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Portugal’s EDP to build 20GW of renewable energy capacity in next five years

March 01, 2021

S&P Global Market Intelligence ($):

EDP – Energias de Portugal SA will double the pace of its renewable energy installations during the next five years, spending €19 billion to build 20 GW of new wind and solar plants while shifting its focus more heavily to the U.S. market.

The utility said in a strategic update on Feb. 25 that it will target €24 billion in total capital expenditure over the period, allocating the vast majority to renewable energy production. Already one of the largest wind developers in the world, EDP said it will double its annual renewables installations to 4 GW on average and install 80% of new capacity in the U.S. and Europe.

The company also announced it will become carbon neutral in 2030, building on a previous target to close the last of its coal plants by 2025. Miguel Stilwell de Andrade, who took over as permanent CEO of EDP in January, said the company’s growth will tap into “a massive secular push” to rise up to the challenge of climate change.

“We want to go all green by 2030,” Stilwell de Andrade said during a presentation of the strategy. EDP will strengthen its wind and solar teams, raising the head count from 1,700 to 3,000, to be able to ramp up its green build-out. “We want to make sure we have the DNA to take this company forward,” the CEO said.

As part of the new strategy, EDP said it will scale back the amount of wind and solar capacity it sells to other investors once the plants are completed. The company plans to rotate around one-third of its new gross additions going forward, compared to 50% historically, Stilwell de Andrade said. The company will still sell majority stakes, typically 100% and 80% of individual project capacity in Europe and the U.S., respectively.

EDP’s annual capital expenditure, including financial investments, will gradually grow from €3.7 billion in 2020 to €4.6 billion by 2025, with 80% going to renewables, 15% to EDP’s transmission and distribution networks in Spain, Portugal and Brazil, and 5% to its retail segment. Most of the renewables growth will be in the U.S. and Europe, with 8.8 GW and 6.7 GW of new capacity, respectively. Onshore wind parks comprise almost 60% of EDP’s current portfolio, with its hydropower assets in Iberia and Brazil making up most of the rest.

[Yannic Rack]

More ($): EDP to double renewables growth, scale back asset sell-downs

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