Iberdrola is a publicly listed company headquartered in Bilbao, Spain. In 2020, its revenue was USD 37.8 billion and installed capacity was 55 GW. The company operates in Europe, the United States, Brazil, Mexico and Australia. Iberdrola has become the first company with only renewable generation assets in the UK.
Iberdrola has implemented board-level oversight of climate change. Board members’ annual bonuses are linked to meeting emissions reduction targets.
The company has a comprehensive low-carbon transition plan, which was informed by climate scenario analysis that considered the implications of a 1.5°C scenario. As a result of scenario analysis, a few adjustments have been made to company’s strategy, such as development of hydrogen technologies and budgeting for decommissioning of thermal assets.
Iberdrola is planning to expand its renewable electricity capacity from 35 to 95 GW by 2030. Interim goals have been set for 2022 and 2025. The company plans to focus on increasing its offshore wind and solar electricity generation, with additional targets to strengthen its position in onshore wind and hydroelectric power. Iberdrola is supporting the expansion of its renewable generation by dedicating about 78% of its total generation capital expenditure (CapEx) to low-carbon generation in 2020.
In 2020 Iberdrola invested almost EUR 280 million (about USD 320 million) on research and development (R&D) in low-carbon mitigation technologies, equivalent to 3% of its total CapEx. This remains below the expectation that electric utility companies should be investing 5% of CapEx in low-carbon R&D. About a half of Iberdrola’s mitigation R&D expenditures has been invested in non-mature technologies, which is significantly higher amount than investments in non-mature technologies made by other companies assessed. Iberdrola has focused its R&D on transformation of the energy industry and decarbonisation, including disruptive technologies, digitalization, innovations with start-ups, smart grids, electric mobility, green hydrogen and energy efficiency.
Iberdrola actively promotes climate-positive policies and is a member of many trade associations supporting clean energy generation. However, the company also remains a member of some associations, such as American Gas Association, that are reported to have opposed climate policies.
Iberdrola can increase the credibility of its engagement on climate rhetoric by implementing a process to withdraw from associations that oppose climate policies.
Iberdrola is almost on track to meet its 2030 targets. However, these assessments measure companies against expectations of the 1.5°C scenario which requires electric utility companies with assets in advanced economies to be net zero by 2035. Iberdrola needs to increase its targeted scope 1 and 2 emissions reductions by a factor of about 1.5 to align with its 1.5°C pathway.
Iberdrola receives a trend score of =. If the company were reassessed in the near future, its score would likely remain the same. Due to continuous commitment, investment in renewables and a profitable low-carbon business model, historically Iberdrola reduced its emissions at a rate aligned with its 1.5°C pathway. The acquisition of PNM Resources and construction of new fossil fuel-powered plants increased Iberdrola’s dependence on gas and other fossil fuels. The company should include newly acquired coal, oil and gas capacity in its reporting, assess associated risks and develop a clear schedule to phase out high-emitting plants in the near future.
Iberdrola has implemented a low-carbon transition plan which aims to reduce its absolute scope 1, 2 and 3 emissions by 43% by 2030 compared to 2017 year and to reduce its emissions intensity to 50 gCO2/kWh by 2030. The company commits to become carbon neutral by 2030 in Europe and by 2050 globally.
With a total investment of EUR 75 billion (USD 85 billion) between 2020 and 2025, Iberdrola intends to expand its low-carbon electricity portfolio. The company’s future planned energy mix has not been disclosed. Iberdrola is also investing in green hydrogen, smart grids, networks, storage and hydroelectric projects.
In 2020, about a half of Iberdrola’s total capital expenditure was invested in renewables. While expanding its renewables portfolio and becoming the first company with only renewable generation assets in the UK, Iberdrola acquired PNM Resources which operates several coal, oil and gas plants in New Mexico and West Texas. PNM Resources is aiming to phase out coal by 2024.
Between 2015 and 2020, Iberdrola’s scope 1 absolute emissions has decreased by about 60% due to the closure of its coal plants. However, continued reliance on gas and even growth of fossil fuel capacity in the US and Mexico might impair the company’s transition to the low-carbon economy.
Iberdrola’s plans and actions are not fully consistent. The company is striving to be a world leader in renewable energy but the future of gas-reliant assets has not been discussed. Acquisition of new coal, gas and oil plants in the US can undermine the company’s success in decarbonisation.
Just Transition Assessment
In this report, we present five key thematic findings showing how 180 companies can increase their ambition towards a transition to a low-carbon future that is just and equitable for the people and communities at risk of being affected by it.