European Power Giant Bets on U.S. Despite Possible Trump Presidency

Spanish utility giant Iberdrola will focus the largest part of its multi-billion investments for 2024-2026 on the United States as its capex plans don’t hinge on the Inflation Reduction Act and a possible repeal of the IRA by a second Trump presidency, Iberdrola’s executive chairman Ignacio Galán told the Financial Times in an interview on Thursday.  

Iberdrola said today it would invest $44.7 billion (41 billion euros) and hire 10,000 people by 2026 to accelerate electrification in its key markets.

A total of 85% of the investment would go to A-rated markets, and the United States remains Iberdrola’s leading investment destination with 35% of the capex, followed by the UK with 24%, Iberia, 15%, and Latin America, also with 15% of the planned capital expenditure.

Of the total investments, $23.4 billion (21.5 billion euro) will be for expansion and strengthening of the networks in the U.S., the UK, Brazil, and Spain, Iberdrola said.

The company also plans more than 50% of its investment in renewables – at $17 billion (15.5 billion euros) – to go to offshore wind in the U.S., the UK, France, and Germany. All investment in renewables will go to projects already under construction, Iberdrola said.

“We are not depending in our plan on the IRA being maintained,” Iberdrola’s Galán told FT. 

“We would be very pleased if it was maintained of course, but for the present it’s not in our plan at all.”

The giant European utility has already received all tax credits under IRA for its projects through 2026, the executive noted. 

“The electrification of energy is unstoppable and will expand exponentially in the years ahead, supporting decarbonisation, boosting energy security, and reducing the volatility caused by fossil fuels,” Galán said in comments to the investment plan.

“Our strategy will focus on delivering enhanced grid to support security of supply, now 60% of our total investment, as well as a strong expansion of renewables capacity, driven by the substitution of fossil technologies and additional demand.”  

By Tsvetana Paraskova for Oilprice.com

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