One of the world’s largest energy producers continues to beat profit expectations with renewable energy, even as oil and gas prices make historic gains.
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Spanish energy giant Iberdrola beat market forecasts with a 27% increase in first-quarter income compared to the same period last year. The earnings beat largely came down to better-than-anticipated hydroelectric power production in Brazil, according to the research firm Bespoke Investment Group.
Since last year, Iberdrola’s Brazilian production of hydro power has expanded by 25%, alongside a 47% increase in solar energy and a 2% increase in wind energy in Brazil. In the US, the company’s solar production in the US has jumped 91%.
Iberdrola also has entered into an agreement with the Singaporean sovereign wealth fund GIC to make a transmission network in Brazil for 430 million euros (equivalent to $472 million).
“I think that the fact that these large sovereign funds are already ready to buy and ready to participate with ourselves means that for them this is already a business that adds real value,” said Ignacio Galan, executive chairman of the company.
The outlook is further boosted by regulations and policies around the world that are advancing the green energy transition, Iberdrola executives said. This includes the European Union’s renewable energy targets, and the US’ Inflation Reduction Act, JOBS Act, and federal infrastructure investments. In the earnings call, Galan said that European countries should find more “carrot not stick” incentives for the transition to renewable energy.
How Iberdrola built its renewable energy business
1992: Iberdrola is born as part of the merger of two Spanish utility companies, with a primary focus on hydroelectric and nuclear power.
1995: Iberdrola enters Latin America for the first time.
2007: Iberdrola acquires Scottish Power, becoming Europe’s third largest utility provider.
2008: Iberdrola purchases Energy East, expanding its footprint in the US.
2011: Iberdrola acquires Elektro Eletricidade e Servicos of Brazil, becoming one of the largest energy providers in Brazil.
2020: Iberdrola buys Infigen Energy, and with it, the rights to the world’s largest wind farm.
The investment in renewables is already paying off
The Spanish energy company Iberdrola has long been a frontrunner in the move towards renewable energy sources. This is evidenced by the fact that, just last year, it was the number one wind-power producer in the world, and its commitment to sustainability is further demonstrated by its extremely ambitious renewable energy targets.
In the last decade, Iberdrola has invested over €50 billion in renewables, with much of this having been invested in the development of wind energy production. As a result, Iberdrola now has an impressive portfolio of wind farms throughout Spain, the UK, Mexico, Brazil, and other countries. This has allowed the company to be a leader in the global shift to using clean energy sources such as wind and solar.
In addition to this, Iberdrola has also made much progress in its development of solar energy. By the end of 2019, Iberdrola had constructed some of the largest solar installations in the world, with a total combined capacity of almost 4,000 MW. This is enough to power 4 million homes, making Iberdrola one of the leading players in the field of solar energy globally.
The company’s investments in the renewable energy sector have been proving successful. Last year, the majority of its electricity generation came from renewable sources, with a total of 19.1%, including 7.4% from wind power and 7.9% from solar.
Moreover, Iberdrola has also announced plans to double its renewable energy output to 40 per cent by 2030. This would make Iberdrola one of the leaders in the field of renewable energy around the world.
It is clear that Iberdrola’s big bet on renewable energy is a winning proposition. This is evidenced by its impressive investments in the sector and its already high rate of success in terms of the production of electricity from renewable sources. If the company continues down this path, its potential for success is immense.