Spain’s Grenergy to expand in US under $2.8 billion plan

By Pietro Lombardi

MADRID (Reuters) – Spain’s Grenergy plans to more than double its U.S. solar power generation projects pipeline in the next three years under a 2.6 billion euro ($2.8 billion) investment strategy.

Spanish energy firms such as renewables giant Iberdrola and oil major Repsol have increased their focus on the United States as they try to take advantage of massive subsidies included in the Inflation Reduction Act (IRA).

“The U.S. is the future,” Grenergy operations chief Pablo Otin said during its first capital markets day on Tuesday.

“The U.S. is, right now, the most desirable market to be in …. It’s predictable, it’s stable and it gives you long-term visibility,” he said, with reference to the IRA.

Grenergy has yet-to-be-built renewable projects in the U.S. with potential for 4.7 gigawatts (GW) of capacity, and wants to increase its pipeline to more than 10 GW by 2026. Of this, roughly 1.1 GW will be in operation or under construction.

Overall, U.S. projects will account for around 30% of its installed capacity in 2026, net of sales.

Grenergy’s expansion is part of a growth strategy aimed at raising its installed solar capacity to 5 GW by 2026, while renewable energy storage capacity would reach 4.1 GWh. Excluding assets earmarked for sale, the targets are 3.5 GW and 3 GWh respectively.

Like other energy companies, Grenergy will raise cash to fund new projects with disposals. It plans to sell 350-450 megawatts (MW) of solar capacity every year and 1 GWh of storage, netting more than 600 million euros by 2026.

“M&A is something we have been doing every single year from our inception and it is intensifying,” Chief Executive David Ruiz de Andrés said.

“We have plenty more projects to build and rotate,” he said.

While the largest energy firms in Spain tend to sell minority stakes and keep control of renewable assets, Ruiz de Andrés told journalists at a press event following the presentation that the company was open to both divesting 100% of renewable portfolios and selling minority holdings.

Asked about a potential dividend, he replied: “With all the investment we have, it’s not going to happen anytime soon”.

Grenergy is aiming for earnings of between 250 million euros and 300 million euros in 2026 from its energy business.

“The strategy … has moved from a solar model towards solar plus batteries where the company could sell electricity during the more expensive hours of the day and be less impacted by solar price cannibalisation and curtailments with more stable long term cash flows,” RBC analyst Fernando Garcia said.

($1 = 0.9168 euros)

(Reporting by Pietro Lombardi; Editing by Alexander Smith and Mark Potter)