Repsol set course to have 15GW of “low carbon” — and mostly renewable — power generation on its books by 2030 as the Spanish oil & gas group formed a new business unit for the sector that plans to be adding 1GW annually in the second half of the decade.

Madrid-based Repsol's 2021-2025 plan calls for total investments of €18.3bn ($21.85bn) in the period, with 30% — €5.5bn — of this spent in the low-carbon business.

Low-carbon generation will be one of four new business units, with the others being upstream, industrial and customer.

Repsol also boosted its emissions-reduction targets as it now aims to reduce intensity by 12% in 2025 (as against the previous objective of 10%), 25% in 2030 (20%) and 50% (40%) in 2040, en route to being net-zero in 2050.

Expanding green asset base

For the low-carbon business, Repsol is looking to increase its asset base with an objective of 7.5GW of capacity by 2025 and 15GW by 2030, up from 3.3GW now.

By the end of the decade it expects to have about 6GW of wind and 5GW of solar, plus 1.7GW of hydropower, plus some gas and co-generation capacity.

“The company is planning to continue the organic growth of this business through the development of a portfolio of projects in operation that will grow at an annual rate of more than 500MW between 2020 and 2025,” it said. That's set to step up to 1GW a year from 2026-30.

Repsol also said it wants to have 1.2GW of renewable hydrogen capacity in place by 2030.

Earnings before interest, tax, depreciation and amortisation from this division are set to jump eight-fold from the 2019 figure to €331m by 2025, with investments to reach €1.4bn a year by that mark — also an eight-fold increase on last year.

Repsol said its new strategy will be “highly flexible in relation to the macroeconomic environment” and will be self-funding at an average Brent oil price of $50 per barrel and $2.5 per thousand British thermal units of gas at Henry Hub.

The strategy will be rolled out in two phases, with the first two years ensuring financial strength, and the focus shifting to accelerating growth from 2022.

'Multi-energy offering'

Chief executive Josu Jon Imaz said: “With this new strategic plan, which leverages our strengths, we are taking a significant step towards becoming a net-zero emissions company, outlining a profitable and realistic roadmap that will allow us to grow, maximize value for our shareholders, and assure the future.

“Our strategy is based on a multi-energy offering that combines all the technologies for decarbonisation of energy. We will be more efficient and increase our renewable energy objectives as well as our manufacture of products with a low, neutral, or even a negative carbon footprint.

“We will promote circular economy initiatives, develop new energy solutions for our customers, and boost cutting-edge projects to reduce the industry’s carbon footprint.”

The company added: “By 2030, Repsol will be a company that is renewed, more sustainable, and more focused.”

This article first appeared in Upstream