EDP Renewables (EDPR) in an extension to its €24bn ($29.3bn) five-year investment plans said it aims to add more than 50GW in renewable capacity by 2030 in order to remain a “green energy major”.

As part of its latest strategic update, the world’s second-biggest wind power producer and a unit of Energías do Portugal (EDP), said by 2025 it plans to add about 20GW of mainly wind and solar, at a rate of about 4GW per year, to reach some 40GW in total. Some of the capacity will also be added in storage and hydrogen.

The developer would then look at add another 30GW or so to reach a cumulative total of 70GW by the end of the decade.

Of the planned five-year capital expenditure, 80% will be in renewables, 15% in networks, and 5% in client solutions and energy management as the company strives to exit coal by 2025, and become fully carbon neutral by 2030 when 100% of its generation capacity is slated to be renewable (up from 74% now).

“We already are one of the green energy majors. That is for sure. [We have the] track record, installed capacity, we already have the scale, the global footprint,” EDP chief executive Miguel Stilwell d’Andrade said during a webcast.

That certainly “places us up on the podium and we intend to stay there”.

The ambitious expansion plan by EDPR comes as green energy ‘supermajors’ Iberdrola and Enel have presented targets to reach 95GW and 145GW respectively of renewables capacity by 2030.

Aggressive prices at UK Round 4

The southern European energy giants face stiff competition from 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.

Total, for example, aims for 100GW in renewables by 2030, and oil firms have made very high bids in the UK’s recent leasing round for wind at sea.

“We saw prices which we thought were extremely aggressive in Round 4,” d’Andrade said, echoing comments made yesterday by Iberdrola chairman Ignacio Galán, who accused oil companies of creating a bubble in renewable energy assets.

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.

The global challenge presented by climate change requires a stepped-up ambition, as some 250-300GW of global renewables capacity must be added over the next decade, d’Andrade said, adding that “this is a huge market. And I believe that there is going to be a rationale I terms of the returns, and there is so much capital that needs to be deployed.”

“In offshore wind, we have a lot of different models, so I wouldn’t extrapolate from the Round 4.”

EDPR is part of a consortium to develop the Mayflower project on the US East Coast, and also has other offshore wind pipelines in Poland, northern Europe and Asia, he stressed.

No merchant bids

But Andrade added his company will not invest in projects on a merchant basis. The Netherlands and Germany had zero subsidy outcomes in offshore wind tenders in recent years.

EDPR made sure that despite its ambitious expansion plans, the company will ensure a low-risk profile and aim towards a solid investment grade rating of at least BBB.

The steep growth course will drive earnings before interest, taxes, depreciation and amortisation (Ebitda) at the company to €4.7bn in 2025, the company expects, up from €3.5bn in 2020.

Net income according to the strategic plan is slated to increase from €0.8bn last year to €1.2bn in 2025.

EDPR said that 40% each of its new investments from 2021 to 2025 will be in Europe and North America, and 20% in the rest of the world, most of that in Latin America.

Split up by technologies, out of the about 20GW expected to be added by 2025, 9.1GW (or 46%) will be in onshore wind, 0.9GW (5%) in offshore wind, 8GW in utility scale solar (40%), 1.4GW (7%) in rooftop solar, and 0.4GW (2%) in storage.

Wind

EDPR launches 50GW expansion plan to 'stay a green energy major'