Iberdrola’s climate story: innovating to create the energy system of the future
Ibeerdrola
A rapid and inclusive transition to a clean energy system is vital to stabilize the climate and ensure a liveable future for all. A world leading renewable energy company, Iberdrola is innovating, investing and engaging stakeholders throughout the value chain to create the energy system of the future.
Headquartered in Spain, Iberdrola has a workforce of more than 42,000 people, net revenues of more than 49 billion Euro and supplies power for 100 million people (as of 2023). The company began transforming over 20 years ago to create a sustainable, safe and competitive energy transition model and has now more than 42GW of renewable energy installed capacity.
Iberdrola has reached a 29% reduction in emissions (Scopes 1, 2 & 3) compared to 2020, achieving levels of 49 gCO2/kWh in Europe and 77 gCO2/kWh globally in 2023.
Beyond its own operations, Iberdrola plays a role in the global climate agenda by advocating for ambitious climate policies and action in its areas of influence and demonstrating tangible sustainable solutions.
An agent of transformation
Iberdrola supports massive deployment of renewable energy, grids and the development of sustainable and efficient energy solutions in line with the Paris Agreement and the European Green Deal, to secure a sustainable and secure climate transition within the 1.5oC scenario and to reach a decarbonized economy and society.
“The current context demonstrates the need to accelerate the energy transition to guarantee a sustainable, robust and fair economy. The structural solution is clear: supporting renewable energy, efficient storage and smart networks to avoid future shocks, promote a self-sufficient energy system and reduce emissions. We have the technologies, a massive social consensus, and, as companies, we are ready to do our part and accompany our leaders in defining clear, stable, and coherent frameworks.”
Iberdrola’s CEO and Chairman, Ignacio Galán
Through SBTi’s Business Ambition for 1.5, Iberdrola is committed to reducing its emissions in line with a net zero future. SBTi net-zero methodology has validated Iberdrola’s science-based targets to reduce absolute scope 1, 2 and 3 GHG emissions by 65% by 2030 from a 2020 base year. To achieve this, the company aims to reach neutrality by 2030 in direct emissions (electricity generation), as well as indirect emissions from electricity transmission and distribution, and its own consumption (scopes 1 and 2). Over the longer term, Iberdrola has committed to net zero emissions for all scopes before 2040.
Investing and innovating
Iberdrola is putting its ambition into action with a strategic investment plan 2024-2026 of €41 billion, strong alliances, and its Climate Action Plan. The Climate Action Plan covers how the company will ensure a just transition for people and communities, through the creation of jobs and access to energy at competitive prices, and for nature – including having a net positive impact on biodiversity by 2030.
To tackle all its emissions’ scopes, it engages with suppliers throughout the value chain and follows a local supplier strategy, 87% of purchases were from local suppliers in 2022). Iberdrola’s commitment of including ESG selection criteria for its main suppliers took shape in 2020 with the objective of ensuring that at least 85% of the group’s main suppliers are subject to sustainable policies and standards for the 2023-2025 period.
The company presented its Strategic Plan 2024-2026 which implies investing €41 billion over the period 2024-2026, focused on investing in grids in markets with stable frameworks, as well as in renewable technologies with greater value, increased storage capacity and customer portfolio optimisation. The plan includes:
- Reducing emissions by up to 60 g CO₂/kWh by 2025;
- 60% of net investment to 2026 (€21.5 billion) in grids;
- More than half of the €15.5 billion invested in renewables is focused on offshore wind projects. At the end of 2023, 1,793 MW offshore were installed and 3,000 MW will come into operation before 2027;
- €1.5 billion will be dedicated to storage by 2026, in order to reach 120 million kWh of capacity through pumped storage.
With 500 MWp of installed capacity and the ability to supply clean energy to 250,000 homes, Nuñez de Balboa has become the largest photovoltaic plant in Europe.
As part of its commitment to the progressive decarbonization of energy uses, Iberdrola is innovating to create clean energy projects and solutions. Some examples include:
- Tâmega Giga-Battery: the Tâmega hydroelectric complex is one of Europe’s largest energy storage facilities located in Portugal. With an investment of more than 1.5 billion euros, the giga-battery consists of three dams and three power plants with an overall capacity of 1,158 MW. This renewable infrastructure has sufficient storage capacity to serve two million Portuguese households for an entire day avoiding 1.2 million tonnes of CO2 emissions annually.
- East Anglia ONE offshore wind farm: located in British waters in the North Sea, Iberdrola has put into operation what is now the largest wind farm in its history and one of the world’s largest of its kind. With an installed capacity of 714 megawatts (MW), the 102 turbines that comprise it are operational and produce clean energy for 630,000 British homes.
- Núñez de Balboa photovoltaic plant: built in Badajoz, Spain, with 500 MW of installed capacity and the ability to supply clean energy to 250,000 homes and preventing the emission of 215,000 tonnes of CO2 every year, the plant is one of the largest in Europe.
- Green Hydrogen Puertollano Facility: The green hydrogen produced at the Iberdrola plant is used in the Fertiberia Group’s ammonia factory in Puertollano. With an investment of 150 million euros, it is the largest facility of its kind for industrial use in Europe, and is also the largest plant currently operating in the world,, avoiding 48,000 tonnes of CO2 emissions per year. The green hydrogen produced is to be used to produce green ammonia for fertilizers. This facility is part of a major integrated project aiming at developing 800 MW of green hydrogen in several facilities in Spain by 2027.
- Alliance Iberdrola-Exiom: in Spring 2024, Iberdrola and Exiom inaugurated in Asturias, Spain, the first large-scale photovoltaic module manufacturing plant in Spain and one of the first plants on an industrial scale in Europe. This project has received a grant from the Just Transition Institute, through the programme aimed at employment-generating business projects that promote the alternative development of just transition areas, creating more than 100 direct jobs, enhancing security of supply for the renewables value chain, and acting as a driver for local industrial development.
- Saint Brieuc: in September 2024, Iberdrola inaugurated the second offshore wind farm in France and the first in Brittany. To date, it is equipped with the most powerful turbines ever installed on a wind farm in France. With an annual production of 1,820 GWh/year, the 62 wind turbines represent the annual electricity consumption of 835,000 inhabitants (including heating), i.e. 9% of the total electricity consumption of Brittany.
Iberdrola works alongside Fertiberia to develop the Puertollano Facility, Europe’s largest green hydrogen plant for industrial use.
Supporting a just transition
Iberdrola is fully committed with the acceleration of a just transition that creates value and opportunities for all stakeholders as the only way to achieve the 1.5⁰C scenario of the Paris Agreement.
Iberdrola’s just transition commitment is proven by a large portfolio of initiatives and collaborations. It’s been several years since Iberdrola closed all its coal plants following the just transition principles and safeguarding jobs as, for instance, in Scotland, under the Partnership Action for Continuing Employment (PACE) framework that provided valuable assistance to employees, including job search advice, education and training support or guidance on claiming state benefits. Also in Spain, the closure of its two last coal plants was coupled with important investments in renewable energy projects to revitalize the industrial activity.
Precisely, Iberdrola’s engagement today with a just transition is centered on the deployment of renewables and innovative energy and climate solutions for decarbonizing and re-industrializing the economy. The company is focused on creating green jobs and building skills for the most vulnerable groups, generating value and opportunities at local level, securing the deployment of supply chains, and ensuring all can benefit from the energy transition opportunities.
Concrete examples of initiatives include the Citizens’ Innovation Platform where citizens, public bodies and industry work together on solving the socio-economic challenges presented by the transition to renewable power. The Exiom-Iberdrola Alliance has developed the first photovoltaic module manufacturing plant in Spain and one of the first ones on an industrial scale in Europe, enhancing security of supply for the renewable energy value chain, and acting as a driver for local industrial development. Iberdrola implements also several initiatives to develop skills for green jobs for vulnerable groups, such as the School of Electricians for women in Brazil, the STEM (Science, Technology, Engineering and Mathematics) scholarships for youth in Mexico or the Alliance with UNICEF to promote education and green employment for vulnerable young people in Spain, Brazil, and Somalia.
Engaging the supply chain
To accomplish Iberdrola’s goal of being net-zero before 2040, it is essential to involve all suppliers which, according to data from 2022, are almost 20.000 companies. Iberdrola’s commitment of including ESG selection criteria for its main suppliers has the objective of ensuring that at least 85% of the group’s main suppliers are subject to sustainable policies and standards for the 2023-2025 period.
Iberdrola seeks to support its suppliers to be more sustainable with individualised improvement plans, a free carbon footprint calculator to measure scope 1 and 2 of emissions and also by holding individual meetings and providing training materials. Iberdrola also tries to support its small suppliers with different initiatives, like the creation of a “Climate Action Hub” in Scotland with training materials for designing climate action plans, or the support to the SME Climate Hub implementation in Spain.
Advocating for ambitious climate policy
Beyond its own activities, Iberdrola advocates for ambitious climate policies to incentivize the global economy and society to shift rapidly to clean and sustainable models. Iberdrola’s advocacy activities have intensified in scope and ambition as the global climate crisis worsens and the need to fill the gap with 1,5oC scenario becomes more pressing.
Iberdrola supports the main milestones of the global climate agenda in order to achieve greater urgency and ambition in the fight against climate change. These include the United Nations Framework Convention on Climate Change (UNFCCC), the active involvement at COPs every year, the Marrakech Partnership activities, as well as the EU Green Deal and its implementation.
It advocates for an ambitious approach in the global climate agenda through dedicated participation in the global alliances and organizations such as the United Nations Global Compact, We Mean Business, the World Business Council for Sustainable Development, Corporate Leaders Group, Powering Past Coal Alliance, Energy Transition Commission, inter alia.
East Anglia ONE offshore wind farm produces enough clean energy to power 630,000 UK homes.
In the context of COP28 and the United Nations Climate Ambition Summit, held during the New York Climate Week, in 2023, Iberdrola worked to keep climate action momentum and urgency, by example and through the support to various campaigns and activities including:
- Fossil to Clean: promoted by We Mean Business Coalition, this campaign calls on businesses to take action to phase out fossil fuels in order to send a clear signal to the market and accelerate moving to clean alternatives.
- Forward Faster: this initiative, led by UN Global Compact, aims at increasing accountability and transparency by calling for companies to publicly declare their commitments and highlight the actions they will undertake to meet the targets in 5 areas of action (Climate Action, Gender Equality, Living Wage, Water Resilience, Finance&Investment) to accelerate progress across all 17 Sustainable Development Goals. Companies committing to the targets are required to report on progress annually.
- Tripling renewables’ objective: the decision of the First Global Stocktake of the Paris Agreement recalls that the current trajectory of global emissions is not consistent with limiting the global temperature rise to 1.5°C and outlines key actions and commitments, to be undertaken urgently, including global emission reduction targets, energy transition by tripling renewable energy (to reach at least 11.000GW) and doubling energy efficiency by 2030.
Reporting on progress
Iberdrola’s Climate Change Policy establishes the company’s goals for decarbonization and highlights how it is working to decarbonize its energy model by integrating climate change into internal decision-making processes. The company reports externally on climate change.
For instance, Iberdrola was one of the first companies to publicly commit in 2017 and implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Moreover, the company created an internal multidisciplinary working group to coordinate all the work performed in this area.
Iberdrola has developed a robust framework to inform and be accountable of its climate advocacy activities across the different jurisdictions, embracing an ambitious and robust approach to climate advocacy and actively engaging within a diverse range of organizations across various sectors, including international organizations, industrial associations, alliances, foundations, think tanks, and NGOs.
On a yearly basis, Iberdrola assesses the alignment with the Paris Agreement of key organizations in which the company participates and has also developed its own framework to assess climate alignment and tackle misalignments of organizations.