- The International Institute for Law and the Environment (IIDMA) has participated in a report analyzing the transition plans of five major European energy companies (Enel, ENGIE, EPH, Iberdrola, and Statkraft).
- The study, using a novel analysis system, shows that Iberdrola has a coherent and ambitious transition plan that is overshadowed by the lack of information about the future of its gas plants.
Iberdrola, with revenues of 49.3 billion euros last year and presence in more than 30 countries, is one of the world’s largest energy companies. Its current strategy is based on expansion, reinforcement, and digitalization of its transmission and distribution networks, as well as promoting renewable energy. However, around 17% of its capacity remains gas-based, a highly polluting fossil fuel whose gradual reduction is essential to address the climate crisis.
The study ‘Power Moves and Power Failures: a first assessment of European utilities’ transition plans’ (available in English here), prepared by specialists from different European organizations –including IIDMA– that are part of the Beyond Fossil Fuels coalition, highlights that Iberdrola has a coherent and ambitious transition plan that is overshadowed by not having revealed its plans for its gas plants. “For the company to remain a leader in energy transition, it must commit to closing all its gas plants in Europe by 2035 at the latest,” says IIDMA environmental lawyer and one of the report’s authors, Carlota Ruiz-Bautista. This commitment means the company must refuse to sell these plants: “This option does not guarantee a real reduction in emissions since they could continue operating under other owners,” she adds.
Additionally, the study concludes that Iberdrola should include a specific methane target in its climate action plan and should provide more details about its Capex (capital expenditure) to fully evaluate the company’s investment plan and its coherence with the required material evolution.
Besides the Spanish energy company, the study evaluates the plans of Enel, ENGIE, EPH, and Statkraft, and although there is a promising general increase in renewable energy investments, a significant portion of their capital expenditure continues to bet on the development of fossil gas plants, infrastructure, and even coal. “The transition plans of EPH, Enel, and Engie make no sense (…), they continue planning to develop fossil gas plants, hindering Europe’s ability to achieve its climate goals,” says Pierre-Alain Sebrecht from Reclaim Finance. “Financial institutions must redirect their financing towards electric companies with sustainable development plans. Iberdrola and Statkraft demonstrate that transition plans focused on readily available and deployable wind, solar, storage, and grid solutions are viable and profitable,” he adds.
This analysis used a novel methodology consisting of analyzing 45 key performance indicators (KPIs) across five categories—emission reduction, energy planning, CAPEX, climate planning, and transparency—to uniformly evaluate the five companies and identify components that can help ensure their plans are credible.
