Smart and innovative solutions that put customers at the heart of the energy transition

#business #investment

The steady electrification of energy uses driven by the decarbonisation of the economy will enable Iberdrola to add to its customer base. The group, which plans to invest more than 6 billion euros in its Wholesale and Retail business between 2020 and 2025, will by the end of this period have contracts with 60 million customers, and has also developed a scenario to 2030, in which it estimates that its customer base will reach 70 million. The company will offer smart and innovative solutions in the residential (heat pumps, energy storage, electric mobility and self-consumption) and industrial (smart solutions, process electrification and green hydrogen) sectors: solutions that will put customers at the heart and make them responsible for energy use.

The decarbonisation process that the world economy is facing imminently will bring with it an increase in electricity demand as a result of the electrification of end uses. This increased demand requires advances in technology, digitalisation and efficiency. New energy products and services are emerging that put customers at the heart and allow them to be responsible for their electricity use, thanks to greater connectivity and the ability to manage and control their consumption.

In those sectors where electrification is impossible or uncompetitive, green hydrogen is the alternative for decarbonisation. It is essential to replace grey hydrogen (obtained from polluting sources) with green hydrogen in current industrial and chemical uses, and to encourage its use in sectors that are difficult to decarbonise, such as shipping, aviation and heavy transport.


The business model of Iberdrola group is based on three main pillars: the decarbonisation of electricity through renewable energies and efficient storage; integration into the system thanks to grids; and the electrification of demand, offering more energy solutions to residential customers (heat pumps, energy storage, electric mobility and self-consumption) and industrial and commercial (process electrification, smart solutions and green hydrogen).

In order to anticipate and take advantage of the opportunities created by the energy revolution facing the world's major economies, the company has announced a historic investment plan of €75 billion euros for the period 2020-2025 — an investment that will reach €150 billion euros by 2030 — of which more than 6 billion will be allocated to its Wholesale and Retail business until 2025. The retail area will receive more than half of this investment (3.2 billion), followed by generation (1.9 billion), green hydrogen (700 million) and smart meters (500 million).

These investments will strengthen its presence in established markets, such as Spain and the UK, where 44 % and 20 % of the investment will go respectively. The group is also committed to the countries in which Iberdrola Energía Internacional (IEI) operates, which will receive 19 % of the investment, especially Portugal, Italy and France, where it will experience strong growth, as well as Germany and Ireland, where it intends to open up new opportunities. Another 16 % will go to Mexico and the remaining 1 % to Brazil.


International presence of Iberdrola group in the Retail area.#RRSSInternational presence of Iberdrola group in the Retail area.

At the end of Fiscal Year 2019, the company had 42 million customer contracts in 10 countries: Spain, United Kingdom, United States (through the distributors of AVANGRID1 Nota and of Iberdrola Texas), Brazil (through the distributors of Neoenergia2COELBA, CELPE, COSERN and ELEKTRO — and of Neoenergia Comercialização), Mexico, Germany, France, Ireland, Italy and Portugal. Thanks to the progressive electrification of energy demand, Iberdrola has increased the contracts to €43.8 million in 2020 and expects them to reach €48.5 million in 2021, €50 million in 2022 and €60 million in 2025, that is, 1.4 times more. It has also developed a scenario to 2030, in which it estimates that its customer base will reach 70 million.

By geographical area, Spain will continue to be the country with the largest number of customers (34 % of contracts in 2025), but Iberdrola Energía Internacional will gain strength, with the percentage of its contracts increasing from 3 % in 2019 to 16 % in 2025.


Planned investments will also be aimed at increasing the range of services Iberdrola offers its customers, which will reach 40 million in 2025, up 60 % from 25 million in 2019. And, within these services, there will be an exponential growth in Smart solutions: from 8.4 million in 2019 to 22.6 million in 2025.

In 2020, this type of solution already accounted for 9.3 million (increasing to 10.7 in 2021) making up almost 4 % of the group's net revenue. The company already offers these solutions in territories including Spain, Portugal, Italy and Brazil and is planning to introduce them in the other countries where it markets its energy.

The Smart solutions that the energy company offers to its domestic customers in Spain are:

The service package for industrial customers in Spain includes:

These Smart solutions make it possible to monitor, optimise, by means of artificial intelligence, and control consumption in order to make responsible use of energy. Together, they form an integrated model capable of meeting 100 % of customers' needs.


Iberdrola has incorporated green hydrogen as one of the main services it offers to the industrial sector, making a pioneering commitment to this technology as a solution for efficient decarbonisation in the medium term. The company plans to develop more than 800 MW of green hydrogen by 2027 (around 50 in 2022 and around 600 in 2025) with an investment of 1.8 billion euros.

The initiative will begin with the commissioning of the largest green hydrogen complex for industrial use in Europe, which will come into operation in 2021 and could be completed with three other projects between 2023 and 2027 at Fertiberia's chemical plants in Puertollano (Ciudad Real) and Palos de la Frontera (Huelva). The group would therefore produce 1,000 tonnes of green hydrogen by 2022 and approximately 15,000 tonnes by 2025, which could rise to as much as 85,000 tonnes by 2030 if these three projects materialise.

The plan, which is subject to support from the European Recovery Fund, is in line with the post-COVID recovery strategy and the decarbonisation targets set by both the European Union and the Spanish government for 2030: the former aims to have 40 GW of green hydrogen electrolysers in just 10 years, while the latter aims to achieve 4 GW of installed capacity by that date.

The initial agreement has been joined by others in Inverness (United Kingdom) to produce green hydrogen through electrolysis in Barcelona to supply green hydrogen to fuel city buses. What's more, Iberdrola has submitted 53 projects to the Next Generation EU programme, which will activate investments of €25 bn to achieve an annual production of 60,000 tons of green hydrogen.

The company is also championing the development of a value chain to support the development of new electrolyser manufacturers. In this regard, Iberdrola has set up the company Iberlyzer, which will become the first large-scale manufacturer of electrolysers in Spain.

Iberdrola has also created a global alliance to accelerate the scale and production of green hydrogen, with the goal of enabling the transformation of the world's most carbon-intensive industries, including power generation, chemical products, steel manufacturing and heavy transport. Under the name Green Hydrogen Catapult, the consortium is composed of seven industry leaders already working to deploy 25 GW of green hydrogen by 2026, as well as to halve the current cost of this technology.


1 AVANGRID, Inc. is 81.5 % owned by Iberdrola S. A.

2 Iberdrola, S. A. owns 50 % + 1 share of Neoenergia, S. A.