EDP ​​admits "risks" in the US and slows down investment in 2025 and 2026

After revealing that the company closed last year in the "red", with losses of 556 million, and recognizing that 2024 "was not good for EDP Renováveis", CEO Miguel Stilwell d'Andrade revealed that in 2025 and 2026 the company will "moderate the pace of investment" in new installed renewable capacity - to 3.5 GW in both years -, maintaining "very strict criteria for balancing risk and return".

"We are moderating the pace of investment, maintaining our focus on efficiency and adjusting our structure to the new context. In terms of strategic execution for 2025 and 2026, we are prioritizing selective growth, with strong investment criteria and efficiency improvements, to ensure that we are carrying out a more sustainable and profitable expansion," he explained.

Without giving many perspectives for this year and next, in terms of expected financial results, the financial administrator, Rui Teixeira, said however that the company's investment should be around three billion euros in 2025 and below that in 2026.

"We are moderating the pace of investments to reach around 3.5 gigawatts of new capacity in 2025 and 2026. We continue to prioritize profitability over volume and most of the growth is coming from our main markets in Europe and the US, which account for 90% of the 2025 additions," Stilwell said on the call with analysts. For 2026, the CEO spoke of 1.5 gigawatts (projects under construction, already in the pipeline or negotiation).

The manager explained that the company is “following stricter investment criteria, which guarantee a minimum 250 basis points differential over the cost of capital.” With supply chains now stabilized, EDPR does not expect any further deviations in terms of investment in the US.

"This is a portfolio of high-yield, low-risk assets. We are also expecting about 700 MW of new additions and batteries over the next two years and that is becoming a major growth driver in the US," Stilwell said.

When questioned by analysts, the manager dismissed a scenario of "zero growth", saying that "markets change quickly, according to economic cycles". And he denied that EDP has tried to grow too quickly in recent years. "We tried to grow as fast as we could. But there were traumatic events for the energy sector, in terms of disruptions in supply chains and the increase in the cost of capital. Projects take time and by trying to grow quickly, we suffered these impacts", he explained, saying that "asset rotation continues to be a very important part of the strategy, and will continue to be", for at least the next two years.

“Beyond 2026, we don’t know,” the CEO said, promising more visibility into the company’s strategy beyond that timeline after the summer, given that the company will hold its Capital Markets Day later this year. As he has said years ago, Stilwell confirmed that “2025 and 2026 are going to be tougher years.”

"We will make a new update after the summer, with longer-term projections. But given the current market context, we feel the need to provide visibility for 2025 and 2026," he explained.

Stilwell admits risks in the US, but is optimistic about energy demand in the country

As for the US and the impact of Trump's rise to power in January (which has already led the company to record impairments on offshore wind projects in the country), Stilwell confirmed that "there has been a lot of speculation and uncertainty about the US market and what that means for renewables".

"Regardless of the political uncertainty, it is very clear to us that energy demand in the US is expected to grow well over the decade, driven by the electrification of the economy, industry and data centres. We continue to forecast double-digit growth in US GDP through the end of 2030. I know the market has had its ups and downs, but the US is expected to see relatively high growth rates over the next few years," he said in his speech, before questions from analysts.

However, he acknowledged risks in the country: "It is obvious that, despite this great demand, there is uncertainty in the US, so we recognize that we are dealing with this situation prudently and carrying out very careful planning and risk management". Regarding the Inflation Reduction Act, he says that the law has bipartisan support in the US, while "the application of new tariffs on imports could have an impact on equipment that is important for renewables, on the other hand, but it will also positively stimulate local production in the US and increase energy demand".

Stilwell also said EDPR is carefully managing uncertainty in the US and is “cautiously optimistic about the increase in electricity demand” in the country.

In Europe, the company is also seeing a positive impact on energy demand from data centers, with prospects for 60 gigawatts of renewable energy capacity to be auctioned in 2025.