Spain's Iberdrola to invest €47B in energy transition over next 3 years

By Alyssa McMurtry

OVIEDO, Spain (AA) – Spanish utility and renewable energy firm Iberdrola announced on Wednesday that it will invest €47 billion ($47 billion) in energy transition from 2023 to 2025.

“The record global investment plans we have set out today will help us to bring more self-sufficiency and resilience against potential energy shocks in the countries where we operate, by reducing their dependency on oil and gas,” Ignacio Galan, the firm’s executive chairman, said in a statement.

The bulk of the money – €27 billion – will go toward bolstering electricity networks, which the company says are key to boosting renewable energy capacity.

A further €17 billion will go directly to renewable projects. Of that, 46% will be spent on offshore projects in Europe and the US, 25% on onshore wind projects, 24% on solar energy, 3% on batteries, and 2% on hydroelectricity.

Although Iberdrola is Europe’s largest utility company, its announced spending plans signal a decisive shift toward the US market, which will receive 47% of all investments.

Speaking to British daily Financial Times on Wednesday, Galan said Washington’s Inflation Reduction Act has made the US a more appealing place to invest compared to Europe.

“The US government took longer to take the climate change theme seriously. But now they are committed to it, they are putting in all the necessary support,” he said.

In the interview, he also criticized the EU’s proposed cap on revenue from electricity generation and Spain’s planned windfall tax on energy companies.

“It’s certainly not making Spain very attractive for investment. Not only for us, for everybody,” Galan said, adding that he will defend the interests of shareholders in courts.

Despite friction in its home country, Iberdrola said it expects to boost earnings between 8%-10% per year over the next three years, with projected net profits between €5.2 billion and €5.4 billion by 2025.

The firm hopes that by then it will be able to pay shareholders up to 75% of those profits in dividends.