Iberdrola said it will spend €150bn ($183bn) to almost triple its already huge renewable energy generation capacity within a decade, underpinned by healthy profits that held up despite the coronavirus pandemic.

The Spanish green energy giant expects to boost its global renewable capacity to 95GW by 2030, up from 35GW in 2020 and far beyond a 2025 target of about 60GW.

Investments foreseen through 2030 are double the €75bn the company had earmarked for its 2020-25 strategic plan.

"Our balance sheet is supporting economic recovery, with record investments of more than €9.2bn [in 2020] and €14bn awarded to over 22,000 suppliers, the largest in our history, to support 400,000 jobs in our markets,” Iberdrola chairman Ignacio Galán said.

“In this decade, we plan to invest €150bn to triple our renewable capacity and double our network assets."

Race against rivals

Iberdrola is increasingly competing with oil & gas majors such as Shell, BP or Total, who are also pouring dozens of billions into buying or building renewables capacity in order to diversify away from fossil fuel-based business models that show declining profits and are at odds with climate protection.

Some of Iberdrola’s rivals have even more ambitious goals for 2030. Italian renewables titan Enel plans to reach a capacity of 145GW by then, while French oil major Total aims for 100GW in renewables by 2030 – but the judgement is still out whether oil companies will be able to expand in green energy as fast as the utilities that have been specialising in the sector for decades now.

2020 profit despite Covid

Iberdrola’s 2020 financial results clearly show how lucrative the growing renewables business is.

The company’s underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) rose by 8% to €10.71bn last year from 2019. The figure excludes an impact of €218m from Covid-19 and an exchange rate effect that amounted to €487m.

Iberdrola’s offshore wind business was particularly profitable, soaring 72% to contribute €585m to the overall result.

Growth in international markets, which now contribute two thirds of Ebitda, was able to offset a weaker performance in Spain, where lower power demand in the wake of the pandemic caused profit to decline by 13%.

The group’s net profit despite Covid-19 rose slightly in 2020 to €3.61bn, up from €3.47bn in 2019.

Iberdrola’s expects that its massive investments will result in boosting net profit to €5bn by 2025, and then to €7bn by 2030.

The Spanish company is putting an emphasis on growing its offshore wind business. Iberdrola currently has 1.3GW in installed offshore wind capacity, with another 2.6GW under construction. Its current offshore wind pipeline totals 19GW, of which 9GW are ready for construction and 10GW planned for development in Sweden, Japan, Poland and Ireland.

Green hydrogen

An additional, new focus area is green hydrogen.

The company has presented 53 projects to the EU’s Next Generation programme, which it said could activate €2.5bn in investments to achieve an annual production of 60,000 tons of green hydrogen (produced from renewable power via electrolysis) per year.

Among proposed projects is a €1.8bn plan together with fertiliser make Fertiberia that would see the installation of 800MW of green hydrogen production capacity in Spain by 2027.

Iberdrola has also joined the global Green Hydrogen Initiative together with other industry heavy-weights such as Orsted, with a view to deploying 25GW of renewable H2 production by the end of 2026 and halving the current cost of the clean gas to under $2 per kilogram.

UPDATES with more detail throughout on offshore wind, investments and hydrogen plans

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Bullish Iberdrola earmarks $183bn to triple renewables to 95GW by 2030