Production increases boost Iberdrola renewables profit

SPAIN: Iberdrola recorded a 3.7% rise in net profit for 2017, which it said was mostly driven by its renewables and networks businesses.

Construction of Iberdrola's 350MW Wikinger site in the German Baltic Sea was completed in 2017
Construction of Iberdrola's 350MW Wikinger site in the German Baltic Sea was completed in 2017

The Spanish utility posted a 7.7% increase in revenue for its renewables division for 2017, rising from €2.39 billion in 2016 to €2.59 billion.

Its operating profit for renewables also increased year-on-year, up 6.1% to €1.59 billion, the company stated.

The company’s onshore wind production (1,716GWh) and offshore wind production (93GWh) increased 5.3% and 12.7% respectively year-on-year, it stated.

Wind farms in the UK and Brazil in particular drove up its gross margin due to increases in production and improvement in wind conditions, Iberdrola said.

The 389MW West of Duddon Sands site in the UK’s Irish Sea contributed €117.8 million — 13.3% more than in 2016 — due to its higher output and an increase in the price of energy, Iberdrola said. The project is owned by ScottishPower Renewables, Iberdrola's UK subsidiary.

Meanwhile, the utility also cited "corporate reorganisation" in Brazil as a major factor in its improved results there.

Its subsidiary Neoenergia reached an agreement to take over another Iberdrola offshoot, Elektro, an electricity distribution, generation and retail company that has a 50% stake in wind power developer Força Eólica in June.

The merger last year of Gamesa, in which Iberdrola was a major shareholder, with Siemens, contributed €251 million (US$310 million) to the utility’s overall net profit for 2017 of €2.8 billion (US$3.46 billion).

Iberdrola now has an 8.1% stake in the merged company.


Announcing its results for 2017, Iberdrola also said it would invest €32 billion by 2022, 37% of which (€11.5 billion) would be in renewables.

The company said it expected its renewable capacity to reach 36.2GW by 2022 — a 24% increase on its total at the end of 2017. 

Ignacio Galán, the group's chairman, said: "Overall, the plan we are presenting today is fully consistent with our strategy over recent years, while seizing the opportunities provided by the new digital environment.

"In essence, it is a plan that maintains focus on growth in specific opportunities in regulated and long-term contracted businesses which offer earnings visibility, while maintaining a geographically balanced portfolio and exploring growth beyond those frontiers."


Iberdrola’s US subsidiary Avangrid, meanwhile, recorded net income of $381 million for 2017 — a $251 million fall year-on-year.

This was mainly due to a $502 million loss in its gas storage division.

Its renewables earnings, meanwhile, nearly trebled year-on-year from $114 million in 2016 to $333 million in 2017.

This was achieved "despite poor wind conditions", Avangrid CEO James Torgerson said. New wind capacity contributed to the year-on-year increase in income, he added.

Avangrid’s 208MW Amazon wind farm in North Carolina and 30MW Deerfield site in Vermont were both commissioned last year.

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