Hot on the heels of of its $8bn acquisition of Albuquerque’s PNM Resources, Spanish energy giant Iberdrola this week unveiled plans to invest €75bn over the next five years as it seeks to double its renewable energy capacity and capitalise on the global move away from fossil fuel.
The timing is opportune. According to a report from Allied Market Research, the global renewable energy market was valued at $928bn last year but that could rise to as much as $1,512bn by 2025. That represents a CAGR of more than 6% over a seven-year period.
This transition away from fossil fuels could accelerate even more now that the EU and several major industrial countries – most recently Japan and South Korea – have committed themselves to virtually eliminating their carbon emission levels by the midpoint of the current century. Along with a group of other so-called ‘new energy majors’, Iberdrola is spearheading the private sector’s response to these public-sector initiatives:
|New Energy Majors||Country||Income||Market cap||Main Activity|
|Iberdrola||Spain||$38.3 bn||$77.9 bn||Mixed Renewables|
|Vestas Wind Systems||Denmark||$15.6 bn||$29.4 bn||Wind|
|Siemens Gamena||Spain||$10.6 bn||$17.4 bn||Wind|
|Orsted||Denmark||$6.4 bn||$57.6 bn||Mixed Renewables|
|JinkoSolar Holdings||China||$4.6 bn||$945.4 mn||Solar|
|Canadian Solar||Canada||$3.2 bn||$1.7 bn||Solar|
|Brookfield Renewable||Canada||$2.9 bn||$8.2 bn||Mixed Renewables|
|Renewable Energy Group||US||$2.6 bn||$1.6 bn||Mixed Renewables|
|Sunpower Corp||US||$1.9 bn||$1.8 bn||Solar|
Iberdrola’s acquisition of PBM Resources was part of an ongoing M&A program that has seen the Spanish company also acquire the French renewables company Aalto Power and the Australian Infigen group this year and in the process catapult itself into the table of Spain’s ten largest listed company – and the world’s largest clean energy provider. On the way, however, it seems to have recognised that there are only a finite number of suitable acquisition targets that can help it capitalise on this global switch to renewable energy.
According to its veteran chairman and chief executive Ignacio Galán, 90% of that $75bn has therefore been earmarked for organic growth and at least $40bn will be invested in renewables. The remainder, approximately $27bn will go towards the development of networks.
Like the nations and trading block that are its customer base, Iberdrola has committed itself to being carbon neutral by 2050, and like them is aiming to develop a diversified portfolio. It is Galán’s hope that the 60GW capacity it aims to achieve by 2025 will include an appropriate mixture of onshore wind (target:26GW ), solar (16GW), hydro (14GW) and offshore wind power (4GW).