Iberdrola: Leading the Energy Revolution

Iberdrola is a global energy leader with almost two centuries worth of history. In terms of stock market capitalisation, the conglomerate is the leading wind power producer and one of the world’s largest electricity companies. One of Iberdrola’s most fundamental pillars is its commitment to clean energy, a core component for building its clean, reliable and intelligent business model. As part of its strategic plan, Iberdrola reports the following key figures:

• €41 billion total investment to 2026
• €21.5 billion investments in networks to 2026
• €15.5 billion investments in renewables to 2026

Moreso, according to this plan, the company further states that “we will create 10,000 jobs worldwide over the next three years, which will increase this figure to 500,000 jobs throughout our supply chain. In addition, we want to make our growth compatible with the zero emissions’ goal in our generation plants and own consumption by 2030, as well as in all our activities by 2040.”

Main activities of Iberdrola

The Iberdrola Group operates in the energy sector in countries across North America, South America, Europe, and Oceania. Itsmain activities include offshore and onshore wind energy, green hydrogen, smart grids, solar power, and hydroelectric power. Through its six subholding companies, the group is able to supply energy to approximately 100 million people in different regions across the globe.

Sustainability

Iberdrola aims to balance its growth in renewables and grids with its goal of achieving carbon neutrality in scopes 1 and 2 by 2030, and net-zero emissions across all scopes, including scope 3 (expressed in CO2eq), by 2040. This includes initiatives like the launch of the company’s 2030 Biodiversity Plan in which Iberdrola has set itself the goal of having a positive net impact on biodiversity in the 2030 financial year. Amongst other objectives, the purpose of the Plan is to “strengthen and implement mechanisms so that Iberdrola has a net positive impact on biodiversity and contributes to promoting cultural change to “Live in harmony with Nature” (2050 Vision of the Convention on Biological Diversity of the United Nations).” Via the plan, Iberdrola also “commits that its activity does not generate net deforestation in 2025. This commitment applies to both direct actions and those of the group’s supply chain.”

Key acquisitions and market expansion

An August 2024 Reuters article reports that Iberdrola has agreed to purchase an 88% majority stake in British power network Electricity North West (ENWL) for 2.5 billion euros, valuing the company at approximately 5 billion euros ($5.4 billion). This acquisition aligns with Iberdrola’s strategic focus on upgrading and expanding power grids, which offer stable and predictable returns, especially as the renewable energy sector faces challenges from high interest rates and debt costs. This move will enhance Iberdrola’s operations in Britain.

In June 2023, the European Investment Bank (EIB) and Iberdrola signed a €1 billion financing agreement to advance the energy transition in Europe by constructing 19 solar power plants and 3 onshore wind farms across Spain, Portugal, and Germany. These projects, with a total installed capacity of 2.2 GW and a combined investment of over €1.7 billion, aim to enhance energy supply security, climate action, and social cohesion in Europe. This initiative is part of the EIB’s support for REPowerEU, the EU plan to boost Europe’s energy independence.

In 2020, Iberdrola made three key acquisitions to expand its global renewable energy portfolio. It acquired Australian company Infigen Energy, later renamed Iberdrola Australia, for a reported A$840.6 million, and the French renewable energy firm Aalto Power for €100 million. That year, Iberdrola also enhanced its presence in Brazil by acquiring the CEB Distribuição for €400 million and expanded into Japan by acquiring Acacias Renewables.

In 2015, Iberdrola acquired U.S. company United Illuminating for €3 billion, strengthening its American market presence. That same year, Iberdrola formed Avangrid by merging Iberdrola USA and UIL Holdings Corporation, leading to its listing on the New York Stock Exchange and further solidifying Iberdrola’s position in the U.S. market.

Market capitalisation, net profits and revenue

Iberdrola has a market capitalisation of €74.94 billion and revenue of €45.71 billion. The Spanish utility giant reported that net profits for the first half of 2024 reached €4.1 billion, a 64% increase, primarily driven by the sale of its business operations in Mexico. In June 2023, the company finalised the divestment of a 55% stake in its Mexican business, including 8.5 GW of gas-fired plants, to Mexico Infrastructure Partners. This deal exceeded €5.4 billion and resulted in capital gains of €1.2 billion, according to the company’s interim financial results. Yahoo Finance noted that without these capital gains, Iberdrola’s net profit would have been under €3 billion.

Commenting on the company’s financial results, Ignacio Galán, Executive Chairman of Iberdrola, said: “Record renewables production and robust performance in our networks business has helped to deliver a strong set of results for the first half of 2024. We have also invested more than ever before in the first 6 months which will drive benefits in the second half of the year, in terms of new renewables capacity and a higher rate base in networks.  This allows us to increase our profit guidance for the year.”

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