Iberdrola bets big on networks with €58 billion investment to 2028
Iberdrola announced plans to invest €58 billion by 2028, doubling down on its belief that power networks are the backbone of the energy transition. The move marks a sharp pivot towards regulated grid infrastructure in the UK and the United States, two markets where demand for electrification is surging.
The Spanish energy group, which owns ScottishPower in Britain and Avangrid in the US, said more than €35.5 billion – over 60% of the total – will go into upgrading and expanding electricity grids. That is a clear signal of where Iberdrola sees the safest returns and the biggest opportunities.
For years, Iberdrola built its reputation on renewables, particularly offshore wind. But grids are now the main story. Without stronger networks, renewable energy cannot connect to the system and consumers cannot rely on stable supplies.
Ignacio Galán, the company’s executive chairman, described networks as the “spine of decarbonisation”. The strategy reflects a growing consensus among utilities: while renewable generation attracts headlines, regulated infrastructure often provides steadier, more predictable cash flow.
This is especially relevant as interest rates remain high. Capital-intensive wind projects, once a darling of investors, have faced mounting pressure from rising costs and supply chain disruptions. Networks, in contrast, offer regulated returns agreed with governments – lower risk, but still essential.
The UK and US will absorb 80% of Iberdrola’s network spending. In Britain, ScottishPower is tasked with expanding grid capacity to cope with the electrification of transport and heating. The government’s targets for electric vehicles and heat pumps hinge on networks being able to carry the extra load.
The US presents a similar challenge at greater scale. Avangrid, which operates in states such as New York and Connecticut, is expected to drive investment in modernising ageing grids and connecting large volumes of renewables. American infrastructure law and state-level decarbonisation targets create a favourable environment for this capital.
Beyond networks
While grids dominate, Iberdrola has not abandoned renewables. Around €15.5 billion will go into clean generation, with offshore wind projects in the North Sea and US East Coast still on the agenda. A further €5 billion is earmarked for customer services, such as digitalisation and energy efficiency solutions.
The company forecasts net profit growth of up to 25% by 2028, with dividend increases to match. Iberdrola is making a bet not just on energy transition but on the stability of regulated markets to underpin shareholder value.
European utilities have struggled with volatile wholesale prices and policy uncertainty. By concentrating on networks, Iberdrola is signalling confidence in regulated models, even as other firms scale back capital spending.
The risk is political. Network operators rely on regulators setting fair returns. If governments clamp down on allowed revenues to shield consumers from high bills, the economics could shift. But Iberdrola is spreading risk across two of the world’s largest and most mature regulatory frameworks.
For now, the message is clear: in the race to net zero, grids are not just the enablers but the real growth business.
