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longinvestor:
https://finance.yahoo.com/news/nevada-utility-announces-three-major-175634324.html

Utility scale solar with battery storage. 3.5 cents per KWH to produce.

I did a search before creating a topic with this title. After all this is where most capital is going to go. As a shareholder my eyes are on this. At the annual meeting there was a question from Greg Warren, I think about the slowdown in the pace of capital projects @ BHE. I had spent a good amount of time at the BHE booth and they were buoyant about this and other topics. Watch BHE.

Dynamic:
I think the dollar amount of capital expenditure is likely to decline from the very high rate recently, where the tax deferral advantages had been hugely beneficial, but are soon to diminish from that peak. Nonetheless, I'm sure a lot of capital will still be deployed at attractive rates by BHE, often with attractive tax benefits.

It now appears that for NVE, it's the three partner companies that will run these projects and presumably benefit from a long-term contract with NVE, and presumably it is those companies that will raise the capital required.

I think BHE has been looking at grid-scale battery storage for quite a while - and their BYD investment many years ago was probably in part linked to the potential of grid scale storage, which was mentioned around the time as items being closely watched, back in David Sokol's day when it was still called MidAmerican Energy.

3.5 cents per kWh with storage, seems very attractive. The costs of solar and battery storage are coming down so rapidly (even faster rate of decline than the cost of wind generation, with the cost per kWh of solar alone now roughly at parity with wind alone but declining faster) such that a lot more capacity of generation and storage can be bought for less capital expenditure than just a few years ago, and now cheaper than most other sources of baseload and peak generation, so I'm optimistic that the economics emerging from these price declines will turn these low carbon alternatives into the default no-brainer solutions in the near future, and will increasingly become economically superior to keeping coal-fired power stations going, providing environmental improvements and additional employment that will far outweigh the losses in the coal industry.

The Holmesdale South Australia battery plant in a short period has reportedly made a lot of money providing grid stabilisation services with extremely rapid reaction times, for which it's financially well-rewarded by the dynamic pricing system in that jurisdiction, such that I believe it makes more of its money from those functions - rapid-response peak shaving and trough-filling and the time-arbitrage it can offer - than from sustained output functions. Further facilities in the same area would have diminishing returns, but it clearly serves a valuable function and is well rewarded.

gfp:
https://www.bloomberg.com/news/articles/2019-06-26/buffett-s-nevada-utility-offers-a-customer-millions-just-to-stay?srnd=premium

longinvestor:

--- Quote from: Dynamic on June 27, 2019, 01:06:21 AM ---I think the dollar amount of capital expenditure is likely to decline from the very high rate recently, where the tax deferral advantages had been hugely beneficial, but are soon to diminish from that peak. Nonetheless, I'm sure a lot of capital will still be deployed at attractive rates by BHE, often with attractive tax benefits.


--- End quote ---

Just curious as to why the rate of capital deployment goes down?

Its my understanding that the appetite only increases yoy because BHEs tax rebates inure to Berkshire Hathaway. Buffett has repeatedly mentioned this as the reason that they are going pedal to the floor for as far as the eye can see. Any slow down is likely due to getting regulatory approvals. BHEs countermeasure is to make it all for the consumer. Regulators like that in addition to investment in an otherwise dormant industry. Take Iowa for instance MidAmerican is holding rates steady until 2032. The other Utility in the state is raising rates. As I drive to Omaha from Chicago I see turbines from the Nebraska border and ends abruptly mid state. Its all because of the 100% retained earnings versus dividending out of cash cow utility companies

gfp:

--- Quote ---Just curious as to why the rate of capital deployment goes down?
--- End quote ---

He may just be basing it on BHE's own projections.  Of course, their future plans don't reflect projects that aren't confirmed or opportunities that haven't come up yet.  But as of earlier this year, they expected capital expenditures to decline.  It probably won't actually happen.  Projects are included in the projections as they are committed to.

https://www.sec.gov/Archives/edgar/data/71180/000108131619000007/ic2019.htm

(several mentions but slide 22 shows it fairly clearly)

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