1 min read

Galp aims to boost Iberia green investment despite taxes

(Montel) Portuguese energy company Galp plans to increase investment in renewables in Iberia despite the region’s current tax levies, it said on Monday.

“Despite recent developments, we hope the heavy taxation targeting these [renewables] businesses will not hold us back from moving faster in this region,” said Galp CFO Maria Joao Carioca while presenting the company’s 2023 results.

Renewables investments in Iberia “have been heavily impacted by discriminatory taxes targeting energy companies, namely in Spain”, she added.

Both Spain and Portugal introduced measures, including windfall taxes and gas price caps, to help consumers cope with spiralling bills during a European-wide energy crisis exacerbated by Russia’s invasion of Ukraine in 2022.

The company posted EUR 75m in tax payments related to Iberian windfall taxes last year.

However, its 2023 earnings before interest and taxes (Ebit) increased 5% year on year to a new record of nearly EUR 2.5bn, amid a robust operating performance across all business units, it said.

Green growth
The firm continued to add new renewable capacity “despite licencing delays and challenging market conditions”, Carioca said, noting that the company expected to start operating 200 MW of new green capacity this year.

Galp’s renewable generation increased 44% year on year to 2.3 TWh, thanks to additional capacity recently built and to the acquisition of the remaining stake in solar firm Titan, the company said.

The firm’s current renewable generation is almost entirely from solar projects and fully exposed to merchant conditions, with a realised sale price of EUR 80/MWh last year, down from EUR 143/MWh in 2022.

This reflected a drop in Iberian prices, it added. Wholesale power prices in Iberia averaged EUR 87.10/MWh in 2023, compared with EUR 167.53/MWh in 2022.