Spanish renewable energy firm Grenergy (GREG.MC) is set to embark on an ambitious investment strategy, eyeing a significant expansion of its U.S. solar power generation projects pipeline over the next three years. With a targeted investment of 2.6 billion euros ($2.8 billion), Grenergy aims to capitalize on the lucrative opportunities presented by the Inflation Reduction Act (IRA) and the substantial subsidies available in the U.S. market.
Pablo Otin, Chief Operations Officer at Grenergy, emphasized the strategic importance of the U.S., declaring it as the future and the most desirable market to be in. Citing predictability, stability, and long-term visibility attributed to the IRA, Otin highlighted the conducive environment for renewable energy investments.
Grenergy's U.S. project portfolio includes yet-to-be-built renewable projects with a potential capacity of 4.7 gigawatts (GW). The company is determined to more than double this capacity, aiming to exceed 10 GW by 2026, with approximately 1.1 GW already in operation or under construction.
As part of its broader growth strategy, Grenergy seeks to increase its installed solar capacity to 5 GW by 2026, alongside a renewable energy storage capacity of 4.1 gigawatt-hours (GWh). Accounting for sales, U.S. projects are anticipated to contribute around 30% of the total installed capacity in 2026.
To fund its ambitious expansion, Grenergy plans to raise capital through asset disposals, targeting the sale of 350-450 megawatts (MW) of solar capacity and 1 GWh of storage annually. The company aims to generate more than 600 million euros by 2026 through these strategic divestments.
Chief Executive David Ruiz de Andrés emphasized the intensification of mergers and acquisitions (M&A) activities, expressing openness to both divesting 100% of renewable portfolios and selling minority holdings. Regarding potential dividends, he noted that given the substantial investment plans, dividends are not expected in the near future.
Grenergy's shift in strategy toward solar plus batteries aims to enhance its resilience to solar price cannibalization and curtailments, ensuring more stable long-term cash flows. RBC analyst Fernando Garcia commended this strategic shift, recognizing the company's focus on adapting to market dynamics for sustained growth.
In pursuit of its goals, Grenergy is targeting earnings of between 250 million euros and 300 million euros from its energy business by 2026, showcasing its commitment to becoming a major player in the rapidly evolving renewable energy landscape.