Iberdrola expands investment as profits suffer amid energy price turmoil

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Iberdrola has committed to installing and commissioning a total of 27.6GW between 2020-2025. Image: Iberdrola.

Spanish utility Iberdrola has expanded its investment in renewables and smart grid projects to €7.03 billion (US$8.15 billion) but its net profit suffered, falling 10.2% to €2.4 billion (US$2.78 billion), according to its recent financial results for the first nine months of 2021, released today.  

The Bilbao, Spain based company increased its investment in grid systems by 27% to €3.18 billion, with around 65% going to renewable projects. It has installed 3.74GW of renewables over the past year, 1.5GW of which was solar, and has 7.2GW under construction. Around 80% of the renewable capacity under construction is in international markets, the company said. This brings its total project pipeline to 81.8GW, of which 37GW are solar.

Its adjusted net profit, excluding non-recurring items, grew 5.2% to €2.68 billion. However, tax levies in Spain and the UK, regressive energy policies in Spain, high power prices in Europe and complications due to COVID-19 brought reported net profit to €2.4 billion (-10.2% on the same period last year). Its liquidity is upwards of €19 billion and covers 19 months of financing needs, said the company.

Between January and September 2021, Iberdrola recorded €8.16 billion (+10.7%) earnings before interest, taxes, depreciation and amortisation (EBITDA), driven by operations in the US and Brazil. Of the total, 87% came from networks and renewables. 

Revenue from renewables increased its EBITDA in the same period by 70.9% to €3.04 billion as a result of increased production due to a higher installed capacity delivered by its investment plan and “the improvement in load factors”, said the company.

Investments in Spain amounted to €1.59 billion, up 21% from the same period of 2020, and have been directed towards the development of new renewable capacity (€792 million), smart grids (€445 million) as well as maintenance and other investments (€356 million).

In Spain, its total renewable capacity from the last year is 2.35GW, which is “larger than the sum of the capacity installed by the next three largest developers in Spain,” the company said in a media release. Moreover, it has 1.5GW under development, of which 1.13GW are solar.

Globally, the company has committed to installing and commissioning a total of 27.6GW between 2020-2025, with the aim of reaching 60GW of renewable capacity. As of last month, “22.7GW are under construction or at a high level of maturity, which means that 82% of the new capacity planned for the period has been secured,” said Iberdrola.

It has made €22 billion worth of purchases from suppliers since the start of the pandemic to fulfil its investment commitments.

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