European utilities step up renewables investment plans

As power companies release their financial results and spending plans for the next few years at this time of year, more investment in renewables is emerging as a theme.

Beneficiary… Developers are planning to increase spending in key wind markets, including the US (pic: Iberdrola)
Beneficiary… Developers are planning to increase spending in key wind markets, including the US (pic: Iberdrola)

Iberdrola ups renewables pledge

Iberdrola plans to increase its renewables investments to 2022, both in absolute terms as well as in clean energy’s share of the total expenditure. The Spanish utility will spend €13.3 billion on renewables in 2018-22, or 39.1% of the €34 billion total investment in the period. This compares with €11.5 billion (37%) of €32 billion in the investment plan it unveiled two years ago.

It wants to commission 9.9GW of additional renewables capacity by the end of 2022, on top of the 29.1GW it had installed at the end of 2017, as well as 90GWh of storage capacity, up from 70GWh currently.

Last year — the first year of the investment period — Iberdrola spent €5.32 billion, of which €1.67 billion (31%) was on renewables.

The Spanish firm will invest €16 billion (47% of the total) in its networks division between 2018 and 2022, it said.

The firm plans to concentrate on the main markets in which it already operates: continental Europe — with a focus on Spain, the UK, Brazil, the US, and Mexico.

In Spain, it will invest €8 billion over the period, with €4.2 billion to be spent on renewables to triple its online wind and solar capacity to at least 10GW by 2030. The firm has 700MW of renewables under construction in Spain, 2.5GW in development and a project pipeline of more than 7GW.

Iberdrola has an offshore wind pipeline of more than 10GW in the US, the UK, Germany and France. It will have more than 2GW of installed offshore capacity in 2022, it said.

RWE sets 2-3GW annual target

German utility RWE plans to add 2-3GW of new clean energy capacity a year as it launches its new renewables division.

RWE Renewables will focus on wind, solar PV and storage, it said. It will target the Americas, core markets in Europe and new markets in Asia Pacific.

This 2-3GW annual expansion will be driven by net annual investment of around €1.5 billion. However, it is not clear how long these expansion targets are due to last.

RWE has appointed a new management team to lead its newly created renewables division as it prepares to integrate the clean energy segments of Innogy and E.on. As a result of the impending acquisitions, RWE will become one of the largest renewable energy operators, with 8.6GW of capacity.

RWE will acquire a 16.67% "effective participation" in E.on, while E.on will receive an 86.2% stake in Innogy in a deal announced in early 2018.

Innogy owner RWE will receive the renewable assets and gas storage business of its subsidiary and E.on, while E.on will only buy Innogy’s grid and retail business.

The European Commission approved RWE’s acquisition of E.on’s electricity generation assets in February but has launched a probe into whether E.on’s takeover of Innogy will reduce competition in retail markets.

EDP refocuses with asset sales

More than 70% of EDP’s electricity generation will be from renewable sources by 2022, the company said while laying out its strategic plans.

EDP chief executive António Mexia is also targeting up to 5.5GW of new onshore wind capacity and 300MW of offshore capacity, mainly in the company’s North American markets, over the next three years.

Improved regulatory visibility for renewable development in Portugal, Spain, the US and Brazil makes this a low-risk strategy, Mexia said.

Investment in renewables will be accompanied by sales, mainly of Iberian thermal and merchant assets, which will raise an estimated €2 billion by 2022.

According to EDP’s chief financial officer, Miguel Stilwell, strong market appetite will help ensure EDP raises a further €4 billion from asset rotation to cover half of its planned investments up to 2022.

Mexía lamented the fact that China Three Gorges’ proposed acquisition of EDP and regulatory disputes with the Portuguese government have "blurred the company’s message" as a successful pioneer of the energy transition.

Engie eyes corporate deals

French utility Engie plans to spend €2.3-2.8 billion expanding its renewables business by 2021, accounting for 19-25% of the €11-12 billion total investment over the period.

Only the client solutions unit will receive more (€4-5 billion) than its renewables arm over the next three years.

The firm plans to add 9GW of renewables capacity by 2021 and aspires to play a big role in technologies such as offshore wind, it said at its capital markets day.

It will target 50% of its new clean-energy projects being dedicated to specific customers and wants to become a leading supplier of corporate power purchase deals.

The new targets update a group strategy, started in 2016, focusing on decarbonisation, digitalisation and decentralisation. Over the next three years, Engie plans to reduce its thermal capacity and coal generation, but has not provided specific targets for this.

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