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Iberdrola will direct the biggest portion of a €41bn investment plan to the US, shrugging off the impact of a possible Donald Trump presidency on America’s flagship green energy policy.
Europe’s largest electricity company by market value said it would commit 34 per cent of that total to the US over the next three years, with the next biggest portion going to the UK, which will receive 24 per cent, or nearly €10bn.
Former US President Trump, who is leading in the polls ahead of the November election, has signalled he wants to repeal the Inflation Reduction Act, the landmark climate bill of Joe Biden’s presidency that provided $369bn in tax breaks and subsidies for clean energy.
But Ignacio Galán, Iberdrola’s executive chair and a leading champion of the transition to greener energy, said in an interview that the Spanish company’s investment goals for 2024-26 did not hinge on the IRA’s future.
“We are not depending in our plan on the IRA being maintained,” he said. “We would be very pleased if it was maintained of course, but for the present it’s not in our plan at all.”
Iberdrola, which unveiled its investment plans for the next three years on Thursday, said it had already received all the IRA tax credits due for its 2024-26 projects.
It wants to plough 60 per cent of its global investment into electricity grids, upgrading networks for the greater use of electricity to power cars, heat buildings and drive industry.
In the US these networks had the advantage of not depending on policymaking in Washington, Galán said. “The focus in the United States is networks, and networks are based on the regulation of the states, not dependent on federal authorities at all,” he said.
The US has become a magnet for clean energy investment thanks in part to the incentives in the IRA, which Biden signed into law in 2022. Its success has spurred agonised debate in the EU about what it can do to rival the appeal of the US.
Iberdrola will fund €36bn of the €41bn plan, the rest being provided by investors including Norway’s sovereign wealth fund and Masdar, the UAE’s renewable energy company.
Spain and Portugal will between them receive 15 per cent of the capital while the rest of the EU receives 5 per cent.
The company plans to make “selective” investments in renewable power generation, with its €15.5bn planned spending in this area earmarked for projects that are well-advanced — either already being built or about to start construction.
The investment should add about 9GW to its portfolio of roughly 42GW, helping towards reaching its target of 52GW of installed renewable capacity by the end by 2025.
It plans to spend the majority of those funds on offshore wind projects in the US, UK, France and Germany. The sector has had a troubled year, particularly in the US, where several developers have been trying to renegotiate power sales deals to factor in surging costs due to high interest rates and supply chain strains.
In the US, Galán said that while the federal government had a big say over offshore wind, its Vineyard Wind project off the Massachusetts coast, the US’s first large-scale offshore wind farm, would be completed before the November election.
Other offshore wind auctions are coming up in the US, including one at the end of this month. Although Iberdrola has eligible projects it has not made any firm commitments to participate.
It also plans to spend €2.3bn on buying out minority shareholders in its US subsidiary Avangrid.
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