Iberdrola Says its £10bn Investments in UK to 2020 Will Help Meet Energy Security Concerns

Ignacio Galán, chairman of IBERDROLA and ScottishPower, today told the UK Energy and Climate Change Secretary Ed Davey in London that the company’s ambitious investment programme in the UK will help ensure security of energy supply and was optimistic on bringing its major offshore wind programme to fruition.

Secretary of State Davey was visiting IBERDROLA’s offices for the company’s first full Board meeting to be held in London.

Galán’s comments came just a week after IBERDROLA secured planning consent for its 1,200MW East Anglia One project in the southern North Sea, which could support up to 2,700 jobs during construction and inject over £500m into the regional economy. This is the first of six planned 1,200MW phases within the overall East Anglia UK Round 3 offshore wind zone, which could eventually comprise up to 7,200MW.

ScottishPower Renewables, which is handling East Anglia, has just completed installation of its first offshore project, the £1.6bn, 389MW West of Duddon Sands wind farm south west of Barrow in Furness, and is now working towards a final investment decision on the much larger East Anglia One, which could power 820,000 homes. A key part of this work includes development of a strong UK supply chain.

The Secretary of State’s discussions with Chairman Galán today focused on the economics of offshore wind as well as future EU energy policy and supply security, which will be high up the agenda of a European Council meeting of EU leaders in Brussels on 26-27 June. They also discussed UK security of supply, including the importance of the capacity auction scheduled for December 2014 and its key role in ensuring that enough generation capacity is available in future.

 Galán said: “Receiving planning consent for East Anglia One and completing construction of the £1.6 billion West of Duddon Sands project are key milestones in our offshore wind development plans. We are now working towards a final investment decision at East Anglia. There is a clear challenge to the industry to improve the cost efficiency of offshore wind and reduce the cost of energy.

 “The very large investments that IBERDROLA is making in the UK are important in securing energy supplies for the country in future and the fact that we are holding a full IBERDROLA Board meeting in London for the first time reflects the extensive investment commitments we are making here.”

 Ed Davey said: “Cutting costs is a big test for the offshore wind industry, and IBERDROLA is stepping up to that challenge. Offshore wind has a lot to offer this country, including thousands of green jobs, investment and a more secure, clean, home-grown energy supply. IIBERDROLA’s decision to invest more in the UK than any other international market underlines how Government policies have made the UK one of the most attractive places in the world to invest in energy.”

The full IBERDROLA Board meeting in London follows the company’s announcement in February 2014 that globally between 2014-16, it would make investments totalling €11.2 billion gross (£9bn)(see note 4). Of this, the largest proportion, 41% or €4.6 billion (£3.7bn) gross, will be in the UK, mainly in power transmission and distribution networks and renewable generation. This follows investment of €4bn (£3.2bn) in the UK in 2012-14. Annual investment in the UK has more than doubled since the integration of ScottishPower into Iberdrola in 2007, up from £600m in 2006 to £1.2bn in 2013. ScottishPower will invest more than €12 billion (£10bn) in the UK up to 2020.

 Iberdrola is the largest global on-shore wind investor and operator with over 14.3GW of capacity, including 1.53GW in the UK, 6.1GW in Spain and 5.5GW in the USA. This UK capacity will be officially increased further once West of Duddon Sands enters full commercial operations later this year. IBERDROLA is also investing in the 350MW Wikinger offshore wind project in the German Baltic, where construction should start in 2016, and the 500MW St Brieuc offshore project in France, which is still in development.