Iberdrola’s Galán: ‘Offshore wind can replace axed UK nuclear projects’
Iberdrola has bet on renewables earlier than most of its peers. Do you think utilities only now starting a major renewables expansion still have a chance?
Renewable energy has been part of Iberdrola’s DNA since we began operating as a hydroelectric company over a century ago now. Back in 2001 we realised the relevance of climate change and started investing in wind energy. We moved ahead from the rest of utilities –many of which criticised us back then- and anticipated what now has become a global trend. Since then, we have invested over €100bn in renewable energy, networks and storage, a strategic decision that has given us a competitive edge.
Investing in renewable energy now, whether you are a newcomer or a long-established utility, makes sense. Energy demand continues to grow, with an expected increase of up to 30% by 2040 as a consequence of population growth, which can reach 10 billion people by mid-century according to United Nations; urbanisation , with two-thirds of the world’s population expected to reside in “mega cities”, and the increase in consumption linked to economic development.
You have just announced plans to increase your renewables capacity by almost 10GW by the end of 2022. When will Iberdrola become 100% renewable, and why does the company still have dirty fossil until 2030?
Our commitment to climate action is beyond any doubt. We have included climate action as one of the key policies in our corporate governance system. We have set up mitigation commitments for the short (2020) and medium (2030) and we are committed to reaching carbon neutrality by 2050. We support multilateral institutions to help deliver the Paris Accord and we have invested more than anyone in renewables. On top of this, in the next 5 years we will dedicate €34bn to more renewables and to the networks and storage required to integrate these energies.
In addition, Iberdrola has closed fifteen coal and fuel oil plants since 2001 across the world, totalling approximately 7.5GW; and the company has already applied for the closure of its two remaining coal plants (jointly 874MW, both in Spain), which by the way are not producing now.
We have reduced our emissions per kWh by 75% since 2000. Today, our emissions in Spain are 75% lower than the average of the rest of the sector and we are 100% renewable in the UK and in other countries of Continental Europe as Germany or France.
Do you think offshore wind capacity could replace planned or ageing nuclear capacity around the world, (for instance, the 9.4GW of new nuclear capacity that will now not be built in the UK after Hitachi and Toshiba pulled out)? Do you think nuclear can still play a key part in energy supply, or is it just too expensive to build new nuclear plants and/or too dangerous?
The specific mix of technologies that will allow the transition depends on the conditions of each country. In the UK, offshore wind can produce as much energy as the nuclear projects that have been cancelled at a lower cost. We just need to ensure we have a robust system in terms of back up capacity and flexible networks to make this happen.
In Spain, for instance, where the seabed conditions are not suitable for offshore wind deployment, we have just launched a 10GW plan of onshore wind and solar PV by 2030 to substitute the production of nuclear plants that, according to the government’s plans, will close over the coming 15 years.
Offshore wind is a core business for Iberdrola. In our current investment plan we are planning substantial investments mainly in the United Kingdom, United States, Germany and France.
Do you plan to further expand your offshore wind capacity in the Baltic Sea?
We have an important offshore wind project pipeline in German waters of the Baltic Sea, where we are building up to 850 MW of capacity. As your readers will know, we will finish awarding the major supply contracts for Baltic Eagle by the end of the year with delivery of the first wind turbines scheduled for 2022/2023.
Iberdrola advances Baltic ambitions as Wikinger ribbon cut
Do you see a “new dawn” emerging for renewables – both wind and solar – in Spain, what are the new challenges for making it happen, and how dependent will its success be on the outcome of national elections at the end of April?
A few weeks ago, we began construction of the largest European PV plant, a 500MW development in Badajoz (south-western Spain). The clarity provided by the new energy plan recently submitted by the government to Brussels is fostering new investments both in solar and wind energy in Spain. In fact, Iberdrola is planning to invest €8 billion between 2018 and 2022. We have over 30 projects under development now all around the country. This plan will allow us to create jobs for 20,000 people in Spain, nearly 10 times the number currently working in our company on traditional power generation.
As costs have come down, and technology has matured, it is clear that solar is going to be a pivotal technology in the energy transition.
How important is it for you to see the UK have a “good Brexit” for business, and that through ScottishPower you are able to continue expanding your UK offshore and onshore wind operations? Do you have concerns over the seeming unwillingness of the UK government to allow onshore wind back into the contract-for-difference auctions?
We are firmly committed to the UK. Our priority will always be providing clean energy for our customers, from our 100% green generation portfolio. We hope that an agreement is reached between the UK and the EU on a relationship that works for everyone moving forward.
There is cross-party political support for fighting climate change in the UK, and ultimately we see that as a positive step. This has allowed the UK to lead the world in offshore wind, both in terms of scale and ambition. We see very positive signals about the future growth of offshore in the UK, and there will be many opportunities for ScottishPower to grow our capacity.
As it stands, onshore wind is the lowest cost form of new-build electricity generation in the UK. We will continue to make the case for policies that support onshore development.