Iberdrola's decision to focus on renewable energy has produced significant results for the company. Between January and September 2008, Iberdrola Renovables saw a growth in production capacity of 83.6% on the same period in 2007. More than 95% of that capacity (12,095m kWh) came from wind, with the remainder provided by small-hydroelectric power. The company also has interests in solar power, biomass and wave power.

 

Profits in the first half of 2008 surpassed those for the whole of 2007, with a net profit of €170m. Between January and September 2008, earnings per share rose by almost 54%, while electricity production grew by 23%. In June 2008, setting out its Strategic Plan up to 2012, the company set out an investment programme of €18.8bn. It expects a net profit of €1bn by 2012.

 

A far-sighted decision

 

The company's approach has involved signing discounted deals with leading wind turbine manufacturers to ensure a steady supply of hardware and to maximise returns on capital. It is a major shareholder in Gamesa, the Spanish wind turbine manufacturer, and one of the world's largest.

 

The evidence of Iberdrola's far-sighted decision to promote renewable energy is dotted across cornfields in the United States, the rural expanses of Spain and other windswept parts of the planet. The company’s geographical footprint extends across Europe, the US and Latin America. Much future growth is expected in the US, partly as a result of a recent merger with the American energy utility Energy East.

 

The Big Horn Wind Project is part of the company's US portfolio, standing tall in the vast expanses of Washington State, near the town of Bickleton. Big Horn opened in 2006 and the 133 wind turbines produce enough electricity for 60,000 homes. It is one of hundreds of such wind power projects to have been built across the US in recent years.

 

Gusts bring prosperity

 

Farmers in the area had always battled with the effects of the wind on their soil and crops. Now, according to the Seattle Times, 'such gusts bring prosperity' A group of landowners will each receive $160,000 per year in royalties, and the project will bring a property tax windfall to the area of more than $1m.

 

 

Spain is one of the world's leaders in wind energy production and innovation and Iberdrola Renovables has invested significantly in renewable energy in its home country. In December 2008, Iberdrola Renovables opened its latest wind farm on Spanish soil. The Paramo Vega wind farm in Burgos was completed in ten months, has an installed capacity of 18MW, and is the result of a €25.1m investment. It will generate enough power to meet the electricity needs of 8,400 homes.

 

Iberdrola Renovables has formally applied to study six new offshore wind farms in Spain off the coast of Cadiz, Castellón and Huelva, which will reach an output of 3,000MW. The forecast for 2020 is to reach 6,000MW, the equivalent output of clean energy to serve six million homes.

 

The right place at the right time

 

The company also has a significant presence in the UK as the parent company (since 2007) of Scottish Power. Iberdrola Renovables has committed to investing €1.2bn in the development of renewable energy in the UK between 2008 and 2010, including plans to construct two offshore wind farms in Scotland (West of Duddon Sands, with an output of 500MW and Shell Flats, with 35MW) and an agreement with the Swedish company Vattenfall to make joint bids in the development of offshore wind farms in the UK.

 

Ignacio Galan, the chairman of Iberdrola, has described his company as being 'in the right place at the right time'. In December 2008, he told staff: 'Over the last seven years, we have invested over €50bn, resulting in wealth and job creation. Today, over 33,000 people work at our Group; we have created over 30,000 indirect jobs and made acquisitions worth €20 bn.' Assets total €82bn, while equity stands at €29bn, he said.

 

This Spanish giant has seen the opportunities offered by renewable energy and has set its course accordingly. In the wide open spaces of Spain, America and elsewhere, the company, its investors and its customers are already reaping the benefits of that strategy.