Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our twenty twenty Fiscal Year Results Presentation. And secondly, we hope that you, your family, friends and colleagues are all safe and well during this global pandemic that we unfortunately have among us for almost a year now. Now on to the reason we are with here, our 2020 results presentation, which will follow our normal format. Firstly, we will begin with an overview of the results and the main developments during the period given by the senior executive team that we have usually with us: our Chairman and CEO, Mr.
Ignacio Galan Mr. Francisco Martinez Corcoles, Business CEO and finally, the CFO, Mr. Pepe Seinth. Following this, we will move on to the Q and A session. I would also like to highlight that we are only going to take questions submitted via the web.
So please ask your question only through our web page www.iberdola.com. Additionally, we expect that today's event will not last more than seventy five minutes, hoping that this presentation will be useful and informative for all of you. Now without further ado, I would like to give the floor to our Chairman and CEO, Mr. Ignacio Galan. Thank you very much again.
Please, Mr. Galan.
Good morning, Ignacio. Good morning, everybody. Thank you very much for joining today's conference call. The global situation in 2020 was unprecedented, and Iberdrola has responded to this environment with accelerating our business activities, our social contribution and our leadership in the energy transition. We maintained our service when it was most needed with a special focus on critical infrastructures.
We have reaffirmed our commitment to a quick and sustainable grid recovery, and we have increased the company's growth prospects. This was only possible thanks to the dedication and professionalism of our employees. My most sincere gratitude to all of them, especially to field staff. They all make Iberdrola best class group. In this complex scenario, we have already delivered a strong result once again.
Reported net profit reached 3,611 million euros Excluding the COVID-nineteen one off effect, which amount €213,000,000 net profit grows close to 10%, showing solid underlying performance. Investment registered a new record of 9,246 million euros up 13% compared to previous year. We also set a new record of purchase of goods and services with €14,000,000,000 awarded globally. This allowed us to maintain the activity of our 22,000 suppliers to preserve the almost 400,000 jobs we support in our supply chains. Adjusted EBITDA grew 8% to 10,750 million euros excluding foreign exchange impact.
We have also made positive progress on the implementation of our twenty twenty-twenty twenty five plan including the creation of new growth platforms that will accelerate result in the coming years. The company has also revenues global leadership in green and sustainable financing with 24,500 million euros issued to date. This set of result has allowed the Board of Directors to propose to the Annual General Shareholders Meeting a dividend of €0.42 per share with an increase of 5% versus 2019. 2020 was an outstanding year for the company's intensive share performance with Iberdrola's stock price outperforming the stock utilities by 80% points and the Spanish IFRS 35 by more than 40 points, driving a total shareholder return to close to 800% over the last two decades. Thanks to our pioneer business model based on values fully in line with the highest environmental social and governance standards, a model that combines the creation of term value for our shareholders, our employees and the society.
Back to 02/2001, we anticipated the energy transition and understood the huge growth prospects of electricity consumption to achieve efficiency decarbonization. Since then, we have invested more than EUR 120,000,000,000 in renewable energy, smart networks and efficient storage, closing all our coal and fuel power plants well before our competitors. At the same time, we have started an ambitious internalization process, focusing on countries with attractive ratings and ambitious climate policies, always maintaining our financial strength and operational excellence and our commitment with an increasing dividend. These strategic pillars have lead us to multiply our size by six times, becoming one of the three largest utilities worldwide with more than €120,000,000,000 in assets and €74,000,000,000 on solid growth on the coming decade. We have already the track record, the expertise, the team, the technology and the financial resources to lead the green energy revolution.
And we have a clear plan with investment of €75,000,000,000 up to 2025 and €150,000,000,000 to 02/1930. They will double our renewable capacity by 2025 and multiply by three in 02/1930, reaching close to 100,000 megawatts of capacity. And increase also our network asset base by 50% in 2025, doubling it by 2030 to reach €60,000,000,000 A plan base in doing what we do best in market in which we already have a strong position and a diversified pipeline of projects. Our target to reach EUR 5,000,000,000 in net profit by 2025 and around EUR 7,000,000,000 in 02/1930, with dividends reaching EUR $0.05 6 per share already in 2025 and around EUR 75 in 02/1930. In other words, our goal is to double the group size and results once again in the next ten years.
In 2020, we have been the first player in execution of our plan. Even in the current condition, gross investment reached the record figure of EUR 9,246 million, up 13% versus 2019, with more than 90% allocated to renewables and network business. Renewables was the main investment destination with 52% of the total, increasing more than 40%, thanks to the acceleration in onshore and offshore wind and solar PV project mainly in Spain and United States. Networks contributed 39% to total investment mainly in United States, UK and Spain. And as you know, in 2021, we will add the integration of P and L Resources in United States, New Mexico utility and CIB in Brazil, the Brazilian utility to this organic investment driving further growth to our business.
Adjusted EBITDA, excluding FX impact, was up 8% to 10,750 million euros thanks to the performance of renewables and generation and supply, which in both cases grew more than 10%. Renewables EBITDA was driven by the contribution of new operating asset in all geographies like the Sanglia 1 offshore wind farm in UK, higher production in United States due to the higher availability and capacity additions and more hydro production in Spain and Brazil. Growth in generation supply reflects lower procurement costs, thanks to price hedge and increased customer base and the positive impact of smart solutions, which already contributed more than EUR 200,000,000 to the group EBITDA and are growing rapidly in our markets. Finally, operating result in Networks reflect the impact of the transition to the new regulatory period in Spain more than offset the increasing result from the new rate case in New York, additional transmission project and tariff reviews in Brazil and the expansion of our UK regulated asset base. Consolidated EBITDA also reflect our geographical diversification, with 76% coming from EA rating countries like Germany, UK, Spain, Australia, France or United States.
As mentioned, one of our main growth drivers in 2020 was the addition of generation capacity. Despite COVID restrictions, we have invested we have installed 4,000 megawatts in the last twelve months, which around 17% are renewable. This means 2,890 additional megawatts leading our total renewable capacity to 35,000 paint, 900 megawatts of solar PV in Spain and Mexico. A new battery storage project, including the first phase of the 50 megawatt super battery at Wiley Wind Farm in Glasgow, the Infusion 25 megawatt battery system linked to the Lake Bonnet Wind Farm in Australia. The increasing share of renewables in our generation mix led to an 11% reduction of CO2 emission, reaching only 98 grams per kilowatt hour.
This figure is between two times and three times lower than the last data published by the other two largest global utilities, Nexera and Enel, and well below the average of the sector in Europe and United States, putting us in the right track to reach our goal to zero emission in Europe already in 02/1930, twenty years ahead of European target and less than 50 gram per kilowatt hour globally. As mentioned, meeting these targets will require reaching 60,000 megawatt of renewable capacity by 2025 and almost 100,000 by 02/1930. But we have the project to make it. Over the last year, Iberdrola has increased its pipeline in more than 25,000 megawatts to over 74,000, a high quality portfolio diversified by geographies and technologies and fully correct with our growth plans. Biographies, one third correspond to European Union, one third United States and remained at 33% is spread over the other markets.
And by technologies, offshore wind already contributes to 22,000 megawatts. We saw that PV reaching 32,000 and onshore wind 60,000. With this pipeline, we have more today than 70,000 megawatts already under construction or secured. This represents 95% of the capacity planned for 2021 and 2022 and seventeen percent of the total target for 2025. Offshore wind is the fastest growing technology in our pipeline, providing us additional prospect in a technology in which we were pioneers over a decade ago.
And it already contributes close to €600,000,000 to our group EBITDA, up 72 in 2020, reflecting the higher EBITDA per megawatt of this technology compared to other renewables I was explaining to you in the previous presentation. We already have close to 1,300 megawatts in service in The UK, West Southern Sands, East Anglia 1 and Germany, Wieckingen, with availability and load factors above estimate in all cases. A four project under construction on track to be commissioned up to 2025. St. Briggs in France and Balti Gigel in Germany, each of them with 500 megawatt and Vineyard Wind and Park City in United States, which add more than 1,600 megawatt.
These four projects were obtained with zero cost of for CVET rights and all of them have PPAs or long term contracts already signed. Looking beyond 2025, we have 9,000 megawatts in offshore projects ready to build in United States, The UK and Germany, again with CVET costs close to zero. And 10,000 megawatts under development in other geographies as Sweden, Japan, Poland and Ireland. Driving a four times increase of this technology EBITDA by 2030 up to €2,300,000,000 and with additional upside expected in the following decade. This growth is fully coined with the global outlook of Offshore Wind one, one of the fastest growing technology in the sector.
Total capacity expected to reach 100,000 megawatts by 2030 from current 40,000. Our competitive project put Iberdrola in an optimal position ahead of the option expected in the coming twelve, eighteen months in markets like United States, UK, Germany or France as well in Denmark where we already have a joint venture. But as the Vice President of the European Union said recently, without grid, there will not be renewable growth. This is why we have always considered networks as a growth business, investing in it both organically and through acquisition. As a result, our regulated assets reached €31,100,000,000 by the end of last year with a balanced geographical breakdown.
And we expect further 50% growth in 2021 up to €36,000,000,000 For an additional investment in all our markets, mainly United States, where Avanti secured a new three year rate case in Europe, they will make this state a new growth platform for the company with revenues of our new utilities increasing by 8% already in 2021 and additional 13% between 2022 and 2023. And from the integration of Enel Resources in United States and CEB in Brazil, The regulatory proceeding of both transaction are progressing on schedule and they have also received shareholders' approval. CEB will start contributing to an earlier result from early March and P and L Resources transaction is expected to close it in the second half of the year. Regulated contracts coming from these two transactions together with additional retail customer in all our market will add close to 5,000,000 contracts during 2021 to reach a global portfolio of 48,500,000 contracts by the end of this year. Iberdrola customer base is increasing quickly in new markets like Portugal, Italy, France, Germany, United States and the new smart solution like in mobility, energy efficiency and new self consumption products that will accelerate growth in the coming years as a result of electrification and higher customer productivity.
This value added smart solution already contributed close to 4% to the Iberdrola group net profit in 2020. The need to decarbonize energy uses, they are difficult to electrify, is driving great growth prospect in green hydrogen for industries such as fertilizers and the heavy transport. Iberdrola is already leading development of this technology. We have more than 50 projects we could see a total production of 60,000 tons per annum and mobilize an investment of close to 2,500 million euros over the next years. We have already secured the Phase three project of all then starting this year.
Puertollano one in Spain as part of our alliance with Fertiberia for decarbonization of fertilizer production with green ammonia. This complex will become as early as this year, the largest green hydrogen facility for the new start use in Europe. We also have signed an agreement to bring green hydrogen to the port of need close to Ivermis in Skoda to decarbonize the manufacture of the steel component for an industry such offshore wind. And also this year, we will start green hydrogen production with to supply the fleet of buses in Barcelona, today appear in the media in Spain. And as you know, we are progressing in our Everlyser joint venture to design and produce electrolyzers in Spain.
I expect to update you on this project very soon. Given the potential of green hydrogen to quickly create new industry and qualified jobs along the value chains and the need for support to accelerate this competitiveness, this technology is one of the key components of the abroad proposal for the European recovery funds. Including all areas, Iberdrola has presented 150 projects that could mobilize investment of more than EUR 21,000,000,000, two thirds can be already from Iberdrola, resulting in further opportunities on top of our twenty twenty-twenty twenty five plan. This initiative will strongly contribute to the green and digital transitions, which, as you know, are the core of the Next Generation EU program and the Recovery Transformation and Resilience Plan published by the Spanish government. By developing clean technologies and energy efficiency, this plan can accelerate the achievement of environmental targets like emission reduction or the improvement of air quality as well as the transformation of our economic model, making it more modern, resilient and competitive, generating 40,000 high skilled jobs per year, creating growth opportunities for two fifty small, medium and large companies, adding 1.5% of the Spanish GDP and improving our balance of payment by almost 1,000,000,000.
Moving to the financial performance over last year, Iberdrola has continued reinforcing its strength driven by cash generation and balance sheet management. Operating cash flow reached EUR 8,192 million, up 1.6%, improving our FFO to adjusted net debt ratio in 190 basis points to reach 23.5%. Our liquidity exceed EUR 70,000,000,000, and we maintain full access to financial market in competitive terms. Just weeks ago, Iberdrola issued the largest green hybrid bond in history worth EUR 2,000,000,000, with any amount reaching five times this amount. After this transaction, total green and sustainable financing in the group reached EUR 24,500,000,000.0, reaffirming Iberdrola as the largest corporate issuer of green bond in the world.
In light of the result presented today, Iberdrola's Board of Directors will propose to the Annual Shareholders' Meeting a supplementary dividend of EUR 0.252 per share payable in July After the interim dividend of €0.168 per share already paid, this amount leads to a total shareholder remuneration of €0.42 per share, 5% increase compared to last year, already above the floor established for the year 2022. I will now hand over to the CFO, who will present the group financial results in further detail. Thank you.
Thank you, Chairman, and good morning to everybody. As the Chairman has pointed out, excluding COVID and FX, our EBITDA would have been €10,700,000,000 showing the real recurring performance of the business. Gross margin was down 0.7% to €16,100,000,000 affected by €744,000,000 of negative FX impact. Without this hit, gross margin would have grown by 3.8%. Net operating expenses improved 0.4% to €4,300,000,000 €242,000,000 positive FX impact more than compensate 49,000,000 of donations and the increase of activity and consolidation of Infigen and Alto Power.
Excluding the positive FX impact and an accounting reconciliation not affecting the EBITDA, net operating expenses would have grown 3.5%. Networks EBITDA fell by 9.2% to 4,800,000,000 considering €111,000,000 negative COVID impact on demand. Excluding €397,000,000 negative FX impact, EBITDA reduced its fall by to 1.7%. In local currency, good performance in The UK and Brazil was compensated by the regulatory cut in Spain and timing and storm effects in The U. S.
Linked to IFRS accounting. As you can see in the slide, Spain contributed 34%, The U. 23%, but it is expected to multiply by two its EBITDA in 2025 being by then the largest contributor, driven by new investments and the PNM integration. Brazil reached 2221% was The UK. In Spain, the EBITDA fell 5.8% to €1,600,000,000 affected by 50,000,000 of the remuneration cut and €82,000,000 of positive impacts in 2019 related to the sale of fiber optic and positive settlements.
In The U. S, IFRS EBITDA was 17% down to $1,200,000,000 driven by $145,000,000 negative temporary adjustments under IFRS as a consequence of differences in volumes and energy costs together with the impact of storms. COVID effect on demand was $65,000,000 and should be recovered from 2021 onwards. I want to stress that in U. S.
GAAP, EBITDA is €252,000,000 higher than the IFRS EBITDA and grew 7.5%. In Brazil, EBITDA grew 16.7% to BRL 6,400,000,000.0. Positive tariff revision in all distribution companies, increasing contribution from higher investment in transmission assets and cost contention due to efficiency plans have been partially compensated by BRL147 million COVID impact. Finally,
in
The UK, EBITDA was 2.7% up to £890,000,000 with higher revenues both in transmission and distribution due to investments, partially offset by £22,000,000 less revenues due to COVID to be started to be recovered in 2022. Renewables EBITDA grew 8.4% to €2,600,000,000 Total installed capacity grew 9% to 34,920 megawatts and production increased by 18%, driven by hydro and offshore. As the Chairman has said, offshore wind already contributes €585,000,000 to the EBITDA sent in 2019, partially compensated by a lower average price. I would like to stress the higher and increasing contribution of our international business than other €334,000,000 to the EBITDA, driven by Infigen and Alto Power after growing 33% in Q4. In fact, our international business EBITDA will multiply by three times, reaching €950,000,000 in 2025 due to the new additions and the offshore business.
In The UK, EBITDA was 46% up to £675,000,000 driven by the offshore business that grew 231% as a result of the East Anglia production, where its seven forty megawatts are fully operational since mid-twenty twenty. In Spain, EBITDA was €698,000,000 5.2% below last year due to lower prices in sales to the supply business despite 17% higher output driven by a 42% higher hydro production as well as higher PV capacity. In The U. S, EBITDA increased 2% to $676,000,000 caused by a 10% higher output following May megawatts increase in operating capacity in the last year and higher wind resource, but negatively affected by lower prices and higher costs. In the international business, EBITDA grew 3.4% to €334,000,000 with increasing contribution from Alto Power and Infigen, both affected by nonrecurring development costs.
In Brazil, EBITDA grew 19% to BRL656 million as output increased by 17% with 45% higher hydro output compensating the 6% falling wind. Finally, Mexico, EBITDA grew 10.7% to $106,000,000 with 113 megawatts higher average operating capacity. Generation and supply EBITDA was 3.9% up to €2,600,000,000 including €107,000,000 negative COVID impact on demand. Business improvement in The UK and Mexico drives this growth. Smart solutions contributed €220,000,000 or 9% of the generation and supply EBITDA and will reach 16% of the generation and supply EBITDA by 2025.
In Spain, the reported EBITDA was 5.7% down to €1,500,000,000 but recurrent EBITDA was 6.4% up, excluding €87,000,000 of LNG contract sale accounted in 2019 and a €95,000,000 charge from the corporate for the first time in 2020 that does not affect the consolidated EBITDA as it is taken or reconciled in the corporate area. In 2020, although we had 6.5% lower output, we had higher purchases at lower prices versus last year. In Mexico, the EBITDA grew 5.7% to $922,000,000 thanks to higher sales linked to the new installed capacity. In The UK, the EBITDA grew 130% to £222,000,000 as a consequence of improved margins versus 2019 despite the fall in sales affected by COVID. Brazil added BRL348 million to the EBITDA in the context of business normalization after the one off negative effect that lowered results in 2019.
And the international business, EBITDA was already positive, 300,000.0, improving €25,000,000 versus last year, but still affected by initial development costs. We have reached €1,800,000 contracts or almost 20% more than one year ago. EBIT fell 5.8% to €5,500,000,000 as provisions grew 42% after including €124,000,000 of bad debt provisions related to COVID euros 27,000,000 in networks, mostly in Brazil and €97,000,000 in generation and supply to be managed through our commercial activity. Part of this cost will be, for example, recognized in The UK by OGM in its new tariff update. In addition, rose 2.6% due to the increase of the asset base and activity.
Net financial expenses improved three zero nine million euros to €991,000,000 driven by €182,000,000 linked to FX hedges and €122,000,000 positive impact due to the lower cost of debt that improved 32 basis points to 3.18. Average net debt remained stable at around €37,000,000,000 thanks to FX evolution and hybrid issuance. Our reported credit metrics remained strong and in comfortable levels for our rating requirements. Our debt improves from €37,500,000,000 to €35,100,000,000 due to the €3,000,000,000 hybrid issued last October and FX gains despite increasing investments and the consolidation of Infigen and Alto Power. FFO adjusted net debt improved 1.9 percentage points to 23.5%.
S and P relaxed the range from 18%, 20 to 1720%, the FFO net debt range after considering Iberdrola, an energy transition leader. Our FFO net debt in their methodology will be around 18.5% in the middle of the range. Adjusted net debt to EBITDA improved to 3.5 times from 3.7 times. Retained cash flow adjusted net debt improved to 21.3% from 20% levels. Adjusted leverage ratio decreased to 42.3%.
Our expansion plan requires a conservative, well active management of interest rate risk, aligned with our earnings structure. Currently, we have 71% of our group's debt at fixed rate and an additional 10% of future debt closed through high interest rate forwards. Our debt management adapts the weight of currencies and its interest rate structure to the cash flow generated by our business. We have mostly fixed debt in our U. S.
Business that it is a perfect pass through on our regulated business and most of our renewable business is based on long term PPAs, less so in euros due to the weight of the liberalized business. In The UK, our debt is more balanced at fixed floating and inflation indexed according to our business profile. And the real is heavily inflation indexed as most of our revenues are linked to Brazilian inflation. Also, have a comfortable financial needs profile with average debt maturity close to seven years. As you can see in this slide, reported net profit grew 4.2% to €3,600,000,000 Business growth in 2020 and Cimesga Mesa capital gain more than compensated COVID impact in the year and the FX negative impact that was mostly hedges.
As a matter of fact, our adjusted
RAFAEL net
profit grew 9.7%, showing the strength of our business model. And now the Chairman will end this presentation. It
confirms the potential of Iberdrola business model to deliver social value when it is most needed and to create sustainable growth and shareholders' value. 2020 results confirm Iberdrola as an early transition leader in the world of standard and foods that Pepe mentioned. On the Green Maisons, a company with a unique model, which combines a strategy fully based in ESG factor, this anticipates sector trends two decades ago, a business portfolio fully current with energy transition and the green recovery, a long term vision to grow over the next decade and a track record of strategic consistency and execution. Insist on the plan, track record of strategic consistent execution. Following the greenest generation portfolio among the largest Italy worldwide, Last year, we added 2,800 megawatts to reach 35,000 of capacity, and we are doubling our capacity the next five years and multiply by three in 02/1930.
Thanks to our pipeline of more than 74,000 megawatts, in which 70,000 megawatts are already under construction or secure. One third of this pipeline correspond to offshore wind, creating additional growth opportunities for the technology that already contribute to already today a 6% of our group EBITDA. In networks, we continue expanding our regulated asset base up to EUR 36,000,000,000 in 2021, reaching EUR 47,000,000,000 in 2025 and close to 60,000,000,000 by 02/1930, with a stable and predictable framework in The UK, Brazil and United States. And additional growth from the integration of P and L Resources and the distribution company of Brasilia. And finally, in generation and supply, we add 20,000,000 new contracts in the next two years with a growing additional new markets.
And further opportunities for our smart products as well as new solution for industrial customers like green hydrogen. This business portfolio will drive strong upside in the medium and long term. Our investment are focused only on growth business with more than 90% directly to power networks and renewables. And we have an optimal diversification with 76% of the EBITDA from rate countries. In addition, 80% of our gross margin is secured with 70% in our generation sold through PPAs or long term arrangement and 90% of our network asset base with regulatory frameworks already fixed until 2023.
This business mix is fully in line with our financial approach. 71% of our debt has fixed or hedged rates and average maturity of seven years. And we will have additional opportunities for increased climate ambition and the green recovery, especially in Europe. We have ahead us the largest investment plan in Iberdrola's history, and we will execute it following the same environmental, social and governance principles that have always been at the core of bureaucracy and inaction. We were the first mover in a clean energy revolution.
The others are joining now. So we'll not have the write off of cost associated with the commissioning of coal and oil power plant they could need to register. And we are an active agent in the transformation of our society, outstanding 400,000 jobs through our supply chains, thanks to the EUR 14,000,000,000 we awarded in purchase of the goods and service last year. Our governance sustainability system has risk graded to reflect the best practice in matters of diversity and inclusion. The result of these commitments are fully available to the financial community through our reporting and disclosure system, which follows GRI and SASB standards and include the latest recommendation of the task force and climate related financial disclosures.
To conclude, thanks to our model, Iberdrola face the future with a strong prospect in the short, medium and long term. We expect our net profit to reach between EUR 3,700,000,000.0 and 3,800,000,000.0 in 2021, accelerating growth in medium term to reach EUR 5,000,000,000 in 2025 and the long term to around EUR 7,000,000,000 by the end of the decade. We are also reaffirming our commitment to visible and increasing shareholder remuneration. On the top of EUR 0.42 per share for 2025, we expect to reach EUR 0.56, 40% more than 2019. In 02/1930, with ambition of paying around EUR 0.75 per share, with an increase around 90% compared to 2019.
The opportunity is there, and Iberdrola stands ready to deliver once again the creating sustainable value for our employees, shareholders and society. Thank you very much, and we'll now answer any questions you may have. Thank you.
Thank you, Chairman. First of all, would like to point out that you have an annex in the presentation you have on your hands right now, which could provide additional information about the results of 2020. Moving to the Q and A session. The first question comes from James Brand, Deutsche Bank Harry Weidberg, Bank of America Merrill Lynch Elkin Mamadouf, Bloomberg Javier Suarez, Mediobanca and Jorge Alonso, SocGen. There have been some sign of significant competitive pressure in auctions so far this year, for instance, the low PPA prices in Spain and the high fees for Seabed in England.
Do you see this as a related incident or a sign of pressure to come?
So I think I will respond first to the lease area for The U. K. Offshore. I was not surprised of the result. Oil companies will be ready to pay high prices.
I was convinced that it will happen because they need to change their equity story. So I think they need to show to the market and they are really committed with that one. But I think my point of that even is not a surprise, I think it's not a surprise what they are already paying in certain for certain purchase of by line of certain purchase of certain ready built onshore wind farms. But they need to clarify their position. It makes no sense to pay high prices in auctions as they did and declare in place after that there is a bubble in the sector.
With that, I think probably they are generating. In any case, I think if there are companies which are already been making write offs of €15,000,000,000.20000000000 So I think it's not much to make already. It's irrelevant for them to make €1,000,000,000 more or less what they are already facing in this moment. Think as a company like Iberdrola, we are not already in such a position. Our story is very clear for twenty years.
We've already just invested a long time ago in those sectors. As I was mentioning in my speech, we have already a pipeline of 9,000 megawatt 19,000 megawatt of offshore, where 9,000 is ready to be built, with Seabed costs close to zero, giving us an optimal access to future actions. And the increase of the prices that already paid for this Seabed increase our competitiveness to our existing pipeline, which I think that is important. I think if you evaluate how much is our, let's say, €90,000 €9,000 which is ready to build. So you add already that one to put already the price they pay for that one.
We are talking about probably zero zero zero of value pipeline, which I think is a good news for us. So moving to the Spanish auction. The first thing I would like to say, and I was insisting on that one, I was saying that the Spanish market was properly. I think I was saying then the auctions, I think, is the government desire, respect the decision of the government, but I think the market is working properly. I think with auction or without auction, my expectation is the market fundamentals will remain similar.
I think it's we see during those days an increase in renewable production. I think this is already pushing the prices down. I think that was happening for the last two decades. I think when C9 in the company in the last twenty years, when there are a lot of hydro production, it was not already much wind at that time, not zero solar. But I think it's when they were already high hydro production, the spot prices fall down, so which I think that continue working well.
I think we are seeing those days in this manner. So but I think the auction, no auction, we have not seen any impact. We are not already expecting. The fact we have already considered all those things and this effect in our estimate in our long term plan. So I think we are considering that when they are already high production, the prices fall down and when they are not production, their prices went up.
And I think that is considered in our estimates.
Could you provide an update on the progress of wind and wheels on offshore wind? Could you outline which newest option this year you are confident Iberdrola can be competitive in?
So we expect to receive the Boeing permit soon, probably, I hope, probably in the next few weeks. With this, we plan to start the construction this year. And we are already our plan is to have Bingard wind operational by 2024. I think it's a good news, as you know, that the PTC has been extended, so I think they will allow to receive 30% instead of 18%. It was already the previous plan.
Additionally, we have already Par City wind. It's another 800 megawatt, because we have already the PPAs with Connecticut. That, I think, we are already working in the project. And we expect with today's best estimate that this plan can already start production construction next year and to be operational in 2025. We have another one, which is Catahawk, which is 2,000 megawatt that needs already we have already submitted a construction plan for to be ready afterwards.
And we have already on your point, we have already assumed five twenty two, another 3,400 megawatt, we gave us access to the auction in the area this year. I think as you have already seen in the presentation, there are already opportunities, new auctions in Massachusetts, there are already in New York, Connecticut and some in Long Island as well. There are a few of them which I think this year and we expect to be already competitive in all those ones and to gain one of those. So I think but we are optimistic about BINJA, and we have already we expect to be competitive in all sections, which is going to happen in the next few days. You know that the Biden administration is very much focused in accelerating the construction of new offshore.
So I think they have ambitious goals. I think in this sense, I think we are in talks with the administration. And we feel that for accelerating that one will be already needed, and they are already aware on that one to increase to make already permitting more agile, to make already bigger auction to produce already critical mass to improve local value chains. I think it's important and this equipment will be already produced locally as much as we can. And I think it's needed as well to have much longer visibility of PTCs.
Now we stand up to twenty twenty six, but should be good. And last one, I think something we can already diminish, the cost for the citizens is the promotion of corridors for connection of the wind farm to the grid to improve the agility and reduce cost. As you know now, each of the transmission, that is one of the areas which is already diminishing the competitiveness of certain wind farms is that each of the projects have to make their own transmission for connection to the Mainland. So they already generate and they make already proper corridors that can already help and to make already much agile connection and much increase the competitiveness of all the projects.
There is an additional follow-up question on this offshore wind questions, and it's coming from the same people, Rob, Gonzalo and Manuel, plus Meike Becker from Vesting. What markets are you looking to further expansion in your renewables pipeline? And secondly, in which market do you expect to achieve higher returns in offshore?
I think which market we are looking, I think I mentioned already, I think we have already auctioned. We plan to the next auction we are planning to participate is in Britain, which is going to be held beginning of next year, where we are going to participate with our Zambia one project, 3,000 megawatts. We are already ready to participate probably in this auction, probably not sure, in this auction, which is going to be held in The United States. They are already just an auction which probably we are going to participate in Denmark. They are already, let's say, in the next few months, in the beginning of this year, probably is going to be already an auction in Japan that we plan to participate as well.
And I think in Germany. In Germany, we have already our Baltic Eagle project, which we plan as well to participate in this one as soon as this will happen. I don't know if I miss anyone. Of course, in France, it's going to be as well as an auction this year that we as well we are ready to participate. So Japan, Denmark, France, Germany, United States are the countries where we are already planning to participate in during the twelve, eighteen months, and we have the people already in this moment analyzing and designing the project to participate in those auctions.
Next question comes from Javier Suarez, Mediobanca, El Quimamadou, Bloomberg and Jorge Alonso, Generale. And is what is your view on the perception of higher regulatory risk in Brazil and Mexico? How could this impact your investment decisions?
So let's say let us start with Brazil. I think the power sector in Brazil, the regulation is very stable, very reliable. I think what we've seen during this pandemic was one of the countries we take the first action to provide already liquidity to the distribution companies with the COVID. So at the moment, we don't expect a single change. I have seen this morning in the media that personally, the President Bolsonaro has provided has presented personally to the parliament the plan for the recapitalized Petrobras, and he has already insisted that his agenda of privatization is full speed.
So which I think is no, we are not seeing changes. Related to Mexico, I think as I said in all my speeches, we are not making the energy policy. The new policy is made by governments. I think if the recent decision can potentially affect to all the energy sector, oil, gas and electricity, and not only that one, also they can already affect to industrial sectors because energy cost is essential for their competitiveness. I think if the decision finally taking effect to the shareholding interest, we will analyze this and we take the appropriate measures.
In any case, what I can say is that all the our power plants, which are already as you know, most of them are leased to CFE, continue dispatching with normality. In those days, also I'm very pleased and has already been essential to maintain the service during this very extreme climatic condition. So I think our conversation with them is fluent. And I think the government is taking the decision and I think that is normal in all countries. So which I think they will they have the capacity and they have the obligation to make already decide the policy, the energy policy as they are obliged to make the decision in other sectors as well.
JOSE Next question comes from Javier Suarez, Mediobanca and is related to the situation, weather situation in Texas. Can you give us some feedback on the situation in Texas and possible impact for Avangrit?
So as you know, we've been closely monitoring the situation of our wind farms in Texas. I think it's not normal that in The Gulf have already such a frost and the frost we were affecting to the blades of the wind turbines. But I think in this analysis, to give you some detail, our total power of Texas wind power in Texas, we have 4.2% of the installed power in the state. But even with those circumstances, our production has been already contributing to 7.5% of the total wind production those days. So I think that means we've been producing more than expected and contributing to restore or to help to restore the barricade generated by the lack of gas.
As you know, the problem there was already the lack of gas for the CCGTs. So it was not a problem of renewable, it was a problem of lack of gas. Same thing in Mexico, the problem was the gas the pipes of gas was frost and they were not ready the gas was not ready arriving to the power plant. So and I think in global terms, we are not expect any negative impact. I would like to say, if any, will be positive, but I would like to say that in these terms.
And something which is important and is this situation shows the need of investment in networks infrastructure interconnection between the states. I think they are the neighbor states, they've already in which we have present and we are going to be even more present in the future. They've already excess of power those days that if they were already properly interconnection, the blackouts had not already accessed because they can already flow from one part another one. So I think that is something in the state. I'm sure the new administration is very much aware of that one And they are going to do all the necessary for interconnecting more the different state, interconnecting more with the neighbor countries, etcetera.
Next question comes from Alberto Gandolfi, Goldman Sachs. Can you elaborate on
the timing of this EUR 21,000,000,000 of project for next generation EU? What is the chance that all will be approved? And how many of these are over and above your current 95 gigawatts target by 02/1930?
So I think that is not included in our plan. I think that will be, as I mentioned, an extra thing if that happen. So I think in those ones, I think they are I think looking on the page where is the yes, I think on the Page sixty two and sixty three, you have a detail of all those projects. Onshore wind, wind blades, that is nice, wind blades recycling, which we are with many companies. More is my network batteries for certain areas.
Heating electrification, but we are not going to be already a pump heaters have pump heating producer, but we would like to facilitate that to the citizens and they are already some kind of subsidies as we are already doing at present with solar PV to be put it in the roof of the houses. I think you have a lot of these things. There are areas like public charging, which we are already working, but we feel that that is going to be already need to be accelerated. So national corridors for electric vehicles, I think is not the charges is nice to put, but without power behind, I think the charge doesn't work. And I think we need a huge power, especially in corridors if the buses and trucks are becoming more and more electrical.
I think there are already certain truck manufacturers, which are already designing trucks, where they would have an autonomy on the range of 400 to 500 kilometers, which means that they have to be recharged within forty thirty, 40 maximum one hour, so it means huge power, they need charges of 900 kilowatt each. So you have already just in an area, you need already several of those or you need megawatts, several megawatts of power of grid power ready installed of that one. So I think here you have the line. I think the other is like green fertilizers, as you as already mentioned, only with this hydrogen is EUR 2,500,000,000.0, which I think most of it is will be dedicated to full production of green ammonia with green hydrogen. So I think we have a big project in Palos, in Huelva for transforming all the production so for the effective area in green and only that one require investment on the range of EUR 1,600,000,000.0 or 1,800,000,000.0, so which is a huge one.
I think I hope many of those can be already treated as a strategy for the country And we will see, I think we already provided we had already presented all of them are according with European rules. I think it's green, digital and already affecting to hundreds of small, medium and large companies together with us. And they are already present in 17 regions. So I think they will be across the country involving already hundreds of small and medium and large companies for digital for a sustainable and transforming the Spanish economy, ARAMBARRI:] not only to put already a
thing which is going to be needed in the future. Next question comes from Alberto Gandolfi, Goldman Sachs as well and is related to are the investments in green hydrogen all incremental versus your current plan? How do you plan to fund any CapEx acceleration, more hybrids, more rotation, equity?
So I think that as I'm telling you, that is already in line up to 2,030, most of them. I think our panel hydrogen, are to face with Fertility, I can say. One is Inmejat, which I think the first hydrogen plant is going to be in operation this year in 2021. And other ones are not already included in the plan. That is, I mentioned, additional opportunities.
In the case of the Fertibaria, the large one, which is going to be already operational, that will remind by 2027, not because we cannot make that earlier, it's because they need as well to transform their production facilities. And for making that, they need already a special timing for making that happen. So I think it's an extra, but certain of them is included and the rest will be already at the end of the year, at the end of the decade, which I think there are room for all those things enough.
Next question comes from Ralph Bouley, Morgan Stanley.
Does think it's we are already facing one point. I think when we try to make the first hydrogen power plant, we have a limitation. The largest electrolysis that can be installed is 20 megawatts. I think we were looking across the suppliers and I think most of them, they are already making a small one, one to five megawatts. And only a couple of them, they say that they will be ready to make 20 megawatts.
I think that is going to be the largest of the largest. But we are talking about electrolysis, which have to be on the range of 100, 300, 400, 500 megawatts. And nothing for that is needed already to make a different thing. If you would like to compare with Gamesa, perhaps it's the same thing. When I came to the sector twenty years ago, the turbines were in the range of 300 kilowatts.
And I think the first one we produced was on the range of 800 kilowatts. Today, the turbines are for onshore, the standard is four megawatts and then the offshore, we are already in the range of thirteen, fifteen megawatt each. So I think heat is needed something like. And I think we see the opportunity to try to make to help already and to use already these opportunities for Europe to make already as an industry within Europe can already design and manufacture already these electrolysis, the size that the hydrogen demand will require for the future. So I think that's why we made this joint venture with a Spanish company, which is in Hetian for genetic fertilizer.
We probably is going to be joined in the next few weeks, Sonne and other international partners, which are at present producing those ones.
Next question comes from Jorge Alonso, Sorgen. What EBITDA can we expect, no storm included, for The U. S. Networks? With other rate cases being negotiated, including the improvements made in New York, do you expect an increase in the average cost of debt in The U.
S. Due to the recent move in bond yields?
Where the EBITDA can be expected in 2020 I don't know the numbers, but probably it's on the range of €1.3.1400000000.0 I'm not sure the number, but we can provide the numbers. But I think in my mind, it's something like that one. We can let you know, but I think probably on this one, 1,300,000,000.0, 1,400,000,000.0, which I think is 20% or 25% or 30% more than previous year, thanks mostly to the New York rate case, which is now its full year and last year was only from April or from May. And I think also, I think always we put in our budget some amount already for standard storms, which I think is those storms which are not already which is going to be collected. I don't know the number of this storm.
But I think in terms of EBITDA, let me remind that this growth on the range of 25% to 30% growth, mainly due to new rate case of New York.
JOSE question is coming as well from
Okay, please. Well, and that is not contemplated for the time being any contribution of P and L. Then probably depending on the months, they can already add something to that one. I think if it's in December, we'll not add much. But if it's in August, they will add half a year.
So I think that is not contemplated in these numbers. So I think the expectation is that can be, I hope, to be better if we can already obtain the permits much earlier.
Jorge Alonson is asking from Soggen for if we expect further improvements in The U. K. Supply unit.
So we are already last year was the result was better than previous one. And this year, the new that we have already are positive. I think it's the fact that the regulated tariff has already included not only the costs which are related, but as well part of the extra costs generated during twenty nineteen twenty twenty because of the COVID has not been already registered. That is a good news. I think the situation in Britain is crazy in retail.
I think I don't know how many dozens of retail companies has already been in Chapter 11. I think every week, they are already a new supply company, which is already just failing. And we are forced. The existing distribution retail companies to absorb the customers with one day to another one, they are without supplier because they are in a rush. We cannot already digest.
So that's why I think I understand that the regulator is aware of this situation and they will be managing things in a manner that we make already improving that one. I think with those teams, our expectation is that our EBITDA in retail business will increase heavily this year. In numbers, don't know with number, but heavily as they did last year as well. So
Next question comes from Elkema Madouf. How do you expect retail energy supply margins to evolve in your key markets, particularly as new entrants like gas and oil companies keep gaining market share from incumbents?
Well, I said always the competition is welcome. So I never had a fret of competition. I think as I mentioned, in the case of oil and gas companies with the offshore auction for Seabed, I think that's not bad for us. That's good. I think they pay huge amount of money that put more value to our existing pipeline.
So I think if they come here, they come to the market and they make pricing teams, I think they have to respond to this to their shareholders as well. So what I can say is then what we work is to be more efficient, more efficient, more efficient to get better service to the customer, better service to the customer to provide new solution, any solution, a non energy solution. And I think it's to compete. I think welcome competition. I think I was telling you that in the non energy product, what we call smart solutions, are already contributing for more than €200,000,000 to our net profit this year.
So which I think that is already affecting. The second one is that mostly all our electricity for the year is sold and almost most of the electricity next year as well is sold, as you see already in the earnings. So which I think is and the prices are really similar to those that we've been already selling at present. So but welcome competition. FERNANDEZ:]
Next question comes from James Brandt, Deutsche Bank. And what is a question related to P and M deal. Are you able to share any estimate for synergies from the P and M resource acquisition?
No. I think as you know, I think that was already a transparent transaction. I think we have no taxes still to their internal detail. I think it was already just based on the public information. I think in our 2021 pie, it is not considered any synergies because we don't know the details, internal details of the Colombia part of those one, which is already which are public.
I think if synergies happen, it will come in the medium and long term, one, integrate the teams. I think it's for us, the urgency now is to have the permits and to once we have the permits to make already as fast integration as possible, which you know always is seeing if they are already potential synergies. Of course, then we are going to look for that one, but that is not something which is in Mediat and certainly is going not to be ready in the short term because we need first to integrate the team, the system and the processes.
IGNACIO Next question probably has been already answered. It's coming from Harry Wybur, Bank of America Merrill Lynch, but I'm going to leave you here. Your recently announced project floating offshore utilizing EU stimulus fund already included in your autumn CapEx plan? Or are the project opportunities from this stimulus providing bigger than you expected?
Well, I think I provide you the list of projects, and we have already just requesting these stimulus funds and plans. But I think if there any potential additional opportunities, we are with many another companies. Those projects we presented our projects in good, we are leading. There are another project we are participating, but we are not leading. There are many, many another ones.
I think in some of those things we are participating, not as leader, but as already partner on that one. If that already the leader is already obtaining the support, in that case, I think will be certain, some extra thing. But I think it's important. I think we are open that one is unique opportunity for Europe for transforming our economies and transforming our manufacturing system and our production system. And I think that's why we are with industries in different sectors, we are particularly a part of those ones that we have already in the next, which are projects that we have already presented, leading ourselves with another 300, three fifty companies, which are already as well with us.
In another one, we are within, but we are not leading those ones. I think it will depend on these people to take already to gain already the project to be accepted the project by the local authorities.
UNIDENTIFIED Next question comes from Manuel Palomo, Exane BNP Paribas. Could you give us an update on the evolution of clients in the Spanish electricity segment in 2020 and expectation for the twenty twenty one, twenty twenty five period?
In Spain?
In Spain, yes, right.
Yes.
Well, starting with electricity, we see a flat portfolio, so we will not foresee to increase our portfolio. We will see to maintain to keep it in around 11,000,000 customers. And but on the other hand, concerning the smart solutions, we foresee an increase of about 30% by the 2025 and around 9% or even more to by the end of the decade. So that gives you a flavor of how this will evolve.
Next question comes from Martin Young, Investec. Please, can you expand on your thinking around whether you will accept the Objengraio two package for the Scott Power Transmission or refer to the CMA?
So I think it's I have to say that many, many things has already changed in the real team since the first proposal. I think substantial improvement has been already made by of the one, especially in terms of the low CapEx and in certain incentives as well. But the rate return is still low and I think we are analyzing a potential CMA appeal. I think we need already stability, predictability and objective return to mobile sorry, don't know. Sorry, think I was saying, I don't know you're here to me.
So I said substantial improvement has already happened seeing the first proposal of Bien, especially in CapEx and incentives. But I think our point is that rate case, the returns still in our opinion are low and that's why we are analyzing a potential appeal to CMA. I think something which is crucial on that of this sector is we need already stability, predictability and attractive return if we would like to mobilize the required networks investment for electrifying the economy. Our business network's life is over forty years. I think we cannot really take decisions if every three years, five years or whatever they take decision to change drastically the returns that we were expecting when we made the investment.
I think that in my opinion, the British government policy is very clear in this respect. They are very much in favor of climate policies to reduce emission, to make the country the greenest of the greenest and to benefit of the investment they can already make for the wealth of the country, especially in these times, where this needed already things for accelerating the economic recovery. But I think we need guidance on that one. So I think the guidance between the government and regulators, if the government will lie, then the investment will be made in a hurry. I think regulators have to provide the necessary means for making that happen.
IGNACIO Second question from Martin Young in Investec. What impact have you seen in The U. K. Supply business from the high prices in January, February in the Great Britain balancing market? Second question from Martin Young, Investec, the impact in The U.
K. Supply businesses.
Whether you will IGNACIO No. We are thinking about whether a yes, yes, yes. Well, I think that is a very, very low impact for us. I think it's probably, I don't know, 15,000,000, 20,000,000 of purchase of production, renewable production. So it's not much.
So it's irrelevant numbers.
Fernando La Fuente from Alantra is asking about the net debt by the end of the year expectations.
Yes. Basically, we are expecting the net debt to be slightly higher than the net debt at the end of this year, around €36,000,000,000 excluding the increase due to the P and M acquisition, if we and the CEP acquisition. With all this taken into account, P and M will take around €7,000,000,000 of additional debt and P and M around 400,000,000 So we are talking around if the two things are suspected coming to the into our balance sheet, we will be having at the end of the year a debt of around €43,000,000,000
And in terms of EBITDA, I think we are already happy with the consensus. I think in the numbers of the consensus around these numbers, we are already happy with these numbers.
Okay. As committed, after seventy five minutes of conference call, we are ready to conclude it. Please let me now give the floor to Mr. Galan.
So thank you very much for taking part of this conference call. Let me remind you that, as always, Investor Relations team will be available for any further information or detail you may require. Thank you very much for your attendance, and I think we'll see you soon. Hope, thank you.