Iberdrola has announced this morning that it will raise its investments in Spain until 2022 to 8,000 million euros, which means an upward revision of 40% with respect to its initial forecast of 5,700 million, to meet its objectives for the energy transition. According to a statement released by the company's president, Ignacio Sánchez Galán, "this plan accelerates investments in Spain and promotes the transition to a low carbon economy", but at the same time stresses that "it will be necessary to consolidate a regulatory framework for long term, that provides certainty and stability to investments ".
According to the new Strategic Perspectives 2018-2022, that he had explained in 2018 but that today has been updated and presented in London, the company plans to develop at least 10,000 new megawatts (MW) solar and wind until 2030, which is almost triple its current power in the country with these two technologies. By 2022, in addition, Iberdrola will have already launched 3,000 new renewable MW in the country, 52% more than its current wind and solar capacity. To date, the company already has more than 700 MW under construction, 2,500 MW in development and a portfolio of more than 7,000 MW. Of the total figure, about 4,200 million will be destined to renewable.
At a global level, the company will invest 34,000 million euros in the period between 2018 and 2022, which increases the investment effort initially envisaged in its Strategic Perspectives for this period, amounting to 32,000 million euros, by 2,000 million euros.
Bet on stable businesses
This update of the Strategic Perspectives 2018-2022 occurs after the company exceeded for the first time the 3,000 million euros annual net profit -3,014 million euros in the year 2018- and in a favorable context to grow organically in the main geographical areas where it operates: Spain, the United Kingdom, Brazil, the United States and Mexico.
According to Sánchez Galán, "new opportunities are opening up for the group in which the company will be able to develop new renewable projects in all the countries in which it operates, as well as launching new transport and distribution assets in the United States, Brazil and UK". And specifically in Spain, has highlighted that there is a new scenario ttas have recently presented the Integrated National Plan for Energy and Climate 2021-2030.
Specifically, of the 34,000 million euros of investment, 86% will be allocated to regulated activities or with long-term contracts, according to the company's strategy of focusing on business with stable and predictable returns. Thus, 47% of the global amount (16,000 million euros) will be invested in networks and 39% (13,300 million euros) in renewables. The Generation and Customers business will receive 11% of the total (3,800 million euros). As a result, Iberdrola will have increased its installed capacity by almost 40% during the execution of these Strategic Perspectives.
The company is currently making progress in the development and construction of 10,113 new MW, of which 65.3% (6,606 MW) corresponds to renewable projects. In addition, in 2023 it will keep 5,300 million euros in progress in the Renewables and Generation business, mainly in the offshore wind farms of Saint Brieuc (France), Vineyard Wind (United States) and Baltic Eagle (Germany) and in the hydroelectric complex of the Támega (Portugal).
9,000 new megawatts of renewable
Virtually all investment in networks (98%) is already assured thanks to the existence of regulatory frameworks defined in different countries. As a result, Iberdrola will have increased the value of its regulated assets by 34% by 2022, to 38,900 million euros. Taking into account the three businesses (renewable, generation and commercial and networks) Iberdrola will have more than 9,000 million euros of capital in progress at the end of 2022, which will contribute to the generation of results beyond that date.
In the area of renewables, the company will have 9,900 new megawatts (MW) by the end of 2022 compared to the close of 2017. In addition, Iberdrola will reach 90 gigawatt hours (GWh) of storage capacity in 2022, which represents an increase of 20 GWh compared to current levels. The storage by pumping hydroelectric power stations is key to enable a greater penetration of clean energies in the electrical system.
Regarding the distribution by currency, the company will maintain a very diversified profile: 36% of the investments will be made in dollars, 29% in euros, 17% in sterling and 18% in Brazilian reais. He also stressed that significant opportunities have been created for Iberdrola in the offshore wind business at a global level: the company has a total offshore portfolio of more than 10,000 MW. These new developments would be located in the United States, the United Kingdom, Germany and France. Currently, the company already has awarded projects that would join the installed offshore wind capacity to reach more than 2,000 MW in 2022 and close to 1,000 additional MW in the following years.
The company expects to close 2022 with a net profit of between 3,700 and 3,900 million euros -which represents an increase of up to 30% compared to 2018- and a gross operating profit (Ebitda) of more than 12,000 million euros. These results will allow the company to fulfill its commitment to increase the remuneration to its shareholders in line with the evolution of the results. Iberdrola will set annual minimums that will reach a gross floor of 0.40 euros per share in 2022.