Endesa to toss EUR 3.1bn at renewables biz in 2022-2024
Endesa team building a solar farm in Andalusia. Image by Endesa (www.endesa.com)
Spanish power utility Endesa SA (BME:ELE) will invest EUR 3.1 billion (USD 3.48bn) under the 2022-2024 strategic plan to grow its renewable energy capacity to 12,300 MW by the end of the planning period.
The EUR-7.5-billion strategic plan was presented today on the occasion of the group’s capital markets day.
Endesa expects to add 4,000 MW of new renewables by the end of 2024, with solar projects making up 90% of the planned total, and the resting being wind.
The rest of Endesa’s money will go towards digitalisation of the distribution network, power retail and electrification efforts, such as installation of charging points for electric vehicles, under the Endesa X brand.
As for the financial targets, the utility sees its EBITDA growing to EUR 4.7 billion in 2024, from EUR 4 billion it expects to record for the full year 2021, thanks to planned investment exploits and improved market conditions. Its ordinary net profit is expected to grow by 18% to EUR 2.2 billion in 2024.
The renewables business is expected to boost its contribution to EBITDA from EUR 500 million to EUR 800 million between 2022 and 2024, Endesa said.
Between 2021 and 2030, Endesa is prepared to invest EUR 31 billion in the whole business, with EUR 12 billion of the amount going towards growing the operational wind, solar and hydropower capacity to 24,000 MW.
Just like its Italian parent company Enel SpA (BIT:ENEL) did yesterday, Endesa also announced it would bring forward its net zero target to 2040 from 2050, and reduce both direct and indirect emissions without relying on carbon capture and other types of offsetting.
The Spanish utility pledged to exit the gas-fired generation and gas retail business by 2040 and produce electricity only from renewables from then on.
At present, 54% of Endesa’s power generation fleet on the Iberian peninsula is renewable. The company expects to increase this figure to 63% at the end of 2024, thanks investment in new renewables and planned closures of coal-fired power plants in Spain and Portugal.
The Enel group as a whole, and Endesa by extension, plans to stop burning coal by 2027. Endesa is currently in the process of closing its coal-fired plants in Iberia, and is waiting for the permit to shut down As Pontes, its last one in Spain.
Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.