Good morning, ladies and gentlemen. First of all, thank you very much for joining us this morning. It is with great pleasure that we welcome you to the presentation of our 2024 Capital Markets Day on ESG, in which we are pleased to update for you our expected numbers of the period 2024- 2026. We would also like to thank you all in Allen & Overy for allowing us to hold this event in this excellent London office one year more. The agenda of the day has been already shared to all of you. First of all, we are going to start with the intervention of our top management, the Executive Chairman, Mr. Ignacio Galán, the CEO, Mr. Armando Martínez, and finally, Mr. Pepe Sáinz, our CFO. The speeches will be followed by the Q&A session.
First, we will take the questions we receive from the floor, and then those asked via the web. We would also like to remind you that the whole event can be followed online as well through our web page, www.iberdrola.com. After this first series of presentations, in addition to the lunch break, we will be pleased to invite you to enjoy several presentations on different topics that we believe will be of interest for you: sustainability, innovation, human capital, corporate development, and finally, electricity storage alternatives. Hoping that you will find the day with us informative and productive, now, without further ado, I will hand over to our Executive Chairman, Mr. Ignacio Galán. Thank you very much again for your interest in Iberdrola. Please, Mr. Galán.
Good morning, everyone, and thank you very much for attending this Capital Markets Day. It's a real pleasure to see you face to face again here in London one year after the last our Investors' Day. Today, I will share with you our long-term vision for the industry, our business model outlook for 2026, and the trends we foresee for the end of the decade. This plan is built on the pioneer vision developed by Iberdrola since 2001, so it's a 23-year vision. It has been reinforced in the context of last year confirming that electrification is unstoppable.
The trend of self-sufficiency and energy security, modern efficiency and competitiveness, and price stability after decades of volatility created by fossil fuels, as well as the urgency of reduced emissions if we want to reach the carbon neutral targets, is driving major changes in energy policies all over the world to promote electrification. But more importantly, it's making electricity the preference option for all customers, in fact. Today, day after day, we see more evidence that once an energy need is covered with electricity, they are not turning back. No one which to an LT Ca or changed domestic gas heating to heat pumps is returning to fossil fuel options. As a result, even assuming no changes in current policies, the International Energy Agency expects that direct electrification will drive a 60% increase in demand in the industrial sector by 2040, with additional consensus coming from green hydrogen and derivatives.
Transport also expects to multiply electricity demand by 4 x to 2030 and by almost 20 x by 2050, moving also toward green hydrogen derivatives from sea and air transportation. In buildings, in just 15 years, electricity will cover 60% of total energy consumption in Europe and 70% in the United States, with huge additional demand from data centers doubling already by 2026 and increasing exponentially afterwards, driven by the energy needs of artificial intelligence and cloud-based applications. The increase in the use of power to substitute fossil energy options and cover need demand will result in a growing share of electricity as a percentage of total final energy consumption after decades of only around 20%, reaching up 28% by 2030 and more than 40% in 2040.
This process will imply a huge deployment of electricity networks, the need to be ready in advance to preserve electricity supply, as well as a strong expansion of renewable capacity driven by the substitution of fossil technologies and additional demand, and finally, an increasing role of storage technology to preserve the balance between supply and demand 24 hours a day. Starting with networks, we have been insisting on this for many years, and today, more and more voices are recognizing the urgency of multiplying great investment. Globally, we need to double annual investment in networks in just six years, and this does not depend on energy policy scenarios.
In fact, the difference between estimates between the low and higher scenarios of the International Energy Agency by the end of this decade is minimal, driven by the need to promote security of supply and reliability, introduce digitalization, and accommodate an increasing penetration of offshore renewables, new large offshore wind projects, and self-consumption facilities. After 2030, growth in annual investment will be more sensitive on the speed of electrification of other energy uses, but even in the lower-ex scenario, we are talking about multiplying current levels by 2.7 x. If we look at Iberdrola Core Geography, opportunities are clearly driven by several reasons, such as replacement or reinforcement of current infrastructure and digitalization in the United States and United Kingdom, and the investment due to regulatory constraints like in Spain, and a quick expansion of consumption as we expect in Brazil.
As Bloomberg New Energy Finance data shows, the progress of all electric systems around the world is clearly behind the requirement of net zero. The need to accelerate the deployment of renewables is also a clear trend. In advanced geographies, due to replacement of 500 GW of fossil generation and the coverage of the new sources of demand, and in developing countries where we need renewables, it will be crucial to cover substantial annual growth in demand of more than 3% until the end of the decade. All in all, we are talking about more than 6,000 new GW in just six years. The impact of this transformation in the wholesale market is already evident in those geographies that moved earlier toward renewables, like Iberia, where non-manageable renewables onshore and wind and solar are already displacing thermal production from baseload to peaks.
As the production from these technologies increases, mainly solar supply starts to be higher than demand during the central hours of the day, creating excess of energy that will be lost unless the system has sufficient storage capacity, thanks to manageable renewables and storage technologies, able to allocate the excess of production to mornings and evenings when consumption increases. This phenomenon will become much more significant by 2030, increasing the needs of these manageable renewables to balance supply and demand. It will not only happen daily. Over weekends period, lower consumption during the weekends with the same renewable resource will also create a huge opportunity to displace this energy and cover demand during Monday to Friday. Seasonal changes in consumption due to weather will also require technologies to balance the system.
As a result, storage requirements will grow, driving higher opportunities for batteries and pumped storage due to higher price volatility. Both technologies can provide short-term storage and ancillary services like frequency regulation, but pumped storage is the only one able to store energy also for periods more than four hours of every high or very low consumption, which are becoming increasingly frequent. Those who anticipated this scenario and invested significantly in storage capacity like Iberdrola will now be able to maximize the use of the asset and their service to the whole system. If we look, for example, at Iberdrola La Muela Pumped Storage Facility in the east of Spain, it was finalized in 2015. Its production has doubled in the last four years, and it's expected to multiply by 3-4x by 2030. This process will also change price dynamics in the wholesale market.
If we look at the Spanish system back in 2019, the most relevant marginal technology was combined cycles, setting a marginal price equal to gas plus CO2 ramp-up costs and operation and maintenance, with manageable renewables playing this role during the rest of hours at a price which is slightly below the cost of inefficient CCGTs. By doing this, manageable renewable resources produce savings to the system as they avoid using more expensive gas and reduce emissions at the same time, allocating energy that is already stored to the moments in which the system requires it instead of wasting it when other resources are abundant. In 2023, the expansion of non-manageable renewables is already displacing inefficient gas, starting to become the marginal technology for significant numbers of hours and driving an increasing role of manageable renewables.
These market dynamics will be exacerbated by 2026, with manageable renewables setting prices during more than 40% of the hours and non-manageable renewables during 20%, driving higher intraday price volatility as we saw earlier, and an average price of around EUR 60 per MWh according to our estimates. Compare this price with current forward prices of around EUR 30 per MWh of gas and EUR 60 per tonne of CO2. So all in all, we are heading toward a power system with a huge need for additional networks and more non-manageable renewables, driving more price volatility, an increasing role of manageable renewables and storage, but still with an average price clearly below the high levels of 2022 and 2023, and more in line with the levels seen on average in the last five-10 years.
Based on this outlook, today, we are reaffirming our strategic pillar announced in November 2022 here in London: growth in networks, a selective approach to investment in renewables, and focus on high-rating countries, and full commitment to financial strength as a key priority of the company and to shareholder remuneration while creating sustainable value for all our shareholders. The implementation of this strategy will drive gross investment of EUR 41 billion between 2024 and 2026, including that acquisition of Avangrid minorities announced a few weeks ago. Out of this amount, EUR 5 billion will be contributed by partners in the renewable business, resulting in net investment of EUR 36 billion. The share of network will increase significantly in the coming years to 60% of the total, EUR 21 billion, with 30% allocated to renewables and the remaining 10% to storage and maintenance of the traditional fleet.
The vast majority of this investment, 17%, will be allocated to growth. The United States will remain our first investment destination with 35% of the total net investment, followed by the United Kingdom with 24%, Iberia with 15%, Latin America, Mexico, Brazil with another 15%. The remaining 11% will be allocated to Australia and other European countries, mainly offshore wind in Germany. Now, our French offshore wind fund in Saint-Brieuc is virtually completed. All in all, 85% of our investment will be allocated to eight great countries. As mentioned, one of the key investment destinations of this plan is networks, EUR 21.5 billion, in countries that combine the need for a strong network expansion, reinforcement, or modernization. With stable attractive remuneration frameworks like in the United States, then we will absorb 45% of the total network investment, followed by the United Kingdom with 25%, Brazil, and Spain in similar amounts.
Transmission investment will reach EUR 6.5 billion, one-third of the total in networks. That's something new for you, growing significantly thanks to our large new project in the United States, NECEC, U.K. Eastern Green Link, and Brazil for an asset base of EUR 15 billion by 2026. If you compare that with certain other transmission companies across Europe, you see that this amount is similar to those ones or even superior. Our distribution asset base will reach a total of EUR 54 billion with a 30% increase. As an optional diversification, the United States will represent one-third, the United Kingdom 26%, Brazil, and Spain 20% each. 80% of this investment will be driven by rate cases which are already closed or under advanced negotiations, with key conditions already known.
In fact, 85% of our estimated RAB has its framework fully closed to 2025, with a large part also secured for 2026, including a distribution in the U.K. and Brazil will represent 34% of the total asset. On top of this, negotiations are already ongoing on transmission in the U.K., representing an extra 11%. In terms of supply chains, we have 90% of our strategic network agreement already secured. That is very important in this time we are living, and 50% of the buildup for 2026 is fully hedged against inflation and interest rates, with an additional 30% with minimal exposure. All in all, we are expecting average returns between 350 and 450 basis points above sovereign funds, driving regulatory remuneration about 7% before taxes in Europe and the United States, and 16% in Brazil.
Gross investment in renewable projects will reach EUR 15.5 billion between 2024 and 2026, including EUR 5 billion contributed by Tier One partners, as I mentioned before. 54% will be directed to offshore wind projects already under construction: Vineyard Wind United States, East Anglia Three United Kingdom, Windanker and Baltic Eagle in Germany, and the very last part of Saint-Brieuc in France, which is almost completed. Out of remaining 45%, almost two-thirds will be invested in onshore wind and the rest in solar PV, also in projects, most of them under construction or ready to build in this moment. This investment will reinforce the competitive advantage we have built over more than 20 years: leadership in renewables. In supply chains, 76% of all our critical renewable suppliers to 2026 are already closed with prices secured.
In terms of access to strategic partners in alliance with Norges Bank, Masdar and MAPFRE, among others, and then geographical diversification with similar capacity addition across the United Kingdom and the United States, Iberia and other European countries, and Latin America and Australia. All this will drive further optimization of our risk-reward matrix, with capacity addition increasing the coverage of energy sales with our own production and raising the share of high-value added energies like offshore wind by 2026 and beyond, thanks to our pipeline of mature projects of this technology, including 2,000 MW ready to participate in the upcoming multistate auction in New England, the United States, and 1,600 MW of East Anglia Hub qualified to round 3 in the United Kingdom this year.
Our plan also includes EUR 1.5 billion in storage, a technology in which we decided to invest heavily 20 years ago, anticipating the increasing role it plays in the system in the coming years. Following this vision, we start making many of our hydro turbines renewable, reversible, and build new pumped storage projects in Iberia like La Muela, fully operating from 2015, or Tâmega Hydroelectric Complex in Portugal, which has been recently completed, reaching 11 GW of manageable capacity with 4.5 GW of storage for a total capacity of 100 million kWh already in operation.
This allows us to concentrate the production of manageable renewables during the peak hours, driving an average price equivalent to 130% of the average price in Iberia, thanks to the stability of the pumped hydro to provide intraday, weekly, and seasonal storage, providing us marginal stability independently of external conditions while we play a key role to modulate supply and demand and preserve system reliability. On top of this, we have 20 million additional kWh under construction in three projects in Iberia and 150 million kWh of future projects in the pipeline, as Armando will comment later on. We also have several projects in the greater scale batteries, mainly in countries like Australia or the U.K.
Investment in customer and traditional generation will reach EUR 2.5 billion, with EUR 500 million directly in maintenance of production assets and the remaining EUR 2 billion to customers to continue reinforcing our portfolio of route to market, which are already in 2023 reached 115 terawatt-hours of contracted revenues with margins secured, 60% to industrial customers, mainly through PPAs with an average duration of 11 years, 15% through regulated contracts like CFDs with an average duration of 16 years, and 25% to retail customers with an average churn rate of 18%. In terms of hedging policy, this means that we have 100% of our sales and margin closed for 2024 covered with our own production, with 80% closed for 2025, 75% for 2026, when our production will reach up to 150 TWh. This plays us in a very comfortable position in regard to energy balance, significantly limiting our expression to wholesale market prices.
In addition, we are assuming retail margins will be normalizing to whatever levels of last year's, as we will see later on. To finance all this expansion of business activities and preserve our solidity, we expect to continue implementing our conservative model based on cash recovery as the key investment criteria, fixed-rate financing, long-term maturities, active liquidity management, and high diversification, maximizing the use of green financing with partnerships and asset rotation, giving us optionality for forwarding growth. So the Pepe side will explain all this in more detail later on. Driven by all these factors, we expect to preserve financial strength and maintain our dividend policy without contemplating any capital increases. Moving now to the 2026 financial outlook, EBITDA will reach EUR 16.5 billion -EUR 17 billion by 2026, from EUR 13.2 billion in 2022, resulting in mid- to high single-digit annual growth in the period.
This will be driven by a combination of investment and further efficiencies, as operational expenses will grow well below gross margin. By geographies, an EBITDA will be even more diversified, with 40% coming from the United States and the U.K., Iberia, and other countries like France and Germany will represent 40%, and the remaining 20% will come from Latin America and Australia. By business, networks and production and customers will contribute 50% gross margin each, gross operating profit each, meaning that 70% of total group an EBITDA will be linked to energy prices. By business, networks an EBITDA will be in the range between EUR 8 billion and EUR 8.5 billion by 2026, up from EUR 6 billion in 2022, increasing in line with our regulated asset base and with transmission as the key growth driver.
By 2026, we are expecting between EUR 1.3 billion and EUR 1.5 billion of an EBITDA from this business, doubling 2022 figures. An EBITDA energy production and customers will also reach EUR 8 billion -EUR 8.5 billion after the extraordinary situation of the last two years, very low in 2022 and high in 2023. Comparing this outlook to 2023, when we obtained EUR 8.6 billion in an EBITDA, we will have also the negative impact of EUR 500 million of the investment in Mexico, and we expect supply margins to normalize, driven by the reduction in prices of around EUR 30 per MWh for a total energy around 40 TWh corresponding to contracts for residential and industrial customers that will be rolled over 2026. These two impacts will largely offset by offshore wind that will increase its an EBITDA by EUR 1 billion to reach EUR 1.8 billion, becoming the key growth driver in this business.
The additional production of onshore, 6,000 MW, and more retail demand, with additional storage preserving the stability of our margin. All in all, as you see, we'll be able to continue increasing the result in this business compared to the average of the last two years, offsetting this EUR 500 million lower EBITDA in Mexico due to the investment and the margin normalization already mentioned.
In terms of net profit, the progress of our plan ahead of schedule is allowing us to improve today's outlook for 2025 to between EUR 5.3 billion and EUR 5.4 billion in the upper limit of the range provided in November 2022, as the cancellation of the PNM transaction and the impact of the asset investment in Mexico in the scenario of higher interest rates and lower market price will more than offset by higher investment in networks, mainly in transmission, and better rate cases, new renewable capacity with offshore wind as main growth driver, and the additional optimization of route to market, as well as lower debt expenses and the depreciation due to the impact of the cancellation of PNM and Mexico transaction. This growth will also allow us to deliver the shareholder remuneration of EUR 0.55-EUR 0.58 per share by 2025.
We expect this positive trend to continue to 2026 with an average growth to mid to high single digit in the net profit versus 2022, reaching between EUR 5.6 billion and EUR 5.8 billion in 2026. Growth in acceleration will be fully compatible with any improvement of our financial strength, which continues to be the key priority of this plan. Today, we are announcing a stronger financial ratio for 2025 and 2026, with FFO over net debt growing from 23.2 in 2023 to 24.5 in 2025, 250 basis points above the target set in November 2022, and remaining above 24% in 2026, driven by higher cash flows and asset rotation. As mentioned earlier, we will continue increasing shareholder remuneration in line with the results, with a payout between 65% and 75% for the earnings per share.
According to our result estimate, this will lead to a dividend per share in the range of EUR 0.61-EUR 0.66 by 2026, as we are today setting a new dividend flow of EUR 0.55 per share during the whole period, identical to the dividend we are paying in 2023. We will also maintain flexibility for shareholders through our Iberdrola Retribución Flexible program, which includes share buyback. All in all, dividend payments are expected to reach EUR 11 billion from 2024 to 2026, from EUR 9.5 billion paid in the previous three years. As you know, the key pillar of our long-term value creating strategy is the combination of financial and social dividends, and this plan will drive additional positive impact to all our stakeholders.
Focusing on environmental issues, 90% of our CapEx for the next three years is aligned with EU Taxonomy, and we will continue maximizing the use of sustainable and green instruments, benefiting from the unique business profile as Fitch has just recognized rating Iberdrola as the greenest on its transition assessment outcome. We will continue progressing in our ambitious decarbonization strategy with a target to become carbon neutral by 2030 in Scope 1 and 2, and all in Scope 3 before 2040. Our investment will imply 10,000 new hires by 2026 and even more jobs in our supply chains on top of the 500,000 already supported today. We will also progress even further in terms of equality, diversity, and inclusion, with women already holding almost 30% of relevant positions, our target for 2025.
We will continue focusing on learning and development in areas in which we already provide three times more training hours in Europe than average. All these targets are also possible thanks to a government system based on ethics, transparency that continues to implement the best market practices. Today, Iberdrola has 79% independent board members, and gender diversity in our board has already reached 43%. Just to conclude, the vision we are presenting today will create even more opportunities for the next decade, maintaining our increasing growth trajectory, mainly driven by an additional investment required in net growth to support the acceleration of electrification, allowing us to reach a regulated asset base of EUR 65 billion-EUR 75 billion by 2030. 30% will be in transmission.
We also state faster growth in renewables due to the replacement of the fossil fuels and nuclear Europe and the United States, resulting in new opportunities for manageable renewables, as well as new demand in emerging countries. By the end of this plan in 2026, we have completed 3,000 MW of new offshore wind capacity and 6,000 MW of onshore technologies that will be fully contributing from 2027, as well as 20 million new, 20 million kWh additional storage. We'll retain huge optionality to capture additional consumption thanks to our 100,000 renewables pipeline and 150 million kWh potential storage projects, while we preserve our financial strength thanks to the access to our tier one partners. Thank you very much. Now, Armando, we'll give you more details of this plan. Thank you.
Thank you, Chairman, and good morning, everyone. It's a pleasure to be here with you in London today. During my presentation, I'm going to detail the main projects that give us a high degree of certainty on delivering the goals of the plan that the Chairman has just covered. Starting with networks, more than 50% of the total investment of the plan will be devoted to the regulated business. During the three years of the plan, we will invest more than EUR 21 billion, which will principally be invested in the U.S., followed by the U.K., Brazil, and Spain. For our distribution activities, we are going to invest more than EUR 15 billion. In transmission, we will invest around EUR 6.5 billion in already known projects in the U.K., Brazil, and the U.S. The growth of our regulated business is well defined thanks to regulatory frameworks, which provide highly stable and predictable results.
The vast majority of the regulatory frameworks to cover our investment are in place or in an advanced stage of negotiation. As a result, 90% of the investment up to 2025 and 80% up to 2026 are driven by rate cases closed with key conditions. Regarding distribution, in the U.K., the company operates under two licenses: ScottishPower Distribution in central and southern Scotland and ScottishPower Manweb. Here, we will invest EUR 2 billion between now and the end of 2026. The distribution framework, RIIO-ED2, which has been agreed for the period 2023 to 2028, sets secure conditions and inflation protection for both of them. In transmission, the company operates under ScottishPower Transmission license in central and southern Scotland.
We will invest EUR 3 billion up to 2026 under the existing transmission regulation, RIIO-T2 framework, which is in place until March 2026, when it will be replaced with RIIO-T3, which we are already having discussions with the regulator about as part of its formal process of definition. This framework will follow a government mandate to the regulator within the scope of growth duty, aiming to promote the network sector. In the U.S., Avangrid has secured rate cases for the distribution in states of New York, Maine, and Connecticut. In particular, in New York, last year, we agreed on a rate case rate year period with very attractive conditions. With respect to transmission, the FERC provides attractive rates and a visible revenue stream, which also has inflation protection.
In Brazil, the framework parameters for our distribution license in the states of Bahia, Rio Grande do Norte, São Paulo, Pernambuco, and Brasília are already set and linked to inflation, securing EUR 3.1 billion of investment between 2024 and 2026. In all these countries, these attractive frameworks bring further opportunities for investment and growth. They also recognize the need of increasing the investment on the networks. In the distribution rate case in the U.K. and the U.S., the annual investment during 2024 to 2026 has a significant increase compared to the levels of the previous regulatory periods. In Spain, the current framework provides a rate that is fixed at 5.6% up to 2025, and discussions are ongoing over conditions for the next period. The government has already shown its intention to amend the methodology.
To achieve the National Integrated Energy and Climate Plan, the investment in networks needs to double, with investment required up to EUR 53 billion in the decade. This clearly highlights the need to review the current limitation to investment linked to GDP, as well as improving the regulatory rates of return. We can already see that countries like the U.S. or U.K. offer reasonable rates in distribution in the rates of 7.5%-9%. So our remuneration rates in line with these countries of around 7% are also expected in Spain. 20% of our investment in distribution will be devoted to digitalization in the deployment of the smart grid. With the aim of improving the operation of our high and medium voltage grid, we are strongly focused on digitalization, which will be increased from 78% in 2023 to 86% in 2026.
With the ongoing investment in providing intelligence to the grid, Iberdrola has dramatically reduced the time response in unplanned outages and other events without human intervention. All these advantages in digitalization are driven by innovation developed in our three smart grids innovation hubs: one in Bilbao, another in Glasgow, and the third in Doha, where Iberdrola works with more than 80 companies from all sectors. As a consequence of the digitalization, the quality of service and efficiency improved drastically. We deliver efficiency gains, which are partially shared with our customers, to decrease tariffs. In terms of quality of supply, we are committed to delivering an 11% global improvement in quality of service by 2026. I would like to highlight that one of the main drivers of this plan is the growth on the transmission business.
As of today, Iberdrola has a strong track record of delivering big transmission projects in the U.K., U.S., and Brazil. Our plan in 2026 allocates EUR 6.5 billion of investment to continue growing our transmission assets in these countries, all of them under defined and clear conditions of remuneration. The investment plan is based on specific projects, and most of them are already under construction. In the U.K., as of today, the group already operates more than 5,000 kilometers of transmission lines, including within this is the Western Link and 400 km high-voltage subsea grid, which is a critical part of the U.K. grid.
The holistic network design program included in RIIO-T2 identifies the critical nature of investments from the electrical system and provides them with enhanced protection, often recognized in the regulatory asset base as the cost of securing the supply chain and returns of these projects as earned from the moment that the investment decision is taken. Each pound invested will increase RAB and remuneration during construction. Under this program, we have now started the Eastern Link 1 project, an HVDC line that will connect Scotland and England down the east coast. The project progresses well, and major contracts were already awarded in December 2023. The company develops two major projects of HVDC lines, Eastern Link 4 and Western Link 2. In this context, ScottishPower has launched the largest network tender for more than EUR 6 billion to secure supplies for transmission projects over the next five years.
In the U.S., the group has almost 5,000 km of transmission lines. We are building new projects through our license, like NECEC high-voltage lines of more than 200 km between the U.S. and Canada. We started its construction in August last year, following the decision of the main department of environmental protection to lift the suspension. The project is currently ongoing, and most of the contracts are already secured. In Brazil, where we operate 2,400 kilometers of transmission lines, the ongoing projects, which came from public tenders, are progressing as expected and will be completely operational in 2025. All of these projects, including the plan under construction and the EUR 2.5 billion of investment, will contribute to our results under the agreed remuneration conditions. The investment across our network business will mean that by the end of 2026, we will have a regulated asset base of EUR 54 billion.
In terms of activity, let me stress the growth in transmission, whose asset base will represent almost 30% in 2026. Based on this investment, during this period, the company will deliver a more resilient and smarter grid with 36 million connections in more than 20 million smart meters through the 1.3 million km of line, and most importantly, improving 11% the quality of service. Let's move to the production and customers, which, as you know, we manage jointly as an integrated business. We have a unique combination of route-to-market options and storage capacity, providing long-term stability and maximizing margins. This includes our renewable generation fleet, which will have a total investment of EUR 15.5 billion to 2026. This project has been selected following a robust process and has been chosen following strict capital allocation criteria.
Manageable generation and storage, which Iberdrola has been leading for years and is key to the energy transition, that plan for the EUR 1.5 billion of investment, and a wide portfolio of route-to-markets that we manage to maximize our margins. The sale of this clean energy has strong visibility on returns thanks to our retail and industrial customer base. It enables us to offer value-add solutions through our existing contracts, which currently total more than 16 million, and with solutions linked to decarbonization of the industry. The company, as a leader in renewables production, has multiple options to allocate investment. Again, Iberdrola has followed strict criteria of selective and profitable growth. Our plan considers investment of EUR 15.5 billion that will deliver additional renewable capacity in eight rate countries and is selected due to their strong value creation credentials.
If we look at investment by technology, more than half of this total investment will be dedicated to offshore wind, with projects already on construction with full visibility on margins in Germany, the U.S., and the U.K. During the next three years, we will add around 9 GW of renewable capacity. 6 GW of this new capacity corresponds to projects already under construction. The remaining 3 GW of the capacity relate to already known projects that are ready to build. We are in a very comfortable position with respect to the certainty of this investment, as I will show you in the following slides. During the period, our offshore business capacity will increase thanks to four new projects that are in an advanced stage of construction. They will join the existing four wind farms that are already in operation to reach 4.8 GW.
Among the new projects are Baltic Eagle and Windanker in Germany, both under construction, which will supply energy through corporate PPAs already closed with companies that include Amazon, Vodafone, and Mercedes. Also, Vineyard Wind in the U.S. and East Anglia Three in the U.K. are progressing as scheduled with full visibility of their incomes through corporate PPAs or regulated schemes like inflation-linked CFDs that are available here in the U.K. All the projects have all the supply chain fully secure. These four projects will come into operation before the end of 2026, when they will contribute with an additional EBITDA of more than EUR 1 billion, resulting in an offshore business EBITDA of EUR 1.8 billion in 2026. Moving on to offshore wind, our plan will allow us to reach 23 gigawatts by 2026. We have selected the projects with the most attractive returns among a large and balanced portfolio.
Around 60% of the new onshore wind capacity is already under construction, and the remainder is already earned through specific projects. By geography, in Iberia, we are building three projects totaling 400 MW. Similarly, in the U.S. and U.K., Iberdrola has five projects for 600 MW, and in Australia, Iberdrola is constructing Flyers Creek projects with a capacity of 150 MW. With regards to solar technology, we apply a rigorous project selection based on predictability of revenues, such as PPAs' closed conditions. During the period, we will finish the construction of 4 GW in the U.S., Italy, and Spain. The revenues of these projects are mainly based on PPA contracts. The new solar projects, already known and ready to build, will mainly be focused on Mexican growth to deliver clean electricity to a fast-growing industrial demand.
In Australia, new solar projects will be hybrid with batteries and wind for providing firming capacity to our industrial customers in the state of Queensland. As I have explained, there are 3 GW of unknown projects that will start construction in the coming months. This project has been selected from a mature and diverse pipeline of around 18 GW, which covers more than six times this capacity. It provides us with significant flexibility and gives us a high degree of confidence in delivering our plan. Given the high dynamism of the industry, we will continue focusing on developing a larger and better pipeline to increase the optionality for future investment decisions. Iberdrola manages today a total renewable portfolio of more than 100 GW. Integrating this huge addition of renewable capacity will require significant new capacity in storage to provide the markets with flexibility and reliability.
Pumped hydro is currently the best alternative, technically and economically, for large-scale, long-term storage. Iberdrola has a total pumped hydro storage capacity of 100 million kWh, including the largest facility of its kind within Europe, Tâmega-La Muela. There are three projects currently under construction in Iberia: Valparaíso, Santiago-Xares, and Torrejón-Valdecañas, that will be operational by 2026, adding 20 million kWh of storage capacity. As the Chairman said, Iberdrola has as well a pipeline of pumped storage projects in Iberia to increase storage capacity to 150 million kWh. Three of them, Alcántara II, Conso II, and Melón, are already under development. Having access to multiple routes to market is one of our key main competitive advantages, and it enables us to maximize returns on assets and limit our exposure to price volatility. Iberdrola's approach is to sell our own production through mid- to long-term contracts, allowing us to secure margin.
Driven by all the investment, the company will significantly grow its available production for sales. In 2026, it will grow to around 145 TWh. In addition to the energy that can be sold in advance, there is generation dedicated to system needs and ancillary services that is not exposed to forward markets. In terms of revenue diversification, in 2025, our route-to-market approach allows us to sell this production through multiple alternatives, including 22% to retail customers, 60% under long-term PPAs and industrial customers, and 15% revenues from regulated schemes such as CFDs or similar. For the year 2025, 75% of the production available for sale has been already sold. Iberdrola is the leader in Europe in the PPA market and has agreements with first-class companies worldwide like Amazon, Meta, Heineken, Holcim, Vodafone, etc.
Increasing demand for the technological sector, in particular in data centers, is pushing the demand for this type of contract. Up to 2030, Iberdrola has committed more than 370 TWh with industrial customers in our main geographies: USA, U.K., Brazil, Spain, and Germany. The stability of revenues to our generation assets is also secured by our stable base of 14 million contracts of electricity. That provides the route-to-market to 45 TWh of our sustainable generation in Iberia and in the U.K. Iberdrola is the Spanish retail market leader and is among the top six in the U.K., with an optimized cost to serve below about 30% of the average cost of our peers. The excellence in customer service is one of our main drivers and has been recognized in Spain and U.K. rankings like Citizens Advice.
In addition to 14 million electricity supply contracts, Iberdrola has 3 million contracts of gas. This retail strategy allows Iberdrola to sell added-value solutions that create further revenues from the energy business. That is the case for our smart solutions. The company is already providing more than 12 million contracts to retail and customers, with an average of three contracts per customer in Spain and two in the U.K., combining power, gas, and smart products. Our smart portfolio covers the full spectrum of decarbonization. In regards to mobility, we deploy more than 14,000 public charging points and 36,000 resilient ones. To maintain the growth of electric mobility, the company reached agreements with the main car manufacturers, and to deploy the public grid of chargers, we have entered into a joint venture with BP.
Moving to PV self-consumption , Iberdrola has been promoting these sustainable products for a number of years now, which is why our company is the actual leader in the Spanish market, managing more than 40% of the total actual installation. Decarbonization of the residential heating is another relevant vector of growth, with more than 150,000 customers. During the plan, we expect to continue increasing our portfolio of smart products and to expand this high-value activity up to 16 million contracts in 2026. Our industrial solution business supports leading companies in their path to net zero by providing them with sustainable products to electrify energy-intensive processes. Our current partners in solutions for heat bring a portfolio of more than 4 TWh of steam demand, with projects to completely decarbonize their processes. Iberdrola is a pioneer in Spain in the development of district heating, with two projects currently under construction.
In particular, the company is building the first grid of the Spanish city of Palencia to supply 9,000 customers with domestic heat and sanitary hot water. As regards to data centers, the group already supplies 7 TWh of green energy through long-term PPAs. Green hydrogen is a solution to decarbonize the hard-to-electrify processes. We have developed a wide portfolio of projects to supply hydrogen as long as the price guarantees their profitability. Incentives may be needed to get so. Iberdrola already has three facilities in operation and construction: one in Puertollano, another in Barcelona, and the third in Castellón to supply 150 tons of hydrogen per year. In the U.K., the Cromarty and Whitelee projects have been awarded funding by the U.K. government. The same is also the case for the GREEN Methanol MEIGA Project, which has been awarded funds from the EU.
The Palos project is in a similar situation. This project will supply 22,000 tons of green hydrogen to decarbonize an industrial complex in the south of Spain. The project has been selected to receive funds from the EU, and it's just pending the allocation of the funds by the Spanish government. The group also has a diversified pipeline in different regions, mainly in Australia, Iberia, U.K., Brazil, which allows us to supply more than 100,000 tons per year of green energy, always, unlike any other project we undertake, provided the economics justify so. Our supply chain management is one of our key pillars, providing us certainty of prices and availability of key materials and services. In today's challenging context, Iberdrola has secured 85% of the critical supplies to fulfill our investment plan, hedging our exposure to the impacts of raw material exchange rates and inflation.
The success of our procurement strategy relies on several elements. Iberdrola's presence in different geographies allows a deep knowledge of global and local markets and related economic cycles. Besides, we maintain close relations with tier-one strategic supplies and monitor markets continuously. Finally, centralized and global purchases result in aggregated volumes thanks to which we achieve very competitive pricing based on bargaining powers with suppliers. Only in 2023, Iberdrola awarded contracts for more than EUR 18 billion. As part of our strategy of securing margins, Iberdrola secures the supply chain prior to FID. We cover the commodity risk through hedging and inflation through linking the CapEx and the revenue profiles. In particular, the company has secured 90% of the strategic supplies for networks, 100% of our offshore wind contracts, 100% of our solar panels, and close to 75% of our onshore wind turbines up to 2026.
With this, I'm now going to conclude. This is a plan built on solid foundations that will deliver sustainable growth up to 2026. The plan targets are guaranteed thanks to the visibility of our business and our de-risking strategy. 80% of the investment in networks has already known conditions under agreed regulatory frameworks. 100% of the new capacity is under construction or ready to build. 85% of the energy margin is secured thanks to a route-to-market based on long-term contracts, and 85% of the critical supplies are secured with certainty on prices. To sum up, each of our growth drivers (distribution and transmission, offshore and onshore generation, storage and customer solutions) provides our plan to 2026 with a very high visibility of revenues and costs. This strategy, together with our consistent and long-standing track record of delivery, will ensure sustained growth in the coming years.
My final words are for the main driver of this plan: the big professionals of the group and their exceptional commitment and expertise. Thank you very much for your attention.
As you can see, it's happening something very Iberdrola that is to be ahead of schedule. So let's go to the coffee break, and we will start with the Pepe presentation afterwards. Thank you. We are going to start with the last presentation about financials, and the floor now is by Pepe.
To everybody, you know, I am going to begin this presentation showing how our business and financial model has created significant value for our shareholders with a proven track record of overdelivery. And then afterwards, I will continue explaining our financial strategy.
The first thing I want to mention is that, as the Chairman and the CEO have explained, the solid fundamentals of Iberdrola are based on a unique business and financial model that combines growth, predictability, shareholders' return, and financial strength. Growth and predictability, as our EBITDA coming from networks is 10 percentage points higher than the peers, reaching about 50% of our total EBITDA in 2026. A good geographical diversification with more than 85% of our operating profits coming from A-rated countries. A balanced generation and supply position based on an integrated model with more than 85% of our production secured by long-term contracts and customer base. With a sustainable financial strategy based on a strong rating, reducing risks in interest rates, FX, and with a strong liquidity. Our partnership model that adds stable and long-term value.
This unique business and financial model clearly has paid off in the last years. Our net income has grown constantly with low volatility. Our shareholder remuneration has grown in line with high predictability. We have been overdelivering versus our annual guidance. We think that this business and financial model deserves a premium, a strong premium over our peers. As you can see in the slide, our total shareholder return of Iberdrola in the last years, in the last 10 years, has exceeded 300%, beating our American peers that reach 180% and also the European integrated companies that achieved around 130%.
Not only that, as you can see in this slide, our net profit compared to our European integrated peers from 2019 to 2024, an uncertain period of time where the world faced COVID, and more recently, the conflict between Ukraine and Russia, we've been growing above our peers and with a very low volatility. Our net profit standard deviation these years is close to zero, providing an attractive risk-return combination if you compare to our peers. As you can see, our shareholder remuneration growth is fully aligned with our net profit growth, giving a strong visibility to our shareholder remuneration policy. To finish this introduction to value creation, as you can see, we have offered an average reported net income growth of a high single digit since 2016, with an average overdelivery of more than 3% on our annual guidance.
2023 was a year in which we beat our guidance, and we are working to do so again in 2024. As the Chairman has pointed out, we are already moving the guidance for 2025 to the top part of the range. Talking about the delivery, as I was mentioning, our net income in 2023 has reached EUR 4.8 billion versus EUR 4.5 billion, taking into account that we in the last quarter make extraordinary provisions of around EUR 300 million. Our 2023 financial ratios, our FFO adjusted net debt improved by 300 basis points, and our net debt-to-EBITDA ratio improved 0.4 x to 3.7 x. In asset rotation, our EUR 7.5 billion target has been more than achieved in 16 months.
On the ESG side, the most important metric to contribute to the energy transition, our specific emission reduction, has also improved from 83-77 g CO2/kWh. Let me now summarize the financial aspects of our 2024-2026 plan. Before entering into the details of our financing strategy, let me explain or recap or try to expose which is the rationale behind Iberdrola's recently announced proposal to reach 100% ownership of Avangrid, which is considered now in our base case. Avangrid clearly has growth opportunities in the U.S., mostly in networks, but also in renewables, as we have commented to all of you. But this requires an important amount of CapEx. As the Chairman has explained, the largest country where we are going to be investing more, 35% of our total investments, is the U.S.
In recent years, Avangrid has been cash flow negative and will continue to be so in future years with financial ratios becoming weaker, while the needs to fund this growth and maintaining the investment rating is important because take into account that we have a lot of regulated companies. Avangrid needs either to reinvest its profits, changing its dividend policy, or to have large capital infusions. I think it is important that we understand this because obviously Iberdrola is willing to do it, but obviously this, as I was saying, means a change in the dividend policy and we will probably also have to make capital increases. At the same time, Avangrid's market performance has reduced its value as a currency for potential transactions in the country.
With this transaction, in addition, we are increasing our exposure to the U.S. and to networks, as nearly 80% of Avangrid net incomes comes from networks. Also, we simplify Avangrid's corporate governance structure. Finally, we are expecting this transaction to be closed between nine and 12 months, but as for the plan, we are assuming that we close the transaction on the 1st of January of 2025. Passing to the macro hypothesis of the plan, I mean, in the annex, you are going to find a detailed explanation of all the hypotheses, which are very much aligned with the market forecast. We expect a progressive stabilization of the macro scenario with inflation under control, gradually converging to central bank targets, but slower than it was expected previously. Interest rates are also going to normalize with short-term rates starting to fall this year.
Long-term rates will finally be above short-term rates from 2025 onwards. Regarding credit experience, we think that we will remain stable during the plan. GDP is expected to recover gradually in 2024 and 2025 in the U.S. faster than in Europe, with Mexico and Brazil growing more than the U.S. and Europe. Finally, regarding the FX, the U.S. versus our previous plan has depreciated from EUR 1.02 to EUR 1.09 per dollar. The British pound will be in line and the Brazil real will continue to be supported by good economic data and political stability. Now I'm starting the Ignacio Cuenca section, which he has insisted that I put the sensitivities to this at the beginning. We were a little bit reluctant on that because once you see the sensitivities, you are going to stop listening to me, but in any case, Ignacio has won.
So based on the mid-to-single high-digit mid-to-high single digit growth of the net profit, you are going to see what are the sensibilities that we have to energy prices in Spain, in the U.K., distribution returns also in Spain, interest rates, and FX. We think that these hypotheses are quite conservative, especially compared to the hypothesis of some of our colleagues. If we would have put the same hypothesis as they have put, we would have been showing an increasing profits of around EUR 300 million more than what we are showing right now for 2026. The important thing to show here is that, as you can see, the expected volatility of the net profit is low and lower than others due to our business profile and policies.
As you can see in the slide, a EUR 5 per MWh change on electricity prices in Iberia from a EUR 60/MWh base has an impact of only EUR 95 million in the net profit for 2026. This is on a net profit of EUR 5.6 billion-EUR 5.8 billion and coming from a low start, which is around EUR 60 per MWh. As you can see also, the impact in the U.K. is minimal. Another important element to point out is that the 50 basis points of a higher or lower remuneration of our networks in Spain for 2026 will have an impact of only EUR 40 million in our net profit. Okay? So I think it is also important to say that if in Spain raises the remuneration, that could cost a lot to the consumers and you see that this is not the case.
In terms of our sources and uses of funds, let me enter now in the details of the financing plan. During the 2024-2026 period, we'll have to fund around EUR 55 billion of CapEx. CapEx, sorry, EUR 55 billion of CapEx will be around 75% of our needs. 4% of our total needs will be to fund the transaction of Avangrid. Around 25% of our total needs, so one-third of the investments, are work in progress that will not contribute to the cash flow, but it will assure future growth in our results. Shareholder remuneration and minority interests will be around 23%, and a remaining 2% will be used for a cash tax payment linked to the Mexican deal. As you can see in the slide, 67% of our needs will be covered by our increasing funds from operations, growing at mid-single digit, on average since 2023.
Those limiting additional debt to only 11% of sources, 10 percentage points below our previous plan. Contribution from asset rotation and partnerships will be around 22% of the sources, but the good news is that around 84% of that is already done or in advanced stages, which is important. As a consequence, our financial solvency will improve given the limited increase in financial debt and the growth of our FFO. In terms of what are we expecting in terms of returns on CapEx, our network business, the return is aligned with the well-known regulatory schemes that Armando has explained, and an average EBITDA over growth CapEx will be more than 10%. In renewables, with different routes to market, given our selective approach to investments, we will be able to generate more than 200 basis points over the cost of capital with an IRR between 7%-12%.
For example, in the offshore business, we are only assuming that we're to invest in one project where we can choose from several projects in different geographies, as Armando and the Chairman have explained. So we expect that the group CapEx will have a higher than 8% IRR, and our return on capital used will increase to 7% along the plan. This is 100 basis points higher than what we had in our previous Capital Markets Day. This is without taking into account work in progress and additional potential value creation from partnerships. As I was mentioning, we have a partnership model capable to attract tier one investors, allowing us to raise equity with lower dilution than issuing in the capital markets. We continue taking advantage of high volume of capital to be deployed by 100% equity funds.
As I mentioned at the beginning of the presentation, our EUR 7.5 billion target has been more than achieved as of today. Our current plan has a EUR 12.2 billion target for the 2024-2026 period, EUR 5 billion in partnerships and EUR 7.2 billion in asset rotation. And as you can see in the slide, and as I mentioned earlier, 84% is completed or in very advanced stages. Finally, let me remark that on our plan, as in our previous capital markets day, we are not including any asset rotation in the EBITDA. So let me repeat that, that we are not including any asset rotation in our EBITDA or in our net profit.
Just for an example, just to know, we are going to have a capital gain in Mexico this year of EUR 1.1 billion that we are going to use to apply to efficiency measures on others that will secure growth for future years. Looking to the net debt evolution in 2025, we expect to have EUR 51 billion of debt in 2025 and to end 2026 with EUR 54 billion, below the EUR 57.5 billion of our Capital Markets Day in 2022 for 2025. Considering that we have the policy of financing the group in the same currency as we have the FFO, the non-euro currencies weight is going to increase and the debt in euros will be falling from 34%-26%.
Regarding our interest rate debt structure, we'll continue to be prudent with a 69% average debt at fixed rate and higher, which is higher than the 61% of our EBITDA that we consider not inflation-linked or variable. As you can see in the slide, we have a percentage of fixed debt higher than the income structure in all currencies, with a 94% fixed debt in our U.S. business, which is basically fixed, both in terms of regulated business, but also a lot in terms of our renewable business, as most of that is contracted with PPAs. In the British pound, we have a very high percentage of covered debt, but basically because we were able to fix it at very attractive levels. And the only area in which we really maintain without fixed debt is the real. As we have said, the revenues are 100% inflation-linked.
Another important element of this plan is that our cost of debt will be decreasing along the plan despite higher cost of currencies increasing weight. To end 2026, around 4.4% down from around 5% in 2023. And what I can say also is that one of the losses that we have in the EBITDA due to the, for example, not the PNM acquisition is the fact that we are going to have significant lower financial expenses in 2024 and 2025 compared to what we had expected. In terms of solvency ratios, as I was mentioning, we are with strong solvency ratios throughout the plan, comfortably above the rating agency thresholds and clearly improved from the Capital Markets Day of last year. So our net debt-to-EBITDA will improve to 3.2x in 2025, 0.2 x better than the target of 2022.
Our FFO over net debt will raise to 24.5% in 2025, 250 basis points over the previous target. And in 2026, we'll still be at a very comfortable 24.2% levels. Although, as you know, our ratio calculations differ from those of the rating agencies, these ratios are comfortably well above the threshold of FFO over net debt, how the rating agencies calculate it. According to rating agencies' calculations, we will be in a range of around 19%-20%. So this is the top part of the BBB+ Baa1 rating that rating agencies have, so we have space to grow.
So rating agencies, which is important, sometimes people are saying that our leverage is higher than others, but taking into account that rating agencies normally require lower thresholds for our BBB+ Baa rating because they consider us as one of the energy transition leaders and have higher debt tolerance due to our business mix, good country diversification, and visibility and predictability of our cash flows. Regarding other elements like hybrid, I would like to comment that Iberdrola is committed with its current hybrid portfolio. Our hybrid strategy will remain supportive of our current ratings. For this plan, we will remain focused on the refinancing of the outstanding stock. In terms of our financial needs through the plan, that will be around EUR 22 billion, EUR 17 billion refinancing debt maturities along with EUR 5 billion of additional debt.
We have already EUR 3 billion of our new needs already signed, basically with supranational entities. In terms of coverage, basically our needs are going to be covered through the bond market, 55%. As I was mentioning before, multilateral export agencies and development bank loans are going to increase significantly its portion from levels of 17% to levels of around 35%. This is very important because this type of funding is fully aligned with the targets, so our investments are fully aligned with their targets. It is not subject to capital markets volatility and providing financing at very competitive prices, partially independent of the market evolutions. Bank loans will be the remaining 10%, a low level that allows us to maintain non-use capacity for other products like credit lines.
In terms of liquidity, we will comply with rating agencies' requirements for what they call a strong or adequate liquidity. At the end of 2026, we'll have around 22 months coverage with EUR 21-23 billion of liquidity. We will optimize our liquidity, position, and cost, reducing our cash balances and using, as I was mentioning, credit lines that will be all based on sustainability KPIs. Our expected average life of debt is going to be six-seven years as we prioritize regulatory cycles versus asset useful life. Also, this six-seven years average life of debt optimizes our risk-cost perspective. Regarding our FX risk management, you know very well what has been our strategy.
Basically, we have a structural FX hedge, and what we do is to hedge our FFO over net debt ratio, which is the most important ratio to protect our financial solvency at the rating of the group from FX fluctuations. In addition, we annually hedge the net profit exposure to protect the P&L of every year to FX volatility. To finalize my presentation, let's move to the ESG sustainability side. We have classified our sustainability and ESG priorities in five strategic lines of action. The first one, which is boosting electricity as the best available energy source, and it is the pillar of our business model as the Chairman has commented, and the main growth driver for us. We will do this while protecting nature, promoting a more sustainable value chain, strengthening human and social capital, and finally maintaining our good practices in governance.
This strategic approach, embedding sustainability into industrial operations, assures the provision of assured value to all our stakeholders. We are also, in terms of the financial performance, we are also progressing well towards the 25-30 targets. We have added two new relevant KPIs. The first one is related to the European Union Taxonomy CapEx alignment, and the second one has to do with promoting sustainability with our suppliers. We have also widened the scope of our targets. About circular economy, we are not only including circular economy for blades, but also for photovoltaic panels, which is very important. In diversity and inclusion, we are widening from gender diversity to other criteria like racial diversity and others. Finally, our training target has been widened to a green skilling to focus the effort into strategic capabilities. Additionally, we have increased the level of ambition of seven targets.
I want to bring the attention to the improvement in our specific emission targets for 2025 by 14% or by 23% from 2023. So now our forecast is to achieve 6 g in 2025 per kWh produced. These 60 g is four, five, or 6 x lower than what our peers are emitting. Also, we have increased the target for storage in 6 GWh. The only target that we are diminishing is hydrogen. Not because we don't want to do hydrogen, that we would love to do more projects, but we are still waiting for the funds to come to the projects that we have presented. As the Chairman has mentioned, 90% of our total organic investments will be aligned with the EU taxonomy. And therefore, we'll provide a large pipeline to be financed under green principles.
We are basically used to use the green principles to finance our needs. Sustainability will be more linked to credit lines and commercial paper. During the plan, a minimum of 80% of new financial instruments will be green or sustainably labeled. As a consequence, we are forecasting that we will have more than 70% green, sustainable, labeled financial instruments at the end of the plan. I would also like to stress that we are very proud to have got the green rating obtained in the transition assessment by Sustainable Fitch.
Let me conclude this presentation remarking that we will continue delivering substantial value creation with EBITDA to high single-digit growth and low risk, optimizing the risk-return profile while maintaining a strong balance sheet, a visible and predictable shareholder remuneration growing in line with results, and at the same time being leaders in sustainability with best practices in environmental, social, and governance. Thank you very much.
Thank you, Pepe. So to conclude today, we are presenting the plan that faces the key challenges and opportunities of an industry under deep transformation after two decades, in our case, of implementing a clear strategy. So I think we are not giving surprises. Some of you were commenting to me. So to attend Iberdrola's meeting is no surprise, which I'm very proud that we are not giving surprises.
Our central record of financial strength and growth and the confirmation of the trends we anticipated 20 years ago, accelerated by the recent macrogeopolitical landscape, lead to reaffirming our vision: electrification is unstoppable. Increasing the use of electricity is the quickest and more efficient route to solve all the key issues affecting today's energy industry and accelerate economic and social development across the world. Self-sufficiency and security, I call Fit for 55. Many years ago, I'm already calling Fit for Self-Sufficiency in Europe. Energy efficiency, affordability and competitiveness, and of course, decarbonization as a consequence of all those things. And a benefit of a positive impact on jobs and industry or the massive investment required.
In this context, building on the strategic pillar presented to you in November 2022, this plan will allow us to reinforce our competitive advantage by increasing even more our focus on net worth that will now represent 60% of our next CapEx up to 2026, reaching EUR 54 billion of total asset base on this year, which EUR 15 billion will correspond to transmission, a new key growth driver that will more than double its EBITDA in four years to reach over EUR 1.5 billion. In addition, we'll increase our presence in highest value of renewable energies with more than half of renewable investment allocated to offshore wind during driving 2026 an increase of an extra EUR 1 billion in EBITDA compared with 2023, reaching EUR 1.8 billion in 2026. With more growth in 2027 and beyond due to the assets already under construction, we'll put in operation during that year.
We will also benefit from the upcoming changes in the wholesale market driven by renewable penetration, thanks to our unique position in manageable renewables and storage built over decades with more than 100 million kWh already in operation. 20 more million kWh under construction that will be operating by 2026 with another 150 million kWh additional pipeline. We'll continue optimizing our customer portfolio with around 85% of our electricity output for 2024 to 2026 already sold and a strong combination of leading industrial companies with huge growth prospect retail customers and regulated contracts. This model will drive EUR 36 billion of net investment in the next three years to reach net profit for 2026 between EUR 5.6 billion and EUR 5.8 billion, not including any capital gains, as Pepe was already mentioned.
We see a holder remuneration growing in line with result, driving a dividend per share of EUR 0.61-EUR 0.66 in 2026 and improving even more our strong financial ratios. Let me highlight that this plan relies on conservative assumption, I would like to insist on conservative, on energy prices and macro assumptions compared to some of our peers. Just by adjusting the wholesale market price in line with their expectation, our net profit will grow in line with what Pepe mentioned to EUR 100 million -EUR 400 million extra profit more. Of course, we will continue creating value for all thanks to the combination of a financial and social dividend, which is the core of the unique business model.
Let me end summarizing in a few words the value proposition we are presenting today, which combines our strategic pillar of focus on net zero, geographic diversification, and balanced energy customer mix, a total commitment to financial strength and BBB+ rating, sustained growth in results and dividends, and a strong and diverse team well known by all of you that combines experience and stability, as proven by our track record of increasing and predictable returns and overdelivering our estimates. You have the full commitment that we will continue working in the coming years based on all this strength to continue delivering sustainable value for shareholders, employees, customers, and the society we serve. Thank you very much. And now we'll be more than pleased to reply to all your questions. Thank you.
Okay, we are going to start with the Q&A. Manuel Palomo, a lot of hands. Sorry. I will try to give the round to everybody. Manuel Palomo, please.
Well, thank you very much. Two questions, but both at the high level. It's Rob Pulleyn from Morgan Stanley. First of all, congratulations on another very impressive plan. Look forward to digesting that. So firstly, on a very topical subject and given you raised it early, I assumed you wanted the question. May we ask how big this data center power theme could be? As I look at slide 55, you talk about 7 TWh already. How big growth area could this be for Iberdrola? And should we consider it mainly through tech-backed PPAs for new renewables? And secondly, maybe a little bit awkward, on the balance sheet, given you've just outlined this investment plan.
But as I look at Pepe's comments and the headroom versus the credit rating agencies, 24% FFO to net debt by 2026, 3.2 x net debt-to-EBITDA is down quite a bit from recent years. So why is this the right level of gearing now, especially when you have 85% of the plan locked in, A countries and a network bias? Or should we just assume there's actually quite a lot of headroom and dry firepower for incremental investments should they arise? Thank you very much.
So I think on the first question related to the data centers, I think we are in this moment something like 7 TWh already contracted with PPAs. Today, we just announced another PPA with Amazon here in Britain precisely for their data centers. And I think it's an area where we are very active.
We are already in contact with very many developers in different countries because we consider that it's going to be an important demand in the future. So I think this afternoon in one of the sessions, Agustín Delgado, we can already provide you detail how we are seeing this market. I don't know the numbers by memory, but probably that can represent an increase in the electricity demand on the range of 10%-15% in the next few years. But I think this afternoon, this detail will be provided by Agustín Delgado. The second one is related to PPAs.
No, the balance sheet. The balance, thank you.
[Foreign language].
No, no. As I mentioned, it is true that we as I mentioned, it is true that now we have good headroom in terms of the BBB+ rating. As I was mentioning, we are somewhere between 19% and 20%, which is the top range of the BBB+ rating. Obviously, that gives us the possibility to accelerate investments if needed, etc. I think that gives us a good position to continue growing and to beat the targets of this plan, maintaining the financial strength.
Next, Manuel Palomo now, and then I will interrupt you.
Thank you. Thank you for taking my questions. Sorry. I've got three. One, it's to some extent a bit of a follow-up of last Rob's question. I mean, previously, in CMD, in November 2022, you took the decision to prioritize investments in networks versus reducing a bit investments in renewables to around 4 GW per year. This time, you go a step farther. You move from 4 to 3 GW per year while increasing CapEx in networks.
However, balance sheet super strong at 3.2x net debt EBITDA by full year 2026, which arguably is much better than other even pure regulated peers. So my question is, what is the rationale for the lower yield installations in renewables? Maybe more challenging returns, trying to make company free cash flow generation more predictable, hence improving the risk profile, or maybe you're just trying to prepare the balance sheet for an additional acceleration in CapEx? Second question would be on storage. You highlighted the relevance of storage. And well, you see that it is key to facilitate the transition. On the one side, you mentioned that Iberdrola has done a lot of investments in pumped hydro in Spain and in Portugal, also batteries in Australia and the U.K. But what prevents you from increasing investments in batteries in other EU countries?
Or maybe asking it another way around, what would you need to accelerate investments in batteries, which apparently are super needed for the energy transition? And my third question is a bit on the Spanish networks. When I look at the plan for the coming three years, you've got EUR 21.5 billion investment in networks, out of which 10% in Spain, which gives us roughly EUR 0.7 billion per year in the country. Is this one of the potential hidden growth drivers? What would you need to boost investments in networks in Spain? And if you could assess to what extent you could increase the CapEx in networks in Spain. Thank you.
So the first thing is why we are not investing more in renewables in networks if we have such a balance sheet. So well, I think in net worth, you're seeing that we have already public service obligations. So I think we are not investing what we like. We are investing what we are requested. So the fact yesterday was with the Chancellor here in Britain, and they were commenting about what is the needs of this country for new transmission. And I think we are just being already given already this Eastern Link connection, but now is planning as well another reinforcement with this Eastern Link. So I think we have to have grown to make as much as is required. Same thing in the state. In the state, this rate case compared with the previous one, we are more than doubling. But I think in any time, we can be called already for making more things because the service is required.
So I think we have to have certain additional room for making whatever is needed at that one. In terms of batteries, we are making in some countries. I think in the storage, we are in the countries we have already like Spain, in which we have already still possibilities of changing our actual hydropower plants into reversible. We are doing. Armando was mentioning three that we have in construction. But we are putting batteries as well. I think we are putting batteries in Spain, in some areas. We are putting batteries in Britain. Here close to Glasgow Whitelee, we have a huge battery, which is beside our onshore wind farm. We have batteries in Ireland. But I think we are talking about what is those ones where we are more obvious.
It's more obvious of those places where we have already huge number of retail customers and we can already stabilize and provide already predictability and stability of our margins. In Spain, in terms of remuneration of this one, Spain, we are under a law, which we have a maximum of investment alone, which I think is 0.70%, correct to me, of the GDP. That makes it EUR 1.7 billion-EUR 1.8 billion for all sector together per annum. And that is what we have today. I think we are already making the maximum we are allowed to make. Now, that is under review. But if that changes, in that case, of course, for change reason of this service, we would be ready to put more money if it's already requested to put more money. So I think those are the main limitation at that one. Okay? Yeah?
Next, Jenny, and then Fernando Lafuente and Javier Garrido.
Thanks very much. It's Jenny Ping from Citi. Three questions, please. Just firstly, on politics, in some of your key jurisdictions, whether it's the U.K. or U.S., obviously, we've got elections coming. I just wondered whether you have any commentary in terms of the expectations there and some of the policy changes that you're seeing expecting in Spain. Secondly, just follow-up from earlier on M&A. I presume, given you talked about asset rotations in renewables, the network side is much more likely to be acquisitive and whether you've got any commentaries around some of the discussions you're having there on the M&A side. And then lastly, just looking at your CapEx plan, 50%, roughly close to, of your CapEx is going into the U.S. networks business in the network division.
Can you just talk a little bit about how you envisage the gap that you have seen in the past in terms of the allowed rate of return and the achieved rate of return in the U.S.? And perhaps that's one of the reasons why Avangrid shares has been trading where it was trading. So how do you envisage that gap to be closed? Thank you.
So first, I think it's as you said, in some countries, almost in all countries, we have elections. So we have election in the U.K. We have election in the United States. We have several elections in Spain. We just had already election in Portugal. We have election in the European Union. So I think where we have not election. So I think we are a company where we are 123 years old, 122 years old.
We've been living under different regimes and different governments. And we've been able to manage the situation, which whatever those one, they will come. I think in the case of the United States, so we've been already under Obama administration, under Trump administration, under Biden administration, and now whatever should come. And why? Because what we have clear is what you have already is to serve the citizen, is not to serve the politician. And we are providing the service. In the particular case in the United States, I think the stability and I link with the last question you made, the stability is given because the regulation is not dependent on the networks. It's not dependent on federal authorities. It's dependent on the states. So it means our rate cases are in each of the state. We have a negotiation.
The terms of those ones are those what are fixing the terms of investment and return for the next few years. Particularly now, I think it's last year, we signed the largest utility we had already, which is New York State. We signed already just rate case for the next three years, up to 2028, which is already just giving us a return, which is on the range of, correct to me, 9.5%. So 9.5%, which I think is in line with what we are expecting. And more than that, they are already requesting more than doubling investment in the state. I think the numbers what we are foreseeing is a range of $6 billion in CapEx investment in only New York State. Similar returns are in another state. Similar returns are in Maine.
I think, but I think it's important that you fix already that 80% of our business in the state are linking with networks. And networks are depending of the not the federal authorities. It's depending of state authorities, state regulators. The second thing was related to 50%. Yeah. So I think that is the reason why we are investing in the state. I think it's United States is networks, stable, predictable in a country with needs a lot of investment, a lot of CapEx in the state because the grid is already most of it is not in a good shape. I think the grid that you can see, you go to New York or you go whatever state on the eastern part of the United States, the grid looks quite obsolete if we compare what we have in Europe. And I think they need already expansion, reinforcement, digitalization.
And that is what is already fully required. The other one is? Yeah, yeah. Well, I think it's well, in the past, well, I think if we change the team, it's just because we are trying to improve. So I think last year, our result were improved a lot with the new team. And I think what I can tell you, the result we are achieving in this moment are in line with the budget we have for the year, which I think is on that one. I think it was very important to sign the rate cases we signed last year. So I think with the new rate cases and with realistic terms in terms of target of service, in terms of, let's say, how the storms is going to be treated, it's one of the problems we are facing. All these things are more clear.
The new team is already doing the things much better on that one. So I think we can tell you that last year, the result that you can see, I think, is much better than the previous one. And that's why the network business is providing what we are expected to be provide because the team is already doing the necessary for make that happen.
Let me give two gentlemen here in the first line. And then I'm committed to go back to the room. Sorry.
Thank you, Ignacio. It's Fernando Lafuente from Alantra. I have three questions, please. The first one, it's a follow-up on the capital gains on Mexico. If I understood correctly, Pepe, it's net of taxes and does not include any kind of provision. And it's not in the financial targets, right?
The question is, you mentioned that you are working on use them for efficiencies. Where do you see the biggest efficiencies within the group? And if these efficiencies could imply an upside on the targets that you have for 2026? The second question, it's coming back again on the balance sheet. This buyout of Avangrid, it's kind of a bolt-on acquisition to improve, let's say, the risk profile of the group. Are you considering additional acquisitions of similar size, EUR 2 billion, EUR 3 billion, EUR 4 billion, that could add to the growth of the company medium term? The third one, it's on Spain. On the one hand, on the mix of generation and your views on first, nuclear, and secondly, the role of thermal assets in this context in which, in theory, nuclears are going to be closed at some point in the next few years.
What should be the use of your thermal capacity going forward? The second one, related to Spain, it's on networks. If I understood correctly, the plan includes flat return for 2026 on your networks in Spain and these sensitivities of 50 basis points up and down. What are your conversations with the regulator regarding a potential increase in these returns for networks? Thank you so much.
Pepe?
Yeah. Well, as I mentioned, we are going to print and we're going to have a capital gain net of taxes this quarter of EUR 1.1 billion, taking into account also that last year, we had a negative impact of EUR 160 million. Obviously, we are not planning to we are planning, and I think that is a better answer for the Chairman than me, to do efficiencies and other elements that will support growth for our results in the following year. So in our guidance, we have not included any capital gain coming from Mexico, despite the fact that it's a large capital gain, no?
So I think on the point related to Spain, a rate case, I think, as you know, the rate case is we have a rate case up to end of 2025. So I think the terms of that one is clear. I think we have already just a cap for investment. And we have already a remuneration is well below what we have in other countries. The talks we have with them is in this moment is how if this cap of investment can be already ends with it and to have already the possibility of investing more, which I think is fully needed. And in terms of remuneration, our expectation is then they will be aligned with this in other countries.
So I think you see, you compare, and we put in our presentation, the remuneration in different countries, either in the States, either in Britain, has already similar return with the exception of Brazil, where the inflation is much higher. So I think there's no reason why Spain is going to be different of the other one. So our expectation is nevertheless, we are talking about one year in the whole project. In a network business, we represent 20% of our regulated asset base and compare with the whole group. So I think Spain and networks is important, but it's only representing 20% of our RAB. 80% is another country where we'll define all our returns up to more than end of the period. I think that is the three things. Is there another one?
The thermal.
Well, I think in nuclear, I think I know to repeat in this thing. So I think they are already just protocol already signed in which we agree with the government to make already a process of closing this power plant from 2035 to 2035. I think we are already would like to respect that one. But I think in any case, technically, this nuclear power plant with some investment can already extend their life easily. But I think it's the question, economical question. I think it's on our requesting to extend life of those one. And if they are already properly compensating the extra CapEx we need to make, I think we're ready to analyze that one. But today's position is we respect what we have already signed.
Javier Garrido, please. And then José Javier Ruiz on the back of the room.
Yeah. Good afternoon. Javier Garrido, JP Morgan. First question would be on your investment targets. You have gradually shifted towards two-thirds networks, one-third renewables. What can drive you back to a more balanced 50/50 approach? You need more power demand in Europe. What would be driving you back to investing more in renewables, given that you have the balance sheet to do it? Second question would be on the transmission business. You have highlighted the strong growth in that business. I was wondering whether you would have any plan to give more visibility to that business by separating it from other networks to make it clearer as a drive of growth and profitability. Also, you would consider entering the transmission business in other countries, given that there are fewer barriers on entry than in distribution, if that would be one of your plans for the future.
And then the third question is a very specific one to Pepe. I noticed that you are looking for a significant reduction in the cost of financing in euros. And I think in British pounds was as much as 110 basis points reduction. Given your views on short-term rates going down but long-term rates now being higher, you can elaborate on how can you see such a big drop in the cost of financing in euros and pounds, given that you have a high proportion of fixed cost debt? Thank you.
So I think on the first one, why to invest more in networks than in renewables? So I think it's not new. I think I was saying that in 2022, we said that we are going to prioritize our investment in networks. We are going to be selective in renewables.
I think it was a shock for certain of our colleagues. I think we are seeing that what we did, it was already the right position. We have the fortune that we have already networks. This positioning in countries, we require huge investment on that one. We are prioritizing because I insist on that one. We have a public service obligation. Second, we have already clear, predictable returns. That's why I think that we are prioritizing. I think with transmission, transmission is not something new. I think the fact here in Britain, we have a special license for transmission. So it's a business. We have a ScottishPower Distribution, ScottishPower Transmission. They are two different licenses. But traditionally, we put inside of networks.
I think now we are seeing that transmission has been already an area which is quite sleepy, let's say. It's not requiring much investment. It's very stable, predictable, but it's not already a growing area. Suddenly, because of the comments I was making in my speech, transmission is becoming, same as distribution, crucial for many things. That's why it's already a fourth, yes, a growing, very important growing area of our business. We feel that we need to have full transparency with you, showing that this area which exists before, but we have not already, let's say, provide special information because we put inside of the networks. It's time to show that that's already just a clear growth area of our network business.
But I think it's a growth area in Britain with transmissions as we've just completed in the Western Link connection, now with the Eastern Link, and some more demand on those ones. Same thing in the case of the United States with this. We have the transmission already in Maine. But I think this new transmission line to connect Canada with Massachusetts, same thing in the case of Brazil, what we were not really present. And now this option that we've been awarded in the last few years, now we are starting already generating cash flow in the moment those one are put in service. That's why we are just presenting. And I think it's a very relevant business.
I think it's not something we can be already putting inside of our network business alone because in a total RAB by 2026 in the range of EUR 54 billion -EUR 55 billion, EUR 15 billion is going to come of this RAB is going to come for transmission. That's why we are going to for now, we are going to present yourself as a business which has already provided a lot of cash flow, a lot of growth into the company. So why not to go another countries? Well, I think we are in networks. We are focused in the countries where we are. I think we are not going we are not already planning to look for another alternatives in another countries.
So I think to make greenfield transmission in some countries, I don't know if that is a necessity because I think it's very complicated, require a lot of skills and a lot of knowledge in each country. So I think being already having a presence, we have already in Britain, United States, and Brazil, what we are allowed to make transmission, not in the case of Spain, as you know, we are not allowed. So we have more than enough for our growing expectation. And what more?
Interest rate.
To Pepe.
No, for two reasons. First, because during the years that interest rates were very low, and we have commented this before, we have been doing interest rate forwards. So we have been able to fix part of our debt that is starting now at levels below what you see today in the long-term interest rates, okay?
This is the first reason. The second reason is that in the case of East Anglia III, we also fixed our cost of debt ahead. So the two elements are allowing us to have lower financial expenses in euros and in pounds, given this policy.
José Javier Ruiz. Then we are going to stay in the back of the.
Yeah. Hello. Good morning.
Peter as well.
Good morning, everyone. Just two questions. The strategic ones. I will rephrase Javier's question. When do you expect the next renewable cycle? So basically, everybody's cutting down on renewables. There is priority for networks. When do you expect is that before 2030, after 2030, if you can guide us? The second question, you said electrification is unstoppable. I guess low electricity prices are helping.
What would you require? How long would you require electricity prices to remain low in order to have a sustainable investment in electrification of the economy? Thank you.
So I think in renewables, I said, what are the drivers of that one? I think in the western countries, I think the drivers is a part of the demand is the decommissioning of the existing power plant. So I think there are many power plants which are at the end of their lives. And I think those power plants have to be substituted for something. I always comment the decision has been taken by the Australian government. Australia is a country with majority of the supplies coming from coal.
I think in my recent meeting with Albanese, with the Prime Minister, they had already made a plan in which they took the decision what substitution have to be made to build new coal power plant or to build new renewable power plant using their own natural resources of coal but are not sustainable, their natural resources, which is wind and sun, which are sustainable. And they decide to move to the direction of investing and transforming their mix on that one. So how is that is going to evolve? How the existing power plant is going to be closed? That will be a driver of that one. The second driver is the demand. So I think you see every time sectors like transport, sector like data, sector like housing and buildings, sector industrial sectors, sector like hydrogen. So what is going to happen with hydrogen?
It depends on the support which the countries are providing on this one. So all those ones will be the drivers for this one. And that will be not unique. It depends on this country. So in the case of Spain, we have seen that unless our industrial transformation will be faster or the interconnection increases or we are already given enough support for making more hydrogen, we can already inject this green hydrogen to the industry. I think the flow of the demand is the picture that I showed to you, which I think there are certain hours of the day where we have excess toward the demand we have. And thanks to our case to our storage capacities, we can already keep and maintain our margins in a good position. So the cycle, I think it depends how the demand evolves. How the closing of the existing premises evolves.
The demand is now recent to Germany is providing EUR 4 billion for already introducing massive green hydrogen into the industry, which I think that certainly is going to accelerate the construction of more renewables for that. So in Britain, now as well, there are some plans. They have already allocated certain hundreds of millions pounds in which we have been benefiting or someone for hydrogen. I think that is. I think we have; it's a plan of three years. So I think we are not talking about 10, 15 years. We are talking three years. And we would like to show to you a realistic plan, not dreaming. And realistic means, as Armando was showing, plans where they are today under construction, mostly. So what we are going to make in 2029, let's see, in 2027, we will present to you the new plan.
We show you what we are making for that time. Now it's 2026. In 2026, we would like to show you things what you can touch, not things that you can dream with. So I think it's touching. So offshore, offshore is going to now is in construction. By 2026, we'll give EUR 1 billion extra EBITDA. And that is realistic. And in transmission, in distribution, we are not dreaming. It's rate cases which is already signed. We know the term. And we know what is the amount of investment we are awarded for investing in those ones. So that's why. I think that is, by your question, I think. Javier, thank you.
Second one is related to prices of the energy, Mr. Galán. The prices of the energy.
Sorry?
Javier. Well, it's about.
Electrification of the economy.
Of course. Of course. I think the drivers of electrification; there are two things. I think we have already learned during the last two years what is the risk of external dependency of fossil fuels. So volatility we have been introduced as consequence of the problem with Russia, Ukraine, etc., etc., Russian gas. We've seen what happened. But I think it's not the first time. I think in my years in this company, we have already had three energy crises. So time to time, happen something in some part of the world which introduced volatility. What can provide the renewables? Stability, predictability. And I think that is why the large corporation are signing with us. So PPA is long-term with a price which is not based in the volatility and the fossil fuel market. It's based in our cost. And that is they would like.
I think last year, we were the company in Europe. We would sign more PPAs. We continue. Why? Because we are not depending what is going to happen somewhere else in the world for whatever reason, their lack of supply of whatever fossil fuels which can already generate this volatility. The big corporation make that one. As much companies are understanding that the most important for their business is not already being depending and things which they cannot manage, so as much people are signing that one. I think Mercedes in Germany, we are already 80% or 85% of their energy supplies made for ourselves with the PPA and the production we have in the Baltic. The business is not to play with this one. The business is to make good design of the cars, good marketing of the cars, whatever thing.
That is their business. Same thing now is not already to see how the things are to evolve. It's how we can make more efficient our power plant. That is our business. Our business is not to be depending what is happening somewhere else to try to make. No. It's how we can make this power plant more efficient. And that's why I think that is already been every time more and more accelerating. Every time more and more large corporation is signing. Every time more and more industry is signing. The fact, so as Armando was mentioned, so 100% of our production for GA is sold. 80% of the year is sold. 70% of 2020 is sold. And what these people are looking, not only what is based in our cost for providing their own, we can keep our margin.
They can already be quiet and relaxed. The prices can already be stable on that one.
Peter and then Gonzalo. We move to another part of the room. Peter, please.
Yeah. Good morning. It's Peter Bisztyga from Bank of America. Two questions, if I may. First one, coming back to the topic of data centers, I'd be interested to hear whether the PPAs that you've signed, for example, with Amazon, do they command a premium of any sort over the ones that you sign with Mercedes or other industrial customers? Do you think in future, you'll get bigger premiums for as consumed PPAs rather than as generated PPAs? So that's my first question.
Then the second one, maybe for Pepe, on your famous sensitivity slide, I'd be interested to understand a little bit how you calculate the sensitivity to a EUR 5 per MWh move in Spanish power prices. And particularly, what assumption are you making about retail prices in Spain? Are they moving by the same amount, or is there a different dynamic? Thank you.
I think on the first one, the PPA is certain. I think the PPAs is based on the old business. What is our cost? And what is the margin we have already in this one? And what is this price is convenient for the buyer or not? There are important thing on this one. I think the data centers need electricity 24 hours a day. It's not already just energy according with one particular or another one.
I think we are one of the few we can provide this 24-hour service because in some countries, because we have another alternative energy supply centers. Storage is an important part. Another one is hydro. Another one is another thing. What we can already provide that one. I think they are requesting green. They are requesting already 24-hour service. I think that we are already, of course, if we provide 24-hour service, we have a premium toward what is the simple PPA base in one particular power plant. Another one, Pepe.
Sensitivity. Well, basically, what we have done is we have, as the Chairman and Armando have mentioned, we analyze how much electricity we have already sold to our clients. Then we analyze, obviously, what is the maturity profile and the churn rate. With this, we have an open position in different years.
And then we are assuming that there is a renewal of this open position at levels of around EUR 60 per MWh. And that is what gives the sensitivity impact. I don't know if you want to.
Oh, no. I think I was very clear on that one, which I think we are expecting a lower retail prices. But I think it only affected a part of our global business. So I think to certain businesses sold at the price which is already agreed. But I think the retail, if you know another one, is already rotation. And I think that one with renewing, there are lower prices than another one. And that is affecting not all the whole production, only a part of the production which this one is going to renew. And we have already just a reduction of prices, which this is compensating with the extra production.
Mainly, I think it's for the new renewal we are already putting in service. And I give you already the details. Only offshore represent EUR 1 billion extra, which I think only with offshore, we are already more the offsetting or potentially offsetting all those ones. I think in Mexico is as well. It's not a question of price. It's a question that we divested. So it's not contributing. But for that one, I think we will have 6,000 MW extra of renewable which are generating as well at the price, at this new price.
Thank you. Gonzalo. And then.
Hi. Good morning, Gonzalo Sánchez-Bordona from UBS. I have a few questions related with networks since you seem to be finding new investments pretty much at every CMD.
I was wondering on your plan, you're saying that 80% of your expected investments in networks by 2026 will have an agreed-on regulatory framework. So there's two questions there for me. One is, what are your assumptions in terms of I mean, on Spain, you more or less said there is flat return. But I'm trying to understand, what is your assumption for everything else? Are you assuming same regulated returns in the 2026 renewal or whatever? And effectively, would that mean that that's potentially also fair to assume that potentially, there is some upside on the numbers if rates remain at high levels as compared to the previous reviews? So that would be the first question.
Second question is, on your conversations that you're having or your expectations regarding regulatory reviews in the next few years, are there any clear sources of potential upside on investments similar to what you've had in New York? You were already kind of anticipating that a little bit earlier. Is there anything that we should be expecting looking forward in terms of big investment hikes in the next two, three years? So that would be the two sources of potential upside, I guess. Also, on the risk side, you've had some issues on execution. So I'm wondering, what is your perceived risk on executing this very ambitious networks plan, particularly thinking in the U.S. where permitting and other stuff has been a potential issue?
And last one, also on the downside risk or potential risk that I'm seeing on this plan is you are effectively increasing significantly the investments in networks. Is there any or are you seeing any issues with securing supplies for the kind of execution that you need? Thank you very much.
So thank you, Gonzalo. So I think, as we mentioned, rate cases, 85% of the rate cases are pluriannual. And that's signed. I think we are not changing the rates every year. I think it's signed in New York. I'm looking to you because we have before about that one. It's from 2023 to 2027 or 2028. So I think that we know the terms in terms of remuneration. The investment, they are low as a certain level, maximum level of CapEx, which I agree with you.
In many cases, they are already coming, the regulators saying, "We need an extension of that one and expansion of that one for whatever circumstances, new demands or whatever thing." And we are already ready for making that one. So there is a real upside. If they request more, we have to make more. So that's clear one point. So in terms of permits, I think in the regulated, we have certain rules without facilitating the permits. So it's in the case of distribution. So I think that we are much we have rules in most countries. We allow ourselves to make the things in, let's say, more agile manner than other traditional permitting processes. In transmission, the main ones we have today in construction are already with all the permits in hand. So NECEC, United States, finally, after two years of delays, of discussion, now is all the permits.
We are already since mid or last year in full construction of that one. Same thing in Brazil. In Britain, I think those what we are already the permits are ready for those ones. In terms of the execution, so it's good that you asked to that. I think if we are well-known, then we are the best in class in execution. So I think what we are committed doing something always, always, always we make in time, in price, and according with the schedule we have already fixed. So I think I'm not any doubt of my engineers, electricians, economists, and whatever, that we will fulfill the things in terms of execution according with this plan. So no doubt. I think we find out big, big problems in certain of our project. In France, for instance, Saint-Brieuc.
Saint-Brieuc goes terrific, difficult project for making that one. I think traditional offshore is made already in the seabed sand. I think suddenly, we discovered which is basalt and is already granite. I think instead of come with him. Clavar is the...
To nail. Nail.
Nails. We need to drill. And I think we need to invent new system for drilling for this huge, but we did. And now it's in place. It's working. It's producing. So I have no doubt about that one. Then, in terms of execution, it's a must. There, you have not any doubt that we will fulfill that one in this step. Thank you for the question of the execution, Gonzalo.
Sorry. We need some clarification about the Spanish distribution returns for 2026?
Well, in 2026, what I say is, I think we have up to 2025, the returns in Spain are the lowest of all the countries we have presence in at this moment. What we are expecting is in 2026 even if it represents only one year in the 20% of our global RAB of the whole regulated business. So it's very small in comparison to that one. But our expectation is they will be aligned with the rest of the remuneration of the rest of the countries. It makes no sense that Spain has the different one because it will be not coherent with the PNIEC, with the National Plan of Energy Transition, which are already encouraging to make more investment. I think they are not already providing a proper return. I think they are not incentivizing that to happen.
I think I'm sure that that is going to be aligned with another one. I think my feeling is in the mind of the regulators on this line.
Any question on the right part? Make it here. Well, go ahead. And then.
James Brand from Deutsche Bank. Two questions for me, please. Firstly, on hedging, you've talked about doing more medium-term hedging in Spain in respect to the new kind of hydro where you would have historically generally only hedged maybe a year or two. Could you maybe describe a bit more detail what you've been doing there? And then for 2026, we can potentially back it out from your sensitivity. But just to maybe help us, how much of the Spanish new kind of hydro have you hedged already for 2026? That's the first question. And then secondly, on solar, you showed the production profile you anticipate for 2030 in Spain in one of the earlier slides with production peaks more than demand over the middle of the day. How does that make you feel about solar? It's obviously a relatively small part of your overall renewable investment.
So you're not going big on solar. But does that make you reluctant to do more solar in Spain? Would you maybe direct your investments more for markets maybe like the U.K. that doesn't have very much solar already, even though it doesn't have much sun, but would perhaps not see the production peaks? Thank you very much.
So I think in the case of solar, it's very simple. I think it's the same question, the same answer that I gave before. So I think the demand is not evolving in Spain or changing because of more demands as consequence of all these things, data centers, transport, electric vehicles, hydrogen, et cetera, et cetera. If we are not already this demand is not increasing on that one, what we are foreseeing with today's solar in construction of planning on that one is going to be at middle of the day a huge excess of this one, which I think there are huge excess. The prices will be already down. That's why we are investing enough in storage. That's why we are already using and you saw how the trend of our storage facility are increasing the hours of they are already working.
We are already buying electricity in the hours with the excess, at low prices. We are already providing and supplying electricity in the hours which the demand is much higher. And the prices, of course, are much higher, making the substitution of the CCGTs of gas. So I think our manageable renewable, which is storage and hydro, are already just being the substitution at the better price than the inefficient CCGTs which they are already just it's not the same thing the price of a CCGT when they are working in base load. Then we have stop and go, stop, go, stop. So I think in this one, when they have to be in these places, the price is much higher on that one. And we can already offer to the citizen a price slightly below these inefficient CCGTs.
At the same time, then we can already absorb during the hours with that excess of electricity for providing this electricity in times which is already needed. We can already with that one, we can make a good business with this transaction. So I think that's it. How much is hedged? So I think we are not hedging this particular hydro, whatever. We are hedging all our production, average production. And as we were mentioning, we have in this moment in the group, I don't know the detail in Spain, perhaps you know. But we have 100% of our expected production of electricity sold already for 2024, 80% or 85% for 2025, 80% for 2026, and 75% for 2027. I think that is globally through this contract, which is PPAs, CFDs, and retail, which is long-term retail.
I think there's a certain rotation on these retail customers, as I mentioned already in my presentation.
Make it here on the please there.
Thank you for taking my questions. Meike Becker, HSBC. I have two. The first one is on your longer-term growth expectations. You show on slide 64 how you have reached this high single-digit growth CAGR over years and years and also expected to 2026. How are you feeling about your growth opportunities to 2030 and beyond? Is it in the same range? The second question is about offshore wind and the execution and supply side of it. How do you feel about the execution risks in offshore wind relative to 2023, now in 2024? And how are you managing these risks? Thank you.
So, well, I think I provide you as much data as I'm available for 2030. So I think for 2030, what is clear is then we are going to increase our regulatory asset base. I think we will continue investing in networks in line with what we invest in up to now. And I think you can make your numbers just 888. And in terms of renewables, we are already giving you how much new MW we will have in service. In 2026, we will deliver 100% from 2027, which is the number of total MW we plan to have already by the end of the decade. So to give you some more things, my mind is more or less we will continue building on the range of 3,000 MW per annum. And we will continue investing on the range of putting already extra RAB.
I think we are moving from EUR 54 billion to EUR 71 billion, which I think is EUR 5 billion-EUR 6 billion more extra per annum. So with this, you can make more or less your models on that one. But I think that is the most we can tell you for the time being for 2030. Offshore. So of course, in offshore, I think we are 100% of our supply chain secure. So I think we are in construction, those one. It's not already we are not planning to make. Now is Anglia III is already now. I think I was yesterday with a Shadow Cabinet here in London. And she was already a few days ago visiting the premises of Lowestoft here in East Anglia. So it's something which is real. It's not already just a project in paper. The turbines is contracted. The cable is contracted. The substation is contracted.
The foundations are contracted. All these are already signed. In another one in the state, it's already 50, 49 from 65 turbines are already installed, which I think is not already expecting anything else. And in the case of Germany, Baltic Eagle is almost completed. I think they will start production during the end of this year. And Windanker is all is agree as well, which is as well starting the construction. So I think 90% of all our needs of that one are already secure, signed because we made for many years, we are making framework contracts. We are not buying contract by contract. I think we are not buying solar panels for this project. We are buying solar panels for the year or for the next two years. We are not buying cable for this project.
We are buying so many km for the whole group of cables for hundreds of km what we need in different parts of the globe. We are not buying transformer for this particular substation. We are buying hundreds of transformer for all our substation for the next three or four years. And what that makes, that makes good for the vendors, for the suppliers because they can already plan their own production. They can buy the components needed for this one. And it's good for us because they give the certainty that we have in time. And we have 10 good prices for that one. It's not very different in terms of our approach for partnering with them making the car industry. I learned from them how to make that one. So we are trying to copy our own outtake with the same thing.
We are trying to make already this framework in such a way that we've already guaranteed suppliers with a plan that we have to then and with framework contracts in which they can already hedge or they can buy already the component need for the supply they have to make to ourselves.
Okay. Now our friends from JB and Caixa, Portuguese friends.
Thank you for taking my questions, Pedro, from CaixaBank. So actually, two follow-ups from previous questions. The first one on the balance sheet. So 24% FFO net, that's clearly a comfortable level considering your risk profile. I was wondering if you can provide us some guidance on the firepower that you may have for growth CapEx, being it inorganic, organic, considering the thresholds, the minimum thresholds of rating agencies, and what would be the priorities in terms of markets and geographies. And secondly, going back to the topic of nuclear, the phase-out that is agreed in Spain, I would be interested in your high-level comments on the potential price impact this will have on wholesale market in Spain given where we are in terms of flexible generation technologies. And perhaps also the impacts this may have on your capital allocation guidelines.
Perhaps this will increase your short position in terms of generation in Spain, especially if electrification of demand does take off. So this will perhaps bring you back to invest more in Spain, either in storage or even renewables again. Thank you.
Pepe, you mentioned about the balance sheet.
Well, I think it's quite easy because I mean, for every EUR 1 billion more or less of additional debt, we lose around 0.4 FFO over net debt. So basically, this is something that you can make. Obviously, it depends on how much FFO we buy something that brings compared to the debt, et cetera. But this is more or less a hypothetical analysis because, as we have been mentioned, this plan is based on organic growth.
So I think in terms of nuclear, as I think I replied before, so I think we have a signed protocol. And I think this signed protocol, there are the dates for closing this nuclear power plant unless politically they decide that they will request ourselves to extend already the life of that one. Technically, it's possible. So I think we require some extra investment for making that happen. And I think if they request and they are ready to pay and to pay this extra CapEx or to the return for the extra CapEx we require, I think we'll be already ready for already expanding that one. What is going to happen if that is closed, which is already the plan? So certainly, I think the volatility increases. And I think this volatility increases is that makes then our pumped storage role will increase as well.
I think we will have the opportunity of making more. Already the manageable renewables can already have to play a more important role in the energy mix than today. So I think that's it. So that's why we are already just preparing ourselves, making some extra investment in more pumped storage, so reinforcing or transforming certain of our facilities. We are at this moment making one, which is in the Tajo River, Torrejón-Valdecañas.
Torrejón.
Torrejón-Valdecañas, which is already another one in the Duero area as well. We are already making those one because we feel and there are another project which is in line because that is going to be needed. It's not only a question of the business. It's a question of stability of the system. So I think we have the two caps. We are providing a public service. And I think we are not only looking for the business, looking for the business, and looking for keeping the lights on in the country. And that is crucial for keeping the lights on. So that's why.
Jorge.
Good morning. Jorge Guimarães from JB Capital. I have two questions. The first one, is it possible to give us an idea about the assumptions on Spanish taxation in the guidance, namely nuclear tax?
In the?
In the guidance, what is the scenario for revenue tax and nuclear tax in the guidance? And the second is a follow-up to the previous question. When do you expect storage through batteries to be economically viable in Spain in this scenario of nuclear closing? Thank you very much.
So I think in the second one, battery storage, I think the batteries is already in favor of batteries. So the fact I spent 70 years of my professional life already in battery business. So I was designing and manufacturing batteries in the Tudor times, which I were in Portugal as well, in Castanheira do Ribatejo, the factory. So I mean on this one, and I strongly believe in batteries. The point is that today, batteries can be already used for a small period of time in economic manner. It's up to two, three, four years at most can already be economic viable. But I think you cannot storage electricity again. We can. So I think you cannot make batteries of the size of any stadium for storing the excess of electricity generating during Saturdays and Sundays. And you cannot already provide already even during the day.
You need already you have to generate electricity during 8 hours. You need to store eight hours. But I think probably it's not enough sample. It's not enough demand for this time. So that's why our analysis is batteries is fine, up to two-four hours per day. In some cases, it will be more economical, another one less economical. That's what we are making in some countries like Britain. I think here in Gwynedd, we have already a huge battery here in one of our offshore wind farm, which is providing two-three extra hours of production. We have already in our hydrogen power plant of Puertollano, we have a battery just beside our solar power plant. We can provide two or three extra hours of electricity to the hydrogen power plant. So we are using that one.
So that's why I think the battery competitiveness, it will depend on technology. But as well, for the massive investment, I think they are already today. I do not say tomorrow. Today, the most efficient manner is pumped storage. I think tomorrow, if the batteries are improving more and so they have to play even more role than today. But I think they have a role to play, no doubt, no doubt. In terms of tax, well, in Spain, we have already 38 different taxes. So when you are talking about taxes, we have 38 sorry, 40. The last two, I think one is in Aragón and another one in the Basque Country. 40 different taxes. So of course, you are contemplating these 40 different taxes. With the taxes we pay in Spain in this moment, these taxes, not the corporate tax. Corporate tax apart on the top.
So it's more than our cost of financial cost, operation and maintenance cost, and personnel cost. So that were the accounts of last year. We pay EUR 1.7 billion taxes on top with a total operation and maintenance cost in the range of EUR 1.6 billion, correct me, including financial costs. So we included all this in one. So.
[Foreign language].
No, no, no. So the only thing would happen is to improve. So it can be worse. So 40 taxes. So I think we have hundreds of people dedicated to make that one. It's local, regional, environmental, whatever. We pay for the nuclear. We pay nuclear waste because it's waste. But nuclear because it's nuclear. Nuclear because it's in the village, which is nuclear. Nuclear because EUR 25 per MWh, we pay nuclear. EUR 25. So that is included. So the only thing can already improve. It's impossible.
Jorge Alonso.
Hi. Jorge Alonso from Société Générale. Just one question on the return on the capital employed that you said that you are going to achieve 100 basis points above what you expected one year ago. I think it's very remarkable. It's not just putting more CapEx and then getting more EBITDA. It's that the EBITDA on the capital employed will be better. So profitability of the assets will improve. I would just like to know your view about where this comes from. It's networks, efficiencies, it's lower cost on the networks, and then profitability of the same CapEx is higher. It's renewables where you have the PPAs, and then CapEx maybe is a little bit lower, and then profitability is better. So because it's important if you see real profitability on the assets improving. Thank you.
Yeah.
Basically, as you see, we are reducing the investments compared to the previous plan, taking into account that, for example, PNM was a very, very large investment. That investment, obviously, as we have said, was providing not a lot of returns. Okay? Basically, we are able to reduce the investment in an important manner. Obviously, we are able to get returns which are in line or better than the last plan. Basically, that is the reason. Also, for example, on renewables, we are able to or we are investing less with higher returns. In that sense, I think that the investment criteria and the fact that we have been investing less amount is allowing to have a higher return on the capital employed.
One point as well, Pepe, then you making your presentation is the way then our needs is for the working capital and the sorry, in the working process. So I think in the moment, we are completing certain of our power plants, which takes a long period of maturity. So I think the amount of capital, which is already generating returns, increases. And that is improved. So I think now it's 25%, Pepe, in the working process of your needs.
Well, in terms of the working capital, it's around 25%. But it's similar to the previous plan. So that has not increased. Okay? So basically, but one-third of our total investments, one-third of our investments are work in progress. So two-thirds are giving money, but one-third is still not giving money.
That means the expectation is there are not so many large projects that is going to potentially improve in the future.
Okay. More questions? Sorry.
Yes. Hi. This is Ahmed from Jefferies. I have a question on the power price sensitivity slides. You mentioned earlier some hedging levels. Could you give us the overall sort of contracted, uncontracted sort of power price or energy price that goes along with it in Spain and U.K. and the associated EBITDA impact? I'm just trying to understand how sort of what we have seen in the wholesale power prices, what is sort of the associated EBITDA impact between 2024 and 2026 for that? So that's one. And then could you talk a little bit about the profitability of the CapEx program?
You've mentioned various elements to it, but I just wonder if there was an EBITDA to CapEx number you could sort of provide us and then just also give us a little bit of sense of what you're seeing in the PPA market in terms of the trend this year versus last year, how are the sort of the prices evolving? Thank you.
Pepe, do you reply the prices?
Yeah. Well, I think that more or less, as the amount that we are losing in terms of EBITDA due to these sensitive prices is around EUR 1.2 billion. Okay? And as the Chairman has said, that is compensated with the increase in the offshore production and at the other offshore and the other renewables. But the impact that we are seeing due to these prices is around EUR 1.2 billion.
You can find the sensitivity analysis of the EBITDA in the annex part.
So, is there the impact?
More questions? Okay. We have several questions from Alberto Gandolfi, Goldman Sachs, and Javier Suárez, Mediobanca, made by the web. Most of them have been about power prices, offshore, etc. But the only one that has not been answered is regarding hybrid. Do you include any incremental hybrid by 2026? How many hybrids will you have by 2026? And do you include a portion of it in your EUR 54 billion net debt guidance?
Pepe?
No, the same. We've said that we are going to maintain the current stock, which is EUR 8.2 billion. That is what we are expecting. Take into account that we have very little redemptions of hybrid to rollover. The idea is to maintain the same stock.
Okay. If there is no more question, we can go to enjoy the lunch break. As I mentioned before, we have several questions. I don't know, Mr. Galán, if you would like to say something to closing remarks for this part?
Thank you very much. I think it's always your questions are very welcome. I think they open our mind. I think we are not doing everything perfect. But I think your question helped us to rethink about everything we are doing and to reinforce those things that we have already just decided to go ahead. So thank you very much. And I think, as always, our people will be ready to reply to you. And this afternoon, you have already this session, which many of the questions you have already passed, they have much more detail to comment with you, whatever things related to technology, human resources, M&As, etc., etc., etc. So thank you very much. Thank you.