Iberdrola Moves to Acquire Full Ownership of US Avangrid

Business & Finance

March 8, 2024, by Adrijana Buljan

Spanish renewable energy giant Iberdrola, which owns around 81.6 per cent of its US subsidiary Avangrid, has launched an offer to acquire the remaining 18.4 per cent in the Connecticut-headquartered company for USD 2.48 billion (EUR 2.28 billion).

Iberdrola says it wants to increase exposure to the networks business in the US and grow in markets with high credit ratings and in regulated businesses such as networks.

Avangrid has two main business areas: networks and renewable energy. Through the networks business, Iberdrola’s US arm owns and operates eight electric and natural gas companies, and its renewable energy business, Avangrid owns and operates a portfolio of renewable energy generation facilities.

Last year, Iberdrola, through Avangrid, launched a project to upgrade New York’s power grid to help deliver offshore wind power from the Long Island grid to New York City and Westchester County. The project is being developed together with Edison Transmission, National Grid Ventures and Central Hudson Electric Transmission, and aims to add approximately 150 kilometres (around 90 miles) of new high-voltage transmission lines that will run both underground and underwater.

Announcing the project in June 2023, Iberdrola noted that the US was the main destination for the company’s investments, allocating USD 21.5 billion (around EUR 19.7 billion) up to 2025, with USD 9 billion (around EUR 8.2 billion) already invested in the country from 2020 to 2022.

In the transmission and distribution grid business, Iberdrola’s investments in the US are aimed at modernisation and digitalisation to increase the quality of service and resilience to extreme weather events and to enable the integration of more clean energy into the system, the company said.

In renewable energy, the US investments Iberdrola is making up to 2025 will lead to a renewable capacity of approximately 10 GW, according to the company.

Avangrid is the third largest renewable energy company in the US by installed capacity, Iberdrola said last year, adding that the US company leads the development of offshore wind in the country with a portfolio of more than 6,000 MW.

Under construction, Avangrid (Iberdrola) has the 806 MW Vineyard Wind 1 offshore wind farm off Massachusetts. This is the first US large-scale offshore wind farm.

The company is also developing the 3.5 GW Kitty Hawk project off North Carolina and the New England Wind project which comprises the 804 MW Park City Wind and the 1.7 GW Commonwealth Wind offshore wind farms.

The New England Wind project has just received a green light after a federal environmental impact assessment and is expected to be approved for construction in April.