With a global project pipeline of more than 33 GW, offshore wind has "become a major growth vector" for Iberdrola SA, but the company is unlikely — at least in the near term — to pursue a previously mooted IPO for the segment, Executive Chairman and CEO Ignacio Galán said Feb. 23.
With offshore wind, Iberdrola generates between two and three times the energy per megawatt of solar, and the segment pulls in almost four times solar's EBITDA contribution, Galán said on the company's 2021 earnings call. Offshore wind accounts for about a third of the Spanish utility's construction-stage capacity, with about 2.6 GW of new projects expected online by 2025.
In total, Iberdrola expects to commission more than 7 GW of new offshore wind capacity by 2027 in the U.K., Germany, France and the U.S.
Beyond 2027, the company has a development portfolio of more than 26 GW, with significant pipelines in markets like Ireland, Sweden, Poland, Japan and the Philippines. Its pipeline also includes 7 GW of projects awarded to U.K. subsidiary Scottish Power Ltd. in the recent seabed leasing round in Scotland.
In the U.S., subsidiary Avangrid Inc. is constructing the Vineyard Offshore Wind Project in tandem with Copenhagen Infrastructure Partners K/S. The two companies completed the restructuring of their 5.3-GW offshore wind joint venture in January, giving Avangrid sole control of the Park City and Commonwealth Wind projects.
Iberdrola's offshore wind business is growing at such a pace that Galán said previously that the company was examining ways to extract "hidden values" from the unit, including a possible spinoff. However, the CEO said Feb. 23 that such a deal is "in this moment ... not on our table."
While a spinoff remains "an option," Galán said the company is more focused on partnerships with other companies than an IPO for the business. As well as Copenhagen Infrastructure Partners, Iberdrola is developing offshore wind projects with Shell PLC and a range of local partners in the less mature offshore markets.
Record investments
Iberdrola invested a record €9.94 billion in 2021, an increase of 3% year over year.
The vast majority of the capital expenditure went into renewables and networks, which accounted for 43.9% and 44.7% of the total, respectively. Geographically, the U.S. received the largest share of Iberdrola's spending, with just over a quarter, followed by Spain at 24% and Brazil at 19.0%.
Iberdrola commissioned 3,500 MW of new renewables capacity in 2021, split almost equally between onshore wind, solar and hydropower. The company has almost 7,800 MW under construction, with nearly two-thirds of that in Spain and the U.S.
Iberdrola's networks and renewables businesses boosted the company's 2021 EBITDA to €12.01 billion, up 19.6% compared to the previous year and above the S&P Capital IQ consensus estimate of €11.27 billion.
The company's reported net profit came in at €3.88 billion, a year-over-year increase of 7.6%. For 2022, it is targeting a net profit range of €4.0 billion to €4.2 billion.
