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Ignacio Galán sees the US as "One of the Key Growth Opportunities for the Iberdrola Group"

19/06/2007

In an address today in London to the opening of the Global Energy Leaders Summit, organized by the ‘Financial Times’

IGNACIO GALÁN SEES THE UNITED STATES AS “ONE OF THE KEY GROWTH OPPORTUNITIES FOR THE IBERDROLA GROUP”

  • The IBERDROLA Chairman said that with the successful completion of the ScottishPower operation, the Group “will continue to expand globally where their presence and opportunities of growth are more significant, building an Atlantic platform”
     
  • Galán reiterated that “energy is and will be an increasingly scarce and costly resource,” and that therefore European policy “should focus on ensuring the availability of energy supplies necessary for sustained and sustainable economic growth”
     
  • He proposed that the European Commission name regulators in countries where energy companies are state owned, in order to guarantee their independence

“IBERDROLA and ScottishPower will continue to expand globally where their presence and opportunities of growth are more significant, building an Atlantic platform,” IBERDROLA Chairman Ignacio Galán said during an address to the opening of the Global Energy Leaders Summit organized by the Financial Times.

During the conference, whose central theme is Shaping the Future: Strategies for a Changing Business Environment, Galán said that “the new Group envisages the United States as one of the most important growth opportunities.”

He added that the Company “will continue focussing both on generation and on distribution in Mexico and Brazil” and that in Europe it will “leverage on its position as a reference player in the European market, using its home markets, the UK and Spain, as platforms for further expansion in other countries.”

He gave as an example IBERDROLA’s growth over the past few years in the European wind energy sector, which has seen it become a leader in countries such as Greece, Portugal, Italy, France, Poland, Germany and Hungary.

Galán said that underlying the integration of IBERDROLA and ScottishPower, completed on April 23, is “a major commitment to the European Union’s security of supply, environmental protection and liberalization.”

Looking to future energy challenges, Galán stressed the significance of the new Group, which is among the three largest electricity groups in Europe, with an enterprise value of around €80 billion, a presence in more than 30 countries, 22 million points of supply and noted that it “has become the world’s number one renewable energy operator with 7,000 MW of installed capacity and a pipeline of more than 38,000 MW.”

Galán said that “energy is and will be an increasingly scarce and costly resource,” both in terms of increasing demand and also of society’s growing requirement for security and quality of supply. For this reason, he said “every energy source and technology is necessary, regardless of its cost,” and that European energy policy “should focus on securing availability of energy necessary for sustained and sustainable economic growth.”

The IBERDROLA Chairman stressed the “importance of increasing energy efficiency, especially when considering the European Union’s objective of saving 20% of energy consumption estimated for 2020”. And in this context, he underlined the importance of “carrying correct price signals to customers, essential for reducing consumption and avoiding energy waste”. He said it is accordingly nessary to eliminate tariffs, particularly industrial ones.

Galán applauded Europe’s leadership in reducing greenhouse gas emissions, having accepted the objectives set under the Kyoto Protocol and establishing new ones for 2020, but added that meeting these goals mean a significant challenge that will require “renewable energy to play a leading role: they are emission-free energy sources that reduce external dependence.”

He said “Europe is still a long way from becoming a single energy market”, due to the existence of entry barriers, often brought about by state ownership of the capital of many companies in the sector, lack of adequate inter-connections or diverse remuneration systems, with differences of up to 80% in the energy prices paid by end-consumers.

For Galán, it is very important for “ownership and regulation to be separated, as the owners of the companies should not be the ones to name the regulators,” and the goal should be to maintain their independence. “In the case of state owned companies, regulators should be named by the European Commission,” he said.

Galán said that “if no measures are taken, there is a great risk that the national champion model will lead to one or two European champions, which likely will neither be the most efficient nor the most competitive, or the most environmentally respectful, but the most powerful state owned companies.”

But if the goal of the European Union is to achieve a single energy market, “the European Union must choose an open market model, with the number of agents necessary to secure a competitive, efficient and environmentally sustainable supply,” he said.

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