Warren Buffett’s Wind Power Extends To Logistics

The Oracle of Omaha sure loves wind power.

Of course, Warren Buffett invests to make money, so the continuing wind plays by companies in his Berkshire Hathaway empire are really a sign of the sector’s economic attractiveness.

The latest Buffett-related move in wind – coming as Berkshire’s MidAmericanEnergy embarks on building more than a gigawatt of new wind power in Iowa – is the development of a logistics center in the heart of wind country, West Texas, by BNSF Logistics, a subsidiary of Berkshire’s Burlington Northern Santa Fe Railway Company.

“With cost per megawatt getting closer to a level that will make wind energy developers less reliant upon subsidies or tax credits, any additional savings that can be taken out of the supply chain is considered critical by industry insiders and observers,” BNSF Logistics said in a news release put out with Tri Global Energy, a developer of wind farms in West Texas that is the first company to sign on to use the facility.

Related: BNSF Logistics & Tri Global Energy Joint Marketing Agreement

Citing information from BNSFL, the Amarillo Globe-News reported that the site for the West Texas Wind Energy Logistics Center, in Hale County, just north of Lubbock, “is within a 100-mile radius of 85 percent of planned wind projects.”

BNSFL said the facility, expected to open in the next few months, will initially cover 40 acres but could grow to 200 acres. ”When fully developed the site will be receiving, storing and loading out hundreds of turbine components each month, receiving components via both rail as well as truck,” te company said.

Wind turbines are massive structures, so getting all the pieces in place when building wind farms is tricky and expensive business. And this is a challenge that only figures to grow as wind turbines themselves get bigger: the U.S. Department of Energy in January announced it would invest $2 million in matching research funds specifically aimed at addressing the logistical issues involved in transporting big wind turbine components.

Tri Global says it has “16 projects in its wind energy development portfolio,” adding up to 6,600 MW, with a big focus on West Texas. “Having a freight and logistics powerhouse like BNSFL bringing their resources and expertise to boost TGE’s West Texas projects provides a critical element supporting our overall vision,” TGE Chief Executive Officer John Billingsley said in a statement.

Texas is already the U.S. leader in wind power capacity, with 12,214 MW as Sept. 30, 2013, but more is on the way as developers rush to take advantage of the Competitive Renewable Energy Zone transmission project, new lines (see the map above) that link the windy west with the state’s big population centers.

Source: EarthTechling

Related: BNSF Logistics & Tri Global Energy Joint Marketing Agreement