Brussels (Brussels Morning) Spain’s Naturgy gas and power utility announced plans to invest 14 billion euro in renewable energy projects and the modernisation of its natural gas and power networks in the next five years.
The company pointed out that the move aims to increase core earnings by approximately 30% by 2025, Reuters reported.
Naturgy is looking to move away from its traditional natural gas business into renewables and green technologies as part of the global shift away from fossil fuels.
The company plans to increase power generation from renewable energy sources roughly 9.4 GW in the observed period to reach an output of 14 GW in 2025. In addition, Naturgy plans to increase its earnings before interest, taxes, depreciation and amortization (EBITDA) from some 3.7 billion euro in 2020 to about 4.8 billion in 2025.
The company posted a net profit of 557 million euro in the first half of the year, representing an annual growth rate of about 17%, mainly attributable to recovering demand and energy prices.
At the same time, the result was roughly 20% lower compared to the corresponding period in 2019, which was before the start of the coronavirus crisis.
Importance of energy transition
Naturgy CEO Francisco Reynés described the move as “a plan that grows around the energy transition, something absolutely necessary for Naturgy today”.
While the plan is not focused on the acquisition or sale of assets, all options would be investigated, he said. Reynés also announced a shift of investments away from volatile markets in Latin America and towards more stable business environments, citing Australia, Europe and the US.
Naturgy plans to reach carbon neutrality by 2050, in keeping with the EU, which looks to cover 40% of its energy needs with power generated from renewables by 2030.
At the start of the year, the Australian IFM Global Infrastructure Fund offered 4.9 billion euro for 23% of Naturgy and is still waiting for approval.