Acciona, S.A. (ANE) Earnings Call Transcript

Good day, and thank you for attending our presentation. Let us start by reading a short legal statement. Access to this presentation and the information contained herein is limited to persons who are resident and physically present in Spain and certain authorized persons who are resident physically present in other jurisdictions outside of the United States, unless you are a qualified institutional buyer, Canada, Australia, Africa and Japan. If you're present in the United States, unless you are a qualified institutional buyer, Canada, Australia, South Africa and Japan, or you're present outside of those jurisdictions but are not authorized to access this information pursuant to applicable securities laws, we regret to inform you that due to regulatory restrictions, your access to this information is restricted. ACCIONA assumes no responsibility for any violation of applicable law and regulations by any person who gains undue access to the presentation and the related information. In the presentation on the screens, hopefully, you can see the agenda for this Capital Markets Day presentation, which is scheduled to take about 1.5 hours. And due to securities laws restrictions, we won't be able to have a Q&A session. And without further delay, let me hand over to Jose Manuel Entrecanales, Chairman and CEO of ACCIONA Group and Chairman of ACCIONA Energía. Jose Manuel?

Thank you, Raimundo. Good afternoon, everyone. Thank you for attending this Capital Markets Day. I will make a short introduction and leave the floor to my -- to the ACCIONA team, who will be presenting -- each of them will be presenting their part of expertise and a general view by Rafael Mateo, Chief Executive Officer. I will start by just telling you what inspires us at ACCIONA and what are our goals -- what are our main goals in this, personal and professional. As you no doubt are aware, global economies and the corporate world are undergoing 2 major market disruptions at this stage. One of them would be the corporate social purpose or ESG disruption, and the other one, I would classify as the climate change disruption. These disruptions, apart from being, as always, an element of change in the market, in this particular instance, they are the most accelerated change events in the history of the corporate world. The acceleration of every change in society, as time goes by, has also affected corporate social or ESG -- the ESG disruption and the climate change disruption. So companies or investors that embrace these events will greatly benefit from a secular opportunity. But of course, those who remain out put themselves at survival risk. Our double compromise at ACCIONA is to contribute to the social purpose of corporations and to contribute to the decarbonization of the economy. As for the corporate social purpose disruption, I guess, ever-growing wealth gap, social demand for corporate transparency or social rejection of exclusive -- the exclusive pursuit of wealth have been key to putting this motion in our corporate world. At ACCIONA, we've been preparing for this for the past 20 years. Way back in 2004, we undertook the, as the company claim, pioneering development and sustainability. We saw this trend coming. I guess -- and why we saw it, I guess, because being as we are, to some extent, the family company, we have a long-term view that is essential for long lasting -- long-lasting, long-term view are key elements of a family company approach because you basically think intergenerationally. So we saw this coming. And not surprisingly, we have been rated repeatedly as one of the most sustainable companies in the world by the main ESG rating agencies, the industry leader at Dow Jones Sustainability -- Sustainability Index or one of the 100 most global sustainable corporations by Corporate Knights and repeated occasions in the recent history. As for the second major disruption, climate change, particularly in the energy sector, we've been preparing for 30 years. We have been the world leading and most experienced pure renewable energy operator. We've created a diversified, geographical and technological base. And we built a very solid pipeline to double our capacity in the next 5 years. This IPO will grant us the financial muscle to embrace the opportunity of climate change contributing to mitigating climate change and to embracing the -- and the capacity to embrace, to take advantage of the opportunities that this disruption brings. It will improve, obviously, our ESG ratings by giving us more visibility and by making it a pure vehicle at ACCIONA Energía. And of course, it will significantly improve our cost of capital and therefore, enhance our competitiveness and our margins. So we will deliver growth within a financially stable -- solidly financially stable company. So ACCIONA Energía is the opportunity, the best opportunity, I would say, to take part and benefit from these game-changing market disruptions while contributing to a better future. And it is my personal and my colleagues' personal compromise to contribute to a change -- to a profound change in the social role of corporations and in the decarbonization of the economy. So thank you very much. With that, the floor is yours, Rafael. Oh, there's a video before Rafael takes the floor. Thank you. [Presentation]

Good afternoon to everyone. Let me start by sharing with all of you this presentation and explaining more about our company, just to know whether why are we a very unique and a very different and a very profitable company with a very different profile in the industry, but without any doubt, the global leader in renewables. Let me share with you this slide, explaining our main positive attributes and characteristics. And I'm going to start to say that we were not -- we are not a newcomer in the industry. We were a pioneer starting in the industry 30 years ago when the almost inventing the business that today is becoming the mainstream in the electricity of the future. With a global footprint, operating in 16 countries, operating in different halves, all of them are very capable of doing everything related with the business in the region, from the deployment to the trading of the energy with all the local capabilities, operating in all the technologies, it's a different profile. Probably we are the only company that is operating all the renewable technologies. But all of them without any CO2 emission, without any risk of fuel -- fossil fuel legacy with any risk of impairments. With a very strong visible pipeline to do -- today to do our plans for the future, doubling our capacity from today to 2025. Always a very innovative company. Always at the forefront of innovation during our last 30 years, capturing the advantages of being the first mover. First mover not just in the technology, but also in the business models and also in the different markets or regions where we are operating. With a fully integrated business model, able of doing from the green development activities from scratch, to the most sophisticated sales of our [ R&E ] to our customers, always maximizing our revenues and mitigating our risk. Very focused in the operational excellence, maximizing the availability of our portfolio and, at the same time, maximizing the life extension of our very valuable base of assets. With a very robust financial profile, with a very stable and visible cash flows, with a clear internal policy about risk mitigation and with a very smart commercial policy to maximize our revenues. In terms of ESG, best in class in the best -- with the best standards in environmental and social and corporate practices. And let me, at the end, talk about the team. The best management team in the industry, working globally in 16 countries in a very well-organized company with the most professional -- with the most experienced professionals in all the areas, as you will see later, with the best knowledge in the sector, in the industry. There is no doubt about it. Let me share with you our long trajectory, more than 30 years of experience. During this period, we were growing in the past decade, almost 20% every year. We are trying to -- we're going to grow in the next 5 years by 13% every year. We did it in the past. And even we were doing it in the last 3, 4 years, especially in our international markets where we're growing at 13%, even doubling our capacity or multiplying by 20 in some markets in the last 5 years. Let me explain a bit more about our -- the period between 2012 and 2016, where we were not growing, but it's necessary to remember that we were dramatically impacted by the regulatory change in Spain. Even when we were not investing, we were divesting some operations in some countries. And we did an internal adjustment, but as a demonstration of the resilience of our business, we are today planning to double our capacity in the next 5 years. You can see also our milestone being the pioneers in the technology 30 years ago. 30 years ago, we inaugurated the biggest wind farm in Europe in -- at this time in Tarifa, but we were also pioneering -- the pioneers in PV or in biomass or in CSP or in storage or in hydrogen -- green hydrogen as we are doing today. Global company with a global footprint. 16 countries. First mover in all these countries, having today the advantages of having been the first mover. So today, we have, in all these countries, the best teams, the best locations in terms of grid interconnection and also in terms of load factor. The best projects, the best customers and also the best reputation. You can see on the slide that we are in the U.S. 18 years ago, or in Australia 16 years ago, or in Mexico 12, or in South America -- or South Africa 7 years ago, having a very long-term knowledge of the business and a deep knowledge and information about the business. Operating in all the technologies, just clean technology with any risk of impairment, even with the benefits of the -- taking -- capturing the benefits of the very high prices of the CO2 emissions today in the future, operating in wind, solar, hydro, CSP, biomass, storage or hydrogen. Today, we are committed with doubling the size of our company in the next 5 years. And for that, we have in our pipeline, a lot of projects with a very solid dynamic, sufficient and cost-efficient pipeline. We will leave later in the characteristics and the maturity of our pipeline with 19 gigawatts plus 28 gigawatts of additional opportunities to fill our commitment of doing 9.3 gigawatts in the next 5 years and more beyond 2025. During the next future, we will not just increase our capacity, we will improve much better our very well-balanced portfolio, increasing our diversification in geographies, building the next 9.3 gigawatts, half and half in the 2 mature technologies and increasing our diversification also in geographies in order to improve our risk mitigation policy. We have been always inventing the business, being the first company in bringing to our useful operations, the most -- the latest and most advanced technologies or business models during our history. And let me talk about -- yes, we were with the first wind farm 30 years ago, but 15 years ago, we signed the first pure renewable corporate PPA in the world. Today, everyone is talking about corporate PPAs. We signed the first in the world 15 years ago. Five, six years ago, we were the first company in offering to the market ancillary services, regulation, frequency control and some kind of ancillary services, just based in pure renewables using the solidity of our platform of assets. But the same company -- the first company in using blockchain to demonstrate the renewable origin of our electricity or to do the first floating PV plant in Spain or the first company in building the first green hydrogen facility, that will be the first green hydrogen production in the Iberian market. As I said before, in all the technologies and in all the business models, let me talk about it, we are operating more than 6,000 turbines with more than 60 different models of turbines that is demonstrating our deep knowledge in this technology. We are operating also some hydro plant with more than 100 years of operation that are today with a performance much better than 100 years ago because we have the best money in modernizing our plants. Let me talk about our possibility of building hybrid projects in Spain. 2.4 just in Spain, plus something in Portugal, plus the rest of the international market where the regulation is in favor of this hybrid solution. Very efficient because we are saving CapEx and we are saving OpEx and is being -- is giving to us a very competitive advantage in our portfolio or in storage or in green hydrogen or in distributed generation that we are offering also distributed at tailor-made solutions to our customers. A company that is working integrated in the value chain, able of doing everything, but with the in-house capabilities to do the development, more than 100 people in our development activities in the different hubs to do the engineering and construction from the early beginning of the project, designing the project using the best technology, more focus in the best levelized cost of the energy in the future that -- in the CapEx during the construction because we are a long-term vision company trying to be a long-term partner with our customers, supplying to the green electricity for a long term. Focusing on life extension, trying to capitalize the second life of the assets and the additional value that the assets are having in 40, 50 years of -- and beyond. And also with a very sophisticated, that we will see later, energy management system that is becoming -- is making us very attractive from -- of the customers. We have been the fourth company in the world, according with Bloomberg New Energy Finance Report in 2020 in signing corporate PPAs. And also, you will see we are -- how we are securing our sales by our B2B market expansion. In terms of operation, best-in-class with a very higher records of availability, not in the short term or almost always in the long term, recognized by our peers as the best-in-class in O&M, recognized by -- publicly recognized by our peers in -- as a best-in-class and also for the third-party services company, thinking in the long life of the assets, operating from the control room that you will see. Very automatically, let me say that we have the best, almost EUR 25 million in the last 3 years, in digitalization to make our control digital, automatic, intelligent and making the -- or preparing our fleet to have the better availability in the markets. Of course, our policy is no accidents, and we have prepared a lot of internal plans to reduce the accident ability of our employees by 80% in the last 10 years. Because our deep knowledge of all the activities, we can do everything in-house, knowing the development activities, the construction, the layout, the design, the O&M and the life extension policies. We are not buying the services from third parties, and we are never paying extra margin or extra cost to third parties for these services. So that it is permitting to us to reach a levelized cost of our energy, at least 12%, 15% less than the average in the market. With a very solid financial profile with very high visible cash flows, because 80% of our production is contracted, and we are, today, having 9 years of remaining life in our 80% of production contracted because we are working in the hard currency market, more than 90% of our business in a very stable markets, delivering to our investors a very, very stable cash flows and very resilient -- without any -- without volatility. Our main pillars: resilience, because our smart commercial policy contracting our sales to B2B or to long-term PPAs with corporation; value creation, because we are more efficient than our competitors because we are saving internal margins, and we are having optimum combination between scale and agility; reaching and spread of the WACC in all our investment with a very solid growth in the future, basically in a very solid portfolio in both technologies and becoming, after the IPO, an investment-grade company with a very attractive ratio -- financial ratio that will permit to us to finance our growth. In terms of ESG, best-in-class in internal sustainability master plan, basically in biodiversity, circular economy or people. And let me say that in 2020, we were the #1, the top leader, in the Dow Jones Sustainability Index, utility sector. We're carbon neutral 4 years ago, but we are carbon positive because we are selling CO2 certificates. We have been, for the sixth consecutive year, the top 1 green utility in the world, according with Energy Intelligence. And we have been, in 2020, the top 1 employer in Spain. In terms of governance, our company, being a stand-alone company and independent, will be also best-in-class in governance standards with 11 members in the Board, 7 members independent. And with a framework agreement signed with ACCIONA to regulate the relation between both listed companies, especially in terms of exclusivity in ACCIONA Energía to develop all the renewable energy business and also in regulating the potential -- in case of conflict of interest or related transactions between the parties. So let me conclude this part of the presentation, explaining that we are the only pure-play renewable platform in the world because of our scale, because of our diversification in countries, in markets, enough takers, because of the very solid quality of -- and cost efficiency of our pipeline, because our early know-how about what's on the business, because our ESG standards, because the sophistication of our energy market and our trading energy activity and because the team we have that is no doubt the best in the market. It's because that we are a company with a very relevant attributes to capture in the market better returns than the rest of the projects. Thank you for -- thank you very much. And now my colleagues, Rafael Esteban, that is the Chief Business Development Officer; and Jose Entrecanales, that is the Chief Strategy and Corporate Development Officer, will leap in the growth for the next future. Thank you. Rafa?

Thank you, Rafael, and good afternoon to everyone. On this section of pipeline and growth, we're going to divide it into 2 parts. First part will be focused on the 2020 to 2025 period, and the second part that will be introduced by José Entrecanales will be for the period that is beyond the 2025. So as Rafael and Jose Manuel explained before, our target is to double the company in the following 5 years. This will be meaning to do 9.3 gigawatts between now and the end of 2025. And our target will be done mainly in the main hubs that we are operating. We said is the U.S., Australia, Spain, Chile and Mexico, but also taking into account that we'll have another portion of that part that will be deployed in other countries where we operate. In relation to the technology, the idea for this 2020 to this 2025 will be to deploy half and half between PV and wind. But of course, as a renewable energy company, we are looking not only at all renewable technologies, but also at all countries that wants renewable energy deployed to their places. So even in this plan, we are working on these scenarios. We're all times working on a new technology that could be interesting for us as well as to any other country. I mean doubling the size sounds like challenging. But as Rafael said before, we've done that in the past. We were successful on it. And we've got a unique position in the market today. We are global and that allows us to access projects, to access synergies, to access and to have diversification of our activities with our local teams. And that means that we are having, in each of the main hubs, more than 100 people in development that are able to put the project that we're having today in the pipeline to an end. So with this and a fantastic pipeline, we are really comfortable and really sure that we will be able to meet the targets that we have set up for 2025. Let me give just a minute about how we define our pipeline, okay? Our pipeline is perfectly sized for the target that we are looking for. This meaning that we've got a very tangible, visible, that we are able to work on it and that we know that it will come to effect, to the target that we have set. And why we know this is because we've done this for the last decades. We understand how the pipeline works around the world. We understand how this needs to put in place, and we know how this needs to be -- the risk enough to have our investment efficient and put it forward. So in our side, we've got 3 main buckets. Let's say that one that we call it secured, that from the 9.4 gigawatts of target, we've got already 3 that we are considering that, well, we are absolutely confident that will come up. Those already have been accepted and decided investment. We've got an offtake solution, and it will begin construction, it had not been done now between now and 2020 and 2022. We've gotten another bucket that is the highly visible. Those are ones that they are already we've got land and grid connection secured or almost to be secured. Those are projects that are -- that accounts for around 6.3 gigawatts that we are fairly sure that will go to secure in a very short term and that we will be able to deploy them. Of course, the development is all times a risk. So we are expecting that not 100% of them will go, but we are fairly confident that almost all of them will pass through from those 6.3 to a secured status. The next part is the advanced development This one is where we're having 1 milestone -- 1 key milestone close to be secured. Milestones, we are around the world. So risks taken are perceived differently. We've got fairly convinced that it's enough pipeline to be sure that we'll go to an advance -- or sorry, to a highly visible or a secured stage. But of course, there still need more time to develop it. So we are considering that part of them will move forward, part of them will be delayed or we will need to reanalyze if we want to move them forward or not. Finally, another bucket that will be explained furtherly by José, the early-stage pipeline. Of course, we are looking at new pipeline all time. But now and in the future -- I mean the world does not end in 2025. We're still growing our pipeline beyond this period with new projects, new technologies, new countries. Let me go a little bit on how this will be deployed. And as we have said, this is a compilation of the last two. Between now, 2020 and 2025, it will be on our main markets, as we said before, and it will be on half technologies between PV and wind. And again, we've got additional pipeline and additional opportunities that are contemplated into our work, and that will, for sure, be part of the work that we'll have to do in the following years. In relation to the premium bucket, just want to give a brief example of how they work. This one that you see in this slide is what we consider secured projects. Secure projects, as you've seen, we've got already the offtaker agreed. We've got already the final decision. These are so tangible, so visible as could be. We've got mainly in the U.S., Australia and Spain. We've got different technologies, as you are able to see. In fact, we've got also hydrogen plants in Petra and Lloseta in Spain that will be explained after, but those are new technologies where we are looking at, where we are piloting new projects to come into place. So in the second bucket, remember, we were having for the 9.3 gigawatts that we need to install, 3 are already secured. I want just to highlight the strength of our pipeline. And in this slide, you are able to see that between the U.S., between Australia, between Spain, between Mexico and Chile, we're already having 8.4 gigawatts of projects that are secured or highly visible, so that we understand that we'll be really close to a secured and construction status. So we're already there. We are very confident about those. The systems, the offtakers, the -- and the degree of possibilities are really high. And therefore, we are understanding that these projects are really solid, and we are happy with them to move them forward in next stage. On the last part, or we say that it's an advanced development stage. As you can see, we have different parts, but one of them is significant. And Rafael stated that before. We've got, for example, hybridization projects that we are already -- that we are looking at them in Spain. Of course, we looked at them in other places in the world. But we see that we have a very upside value. Why? Because they have less CapEx, they have less interconnection costs, they have a more optimized O&M, and we have also a certain degree of curtailment that we're able to work with them. And in this case, we have a pipeline that only in the advanced stage and in Spain, we're able to see 2 gigawatts of the situation. So even though in the advanced development stage milestones, we are considering that the projects need to still be working. In this pipeline, 2 gigawatts, we already have a secure interconnection. So we're understanding that working on the rest -- the rest of the milestones and the rest of the risk, we will be able to have them pass to a highly visible and secured process. So as we have said -- we have said, our pipeline is visible, it's tangible, it's solid, it's perfectly sized for what we're looking for and perfectly sized to achieve the targets of the 9.3 gigawatts that will be deployed in 2025. And I give the floor to José to explain the rest part of the presentation for 2025 onwards. Thank you very much.

Thank you, Rafa, and good afternoon. Over the next few slides, I will elaborate on the growth plan that you've just described for the next 5 years and explain where we see the next wave of growth post 2025 and how we're positioning ACCIONA Energía to be a winner in the decades to come. As has been mentioned throughout the presentation, ACCIONA has always been, and ACCIONA Energía will continue to be, a company focused on the long term. As such, we do not look at 2025 as the finish line, but as a step in our path to become the leading pure-play company in the energy transition space. I will start by explaining in detail our 13 gigawatts of early-stage pipeline and then go into the fifth bucket that we showed on Page 28, which we call other identified opportunities to describe what that includes. I want to reinforce that all the megawatts mentioned in this section are clearly identified projects that we have analyzed and continue to work on. They are not extrapolations of what our pipeline should look like to sustain our growth. So our early-stage pipeline contains 13 gigawatts of projects in our core technologies being wind and solar PV, and that includes -- or breaks down into 7.1 gigawatts of solar PV and wind projects, both in countries where we're currently present in, such as Spain or Australia, as well as opportunities in new countries where we believe renewables penetration will grow significantly over the coming years and which we believe we can -- we have a good chance of tackling from our 5 main hubs. And examples of those include Brazil, Colombia, Peru, India or Taiwan. These are projects that are at an early stage, but which we have -- where we have carried out a preliminary analysis, which has yielded a positive conclusion. And when we continue to working on that development process, we expect they would come -- they will come online after 2025, which is why they're included in this category of the pipeline and not in others. Within these 13 gigawatts of projects, there are also 5 gigawatts of international hybridization opportunities of our existing fleet, where the -- these are projects where the economic rationale is there, the technological feasibility is there. And where we're just waiting for the regulation to follow other countries such as Spain. So absent that regulation, which we think will eventually come, everything else should be within our control to develop those projects. And finally, 700 megawatts of opportunities in distributed generation for commercial and industrial clients, C&I clients, which breaks down to 71 specific projects across Spain, Australia, Chile and other geographies, and we're reaching out to the client to directly install solar PV plants on the client site. On top of this, we have 6.5 gigawatts of opportunities outside our core technologies and an additional 9 gigawatts of M&A opportunities that are currently under analysis, and we also expect all of these would materialize after 2025. This breaks down into 2.7 gigawatts of projects in other mature technologies, such as hydro, pump hydro, CSP and biomass, where we have ample experience, as well as 2 gigawatts of offshore opportunities, which I will go into a bit more detail in the following slides. We have 3.2 gigawatts of early-stage projects eligible for the EU Next Gen funds, which we plan to present and which are not included in other categories of our pipeline. And this includes, among others, just to give you a flavor of what these projects look like, what we call renewable platforms, 24/7. These are projects where we combine solar PV, wind and battery storage within a single solution to provide renewable energy that can be delivered 24 hours a day for 7 days a week. We've identified 74 locations across 6 comunidades autonomas in Spain, where we think these projects will be a viable solution. It also includes, for example, 1.4 gigawatts of opportunities to develop floating solar PV projects in Spain, spread across 14 specific projects and representing around EUR 900 million of investment. In terms of floating solar PV, in 2020, we connected the first floating solar PV plant in Spain, which is a 1 megawatt plant in Extremadura, which will allow us -- this is the Sierra Brava project, which will allow us to test different configurations for the eventual commercial application of the technology. We think, maybe to state the obvious, this technology has huge potential, including the potential to hybridize floating solar PV with our existing hydro fleet, and we believe we're uniquely positioned to take advantage of it. Within other identified opportunities, there are also 450 megawatts of electrolyzer capacity that we have presented to the EU Next Gen funds. This represents a pipeline of projects that include both centralized projects and distributed generation projects with self-consumption. Similarly, there's a slide after this, where I will go into a bit more detail. And as I mentioned, 9 gigawatts of M&A opportunities that are not included in other categories, which we are currently analyzing and could well complement our existing pipeline and our growth plans, particularly with a strong balance sheet after the -- after the IPO. All in all, we believe we're well positioned, both in mature -- in more mature technologies and in those that are at an earlier stage in their life cycle to fuel ACCIONA Energía's growth well beyond 2025. So let me take a few minutes to dig deeper into a few of these areas that I alluded to. In the following slides, I will go into more detail around what we're doing around offshore wind, battery storage and green hydrogen. On the offshore wind side, we believe there are very interesting opportunities. Admittedly, offshore wind hasn't been a priority for us in recent years, but we have been active in this technology, at least from the technology perspective, since the early 2000s, mainly through R&D projects. Our development efforts are focused on 2 main areas at the moment. One is Poland, where, as you know, Poland is expected to launch a seabed rights auction in the Baltic Sea this year for 12 gigawatts of capacity spread across 11 sites with individual project sizes which will range from around -- are estimated to range around 800 megawatts to 1.5 gigawatts. We are preparing the applications and expect to participate in this auction. And on the other side -- on the other hand, in Iberia, where we've reached an agreement with SSE to develop offshore wind projects in both Spain and Portugal where ACCIONA is bringing its -- to the table, its local development knowledge and SSE its expertise in offshore wind. We are currently exploring sites for greenfield development across Spain, mainly across Galicia, Andalusia and the Canary Islands. And again, if this partnership proves to be fruitful, there's no reason why we wouldn't be able to expand it to other geographies if we see the opportunity. On the technology side, as I was saying, we're working with ACCIONA Infraestructuras and Nordex to develop a new gravity-based structure, which we're very excited about, for the installation of offshore wind turbines in shallow waters of up to 40 meters that we believe can deliver a significant cost advantage to existing construction methods. In fact, a few weeks ago, we received the European patent for the -- what we call the ARGO foundation system, which we presented alongside Nordex -- or we presented the application for the patent in 2008. And we also have the patent in Spain, in Japan, South Korea, the U.S. or Canada. And this system represents a huge advantage, as you may be able to tell from the pictures, because it allows for the turbine to be mounted or assembled onshore, and it is then mounted onto the BYK floating platform and towed to the location where it will be finally installed. The turbine then sinks and is released and rests on the seabed. We continue to work on this solution, and we're looking to build a 5-megawatt prototype to test it further. But again, we believe that this technology has huge potential. And on top of exploring this, we're also exploring opportunities in the floating offshore wind space, which we think is an industry with a lot of potential and, again, at an earlier stage in the life cycle of the technology. Another technology that we're currently focused on as one of the potential growth engines of the future is battery storage. The development of a short to medium duration electricity storage solution, we believe, will be fundamental for the integration of a rapidly growing base of renewable installed capacity into the grid. And where, right now, lithium-ion batteries seem to be the most competitive technology out there. This page shows in light green what we've done and in dark green what we are working on. In terms of the light green buckets in 2017 and 2018, we installed 2 small batteries co-located in Spain, co-located with both wind and with solar PV as prototypes to test different configurations of the batteries and explore the usage. And in terms of pipeline, in Spain, we have 600 megawatts of battery storage capacity in projects where we -- these renewable platforms that I was speaking about earlier, where we combine solar, wind and battery storage. In Australia, we are currently constructing a 160-megawatt project, and we have formal approval from the TSO for the installation of a 4-megawatt battery. And in the U.S., we have approved the installation of a 4.5-megawatt lithium-ion battery in one of our existing wind farms and have a large pipeline of 1 gigawatt of storage capacity from the Tenaska portfolio, which we will analyze on a case-by-case basis. And that is not included in other categories of our pipeline. On the hydrogen side -- green hydrogen side, again, we think this is a technology with huge potential. Let me start by describing our Power to Green Mallorca project, which is a project that is currently under construction, and where we expect to reach COD by the end of the year to become the first green hydrogen hub in Southern Europe. It is a 2.5 megawatt electrolyzer, supported by two 8-megawatt solar PV plants, which are also currently under construction. And the green hydrogen generated by this project will be used to supply various sectors in the island, including selling green hydrogen for transportation to the local bus fleets and rental car fleets, providing green hydrogen for heat and power generation for hotels and industry in the island and partly through injections of green hydrogen into the grid and supplying auxiliary power to supply ferries and port operations. In terms of other projects, we're finding that our clients increasingly -- are increasingly asking us to provide a green hydrogen solution when we approach them as part of our energy commercialization efforts. And we have a number of projects with large C&I clients to supply them with green hydrogen. And this amounts to 450 megawatts of electrolyzer capacity in total that we have presented to the EU funds. These are divided mainly into 2 broad categories: what we distributed -- what we call distributed generation projects with C&I clients where the hydrogen generation plant will be located on site; and centralized generation projects, which are typically larger in size where we partner with city councils such as Málaga or Arteixo. And for all of this, we believe that securing a supply of competitive electrolyzers will be key. So we have reached an agreement with a company called Plug Power, which is an American manufacturer of electrolyzers, who we think is very competitive to tackle the Iberian market. And our joint target is to capture 20% of -- a 20% market share of that market by 2030, which translates, based on our estimates, to around an electrolyzer capacity of around 800 megawatts and a total investment of over EUR 2 billion. Naturally, if this partnership proves to be successful in Iberia, similarly as is the case with SSE, there is no reason why we wouldn't expand it to other geographies. So to close off this section, let me conclude with the main messages that I would like you to walk away with. This is the time where all the elements in the renewable energy industry have come together. And as a result, we see an unprecedented growth opportunity ahead of us. A growth opportunity that we're -- we believe we're uniquely positioned to capture, building on 30 years of experience and track record across the value chain with a robust pipeline of projects that Rafa explained in detail, which is not only diversified across technologies and geographically, but also very tangible. It will serve as the foundation for the growth that we envision over the next 5 years. But the story for us doesn't end there. As of today, we're planting the seeds to be a leader in the next wave of growth in the energy transition space, well beyond 2025, like we have done in the past by investing more than our peers in new technologies and new business models. And all of that supported by a rigorous and disciplined investment framework and process that ensures that all the risks are evaluated carefully and taken into account and that our investments deliver the returns that we need them to. With that, I will pass it on to Joaquín, Chief Engineering and Construction Officer, for the next section.

So good afternoon -- sorry, everybody. So this is Joaquín Ancín. I'm currently Chief Engineering and Construction Officer in ACCIONA Energía, working for the company since -- since last 21 years right now. So my presentation is going to be quite simple. A summary would be, we did it, we are doing it, and we really believe that we are ready to do it. I will try to show you that our whole organization, our processes and the whole team and structure, we are already prepared to deliver what the company is requesting us to deliver in this growing -- expect that is not in this very nice challenge that we have in front of us. How are we going to do that? First of all, I want to say that we are designing and building for ourselves. That's a quite simple statement, but I think it's very relevant. So we are always focused since the very beginning of the projects on quality. As Rafael was mentioning from the very beginning on LCOE, we are looking for competitiveness in the long term, not in the short or medium term, and always keeping safety very much in our minds. So we really consider that we are a key part of the company to be really successful in all of this growing expectation. How are we doing that with all of these main skills that we are having? From engineering perspective, leading project design, as we mentioned here from the very beginning, in the identifying always the best possible solutions for a specific site from the very beginning. We are doing that. And by the way, we are already doing that in a very extensive and growing rates as requested by our colleagues from Business Development in the last months and years. So we are already prepared to do the same for a growing capacity. From a procurement perspective, we have, I would say, really excellent long-standing relationships with Tier 1. We will deploy a little bit later on. And always doing procurement focused on quality beyond just cost reduction in the short term. Again, looking, sorry, for long-term persistency in the business. From a construction perspective, I used to say it's very clear. We know what and how we want to contract. We are normally splitting contracts. We are doing multi-contracting rather than EPC contracts. And through this type of contracting, we are just saving, in some cases, even up to 20% in the CapEx reduction to get the same final or even better final product as we are having. We are doing an active management of all of our contractors in a project-by-project and case-by-case best analysis. And we are maintaining all of this while still reducing our competitiveness, our schedules and our quality permanently and improving our safety standards in a daily basis. Next slide is just to show the benefits of having all of this, let's say, at home. All the benefits that we have to talk directly with our, what I call colleagues, but internal customers in one side from Business Development, we are taking advantage of working together from the very early stages of every single project. With our energy resources team, by the way, one of the most, if not the most, recognized by advisors -- technical advisors and lenders in the world as the most knowledgeable team for all these activities and also preparing every -- planning activities from the very beginning, from the very early stages of the projects. We don't have a development plan and an engineering and construction plan, we have an integrated planning that allows us to really be faster than any other. From a supply chain perspective, we also take advantage of very early stage cost estimation for the projects and optimization of all the cost of the projects and market intelligence and risk anticipation on that. On the other hand, also with our colleagues, but internal customers from production department, we are benefiting neutrally from a permanent feedback, again, designing and building for ourselves. So we are always taking the best solution they are proposing us so that we can warranty that the asset that we are delivering to them will be the best possible assets to be managed during next 20, 30, 40 years or forever. We have the best integrated teams also to be sure that the connection will be according to all the requirements that we are having with the electrical networks, but also with our internal standards with the integration with the rest of our assets and so, and I insist with a permanent feedback to improve on that. Also from procurement strategy to O&M, to production, we are not just thinking on our supplies during the time of the construction, but thinking on the long-term activities that we will have with spare parts and all of this. And again, all of this is already being prepared, not for the current activity, but for the growing activity that is in front of us as we are preparing all of our structure and all of that in order to warranty that will be done the same for the increases. A specific point on competitiveness, it must be a key of our support to the company. And that's just a sample of what we got in the last 5 years. We have reduced 20% in wind and 60% in PV, the cost of the electricity that we'll be delivering to the grid in next, again, 20 years or even more. And we are still in this permanent in a daily improvement of competitiveness. How are we getting that? In a very relevant part, of course, with our internal engineering knowledge, but also dealing with best contractors that we can find in the world. Just to mention the very, very special and relevant relationship that we have with our close friends from Nordex. That's giving us a lot of unique opportunities to work with -- from the very early stages of our wind projects with the best possible turbine that we will select or even requesting them to prepare the turbines for our future needs, working together in every aspect of engineering, grid code connections and all these things. But also for the rest of the contractors, we are having or selecting through sophisticated process to warranty that we are always selecting contractors best-in-class and we are trying always to have permanent relationships with them. Through that, we are signing some master supply agreements that are giving us some benefits. First of all, we are reducing dramatically the time we need to contract everything. And we are working together with them also to have the best design and construction solutions as they know that we will be working with them in a more -- on a permanent basis or long-term basis. Again, the incremental of the activity that we are going to have will even give us more strength to select and to work even deeper with the contractors that we are going to do that. And all of that, I mean being more competitive, being faster, being more aggressive in our constructions, in our designs and everything, but with a very clear and strong track record of delivering projects on budget, on schedule, on quality. So we are delivering what we are committing to deliver to the company -- that's being reliable. So I can really say that we feel that we are reliable. So as a summary, I would say, we are really ready for the growth targets that -- the nice challenge the company is putting in front of us without losing our DNA. DNA, excellence in quality, excellence in delivery, excellence in schedules, competitiveness, always with maximum safety standards that can never be compromised. That's all from my side. I just want to finish with a personal statement. I'm really very proud of managing this team. And I'm really very proud of belonging to this company since launch 21 years and, hopefully, forever. That's it. Thank you so much.

Good morning. I am Juan Otazu, Chief Operations Officer. I have 30 years of experience, 20 in ACCIONA. I am very pleased to tell you. Okay. I will start by highlighting operations. Safety is integrated in our operations. We are best in class in availability, and we have the best load factors, maximizing our production. We are focused in efficiency and with long term of view. Our digital strategy and permanent innovation let us get best performance. Our operations model is based in safety, availability, cost efficiency and asset life extension. Thanks to our long-term maintenance strategy, we have very high-quality asset base. Our improved maintenance year-by-year let us achieve the best availability, reduce our cost and increase the asset's life. In terms of technologies, we are pioneers in digitalization and unique in robotization. Our availability in wind turbines is over 98% and 99% in photovoltaic. We only sacrifice the availability if we need drastic reduction of expenses, for example, in North America, in assets with very low energy price. Any mention to COVID, we have avoid the potential COVID impact in operations. Why? Because we have covered the risk due to our successfully COVID contingency plans. We always are all ready for big challenge. Our anticipation capability is our key. In this slide, you can see the results of our cost efficiency programs. In terms of know-how, we operate assets in-house since 30 years. We operate more than 60 turbines models. In terms of production, we were permanent pushing to TSO to increase the grid energy integration of assets is fundamental for this business. Our capability demonstrated by us is our asset's life extension. We have 100-year-old hydro plant, Seira. We have 26-year-old wind farm, El Perdón. We have 20-year-old PV plant, Tudela. We have 19-year-old biomass plant, Sangüesa. Four assets example in 4 different technologies, all in perfect condition with recurring cash flows assured for years. Now we are going to see the video of the example of Perdón. Then to our video. [Presentation]

Okay. We will have resumed this slide very well in the video. I will continue. Our commitment with the asset life extension is very clear, but we don't rule out repowering. We have identified 200 megawatts of potential replacement, but new repowering won't take place before 5 years. I will finish this slide with 3 repowering conclusions. Always we can install new turbines in the same place and taking advantage of another cycle for more profitable repowering, the new project needs a significant increase of capacity. The grid capacity and the environmental requirements are critical in the repowering success process. [Foreign Language] [Presentation]

Okay. We replaced 90 obsolete turbines for 12 more efficient. We had 50% more production, and we have achieved 8% higher capability from the new asset. I will finish -- Santxo will continue with CECOER. Santxo?

Thank you, Juan. Good evening, everybody, and welcome to CECOER, our control center. My name is Santxo Laspalas. I'm the Head of the Control Center, which we believe is the heart of our operations worldwide since we are able to control, operate and coordinate all the operations that are carried out in all of our assets worldwide. To do so, we need a tight coordination not only with internal areas but also with external entities such as TSOs and DSOs in order to provide all the services that we do in real time that you can see in the right part of this slide, that we can summarize saying that we do a permanent and full control of our assets 24 hours per day, 7 days per week, minute by minute in order to maximize the energy integration in the grid in the most profitable way for our company. This control center has been running for the last 26 years nonstop. Even in the worst days and weeks of the pandemic, we've been running. And you can see some of the figures below. We are operating 15,000 megawatts of exclusively renewable energy assets in 24 different countries. I would like to highlight that we have a global centralized data model in the meaning that we are collecting absolutely all the data from our assets and bringing them to the control center to be able to operate but also to be able to exploit them afterwards by our back-office areas such as engineering or maintenance strategy areas. That makes an amount of 4.3 million variables that we are collecting every 1 or 2 seconds in our control center. We have 3 main pillars in -- part of our DNA in the control center. Starting with robotization. We are doing hundreds of thousands of operations per year. And everything that comes to make it robotic or automatic, it's a huge advantage for us. As an example -- we will see later on our platform, but as an example, we have a robot, which is able to solve 30% of our stops, problems and issues autonomously without any human interaction within minutes. The second pillar is everything related with being more efficient. And in that sense, we have a platform that is helping us doing the pre-diagnosis, troubleshooting in order to be able to do more and better and faster in our operations. And as an example, nowadays, we are able to operate 2,000 wind turbines at once by a single operation engineer. The third pillar is it comes related with digitalization. We've been working really hard for the last 4 to 5 years in order to digitalize all the processes that we do, not only in the control center but also on site locally in all the assets of the world. In that sense, a site manager, for example, can have access to the data of the company, real-time data, historic data, manuals, procedures, checklists, the status of the warehouse, the spare part stock, everything through a tablet or live and anywhere in the world, which is a huge advantage and a really efficient and safe way of doing things. If we go to next slide, please. All these 3 pillars come together in this platform, which is called CCS, the Cecoer Cognitive System. It's a platform, it's a kind of big brain that we have on top of the SCADA system. And it's able to do 2,300 calculations per second, and it's helping us in everything related, what I've said, robotization, automatization, is able to start and stop a facility based on real-time crisis strategy or weather conditions, and also is able, for example, as a write-down or record all those 2.4 million events that we are recording in our assets comparing to typing need by operation engineers. So it's a huge advantage for us in terms of efficiency and safety. And also, you can see in the right part of the slide, other innovations that are already business as usual. We use them on a normal -- on a daily basis as how we are cleaning our steel towers or how we are doing inspections in a boiler with drones or in the blades with image robots. If we go to next slide, please. Juan Otazu has explained briefly our strategy when it comes to lifetime extension. I would like to go deeper technically. We have 2 different approaches. From one side, we have the physical approach, which is based on material science. What we do is modelize the critical component of each wind turbine specifically in its location, and then we cross it with real wind data in order to know how much stress is in each component in each wind turbine. The other approach is based on big data and machine learning. As I told you before, we are collecting a huge amount of data. In the case of El Perdón, 26 years of data of that wind farm. And knowing what has happened in the past give us a really accurate picture of what is going to be the behavior of the wind turbine in the coming months or years. We have 2 different platforms, SolarBrain and WindBrain. And putting those together with the physical model give us a huge, really relevant information, not only to life -- to do the lifetime extension but also to do it in the most cost-effective way. Everything from my side. I will give -- if we go to next slide, we have the conclusions that Juan Otazu will wrap them up. So I send back the connection to him.

Thank you, Santxo. Before conclusion, I am watching in my smartphone the wind farms or the lease model, Tehuantepec, Oaxaca. The availability now is 97.3; capacity factor, 28.9. Could you show us any of these assets, Eurus or Oaxaca 2 or 3 or 4? For example, Oaxaca 2, the availability before I come up here, the availability was 98.5 and now it's 95.6%. Could you show us an example?

Yes. Yes, sure. I -- we can see it in the video if you want. Let me take the control. Can you do -- zoom there?

Okay.

Let me go through the -- let me go to Mexico. Okay. Let me go to -- as you said, the availability is 98.5 in the area of El Istmo, okay? And we have a load factor of about 30%. And actually, we can go inside of, for example, Eurus wind farm. You can see here all the map with all the position of all the wind turbines inside of the wind farm, and in the right-hand side, the summary of all the wind turbines. We have 162 wind turbines running, and there are 4 wind turbines of them that are being attended under maintenance. And actually, if you want, we can get into one specific wind turbine. This is the [ 1 A 1 ] of Eurus, which is producing 30% of load factor with a wind of 7.7 meters per second in this moment, which should be around 6:00 a.m. in Mexico in this moment. I don't know if you want to see any other assets, Juan.

El Perdón for example, do we have total capacity at El Perdón?

Okay. So let's fly from Mexico to Spain. Okay. In the case of El Perdón, we are producing -- there is really low wind today in El Perdón. We are producing 2 megawatts out of 20 installed capacity. But it's a really good day of -- in the prices -- in the pool price market, really around [ EUR 76 per ] megawatt hour. So there is no much wind, but we have really good prices today in Spain. And as you can see, we have 39 wind turbines running and just 1 wind turbine being attended by immediate corrective.

Okay. Thank you, Santxo. We'll have [indiscernible].

Thank you, Juan.