EDP, EDP Renewables (EDPR), the fourth-largest producer of wind and solar energy globally, and EDP Renewables North America (EDPR NA), a wholly-owned subsidiary are scaling up ambitions to lead the energy transition by pushing its investment plan and targets further in the updated 2023-2026 Business Plan.
EDP says that within a context in which climate emergency and security of supply are ever more preeminent, the group will increase its global investment to €25 billion to boost renewables, reinforce its position in electricity networks and support its clients in the transformation to a more sustainable world.
The 23-26 Business Plan will support EDP’s net zero commitments and follows a selective and disciplined approach, allocating 85% of the total investment to renewables, clients, and energy management and 15% to electricity networks across fast-growing and low-risk markets in four regional hubs: Europe (40% of the investment plan), North America (40%), South America (15%) and Asia-Pacific (5%). EDP’s yearly investment rate will increase by 30% to 6.2 billion euros while maintaining sustainable growth and ESG excellence within a future-proof organization.
- €25 Bn investment plan: €21 Bn focused on Renewables and €4 Bn focused on electricity networks, representing an annual gross investment of ~€6.2 Bn – 30% higher versus the previous Business Plan
- Renewables deployment to increase to 4.5 GW per year, totaling 18 GW gross additions by 2026, aiming to a renewables installed capacity of 33 GW by 2026 and with the ambition to reach more than 50 GW by 2030
- Renewables investments diversified by technologies including Wind Onshore (40%), Solar PV Utility Scale (40%), Solar Distributed Generation (12%), Wind Offshore (5%), and Storage & Hydrogen (3%)
- We are leveraging our superior portfolio and infrastructure as a competitive advantage for increased renewables deployment based on hybridization and repowering
- €3Bn investment in digitalization and innovation to foster efficiency and a sustainable growth
- Reiterated commitment to be coal-free by 2025, 100% renewables generation by 2030, with a Net Zero emissions target by 2040 (SBTi approved)
- Future proof organization creating 3000 new jobs by 2026 and communities’ empowerment through a €200m investment in social impact initiatives
- Reiteration of BBB credit rating commitment, FFO/Net Debt of 21% in 2026
- Recurring EBITDA of €5.7 billion by 2026, with a 6% CAGR in 2022-26
- Recurring net income €1.4-€1.5 billion by 2026, with 12%-14% CAGR 2022-26
- New dividend policy, with a target payout ratio between 60-70% and an increase in dividend floor to €0.20 per share in 2026
“Today, we ramp up our ambition to lead the energy transition supported by a competitive and resilient portfolio, strong financials, an empowered team, and the will to contribute to a climate-positive world for the coming generations. This Business Plan reinforces our growth ambition while pushing even further our commitment to the planet and creating superior value for all,” said Miguel Stilwell d’Andrade, EDP’s CEO.
The investment plan will combine conventional and emerging technologies. Onshore wind and solar utility scale will each account for 40% of the 21 billion investment plan in renewables, complemented by emerging technologies such as solar distributed generation (12%), storage, and hydrogen (3%). Offshore wind will represent 5%, with capacity scaling up through the joint venture Ocean Winds and providing significant visibility on growth over the next 10-15 years. A diversified renewables technology mix that is strengthened and supported by a hydro portfolio with a strong cashflow generation profile while also providing flexibility and storage capabilities.
On the electricity networks segment, for which a 4 billion euros investment plan is compromised, EDP will continue growing and diversifying its portfolio, acting as a stabilizer for the group. The updated business targets include reaching 400 thousand kms of distribution lines, 9 million smart meters (+500 thousand vs. 2022), and 12 million connection points (+2.5 Mn vs. 2022).
The updated Business Plan will also leverage customer franchise to accelerate growth and value creation, focusing on a cross-selling offer strategy that combines multiple client solutions such as solar distributed generation, corporate PPA, electric mobility, services, energy efficiency, demand side flexibility, and storage.