Spain's Endesa to invest EUR 4.3 bn in renewables in 2023-2025

• Spanish utility Endesa SA (BME: ELE) is prepared to invest as much as EUR 8.6 billion (USD 8.9 bn) in 2023-2025 and devote half of that amount to grow its renewables capacity in the Iberian Peninsula, the team revealed on Wednesday in the discussion of the three-year strategic plan.

The business will intend to invest the bulk of the EUR-4.3-billion renewables investment to build 4,400 MW brand-new solar as well as wind farms. It stated that it will certainly also function to set up 200 MW of battery energy storage space systems (BESS) by 2025, a modern technology that is included in its two power transition projects in Pego, Portugal, as well as Andorra, Spain.

Endesa anticipates that this financial investment rhythm will certainly help it reach 13,900 MW of emissions-free capacity, consisting of BESS and also hydrogen, in 2025.

Currently, 58% of projects in Endesa's pipeline are for solar energy, 16% for wind as well as some 20% for BESS, according to the presentation.

The planned investment in distribution grids stands at EUR 2.6 billion, which Endesa will certainly spend on network digitalisation, adaptations to be able to incorporate even more self-consumption as well as dispersed generation, and also grid resilience.

The next biggest spending item in the 2023-2025 strategy is the retail company, to which Endesa will designate EUR 900 million to be able to offer affordable rates and also value-added solutions to clients, the company claimed.

The total financial investment for the upcoming three-year period is 15% greater compared to the 2022-2024 strategic plan, mainly since Endesa will put even more cash right into the renewables build-out. Endesa's approach remains in line with the strategy that its parent business Enel medical spa (BIT: ENEL) provided on Tuesday, which put Italy and Spain, and also Portugal by extension, at the centre of the Italian team's operations in Europe.

As for Endesa's financial targets, the utility anticipates its financial investments to deliver EBITDA of EUR 5.2 billion to EUR 5.5 billion in 2025, up by 4% contrasted to estimated profits for 2022.

Common net profit for the fiscal year 2022 is expected to stand at in between EUR 2.2 billion and EUR 2.3 billion. At the end of 2025, it will drop to EUR 2 billion to EUR 2.1 million once the Spanish federal government starts ordering some EUR 250 million to EUR 300 million per year for tax for power windfall profits, Endesa included.