Iberdrola Seeks Acquisitions to Expand in Asian Wind Market
(Bloomberg) -- Spain’s Iberdrola SA will look for acquisitions in Asia as part of its strategy to expand in the region’s renewable energy market, according to a senior executive.
The company is seeking to work with local partners and obtain at least 50% ownership of some early-stage development projects in the region, Iberdrola’s global head of renewables, Xabier Viteri Solaun, said in an interview in Madrid.
“The next hot spots will be Asia Pacific -- Japan, China and Taiwan -- with big potential in the second half of the decade,” he added.
Coal-dependent countries in east Asia such as South Korea, Japan and Vietnam plan to boost the amount of electricity they get from renewable power sources in the coming years. There’s an opportunity for developers like Iberdrola to establish a presence now so that their business can benefit as green energy sources like wind and solar grow from a niche to a major part of the electricity mix.
The renewable-energy giant has aggressive plans for expansion, especially in the area of offshore wind, as part of a 150-billion euro ($174 billion) investment plan for the next decade. The company recently said it will establish an office in Taiwan. It also bought Sowitec’s operations in Vietnam and purchased a stake in a 600-megawatt project in Japan.
Offshore wind farms are seen as a key part of achieving global climate goals, as regions such as Europe lack land availability for new renewable-energy capacity. Global annual installations will exceed 10 gigawatts for the first time this year and hit over 30 gigawatts in 2030, according to a BloombergNEF forecast.
Iberdrola operates 1,300 megawatts of offshore wind plants and is building more projects in France, the U.S. and Germany. The company expects its participation in auctions in North America, Europe and Asia will help boost its short- and medium-term growth.
Europe needs to accelerate the expansion of renewables in order to achieve its target of having an economy with net-zero greenhouse gas emissions by 2050, Viteri said, adding that regulatory hurdles have slowed the process.
“Europe’s number one problem is its permitting system,” he said. “It is definitely the biggest bottleneck and Europe’s success will depend on how quickly it will be able to address it.”
Getting the necessary approvals has been difficult, and the pandemic intensified the problem by further straining resources, he added. The European Commission is expected to issue common guidelines on permitting early next year.
Europe would have to more than double the rate of deployment of renewables this decade, and more than triple it for the decades after that, to achieve its climate targets, according to Andreas Gandolfo, head of the European power team at BloombergNEF.
Viteri said the continent’s current energy crisis -- marked by high natural gas and power prices -- “wouldn’t be too harsh” if the region had more renewables. “Europe wouldn’t have to rely so much on gas and, as renewables production is localized, it means more independence.”
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