Industry positioning
The group’s strategy since the beginning of the 2000s was designed based on the goals set out in the Kyoto protocol, anticipating the role that the electric industry would play in the fight against climate change. Iberdrola wagered on decarbonisation and renewable energy; and the strong focus on innovation by all of the group’s businesses allowed for the rapid adoption of new generation technologies, as well as automation and remote control of the transmission and distribution networks. As a result, Iberdrola is today positioned as a leader in renewable energy and smart grids, activities that constitute the backbone of the decarbonisation of the electricity sector.
Iberdrola will continue strengthening its commitment to the energy transition, accelerating its investments in renewables and smart grids to a record amount of almost 10,000 million euros annually, double the amount of only four years ago. In 2017 Iberdrola requested the closure of its last coal plants in the world, which request is pending final approval by the government. The strong investment in smart grids will allow for the large-scale integration of renewable sources as well as on a distributed scale, ensuring quality of supply and safety of the system.
2019 saw the launch of the Núñez de Balboa photovoltaic solar plant in Spain, the Montague, Patriot and Karankawa wind farms in the United States, and the inauguration of the Baixo Iguaçu hydroelectric plant, the development of customer solutions based on connectivity, and the startup of various transmission and distribution network facilities, as well as a continuation of smart grid transformation projects.
“Action is needed now. Iberdrola's energy transition started 20 years ago.”
Ignacio Galán, during the World Economic Forum (Davos)
Economic/financial positioning
Economic/financial aspects are an essential part of Iberdrola’s business model, along with industrial and technological positioning. The company engages in a strategy that seeks to balance growth, financial strength and a sustainable dividend. To this end:
- Investment is concentrated in the regulated businesses or long-term contracts, which provide known and recurring cash flows.
- Country selection takes into account the stability of the regulatory environment that applies to the sector.
- The commitment to the group’s level of financial strength is public and decisive in long-term planning and in the group’s leverage level.
- The dividend policy is focused on a strong and growing return in line with the increase in the company’s results.
Given the company’s position, Iberdrola’s business model is distinguished by:
| Iberdrola´s Primary Business | Natural Capital | Manufactured Capital | |
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| Focus on regulated businesses | Commitment to clean and competitive energies | Operational efficiency | |
| The company focuses its projects and investments preferably in regulated businesses, renewable assets or assets with long-term contracts. |
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A business culture highly focused on innovation and digitisation has allowed our company to be 40% more efficient than the average of the main competitors1. (1) Operating expenses by customer. Source: external reports. |
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| International diversification | Financial strength and solidity of the group | Global, committed and qualified workforce | |
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The results obtained reflect the diversification of the group (2019 EBITDA by country): 40 % in Spain.
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| Presence by Areas of Activity | Financial Capital | Human Capital | |
| Social Dividend | |||
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