Iberdrola is placing its foot firmly on the clean energy pedal after securing a $1bn loan with the European Investment Bank (EIB) – following a recent commitment to accelerate green ammonia opportunities.
The deal will fund an extensive network of 19 solar power plants and three onshore wind farms in Spain, Portugal and Germany.
With a total installed capacity of 2.2GW, the projects – part of the EIB’s financing package in support of REPowerEU – envisage a joint investment of more than €1.7bn, and will help support the energy transition and boost supply security. They will facilitate the integration of renewables into grids, undoubtedly one of the great challenges in achieving Europe’s climate objectives.
Some of the photovoltaic projects will include ‘hybridisation’ with wind power and battery systems for energy storage. Hybrid systems generate solar energy when the sun shines and wind energy when the wind blows, with integrated systems complementing each other and sharing the same connection point to guarantee a more stable supply to the grid.
Energy storage is a fundamental pillar of the energy transition by adding flexibility to the generation of renewable energy and allowing a better integration into the system.
The agreement was signed in Madrid by EIB Vice-President Ricardo Mourinho Félix, and Executive Chairman of Iberdrola, Ignacio Galán.
The new installations will provide green energy equal to the average annual energy consumption of more than 1,000,000 households and they will be mostly located in cohesion regions, where per-capita-income is lower than EU average, underlining EIB’s commitment to equitable growth and the convergence of living standards.
The investments made under this agreement will boost economic growth and employment in the regions where these renewable energy facilities are installed. These new projects will also support the national energy plans of the three countries, and help Iberdrola achieve its 2040 net zero emissions target.
Félix said the financing agreement highlights the EIB’s continued firm commitment to accelerating the energy transition in Europe and to ensuring access to affordable, clean power for all Europeans.
He said, “This is a strategic objective for the European Union and the EIB that will not only contribute to climate change mitigation, but also to the EU’s energy security and strategic autonomy. As the horrific war in Ukraine has shown, sustainable energy and energy security are two sides of the same coin. To achieve them both, it is vital that we collaborate with companies in the European energy sector such as Iberdrola.”
Galán added that it will make a significant contribution to accelerate Europe’s energy independence, achieve climate objectives, and creating growth and employment.
In 2022, the EIB Group committed financing more than €17bn for the energy transition in Europe. As this is a top priority for the EU climate bank, Spain received a record €3.1bn in financing for sustainable energy and natural resources projects in the same year, making it the second largest beneficiary of financing in the EU.
This figure confirms the Group’s commitment to ensuring access to sustainable energy at a time of great uncertainty. These investments are helping Europe weather the crisis triggered by the abrupt cut in gas supplies in the aftermath of Russia’s unjustified attack against Ukraine.
Green ammonia deal with Trammo
Last week Iberdrola signed a deal with Trammo, the world largest seaborne trader of anhydrous ammonia, for the purchase and sale of up to 100,000 tonnes of green ammonia per year from 2026.
The contract will enable Iberdrola to construct the first green ammonia plant in southern Europe, which will be viable thanks to European funding, and involves a total investment of €750m.
Iberdrola is currently developing green ammonia and methanol plants in Europe, the United States, Australia as well as other markets, and this first plant consolidates the company’s global growth strategy in green hydrogen and its derivatives.
The green ammonia plant will be supported by the construction of 500MW of new renewable energy, as green ammonia will meet all the requirements of the EU’s Delegated Act. It will also contribute to the creation of industrial and innovation opportunities in a growing market with a high export component.
The plant’s green ammonia production will be purchased and sold by Trammo to contribute to the decarbonisation of northern European industry.
This project aims to kickstart the European green hydrogen corridor. Southern Europe has a large renewable potential that allows it to supply competitive green energy to decarbonize the various energy-intensive heavy industry all across the continent such as the Netherlands, Germany or France.
Millán García-Tola, Iberdrola’s Global Head of Green Hydrogen, said when you bring together one of the world’s largest renewable energy developers and the world’s largest seaborne trader of anhydrous ammonia, “innovative projects like this can quickly become viable”.
He said, “For the past year, we have been operating Europe’s largest green hydrogen plant, which gives us the experience and understanding of the processes and technology to scale-up quickly to these larger projects.
“Reducing industrial emissions with the supply of green ammonia presents opportunities in the coming years and Iberdrola wants to be at the centre of this market, delivering real projects to develop a more sustainable production chain and achieve decarbonization goals. We are already in talks with Trammo to look at similar projects in other markets.”
Green ammonia can be used in the decarbonisation of existing applications, such as fertiliser production or chemical industries. In addition, huge market growth is expected in new uses of this product, for example, as a marine fuel or to make green hydrogen transport viable as a carrier. Green hydrogen reduces water consumption by more than 40% when compared to the processes required in a grey ammonia plant.
Iberdrola, which has 40GW installed worldwide, aims to double its current portfolio by 2030. The company became a pioneer in green hydrogen production with three plants in operation by 2023 and Europe’s largest electrolyser (20MW) at its Puertollano plant in Spain.
It is developing more than 60 hydrogen projects in eight countries, including green ammonia and green methanol in geographies such as Iberia, the United States and Australia.
As the world largest seaborne trader with a global position lead in the commercialisation and the distribution of anhydrous ammonia since 1965, Trammo is taking an active role in the transition to decarbonise the industry sector, helping to make available significant volumes of green ammonia by 2035.
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