By Pietro Lombardi
MADRID (Reuters) - The European Union needs to provide greater incentives to support the region's green ambitions, Iberdrola (BME:IBE)'s executive chairman said on Wednesday, praising government subsidies in the United States.
Iberdrola Executive Chairman Ignacio Sanchez Galan echoed the comments of other leaders of big European energy companies, who have urged the EU to come up with new incentives in response to the subsidies included in U.S. President Joe Biden's landmark climate package.
"We need huge investments and that requires a stable framework ... We need more carrots and less stick," Galan told analysts after the company released its first-quarter results. He pointed to the U.S. Inflation Reduction Act as a "great" example, as it provides a support programme over several years.
Earlier this month, Iberdrola said that it would seek to expand in the U.S. to seize the opportunities offered by the IRA.
The Spanish company is one of the leaders in renewable power in Europe, which has embarked on a plan to reduce its reliance on fossil fuels and cut energy dependence on Russia.
Iberdrola has invested more than 10 billion euros ($11.05 billion) in renewables and networks in the past 12 months. And more is coming.
Iberdrola pledged at an investor day in November to invest 47 billion euros through 2025, with a focus on electricity networks and renewable energy production.
This plan is in part supported by asset sales and partnerships amounting to an overall value of 7.5 billion euros through 2025. The company said this target had already been met.
Galan said the company would consider potential opportunities now that the asset rotation programme is complete and there are no new plans at the moment.
The energy group gave an upbeat outlook for the year, after its net profit rose more than 40% to 1.49 billion euros in the first quarter. It now expects profit to grow by mid- to high-single-digits this year, taking into account a new Spanish tax on revenues, up from a previous outlook of mid-single-digit growth.
($1 = 0.9049 euros)