Giant in Renewables Shows Profits in Times of Pandemic

Iberdrola, a major Spanish player in utility-scale energy projects and renewables seems to be quite unbothered by COVID-19’s adverse effects. In fact, the company is able to flaunt profits, show new investments and will hire personnel. How did this break in expectations come about?

The company has operations worldwide, including a significant presence in Mexico. Iberdrola is currently constructing 8.5GW of mostly renewable projects, which it plans to have operational within two years, reported Green Tech Media. This adds to their already significant portfolio of 30GW. Early April, the company presented its “Renewables vs. Coronavirus” plan, which includes the hiring of 5,000 extra employees and boasts investments worth €10 billion (US$10.7 billion) for the remainder of 2020.

Spanish newspaper Expansión reported that Ibedrola reached a profit of €968 million (US$1.05 billion) from January to March 2020. It is an increase of 5.3 percent over the same period in 2019. One major factor was a record amount of investment for the company, as well as the sale of its 8 percent share in Siemens Gamesa. A new offshore wind farm in the UK had its last turbine installed and with summer’s sunlight boosting solar operations, the company is looking forward to a successful continuation of the year. Nonetheless, Iberdrola did report that in Spain, in particular, energy demand had fallen, leading to a drop in energy market prices of 37 percent. Iberdrola Spain therefore had to reduced its EBITDA by 3 percent and its net profit by 7 percent.

Nonetheless, this setback has been created by COVID-19 and therefore expected in the current market. Ignacio Galán, Iberdrola’s CEO and Chairman, said in a conference call that he expects growth for the rest of the year to be as positive as in 1Q20. Focusing on Europe, Galán mentioned that a green development plan would contribute greatly to the continent becoming an industrial center for renewables, leading to further energy independency. The company aims to blow full steam ahead by increasing its investments 51 percent compared to the same period last year, targeting networks and in the acceleration of new renewable projects specifically. “Speeding up investments, once these exceptional circumstances come to an end, is the best — I would venture to say the only — way to get through this situation of crisis and uncertainty. Therefore, in 2020, it is our intention to surpass last year’s investment record and reach €10 billion (US$10.7 billion),” Galán said in April.

Iberdrola’s subsidiary Iberdrola Mexico is taking extensive measures to address the COVID-19 crisis. Actions taken include donating MX$30 million (US$1.26 million) in medical supplies, implementing home office for 60 percent of its employees and the best possible safety precautions for those working on site.