Networks, strategic infrastructure for the transition towards a decarbonised economy

#business #investment #electrical network

Iberdrola group sees networks as being a key factor for the electrification of the economy and regional vitalisation. For this reason it places regulated assets — together with renewable energy — at the heart of its strategy, as demonstrated by its investment plan for the period 2020-2030, which will amount to €150bn. Between 2020 and 2025 alone the company will spend over €27bn on networks (40 % of the forecast organic investment for this period) which will take its regulatory assets base up to 47 billion euros by 2025, which is 1.5 times its current value.

The electricity supply system is going through an unprecedented transformation regarding the move towards the necessary decarbonisation of the economy. In this transition towards a cleaner, more reliable and smarter energy model it is the transmission and distribution networks that are proving to be the cornerstone in the development of an electricity supply system with more renewable sources, in the promotion and implementation of sustainable mobility, in the creation of smart cities and in encouraging self-consumption.

The global energy revolution also represents an extraordinary opportunity for the post-COVID green recovery due to network activity having a significant knock-on effect upon the local industrial framework. In addition to boosting the economy and employment, innovation within this segment will attract investment and strengthen community growth.


The historic investment programme begun by Iberdrola to make a decisive contribution to economic recovery involves the investment of €75bn in the run up to 2025 to energise the industrial fabric and employment in the countries in which it operates. But the vision for the future goes further and the company's commitment amounts to €60bn between now and 2030 for the Networks Business.

Of the €75bn in the 2020-2025 plan, 90% (€68bn) will be organic investment. Of this organic growth, 40 % (over 27 billion) will be channelled into the group's Networks business, with the aim being to continue with its deployment plan and consolidate a solid and more flexible distribution grid in line with its digitalisation strategy designed to meet the needs of the energy transition. This figure includes investments into transport, which will account for 4 billion euros.

The company already operates one of the world's most extensive distribution systems, with over 1.2 million kilometres of electricity power lines and more than 4,400 substations, which distribute electricity to more than 34 million people worldwide. The new investments strengthen the group's position in this market: between 2020 and 2022, it will be channelling 12.5 billion euros into the Networks area, which will raise its regulatory assets base from the current 30.4 billion up to 38 billion, and between 2023 and 2025 it plans to invest a further 14.6 billion euros, which will take its regulatory assets up to 47 billion. At the end of 2021, regulated assets in all areas are expected to reach € 36 million.

Furthermore, Iberdrola is continuing to focus its efforts on countries with an A Rating, which will result in 83 % of its assets being located in these markets by the end of the period in question. The United States will receive the largest investment in networks, 11.88 billion euros (44 % of the total 27 billion), followed by Brazil (5.67 billion, 21 %), the United Kingdom (4.86 billion, 18 %), and Spain (4.59 million, 17 %). This means that in 2025 the United States will be the country in which the group operates with the highest number of regulatory assets, with 40 % of the total, overtaking Spain, which will represent 23 % — compared with the current 31 % —.

In line with the climate-related objectives of its principal markets, the company is working towards a 10-year horizon, which, if everything goes to plan, will see it double its regulatory assets, thereby taking them to values of 60 billion euros by 2030.


Iberdrola will continue to work on the modernisation, digitalisation and automation of its networks, which it sees as a key element for improving the quality of the distribution system and guaranteeing the mass incorporation of renewables in the near future, and for promoting the electrification of transportation, buildings and industry.

The group is currently the world leader in the development and implementation of smart networks. Its distribution companies have installed around 15 million smart meters and incorporated remote management, supervision and automation capabilities into the grid in Spain, the United States, Brazil and the United Kingdom, thereby consolidating one of the world's most advanced electricity transport and distribution systems. Thanks to its new investment plan, Iberdrola will increase the number of smart meters within its network by almost 50 % to 21.2 million by the end of 2025.

As well as improving the efficiency of the grid and the quality of supply, this progress towards a smart infrastructure — more reliable and secure — is fundamental for advancing towards the new energy model. A scenario in which the consumers take centre stage by having greater decision-making and connectivity capacity, which enables them to take responsibility for how they use electricity, and in which clean energies, smart cities, electric vehicles and self-consumption play a leading role.


In this respect, Iberdrola has stolen a march on the future with the creation of a Global Smart Grids Innovation Hub that allows it to meet the challenges of the energy transition and be the leading light in this area. The centre will act as a platform for promoting innovation by combining its technological capacity with that of suppliers, partners and start-ups from around the world.

The hub will bring together the innovative potential of more than 200 professionals in undertaking R&D projects related to the challenges of the electricity networks of the future, including greater digitalisation, the processing of the data generated by this infrastructure and the response, in terms of robustness and flexibility, of the electricity grid to new models of consumption, such as electric mobility and self-consumption.

The innovation hub will start operating in autumn 2021 and the company has already identified more than 120 projects for future implementation worth 110 million euros. The international lines of work will enable the development and deployment of innovative solutions for the energy group's electricity grid activity worldwide.

The initiative can count on the partnership of the Regional Government of Bizkaia (Spain), which will facilitate the interaction of Iberdrola's ecosystem with the fiscal mechanisms for the innovation developed and implemented by the regional institution and the instruments designed for speeding up the consolidation of start-ups.