ScottishPower owner Iberdrola has announced plans to invest more than €5 billion (£4.3bn) in Scotland by the end of 2026 in support of the ‘unstoppable’ drive to electrify homes and industries.
The programme will see ScottishPower invest heavily in renewable energy assets and the networks that connect windfarms and the like with energy users.
The Glasgow-based company expects to create significant numbers of jobs in Scotland in support of the investment drive.
The investment is included in a record €10bn that Spanish-owned Iberdrola plans to spend in the UK by the end of 2026. Iberdrola reckons ScottishPower can play a key role in the drive to reduce emissions in the country.
The UK will rank second only to the US in terms of its share of the total €41bn investment that Iberdola plans to make in the period concerned.
The company said its chairman Ignacio Galan has met separately with both the Chancellor of the Exchequer, Jeremy Hunt, and the Shadow Chancellor, Rachel Reeves, to outline plans for ScottishPower to build the green infrastructure essential to electrifying the UK economy.
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“The electrification of energy is unstoppable and will expand exponentially in the years ahead, supporting decarbonisation, boosting energy security, and reducing the volatility caused by fossil fuels,” said Mr Galan.
He added: “Our strategy will focus on delivering enhanced grid to support security of supply, now 60% of our total investment, as well as a strong expansion of renewables capacity, driven by the substitution of fossil technologies and additional demand.”
ScottishPower confirmed that the investment in Scotland is expected to include €4.2bn spending on networks. Some €2bn will be spent on the network of high voltage lines that spans the country with the remainder to be invested in the distribution facilities needed to take electricity into local areas.
The company plans to invest around $1bn in Scotland in areas ranging from onshore wind power generation to the production of hydrogen fuel and in its retail business. ScottishPower is supporting the official drive to encourage householders to switch to heat pumps.
The investment drive will create the demand for large numbers of people with the skills required to support the electrification drive or who can be trained up. The programme will involve the recruitment of graduates and people with experience gained in industries such as oil and gas as well as apprentices.
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ScottishPower recruited more than 1,000 people across the UK last year.
The company expects to create around 1,000 further jobs in the UK by the end of 2026 with the majority in Scotland.
The investment budget only includes schemes for which ScottishPower has won planning approval.
The company could commit significant sums in respect of future years. It is considering plans to develop windfarms off Scotland and onshore.
The UK Government will this year invite firms to apply for revenue support for offshore windfarms. It has increased the amount of support that will be made available under the Contracts for Difference programme to £800m after failing to win any bids last year.
Iberdrola’s total spending in the UK could total £12bn by 2028, including investments that it may sanction following completion of the latest review by the regulator.
That would represent more than Iberdrola expects to spend in Spain, Germany, France and Australia combined.
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Iberdrola expects to allocate 35%, €14.4bn, of the €41bn investment planned by 2026 to the USA.
The group said it expects to grow earnings and dividends at a high to mid-single digit rate in the period concerned.
In the announcement of the programme, Iberdrola included a figure of $5.6bn to $5.8bn for 2026 net profit.
Mr Galan said: “Our strategic pillars focus on networks, geographical diversification, and a balanced energy and customers mix. This plan will allow us to grow our asset base, grow our profitability and strengthen our finances, as well as increasing dividends and driving jobs and skills and economic growth.”
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