Galp pushes ahead with record renewables investment in Spain – Andy Brown

  • ECO News
  • 7 June 2021

With Andy Brown's appointment, Galp is accelerating the launch of a new strategic plan for decarbonisation and will make the largest investment in the company's history in Spain.

Galp’s new CEO, Andy Brown, took the reins of Portugal’s largest oil company in February to accelerate the group’s decarbonisation plan. Galp is focused on a radical transformation process to reconvert itself into a zero-emissions business. And in this race, renewables are playing a key role, especially in Spain. “If we don’t change, our business will disappear,” the CEO emphasises.

Brown, who has just completed four months as Galp’s CEO as he replaces Carlos Gomes da Silva, reveals in an interview with Expansión newspaper that a third of the new strategic plan will be allocated to the Spanish market.

The new leader of the Portuguese oil company highlights that the Spanish renewable energy market is “very attractive”, full of “opportunities” and Galp “will continue to look at them”. This is how Andy Brown looks at the renewable energy market.

“Spain is of great importance in Galp’s decarbonisation strategy because it is the country where we have more renewables and will have even more, given the opportunities and potential that exist in the market,” explains the new CEO.

In September last year, Galp closed a 326 million deal with Spanish ACS and became the leader in solar energy on the Iberian Peninsula. The two companies created a joint venture, of which Galp holds 75%. The transaction has a total value of around 2.2 billion euros by 2024, when the solar portfolio will reach 2.9 GW.

“Thanks to the alliance we signed with ACS, we have reached over 3,300 megawatts in renewable energies. From that amount, 914 megawatts are already in operation and 2,387 megawatts are in various stages of development,” said Galp’s CEO.

At this moment, Galp is concentrating almost all its power on renewable energies in the Spanish market. Andy Brown also adds that the 3,300 megawatts are over 85% of the 3,808 megawatts that Galp has in its portfolio.

Galp’s investment in renewable energy in Spain in the coming years will be a historical record for the company in this market. Galp has so far been one of the main players in the hydrocarbons market in Spain. With about 600 service stations in the country, the company has been among the five largest service station networks in the Spanish market.

The strategic update presented a few days ago envisages a scenario for 2030 with the aim of achieving “greater electrification of the company, although the oil business will continue to play a crucial role” for the company.

Galp not only wants to become a player in renewable energy but also in other businesses, such as the electricity recharging service for electric vehicles or hydrogen projects. In the recharging of electric vehicles, Galp wants to maintain its leadership in Portugal, and position itself as a leader in the electric vehicle market. By 2025, it aims to have 10,000 points in the Iberian market.

The investment planned until 2025 includes an average of €1 billion per year. This is 20% less than initially planned, but above all, it represents a reorganisation. 20% will continue to be allocated to exploration and production and 15% will go to the industrial business, which is now known as energy transformation, where investments to decarbonise production processes in refineries, for example, are included.

Another 20% will go to the commercial business and 20% or more to renewables and new energy. Of the total investment, Andy Brown estimates that “about a third” could go to Spain, especially because of the renewables boost.