Europe’s largest utility, Iberdrola, has announced a comprehensive €110 billion investment plan through 2031, marking a significant shift towards regulated grid networks and away from risk-laden renewable generation projects. The strategy, revealed to investors on Wednesday, positions the UK and the US at the forefront of the company’s growth trajectory.
This strategic pivot builds on a 2022 decision to focus on stability and predictable returns. Iberdrola plans to increase annual capital expenditures to approximately €15 billion, up from €12 billion, with two-thirds of the spending through 2028 dedicated to power transmission and distribution.
“This plan aims to transform Iberdrola’s profile into a more regulated company, with networks as a vector for growth,” stated Executive Chairman Ignacio Sánchez Galán.
Between 2025 and 2028, Iberdrola will allocate €58 billion, with nearly two-thirds directed at US and UK networks. An additional €45 billion is planned for 2029 to 2031. The company views the US as crucial, despite political challenges, and is focusing new capital on grid infrastructure in Democratic-led states such as New York, Massachusetts, Connecticut, and Maine.
“In the US, we are only considering the commissioning of projects under construction,” Chief Executive Pedro Azagra told investors. “Construction is on track.”
This approach reflects a growing caution across the renewables sector, where permitting bottlenecks, political resistance, and volatile returns have tempered expansion strategies.
Iberdrola is forecasting an adjusted annual net profit of €7.6 billion by 2028, an increase of €2 billion from 2024. The company expects a cash flow of €52 billion during this period, supported by €13 billion in planned asset sales and partnerships, of which three-quarters have already been executed.
The company plans to distribute approximately €20 billion in dividends between 2025 and 2028, representing 65–75% of earnings, with a minimum payout of €0.64 per share. The investment programme also includes a significant employment component, with 15,000 new hires anticipated as the company expands its grid portfolio. By 2028, Iberdrola’s regulated grid asset base is expected to reach €70 billion, rising above €90 billion by 2031.
For regulators and investors, Iberdrola’s shift underscores the strategic importance of grid networks in energy transition planning. Transmission and distribution are increasingly viewed as bottlenecks to large-scale renewables deployment, with policy frameworks in the US, UK, and EU pressing for accelerated upgrades.
Grid assets, unlike generation, offer guaranteed returns under regulatory oversight, appealing to institutional investors seeking stable, climate-aligned infrastructure exposure. Iberdrola’s plan positions it at the centre of these policy-driven growth markets, even as renewable project pipelines face uncertainty.
The strategy also reflects broader capital-market dynamics. Utilities across Europe are balancing shareholder pressure for dividends with the massive infrastructure buildout required to meet climate targets. Iberdrola’s mix of asset sales, partnerships, and regulated returns aims to reassure investors while maintaining alignment with decarbonisation pathways.
By anchoring its long-term growth in networks, Iberdrola signals where the next phase of the energy transition may unfold: in the infrastructure that enables renewable power, rather than generation itself. For governments, the company’s plan underscores the urgency of regulatory clarity in approving grid expansion. For investors, it offers a case study in de-risking through regulated assets without abandoning decarbonisation ambitions.
If successful, Iberdrola’s €110 billion investment could reshape the global utility landscape by 2031, integrating corporate strategy, climate policy, and financial markets into a grid-centred model for energy transition.
