The CEO of global green power giant Iberdrola took a swipe at oil & gas bosses for complaining about a bubble in renewable energy assets that he claimed the supermajors themselves are creating.
Ignacio Galán said he was “not surprised” by the hefty bids seen in this month's auction for new offshore wind leases off the UK, which saw BP and Total emerge with development rights, but long-time incumbents such as Orsted and Iberdrola itself emerge empty-handed.
The 8GW leasing round by UK seabed landlord the Crown Estate led to scathing criticism from some in the industry that the prices paid risked driving up the price of wind at sea, reversing a decade of cost reduction by the sector.
Galán said he expected the supermajors “to be ready to pay high prices because they need to change their equity story.
“They need to show to the market that they are really committed [to the energy transition].”
But Galán added: “They need to clarify their position.
“It makes no sense to pay high prices in auctions as they did and declare days after that there is a bubble in the sector – that probably they’re generating.”
Galán, who was answering questions from financial analysts following the group’s full-year results, did not specify which oil company he was referring to, but Total CEO Patrick Pouyanné in an interview with the Financial Times last week claimed there was “a bubble” in the renewables sector with scarce assets leading to “crazy valuations”.
In a sign of the shifting landscape of the renewables sector as new entrants join, Iberdrola and French supermajor Total are themselves teaming up to bid jointly for the right to build Denmark’s largest offshore wind farm, the 1GW Thor.
The Iberdrola boss said the Spanish group could only benefit from any “crazy” prices paid by fossil giants, as it would drive up the value of its own 19GW offshore wind portfolio.
Galán has led Iberdrola to a position where it is widely-regarded as one of a new breed of ‘renewable supermajors’, alongside Italian utility group Enel and Denmark’s Orsted.
Iberdrola’s headline target of 95GW of renewables by 2030 is among the highest globally, alongside Enel’s 145GW and 100GW from Total itself.