.
“It was complete chaos,” she said.
“No one knows how to follow the rules of the road. You really have to be careful because cars are not moving in any sort of order. Even pedestrians would just walk out, not paying attention at all.”
Several businesses in the downtown core were only accepting cash and cut back on their services during the outage. The Lennox Pub on Granville Street lost power from about 10:15 a.m. to 2:15 p.m.
They could only accept cash and were only serving beer.
The fire began at about 9 in the morning in a hydro circuit located underground, cutting power to the eastern half of the city and forcing the evacuation of several buildings. Even the offices of B.C. Hydro were left in the dark.
The blackout knocked out service provided by a major Internet service provider, Peer 1, because their operations are based in a skyscraper that was left in darkness.
Spokesman Rajan Sodhi said the two largest sites affected for at least some part of yesterday were Plentyoffish.com, a dating site, and Bravenet.com, a web-hosting site.
The situation even affected plans for a film festival in Michigan involving celebrated documentary filmmaker Michael Moore.
“We had a big launch today for Traverse City Film Festival in Michigan. It's Michael Moore's big festival, so it's one of our largest clients of the year and today was the day that the ticketing went on sale,” said Kim McCann, a system administrator with synercom/edi, which maintains various websites and whose servers were based in a downtown building affected by the blackout.
“So we had about less than an hour of tickets going on sale, and everything came down. And so the rest of the day I fielded phone calls from them and various other clients. All day in my office people were screaming and yelling about why their stuff wasn't working. We're pretty much hosed.”
Existing Nuclear Reactor Lifetime Extension sustains carbon-free electricity, supports deep decarbonization, and advances net zero climate goals by preserving the US nuclear fleet, stabilizing the grid, and complementing advanced reactors.
Key Points
Extending licenses keeps carbon-free nuclear online, stabilizes grid, and accelerates decarbonization toward net zero.
✅ Preserves 24/7 carbon-free baseload to meet climate targets
✅ Avoids emissions and replacement costs from premature retirements
✅ Complements advanced reactors; reduces capital and material needs
Nuclear power is the single largest source of carbon-free energy in the United States and currently provides nearly 20 percent of the nation’s electrical demand. As a result, many analyses have investigated the potential of future nuclear energy contributions in addressing climate change and investing in carbon-free electricity across the sector. However, few assess the value of existing nuclear power reactors.
Research led by Pacific Northwest National Laboratory (PNNL) Earth scientist Son H. Kim, with the Joint Global Change Research Institute (JGCRI), a partnership between PNNL and the University of Maryland, has added insight to the scarce literature and is the first to evaluate nuclear energy for meeting deep decarbonization goals amid rising credit risks for nuclear power identified by Moody's. Kim sought to answer the question: How much do our existing nuclear reactors contribute to the mission of meeting the country’s climate goals, both now and if their operating licenses were extended?
As the world races to discover solutions for reaching net zero as part of the global energy transition now underway, Kim’s report quantifies the economic value of bringing the existing nuclear fleet into the year 2100. It outlines its significant contributions to limiting global warming.
Plants slated to close by 2050 could be among the most important players in a challenge requiring all available carbon-free technology solutions—emerging and existing—alongside renewable electricity in many regions, the report finds. New nuclear technology also has a part to play, and its contributions could be boosted by driving down construction costs.
“Even modest reductions in capital costs could bring big climate benefits,” said Kim. “Significant effort has been incorporated into the design of advanced reactors to reduce the use of all materials in general, such as concrete and steel because that directly translates into reduced costs and carbon emissions.”
Nuclear power reactors face an uncertain future, and some utilities face investor pressure to release climate reports as well.
The nuclear power fleet in the United States consists of 93 operating reactors across 28 states. Most of these plants were constructed and deployed between 1970-1990. Half of the fleet has outlived its original operating license lifetime of 40 years. While most reactors have had their licenses renewed for an additional 20 years, and some for another 20, the total number of reactors that will receive a lifetime extension to operate a full 80 years from deployment is uncertain.
Other countries also rely on nuclear energy. In France, for example, nuclear energy provides 70 percent of the country’s power supply. They and other countries must also consider extending the lifetime, retiring, or building new, modern reactors while navigating Canadian climate policy implications for electricity grids. However, the U.S. faces the potential retirement of many reactors in a short period—this could have a far stronger impact than the staggered closures other countries may experience.
“Our existing nuclear power plants are aging, and with their current 60-year lifetimes, nearly all of them will be gone by 2050. It’s ironic. We have a net zero goal to reach by 2050, yet our single largest source of carbon-free electricity is at risk of closure, as seen in New Zealand's electricity transition debates,“ said Kim.
✅ States, market operators push investment certainty and storage
The United Nation’s climate body, the Intergovernmental Panel on Climate Change, on Monday said radical emissions reduction across the world’s economies, including a phase-out of coal by 2050, was required to avoid the most devastating climate change impacts.
The Morrison government dismissed the findings. Treasurer Josh Frydenberg insisted this week that “coal is an important part of the energy mix”.
“If we were to take coal out of the system the lights would go out on the east coast of Australia overnight. It provides more than 60 per cent of our power," he said.
Ms Zibelman, whose organisation operates the nation’s largest gas and electricity markets, said if Australia was to make an orderly transition to low-emissions electricity generation, aligning with the sustainable electric planet vision, “then certainly we would keep the lights on”.
Ms Zibelman said coal assets should be maintained “as long as they are economically viable and we should have a plan to replace them with resources that are lowest cost”.
Those options comprised gas, renewables, pumped hydro and other energy storage, she told ABC radio, as New Zealand weighs electrification to replace fossil fuels.
Under the Paris treaty the government has pledged to lower emissions by 26 per cent by 2030, based on 2005 levels, even as national emissions rose 2% recently according to industry reports.
Labor would increase the goal to a 45 per cent cut - a policy Prime Minister Scott Morrison said last month would " shut down every coal-fired power station in the country and ... increase people’s power bill by about $1,400 on average for every single household”.
The federal government has scrapped its proposed National Energy Guarantee, which would have cut emissions in the electricity sector, but the reliability component of the plan may continue in some form.
The policy was being developed by the Energy Security Board. The group’s chairwoman Kerry Schott has expressed anger at its demise but on Thursday revealed the board was still working on the policy because “nobody told us to stop”.
Speaking at the Melbourne Institute's Outlook conference, she urged the government to revive the emissions reduction component of the plan to provide investment certainty, noting the IEA net-zero report on Canada shows electricity demand rises in decarbonisation.
Energy Minister Angus Taylor, an energy consultant before entering Parliament, on Thursday said the electricity sector would reduce emissions in line with the Paris deal without a mandated target.
Mr Taylor said only a “very brave state” would not support the policy’s reliability obligation.
The federal government has called a COAG energy council meeting for October 26 in Sydney to discuss electricity reliability.
It is understood Mr Taylor has not contacted Victoria, Queensland or the ACT since taking the portfolio, despite needing unanimous support from the states to progress the issue.
The Victorian government goes into caretaker mode on October 30 ahead of that state's election.
Victorian Energy Minister Lily D’Ambrosio said the federal government was “a rabble when it comes to energy policy, and we won’t be signing anything until after the election".
Speaking at the Melbourne Institute conference, prominent business leaders on Thursday bemoaned a lack of political leadership on energy policy and climate change, saying the only way forward appeared to be for companies to take action themselves, with some pointing to Canada's race to net-zero as a case study in the role of renewables.
Jayne Hrdlicka, chief executive of ASX-listed dairy and infant-formula company a2 Milk, said "we all have an obligation to do the very best job we can in managing our carbon footprint".
"We just need to get on doing what we can .. and then hope that policy will catch up. But we can’t wait," she said.
Ms Hrdlicka said the recent federal political turmoil had been frustrating "because if you invest in building relationships as most of us do in Canberra and then overnight they are all changed, you’re starting from scratch".
Aurelia Boat Club delivers electric boat membership in Seattle, featuring zero-emission propulsion, quiet cruising, sustainable recreation, and a managed fleet with maintenance, insurance, moorage, and charging handled for members seeking hassle-free, eco-friendly boating.
Key Points
Aurelia Boat Club is a Seattle membership offering all-electric boats, with maintenance, insurance, and moorage included.
✅ Unlimited access to an all-electric fleet
✅ Maintenance, insurance, moorage, and charging included
✅ Quiet, zero-emission cruising on Seattle waters
Seattle's maritime scene has welcomed a new player: Aurelia Boat Club. Founded by former Pure Watercraft employees, Aurelia is poised to redefine electric boating in the city, where initiatives like Washington State Ferries hybrid-electric upgrade are underway. The club's inception follows the unexpected closure of Pure Watercraft, a Seattle-based startup that aimed to revolutionize the pleasure boating industry before its financial troubles led to its downfall.
From Pure Watercraft to Aurelia Boat Club
Pure Watercraft, established in 2011, garnered attention for its innovative electric propulsion systems designed to replace traditional gas-powered motors in boats, while efforts to build the first commercial electric speedboats also advanced. The company attracted significant investment, including a notable partnership with General Motors in 2021, which acquired a 25% stake in Pure Watercraft. Despite these efforts, Pure Watercraft faced financial difficulties and entered receivership in 2024, leading to the liquidation of its assets.
Amidst this transition, Danylo Kurgan and Mrugesh Desai saw an opportunity to continue the vision of electric boating. Kurgan, formerly a financial analyst at Pure Watercraft and involved in the company's boat club operations, teamed up with Desai, a technology executive and startup investor. Together, they acquired key assets from Pure Watercraft's receivership, including electric outboard motors, pontoon boats, inflatable crafts, battery systems, spare parts, and digital infrastructure.
Aurelia Boat Club's Offerings
Aurelia Boat Club aims to provide a sustainable and accessible alternative to traditional gas-powered boat clubs in Seattle. Members can enjoy unlimited access to a fleet of all-electric boats without the responsibilities of ownership. The club's boats are equipped with electric motors, offering a quiet and environmentally friendly boating experience, similar to how electric ships are clearing the air on the B.C. coast. Additionally, Aurelia handles maintenance, repairs, insurance, and moorage, allowing members to focus solely on enjoying their time on the water.
The Future of Electric Boating in Seattle
Aurelia Boat Club's launch signifies a growing interest in sustainable boating practices in Seattle. The club's founders are committed to scaling the business and expanding their fleet to meet the increasing demand for eco-friendly recreational activities, as projects like battery-electric high-speed ferries indicate. By leveraging the assets and knowledge gained from Pure Watercraft, Aurelia aims to continue the legacy of innovation in the electric boating industry.
As the boating community becomes more environmentally conscious, initiatives like Aurelia Boat Club play a crucial role in promoting sustainable practices, and examples such as Harbour Air's electric aircraft highlight the momentum. The club's success could serve as a model for other cities, demonstrating that with the right vision and resources, the transition to electric boating is not only feasible but also desirable.
While the closure of Pure Watercraft marked the end of one chapter, it also paved the way for new ventures like Aurelia Boat Club to carry forward the mission of transforming the boating industry, with regional moves like the Kootenay Lake electric-ready ferry and international innovations such as Berlin electric flying ferry showing what's possible. With a strong foundation and a clear vision, Aurelia is set to make significant waves in Seattle's electric boating scene.
ITER Nuclear Fusion advances tokamak magnetic confinement, heating deuterium-tritium plasma with superconducting magnets, targeting net energy gain, tritium breeding, and steam-turbine power, while complementing laser inertial confinement milestones for grid-scale electricity and 2025 startup goals.
Key Points
ITER Nuclear Fusion is a tokamak project confining D-T plasma with magnets to achieve net energy gain and clean power.
✅ Tokamak magnetic confinement with high-temp superconducting coils
✅ Deuterium-tritium fuel cycle with on-site tritium breeding
✅ Targets net energy gain and grid-scale, low-carbon electricity
It sounds like the stuff of dreams: a virtually limitless source of energy that doesn’t produce greenhouse gases or radioactive waste. That’s the promise of nuclear fusion, often described as the holy grail of clean energy by proponents, which for decades has been nothing more than a fantasy due to insurmountable technical challenges. But things are heating up in what has turned into a race to create what amounts to an artificial sun here on Earth, one that can provide power for our kettles, cars and light bulbs.
Today’s nuclear power plants create electricity through nuclear fission, in which atoms are split, with next-gen nuclear power exploring smaller, cheaper, safer designs that remain distinct from fusion. Nuclear fusion however, involves combining atomic nuclei to release energy. It’s the same reaction that’s taking place at the Sun’s core. But overcoming the natural repulsion between atomic nuclei and maintaining the right conditions for fusion to occur isn’t straightforward. And doing so in a way that produces more energy than the reaction consumes has been beyond the grasp of the finest minds in physics for decades.
But perhaps not for much longer. Some major technical challenges have been overcome in the past few years and governments around the world have been pouring money into fusion power research as part of a broader green industrial revolution under way in several regions. There are also over 20 private ventures in the UK, US, Europe, China and Australia vying to be the first to make fusion energy production a reality.
“People are saying, ‘If it really is the ultimate solution, let’s find out whether it works or not,’” says Dr Tim Luce, head of science and operation at the International Thermonuclear Experimental Reactor (ITER), being built in southeast France. ITER is the biggest throw of the fusion dice yet.
Its $22bn (£15.9bn) build cost is being met by the governments of two-thirds of the world’s population, including the EU, the US, China and Russia, at a time when Europe is losing nuclear power and needs energy, and when it’s fired up in 2025 it’ll be the world’s largest fusion reactor. If it works, ITER will transform fusion power from being the stuff of dreams into a viable energy source.
Constructing a nuclear fusion reactor ITER will be a tokamak reactor – thought to be the best hope for fusion power. Inside a tokamak, a gas, often a hydrogen isotope called deuterium, is subjected to intense heat and pressure, forcing electrons out of the atoms. This creates a plasma – a superheated, ionised gas – that has to be contained by intense magnetic fields.
The containment is vital, as no material on Earth could withstand the intense heat (100,000,000°C and above) that the plasma has to reach so that fusion can begin. It’s close to 10 times the heat at the Sun’s core, and temperatures like that are needed in a tokamak because the gravitational pressure within the Sun can’t be recreated.
When atomic nuclei do start to fuse, vast amounts of energy are released. While the experimental reactors currently in operation release that energy as heat, in a fusion reactor power plant, the heat would be used to produce steam that would drive turbines to generate electricity, even as some envision nuclear beyond electricity for industrial heat and fuels.
Tokamaks aren’t the only fusion reactors being tried. Another type of reactor uses lasers to heat and compress a hydrogen fuel to initiate fusion. In August 2021, one such device at the National Ignition Facility, at the Lawrence Livermore National Laboratory in California, generated 1.35 megajoules of energy. This record-breaking figure brings fusion power a step closer to net energy gain, but most hopes are still pinned on tokamak reactors rather than lasers.
In June 2021, China’s Experimental Advanced Superconducting Tokamak (EAST) reactor maintained a plasma for 101 seconds at 120,000,000°C. Before that, the record was 20 seconds. Ultimately, a fusion reactor would need to sustain the plasma indefinitely – or at least for eight-hour ‘pulses’ during periods of peak electricity demand.
A real game-changer for tokamaks has been the magnets used to produce the magnetic field. “We know how to make magnets that generate a very high magnetic field from copper or other kinds of metal, but you would pay a fortune for the electricity. It wouldn’t be a net energy gain from the plant,” says Luce.
One route for nuclear fusion is to use atoms of deuterium and tritium, both isotopes of hydrogen. They fuse under incredible heat and pressure, and the resulting products release energy as heat
The solution is to use high-temperature, superconducting magnets made from superconducting wire, or ‘tape’, that has no electrical resistance. These magnets can create intense magnetic fields and don’t lose energy as heat.
“High temperature superconductivity has been known about for 35 years. But the manufacturing capability to make tape in the lengths that would be required to make a reasonable fusion coil has just recently been developed,” says Luce. One of ITER’s magnets, the central solenoid, will produce a field of 13 tesla – 280,000 times Earth’s magnetic field.
The inner walls of ITER’s vacuum vessel, where the fusion will occur, will be lined with beryllium, a metal that won’t contaminate the plasma much if they touch. At the bottom is the divertor that will keep the temperature inside the reactor under control.
“The heat load on the divertor can be as large as in a rocket nozzle,” says Luce. “Rocket nozzles work because you can get into orbit within minutes and in space it’s really cold.” In a fusion reactor, a divertor would need to withstand this heat indefinitely and at ITER they’ll be testing one made out of tungsten.
Meanwhile, in the US, the National Spherical Torus Experiment – Upgrade (NSTX-U) fusion reactor will be fired up in the autumn of 2022, while efforts in advanced fission such as a mini-reactor design are also progressing. One of its priorities will be to see whether lining the reactor with lithium helps to keep the plasma stable.
Choosing a fuel Instead of just using deuterium as the fusion fuel, ITER will use deuterium mixed with tritium, another hydrogen isotope. The deuterium-tritium blend offers the best chance of getting significantly more power out than is put in. Proponents of fusion power say one reason the technology is safe is that the fuel needs to be constantly fed into the reactor to keep fusion happening, making a runaway reaction impossible.
Deuterium can be extracted from seawater, so there’s a virtually limitless supply of it. But only 20kg of tritium are thought to exist worldwide, so fusion power plants will have to produce it (ITER will develop technology to ‘breed’ tritium). While some radioactive waste will be produced in a fusion plant, it’ll have a lifetime of around 100 years, rather than the thousands of years from fission.
At the time of writing in September, researchers at the Joint European Torus (JET) fusion reactor in Oxfordshire were due to start their deuterium-tritium fusion reactions. “JET will help ITER prepare a choice of machine parameters to optimise the fusion power,” says Dr Joelle Mailloux, one of the scientific programme leaders at JET. These parameters will include finding the best combination of deuterium and tritium, and establishing how the current is increased in the magnets before fusion starts.
The groundwork laid down at JET should accelerate ITER’s efforts to accomplish net energy gain. ITER will produce ‘first plasma’ in December 2025 and be cranked up to full power over the following decade. Its plasma temperature will reach 150,000,000°C and its target is to produce 500 megawatts of fusion power for every 50 megawatts of input heating power.
“If ITER is successful, it’ll eliminate most, if not all, doubts about the science and liberate money for technology development,” says Luce. That technology development will be demonstration fusion power plants that actually produce electricity, where advanced reactors can build on decades of expertise. “ITER is opening the door and saying, yeah, this works – the science is there.”
Duke Energy Smart Meters enable remote meter reading, daily energy usage data, and two-way outage detection via AMI, with encrypted data, faster restoration, and remote connect/disconnect for Indiana customers in Howard County.
Key Points
Advanced meters that support remote readings, daily usage insights, two-way outage detection, and secure, encrypted data.
✅ Daily energy usage available online the next day
✅ Two-way communications speed outage detection and restoration
✅ Remote connect/disconnect; manual reads optional with opt-out fee
Say goodbye to your neighborhood meter reader. Say hello to your new smart meter.
Over the next three months, Duke Energy will install nearly 43,000 new high-tech electric meters for Howard County customers that will allow the utility company to remotely access meters via the digital grid instead of sending out employees to a homeowner's property for walk-by readings.
That means there's no need to estimate bills when meters can't be easily accessed, such as during severe weather or winter storms.
Other counties serviced by Duke Energy slated to receive the meters include Miami, Tipton, Cass and Carroll counties.
Angeline Protogere, Duke Energy's lead communication consultant, said besides saving the company money and manpower, the new smart meters come with a host of benefits for customers enabled by smart grid solutions today.
The meters are capable of capturing daily energy usage data, which is available online the next day. Having this information available on a daily basis can help customers make smarter energy decisions and support customer analytics that avoid billing surprises at the end of the month, she said.
"The real advantage is for the consumer, because they can track their energy usage and adjust their usage before the bills come," Protogere said.
When it comes to power outages, the meters are capable of two-way communications. That allows the company to know more about an outage through synchrophasor monitoring, which can help speed up restoration. However, customers will still need to notify Duke Energy if their power goes out.
If a customer is moving, they don't have to wait for a Duke Energy representative to come to the premises to connect or disconnect the energy service because requests can be performed remotely.
Protogere said when it comes to installing the meters, the changeover takes less than 5 minutes to complete. Customers should receive advance notices from the company, but the technician also will knock on the door to let the customer know they are there.
If no one is available and the meter is safely accessible, the technician will go ahead and change out the meter, Protogere said. There will be a momentary outage between the time the old meter is removed and the new meter is installed.
Kokomo and the surrounding areas are one of the last parts of the state to receive Duke Energy's new, high-tech meters, which are commonly used by other utility companies and in smart city initiatives across the U.S.
Protogere said statewide, the company started installing smart meters in August 2016 as utilities deploy digital transformer stations to modernize the grid. To date, they have installed 694,000 of the 854,000 they have planned for the state.
The company says the information stored and transmitted on the smart meters is safe, protected and confidential. Duke Energy said on its website that it does not share data with anyone without customers' authorization. The information coming from the meters is encrypted and protected from the moment it is collected until the moment it is purged, the company said.
Digital smart meter technology uses radio frequency bands that have been used for many years in devices such as baby monitors and medical monitors. The radio signals are far below the levels emitted by common household appliances and electronics, including cellphones and microwave ovens.
According to the World Health Organization, FCC, U.S. Food and Drug Administration and Electric Power Research Institute, no adverse health effects have been shown to occur from the radio frequency signals produced by smart meters or other such wireless networks.
However, customers can still opt-out of getting a smart meter and continue to have their meter manually read.
Those who choose not to get a smart meter must pay a $75 initial opt-out fee and an additional $17.50 monthly meter reading charge per account.
If smart meters have not yet been installed, Duke Energy will waive the $75 initial opt-out fee if customers notify the company they want to opt out within 21 days of receiving the installation postcard notice.
Berkshire Hathaway Energy Wind Power drives cheap electricity rates in Iowa via utility-scale wind turbines, integrated transmission, battery storage, and grid management, delivering renewable energy, stable pricing, and long-term rate freezes through 2028.
Key Points
A vertically integrated wind utility lowering Iowa rates via owned generation, transmission, and advanced grid control.
✅ Owned wind assets meet Iowa residential demand
✅ Integrated transmission lowers costs and losses
✅ Rate freeze through 2028 sustains cheap power
In his latest letter to Berkshire Hathaway shareholders, Warren Buffett used the 20th anniversary of Berkshire Hathaway Energy to tout its cheap electricity bills for customers.
When Berkshire purchased the majority share of BHE in 2000, the cost of electricity for its residential customers in Iowa was 8.8 cents per kilowatt-hour (kWh) on average. Since then, these electricity rates have risen at a paltry <1% per year, with a freeze on rate hikes through 2028. As anyone who pays an electricity bill knows, that is an incredible deal.
As Buffett himself notes with alacrity, “Last year, the rates [BHE’s competitor in Iowa] charged its residential customers were 61% higher than BHE’s. Recently, that utility received a rate increase that will widen the gap to 70%.”
The Winning Strategy
So, what’s Buffett’s secret to cheap electricity? Wind power.
“The extraordinary differential between our rates and theirs is largely the result of our huge accomplishments in converting wind into electricity,” Buffett explains.
Wind turbines in Iowa that BHE owns and operates are expected to generate about 25.2 million megawatt-hours (MWh) of electricity for its customers, as projects like Building Energy operations begin to contribute. By Buffett’s estimations, that will be enough to power all of its residential customers’ electricity needs in Iowa.
The company has plans to increase its renewable energy generation in other regions as well. This year, BHE Canada is expected to start construction on a 117.6MW wind farm in Alberta, Canada with its partner, Renewable Energy Systems, that will provide electricity to 79,000 homes in Canada’s oil country.
But I would argue that the secret to BHE’s success perhaps goes deeper than transitioning to sources of renewable energy. There are plenty of other utility companies that have adopted wind and solar power as an energy source. In the U.S., where renewable electricity surpassed coal in 2022, at least 50% of electricity customers have the option to buy renewable electricity from their power supplier, according to the Department of Energy. And some states, such as New York, have gone so far as to allow customers to pick from providers who generate their electricity.
What differentiates BHE from a lot of the competition in the utility space is that it owns the means to generate, store, transmit and supply renewable power to its customers across the U.S., U.K. and Canada, with lessons from the U.K. about wind power informing policy.
In its financial filings for 2019, the company reported that it owns 33,600MW of generation capacity and has 33,400 miles of transmission lines, as well as a 50% interest in Electric Transmission Texas (ETT) that has approximately 1,200 miles of transmission lines. This scale and integration enables BHE to be efficient in the distribution and sale of electricity, including selling renewable energy across regions.
BHE is certainly not alone in building renewable-energy fueled electricity dominions. Its largest competitor, NextEra, built 15GW of wind capacity and has started to expand its utility-scale solar installations. Duke Energy owns and operates 2,900 MW of renewable energy, including wind and solar. Exelon operates 40 wind turbine sites across the U.S. that generate 1,500 MW.
Integrated Utilities Power Ahead
It’s easy to see why utility companies see wind as a competitive source of electricity compared to fossil fuels. As I explained in my previous post, Trump’s Wrong About Wind, the cost of building and generating wind energy have fallen significantly over the past decade. Meanwhile, improvements in battery storage and power management through new technological advancements have made it more reliable (Warren Buffett bet on that one too).
But what is also striking is that integrated power and transmission enables these utility companies to make those decisions; both in terms of sourcing power from renewable energy, as well as the pricing of the final product. Until wind and solar power are widespread, these utility companies are going to have an edge of the more fragmented ends of the industry who can’t make these purchasing or pricing decisions independently.
Warren Buffett very rarely misses a beat. He’s not the Oracle of Omaha for nothing. Berkshire Hathaway’s ownership of BHE has been immensely profitable for its shareholders. In the year ended December 31, 2019, BHE and its subsidiaries reported net income attributable to BHE shareholders of $2.95 billion.
There’s no question that renewable energy will transform the utility industry over the next decade. That change will be led by the likes of BHE, who have the power to invest, control and manage their own energy generation assets.
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