Iberdrola has unveiled plans to double its spend on renewables, taking its investment from €75 billion (US$91 billion) by 2025 to €150 billion (US$182 billion) by 2030.
The Spanish energy group made the pledge after its renewables business posted net profits of €3.6 billion (US$4.4 billion) last year despite the widespread disruption in the power market caused by COVID-19.
Chairman and CEO Ignacio Galan told analysts today (24 February) that the company will set aside €150 billion (US$183 billion) to nearly triple its renewable energy capacity by 2030, adding it would further expand by “focusing on countries with attractive ratings and ambitious climate policies”. The company also increased its dividend 5% to €0.42 (US$0.51) per share.
Overall, Iberdrola’s operating profit fell by 3% to €1.2 billion (US$1.4 billion), driven by its recent commissioning of new plants as it ramps up its renewables capacity. However, EBITDA earnings, gross profit and revenues in the renewables arm rose by 8.4%, 9.1% and 8.5% respectively, according to the company’s 2020 results statement. It estimated that profits would have been 10% higher compared for 2019 if the pandemic had never existed.
Spain, the company’s home market, took the greatest sales hit last year in the renewables sector, falling 5.2% to €697.6 million thanks to falling electricity demand brought on by the pandemic and subsequent restrictions on movement.
Nonetheless, the utility’s renewables earnings rose in all other markets and was notably supported by growth in the UK, where margins jumped 40% last year compared with 2019. EBITDA in Brazil also rose 19%, and 10.7% in Mexico, due to higher output increases and operating capacity in the countries. Iberdrola said it expects annual profits to reach €7 billion (US$8.5 billion) within the next decade as it ramps up investment in renewables.
The utility has targeted installing 60GW of renewables capacity within the next five years, doubling its solar PV capacity to 16GW, and plans to reach 93GW by 2030. The company recently signed a power purchase agreement (PPA) to sell electricity from what is claims will be Europe’s largest PV plant, the 590MW Francisco Pizarro project in Spain’s Extremadura region, to French food group Danone. The project is expected to come online April 2022. Meanwhile, the company also plans to form a new business unit focused on hydrogen that will use 100% green energy in the electrolysis process.