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Commentary

The Big Green – renewable majors emerge as the market heats up

No longer an experimental sproutling of the energy industry, the renewable sector has bloomed into one of the hottest markets in play. Like the oil majors that came before, key players in the utility-scale renewable market have begun emerging. These renewable behemoths have moved fast to capture market share, setting aggressive investment targets in the short term with long term goals expected soon. Rystad Energy has identified the top 10 “Big Green” players, which currently operate an impressive 130 gigawatts (GW) of solar, wind and storage globally (excluding China and India). We expect these companies will not only meet their capacity targets, but in some cases, even exceed stated goals.

No longer an experimental sproutling of the energy industry, the renewable sector has bloomed into one of the hottest markets in play. Like the oil majors that came before, key players in the utility-scale renewable market have begun emerging. These renewable behemoths have moved fast to capture market share, setting aggressive investment targets in the short term with long term goals expected soon. Rystad Energy has identified the top 10 “Big Green” players, which currently operate an impressive 130 gigawatts (GW) of solar, wind and storage globally (excluding China and India). We expect these companies will not only meet their capacity targets, but in some cases, even exceed stated goals.

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NextEra Energy
Taking a deeper look at the top five Big Green players NextEra Energy (NEE) is the largest utility scale renewable company in the world by operating capacity. Based in the US, NextEra Energy conducts operations principally through its wholly owned subsidiaries; NextEra Energy Resources, Florida Power and Light Company, and Gulf Power. NEE’s portfolio of operational assets exceeds 22 GW, with an additional 9 GW in the development pipeline. The company’s portfolio includes around 17 GW of operational onshore wind farms in North America, and around 5 GW of solar assets. NextEra Energy plans to expand its North American footprint, bringing around 5.5 GW of onshore wind online in 2020-2021 through NextEra Energy Resources. Over the same timeframe, the company plans to expand its solar portfolio by 1 GW to 2.5 GW through Florida Power and Light Company, with an additional 1.5 GW of new solar capacity over the next decade through Gulf Power. Together, Next Era Energy plans to add 6.5 GW to 8 GW of solar and wind capacity, expanding its portfolio to 30 GW by 2021.

Enel
Italian energy major Enel comes in second, with operating assets on six continents, and high activity in Europe. The company currently has 5 GW of operational solar and around 12 GW of onshore wind, in addition to 28 GW of hydroelectric capacity. In the next two years, the company has stated its intention to add 14.1 GW of new renewable capacity, meaning that 60% of its portfolio will stem from renewable activity. Enel has already begun construction on two renewable and storage hybrid projects in North America, both located in Texas. The Lily project is comprised of a 146 MW solar PV facility paired with a 50 MW battery. Similarly, the Azure Sky project will have 225 MW of capacity upon completion, paired with an 81 MW battery. Both projects are expected to be operational by the summer of 2021, helping Enel achieve its goal of owning 60 GW of installed renewable capacity by the end of 2022.

Iberdrola
Iberdrola has also established itself as a leader in the global renewable market, in Europe and – increasingly – abroad. Currently, the company owns around 14 GW of installed capacity in onshore wind, with almost half coming from activity in the US through Avangrid, in which Iberdrola owns an 81.50% stake. Additionally, Iberdrola’s portfolio includes 1 GW of solar PV, nearly 1 GW of offshore wind, and 12.8 GW of hydroelectric capacity. The company has established a target to install 30 projects by 2022, adding over 3 GW of solar PV in Spain, and increasing its current offshore wind capacity in the UK and Germany to more than 2 GW. Just last year the company stated that it is on track to exceed its target; Iberdrola has more than 4 GW projects currently under construction, including the 328 MW Ceclavín. Additionally, the 590 MW Francisco Pizarro, the largest project in the pipeline, will begin construction soon and will be the largest solar PV project in Europe upon completion. Indeed, the Francisco Pizarro project will come in 90 MW larger than the current solar PV champion, Iberdrola’s 500 MW Núñez de Balboa, which became operational this year. Iberdrola has also been active in the M&A scene. Since March, the company has completed asset and company acquisitions, in France, Australia, Sweden, Japan, Scotland, and Brazil. As recently as last week Iberdrola bought US utility PNM Resources – the transaction is expected to close in 2021.

EDF
French utility EDF also makes it into the top five Big Green companies, with operations on five continents and a goal to double its renewable energy capacity to 50 GW by 2030. At present the company has almost 15 GW of installed capacity, with 9 GW from onshore wind, close to 2 GW from solar PV and around 4 GW from storage. Additionally, the company has around 22 GW of operational hydropower. Thus far, investment has primarily been devoted to projects in France. However, in 2018 the company also established a target to develop 10 GW of storage globally by 2035. EDF hopes to achieve 18 GW of net installed capacity from solar and wind alone, by 2023.

EDP Renewables
Spanish player EDP Renewables is the fifth member of the Big Green, and currently owns about 13 GW of operational assets. The company primarily focuses on onshore wind projects in North America (6 GW), Spain (2 GW), and Portugal (1 GW). Meanwhile, the company’s 5.1 GW of operational hydroelectric capacity remains dominant in Portugal. EDP Renewables plans to add 7 GW of new capacity, reaching 23 GW by 2022, with continued focus on onshore wind development; 4.9 GW of new additions will come from onshore wind, 1.75 GW from solar PV and just 350 MW from offshore wind. Most of the activity will be located in North America.

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Comparing the top 10 Big Green players, Enel’s 60 GW target by 2022 is the most ambitious. However, the company’s currently installed capacity clocks in at 48 GW; 20 GW from solar, wind and storage, and 28 GW from hydropower. Given the company’s robust portfolio, it is likely they will achieve their goal despite the short timeframe.  Iberdrola’s 36 GW target by 2022 is also quite achievable, as the company currently has 32 GW of operating renewable capacity with more than 2.1 GW of onshore wind and 2 GW of solar PV currently under construction. In fact, Rystad Energy expects Iberdrola will reach its target as soon as 2021 – it would therefore not be surprising to see Iberdrola announce a new goal soon. RWE has a target to achieve 13 GW of renewable capacity by 2022, and currently has 11 GW of operating renewable assets in its portfolio (excluding 2.5 GW which was acquired from Nordex earlier this year). Engie plans to double its onshore wind and solar PV to reach its target of 33 GW of installed capacity by 2021. This includes 16 GW of hydroelectric power which is currently operational. The company will expand in France through its subsidiary Engie Green, as well as venturing into the international market. Danish player Ørsted currently has more than 3.6 GW offshore wind and around 2 GW of onshore wind, and aims to expand its offshore wind capacity to 9.9 GW by 2022. This will include offshore wind farms in the US, in Taiwan and across Denmark, Germany, the UK and the Netherlands. Looking further to 2025, the company aims to expand its portfolio to 15 GW of offshore wind and 5 GW of onshore wind and solar, propelling it to more than 30 GW of installed renewable capacity by 2030. EDF has targeted 50 GW by 2030, with an additional 10 GW of storage by 2035. Although this brings its targeted capacity up to 60 GW, it will put EDF thirteen years behind Enel.  Acciona’s short term target is to reach 10.5 GW by 2020, while Vattenfall aims to have 7 GW of total installed capacity by 2023.

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