At ENGIE’s recent Q1 2025 financial results conference call, Catherine MacGregor, CEO, ENGIE talks about the progress the company has made in increasing its renewable energy deployments and the company’s strategy in the US in light of the recent policy disruptions. REGlobal presents selected excerpts from her address…
There’s been no let-up in our renewables expansion, both organically and via acquisition. And we’ve had the landmark moment of the closing of the nuclear deal in Belgium, enabling the transfer off our balance sheet of €12bn of nuclear waste storage provisions. It’s been really great. It’s been great to see how resilient and solid ENGIE has become. Our integrated, balanced model and our geographical spread, enabling us to maintain earnings by offsetting headwinds and declines in some areas with progress elsewhere.
Let’s talk a little bit about how we are dealing with the situation in the US, which I would summarize as follows. Things are dynamic, but in the case of tariffs, we were already moving before the current administration’s action and we were quite quick to move. So we have largely de-risked our exposure. To go into some details, our operating fleet, that is to say, around 8.5 GW of onshore wind, solar and BESS is unaffected. For the 2.0 GW that is under construction, of which we have 1.3 GW of batteries, about 0.5 GW of solar, the remainder, onshore wind. We are, to a very large extent, protected. And why is that? Because in batteries, first, we have been very proactive in sourcing, which has allowed us to reallocate batteries that were bought in 2024 to projects in 2025, thus securing safe harbor for several of our projects. And the pipeline that we assumed by acquiring BRP is on schedule for completion over this year. On the solar front, our prior efforts to increase local sourcing of PV modules and diversifying our suppliers have paid off. Indeed, we are well protected by the near-term timing of our projects and particularly including the 90-day pause. In wind, we have no impact.
Now, for projects under development that have yet to reach FID, that is where we are pausing for clarity on future tariffs going forward. Also the future of the IRA and, of course, permitting procedures. With regard to the future of the IRA when it comes to renewables and batteries, as a very starting point, the first draft of the budget reconciliation deal seems a little bit more constructive than what we might have expected. But of course, the situation is fluid and we will be carefully monitoring the evolution of the text in the coming weeks.
With regard to the future of the IRA when it comes to renewables and batteries, as a very starting point, the first draft of the budget reconciliation deal seems a little bit more constructive than what we might have expected.
All that said, what is undisputable is that our customers’ appetite for green energy remains strong. Indeed, we have just signed a preliminary agreement to provide up to 300 MW to Cipher Mining Technologies’ data center in Texas as an example. In addition, there are many markets in the US where significant load growth is expected and our conviction remains that renewable and BESS should benefit from their short time to market relative to gas and nuclear. As of now, we benefit from a big level of optionality. Remember, we have a pipeline of 115 GW, 80 GW of this is outside North America. So, if needed, we could allocate capital originally intended for the US into other attractive markets where we are already well established. Remember, ENGIE has been present in Brazil for 27 years, in the GCC for half a century, in Australia for 29 years, in India for over 30 years, just to give you a few examples, and we are really excited by these opportunities and the optionality that they provide us with.
Now, a few words on the recent power blackout in the Iberian Peninsula, which has been already abundantly commented upon. I think it’s fair to say that it will take some time to fully understand the root causes, but it is useful sometimes to remind some basics. Electrical systems have grown more complex over time. This complexity needs to be managed. It needs to be managed with sufficient investment in the grid, in the interconnection and very importantly, and we say that over and over again, in flexible generation assets. These flexible assets, they can be CCGT, OCGT, but also batteries with the right configuration, they will play an increasingly important role to guarantee, of course, security of supply, but also to address potential frequency or local voltage issues. As for immediate consequences on the group, I am pleased to report no impact on our personnel, on our assets, on our financial results. Our teams in Spain and Portugal, having managed the situation very well. In fact, they contributed to the recovery of the system as our hydro assets in Portugal were among the first one to be reconnected.
A brief run-through of our Q1 highlights. Now we added over 0.6GW of renewables capacity, mainly in LATAM and Egypt, taking a renewables and base capacity to 51.6GW. At the end of Q1, we had 8.5 GW under construction with 101 on-going projects, continuing our track record of very efficient execution. Our teams are doing a fantastic job there.
In March, we announced two acquisitions in renewables, subject to approval from the relevant local authority. First, two fully contracted hydro plants in Brazil with capacity of 612 MW, which consolidates our position as the country’s leading private hydro generator. Second, in operating portfolio of 157 MW of operating onshore and solar capacity in the UK at seven sites, at which we intend to add battery and solar, as well as raising capacity through repowering, which is obviously a very attractive option given how time-consuming new grid permitting can be.
We have a pipeline of 115 GW, 80 GW of this is outside North America. So, if needed, we could allocate capital originally intended for the US into other attractive markets where we are already well established.
In power networks, we won the tender for a new substation north of Santiago in Chile in an area in need of network strengthening that has established itself as a hub for photovoltaic development. We have an excellent integrated position in Chile, including major positions in renewables, in BESS, we’re provider of PPAs and we are number three ranking in power transmission.
A word on our progress, since the new business organization was put in place in February, it was put in place to seize opportunities from these very dynamic power markets to unlock synergies to simplify our structures. We are streamlining through divestment, already making progress on exiting non-strategic businesses of our former energy solutions business unit as announced. Through the sale of our gas generation, we exited Kuwait, Bahrain and Pakistan. In Morocco, we have reduced our stake in the Safi coal-fired plant from a third to what is now a pure financial investment of 18%. And our only remaining coal is now in Chile at just below 1GW, which we will exit by ’27 at the latest.
Finally, a significant highlight of Q1 with the closure of the nuclear transaction in Belgium, which representing the culmination of complex and time-consuming negotiations. I want to take this opportunity to thank all of those involved for their patience, professionalism, determination, to achieve what for our group is a major milestone, as it eliminates a major source of financial uncertainty and allows us to focus fully on rolling out our core strategy.
The complete transcript can be accessed here
