Repsol to Invest €5.5bn in Low Ccarbon Generation

Repsol is planning to spend over €5bn on renewables and low carbon generation between 2021 and 2025.

The proposed €5.5bn investment is around 30% of a larger €18.3bn commitment in the period, which forms part of the Spanish oil and gas producer’s strategic plan, to “accelerate the energy transition and ensuring return and the highest value for shareholders”.

The strategic plan outlines a “challenging roadmap”, Repsol said, with more ambitious intermediate emissions cuts targets to successfully achieve net zero emissions by 2050.
Repsol said it will decarbonise its asset portfolio and establish a new operating model.

The renewed strategy is self-financing at an average $50 per barrel of Brent oil and $2.5 per million Btus of natural gas at the Henry Hub.

At these prices, Repsol said it can generate cash to cover investments and dividends throughout the period, without increasing debt from current levels.

Organisational changes include establishing four business areas, upstream, industrial, customer and low carbon generation.

Repsol CEO Josu Jon Imaz: “with this new strategic plan, which leverages our strengths, we are taking a significant step towards becoming a net zero emissions company, outlining a profitable and realistic roadmap that will allow us to grow, maximise value for our shareholders, and assure the future.

“Our strategy is based on a multi-energy offering that combines all the technologies for decarbonization of energy.

“We will be more efficient and increase our renewable energy objectives as well as our manufacture of products with a low, neutral, or even a negative carbon footprint.

“We will promote circular economy initiatives, develop new energy solutions for our customers, and boost cutting-edge projects to reduce the industry’s carbon footprint.”

Repsol is targeting a global portfolio with a generation capacity of 7.5GW by 2025 and 15GW by 2030 through its low carbon generation business.

The company is planning to continue the organic growth of this business through the development of a portfolio of projects in operation that will grow at an annual rate of more than 500MW between 2020 and 2025.

Among the initiatives that are under consideration is a 1GW enlargement of the capacity of the pumped storage station at Aguayo in Spain, costing €700m.