Iberdrola chief reveals multi-billion plan to seize market share of oil & gas firms

In an exclusive interview, Agustin Delgado, Iberdrola’s Chief Innovation and Sustainability Officer, says the company’s number one priority is to invest – and heavily.

That investment amounts to €75 billion up to 2025 and €150 billion up to 2030 corresponding to about €15 billion each year.

But it is also about investing wisely, he adds, which means incorporating all the technologies that are available both to increase competitiveness but also to provide customers with the level of comfort they have been used to but backed more sustainably.

This drive has been further accelerated by recent events in Ukraine, with an understanding of “the need for dramatic changes in the energy system” and the characteristics of renewables able to meet the demands of competitiveness and security of supply while also being environmentally friendly.

“One of the things we have learned is that technology is not a problem. We used to think in a linear way but technology is evolving more exponentially and so we need to think in an exponential way, and we also need to be very focused on action. With this, we want to be one of the companies that is in a leading position to embrace and promote this change.”

Decarbonising the demand side

For Iberdrola, the change is not so much in the deployment of the renewables themselves – “we can put in whatever renewables we can” – but is more to do with decarbonising the demand side for them to be effective.

“If people keep using oil for the cars or gas for their heating systems, then we are not doing anything.”

Delgado says that Iberdrola expects that by the end of the decade, approximately 50% of electricity globally will be supplied by renewables, with solar the lowest cost generation followed closely by wind.

“This clearly shows we have the tools and technologies to decarbonise the electricity sector and that we have the ability to use renewable energies to produce electricity. The question is whether we can use electricity for all energy uses and the answer is yes.”

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He adds in this connection that while there is a pipeline of lithium-ion battery projects, long term storage is of particular interest to Iberdrola with its potential to support the 50% of the demand side energy consumption that is used for heating in homes and industries. Some two dozen technologies and/or start-ups are under evaluation.

Longer term, the growth in demand is expected to come almost equally from transport, industry and buildings and Iberdrola plans to more than double its electricity production globally from 25,000TWh currently up to around 60,000TWh in the 2040-2050 timeframe.

With its drive, Iberdrola also is at the forefront of reducing its own carbon footprint, closing its coal-fired power plants and reducing its combined cycle holding.

“I think we are one of the utilities with the lowest CO2 emissions per kilowatt-hour and we have a clear vision that we are going to decrease that much more and embrace all the opportunities that the compensation of the economy is going to take.”

Short term actions

Looking to the broader European landscape, Delgado says there is a lot of “low hanging fruit” that can be captured in the short term.

“My thesis is that first we have to be able to capture as much renewable energy as possible but there is a lot of low hanging fruit to decarbonise many sectors, like residential heat and low-temperature processing in the industry.”

As an example, he cites the one million homes in Spain using oil for heating, which could be swopped out cost effectively with heat pumps.

Hydrogen is another emerging component in the energy sector, expected to play a role in both decarbonising industries such as fertilisers and steel as well as a ‘synergy carrier’ in the form of ammonia or methanol for example for shipping or other transportation.

“But I see this occurring in the 2040s rather than for the low hanging fruit.”

With all this activity, Delgado has a stark warning for the oil and gas sector: “We are not an electric company, we are an energy company and we [are] coming to take your share of the energy market. It's not about an energy mix but about an energy share.”

This interview took place in Bilbao during the first edition of Enlit on the Road.

Find out more about Enlit's unique journey through Europe to cover the energy transition.