Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us for our 2021 first half results presentation. Secondly, we wish you a safety and health period for all of you and your families. Moving now onto the reason why we are all here, our H1 results presentation, which will follow our traditional 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 usually have with us, our Chairman and CEO, Mr. Ignacio Galán, Mr. Francisco Martínez Córcoles, Business CEO, and finally, the CFO, Mr. Pepe Sainz. Following this, we will move on to the Q&A session. I would also like to highlight that we are only going to take questions submitted via the web.
Please ask your question only through our webpage, www.iberdrola.com. Additionally, we expect that today's event will not last more than 60 minutes-65 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 Galán. Thank you very much again. Please, Mr. Galán.
Good morning, everyone. Thank you very much for joining today's result presentation. Almost 18 months after the outbreak of the pandemic, I would like to begin today hoping you and your families continue to be healthy and sending our best wishes to everyone affected, both personally and on behalf of the whole Iberdrola Group. Let me transmit a cautious but positive message on the global prospect of recovery. As vaccination is progressing rapidly, recovery plans are already designed and are starting to be implemented, and more and more countries are focusing on green growth. Also, travel restrictions are being lifted, allowing us to return gradually to business as usual. Personally, I've already had the chance to travel in the last weeks to United States, where I finally met some of the new members of our green management team in person, France and Germany, where we assume our research activities.
This ongoing normalization will allow Iberdrola to continue executing our plans with even more determination, accelerating clean investment, promoting economic activity, and creating jobs all over the world. All this is reflected in today's presentation. In the first half of 2021, adjusted net profit reached EUR 1,144 million, up 8%, with a reported net profit of EUR 1.5 billion once we include non-recurring tax items, mainly for the non-cash impact in our deferred taxes due to the U.K. government decision to raise corporate taxes from 19%-23% from 2023 onwards. EBITDA grew 10% to EUR 5,444 million or 15% excluding COVID and foreign exchange impact, showing the group's underlying performance. Investment increased by 37% to almost EUR 5 billion, in line with our expectation of acceleration driven by electrification and green economic recovery.
In the last 12 months, we have added close to 3,000 MW of new renewable capacity, and we have more than 8,500 MW under construction. We have also closed several transactions and alliances, creating new growth opportunities in our core countries and new markets. We have continued reinforcing our financial profile and credit ratings. The support of our shareholders Iberdrola strategic direction and governance and sustainability system was once again reaffirmed in the annual general meeting celebrated in June with a quorum of almost 60% and the proposals including the agenda approved with almost 97.6% favorable voting average. A final dividend of EUR 0.254 per share was approved in this meeting, for a total annual remuneration of EUR 0.422 per share, a 5.5% increase compared to the previous year. As mentioned, EBITDA was up 10% to EUR 5.4 billion, thanks to the good evolution of renewables and networks.
More than offsetting the negative impact of our generation and supply business from higher commodities prices, cold snap, and COVID-19 effect on the retail debt. Networks show a strong performance in all regions, thanks to the increased revenue from new rate case in mainly New York. The good performance of Neoenergia in Brazil, driven by tariff readjustment and reviews, additional results from transmission investment, and the contribution of Neoenergia Brasília since the beginning of March. Finally, the expansion of our Regulated Assets Base in U.K. Renewables EBITDA increased by 63%, driven by new operating assets in all geographies, like the East Anglia ONE offshore wind farm in the U.K. A higher production from existing facilities, mainly offshore wind and hydro in Spain, with more than offset lower wind results in the U.S. and U.K.
COVID had an impact of EUR 108 million in EBITDA, and foreign exchange impact reached EUR 287 million. Excluding both, adjusted EBITDA grows 15%, which, as I said, demonstrate the capability of our business model to deliver increasing results in all scenarios. By geographies, A-rated countries like United States, the U.K., Spain, Germany, Australia, France contribute 80% to EBITDA, reflecting the group optimal geographic diversification. Building on last year record, in the first half of 2021, we have kept expanding our investment. Reaching almost EUR 5 billion in just 6 months, 37% above the first half of 2020, with more than 80% allocated to renewables and networks. Networks, which increased 40%, was once again the largest investment destination with 46% of the total. Investment in networks grew in all our markets, and especially in Brazil, where EUR 410 million correspond to Neoenergia Brasília.
Renewables investment increased by 35% thanks to the acceleration of our dozens of offshore wind and solar PV projects, mainly in the European Union, United States, U.K., Brazil, and Australia. Over the last 12 months, we have commissioned close to 1,000 MW of new onshore wind, solar PV, and batteries, driving the total renewable capacity to more than 35,500 MW globally. Addition includes 2,000 MW of onshore wind installed in several countries like Spain, Brazil, U.S., U.K., Australia, Portugal. 900 million of solar PV in Spain and Mexico. 80 MW of battery storage located at hybrid facilities with wind farm in the U.K. and Australia and solar PV facilities in Spain. On top of that, we have already more than 8,500 MW under construction on both sides of the Atlantic, of which 2,600 MW are in the offshore wind area.
By geographies, more than 1/3 of the total capacity correspond to Iberdrola Energía Internacional in European countries like Portugal, France, Germany, Greece, and Australia. For a total of 1,000 MW of offshore wind projects under construction, 1,200 MW of pumped hydro and battery storage, and 250 MW of offshore wind and solar PV. Almost another third comes from green power and solar in the United States, the remaining 34% is located in Spain, Brazil, and to a lesser extent as well in U.K. Once we add the capacity we have already installed from the beginning of 2020 and the projects that are under construction or ready to build, we already have 22,000 MW. That is 80% of our target of new renewable capacity for 2025. We continue adding new projects to our pipeline, which has reached a new record of 81,500 MW, with a balanced mix of technologies and geographies.
As you know, all, in the last month, we have seen strong price increases in several commodities and raw materials used in clean energy projects like steel, copper, or aluminum. We have analyzed our position in detail, and in the coming years, we do not expect any material impact from this situation that for now seems to be temporary. All group major equipment is purchased globally through long-term strategy agreements that allow us to benefit from better price and delivery time. In addition, we have advanced purchase orders worth EUR 18 billion to our suppliers in the beginning of 2020. As you know, the purpose of this was to provide them certainty to mitigate the impact of the pandemic in their activity and employment. Now we are also benefiting from this relevant side effect of that decision.
We have fixed or hedged prices for high share of our purchase for the next years, insulating ourselves from any potential disruption in global supply chains. Taking all this into account, as well as other protection included in regulatory frameworks of our network activities, we estimate our exposure is lower than 4% in our total investment plan up to 2025. This is particularly relevant in large-scale projects like offshore wind farms. In this respect, let me say that our projects under construction with a total 2,600 MW are not relevant impact. All of them are progressing according to plan. Saint-Brieuc, with 500 MW, is already being built in Brittany and will be operational by 2023. The manufacturing of the offshore substation and other components is progressing well. We have started installing the foundation.
In the United States, Vineyard Wind, we will begin the first large-scale offshore wind farm in the country, began construction off the coast of Massachusetts after completing all permitting and authorization processes in May. A few days ago, we signed with local union the first project labor agreement for an offshore wind farm in the United States. with attendance of the President Biden Climate Advisor, Gina McCarthy, and several congressmen for Massachusetts as well. We are also moving forward with our second offshore wind mega project in the United States, Park City Wind, off the coast of Connecticut. A few weeks ago, BOEM issued a notice of intent to proceed with the primary permitting document for the project. The design and procurement process are ongoing. As you know, both projects already have secure long-term PPAs with local distribution companies.
Finally, Baltic Eagle in Germany is also progressing as scheduled. We have signed as many supply contracts and started the construction of the offshore substation. We expect the permit from the Federal Maritime and Hydrographic Agency by September, and we have in 2034 as full commissioning date. Additionally, we are working on different offtake opportunities to ensure routes to market for all the projects in our pipeline, like several auctions and tenders, that in some cases include also seabed rights for new investment opportunities. In Europe, we are participating in the auction that will close after the summer in Germany with a preferential right in site of our Windanker 300 MW project. We are also ready to participate in the fourth round of Contract for Difference in the U.K. with our 3,100 MW East Anglia Hub project.
We are preparing bids in several processes to add new pipeline, giving us growth opportunities for second half of this decade. This is the case, for example, of the ScotWind leasing round in the U.K., which includes rights for fixed and floating projects, where we have already reached a partnership agreement with Shell, the auction schedules for the last quarter in Denmark, where we have an alliance with Total. In the Netherlands in early 2022, again with Shell. Iberdrola has already been pre-qualified for up to 1,050 MW in Normandy, France, building on our capabilities in this country. We have also built new platform in other countries like Poland and Ireland. We have published ambitious targets for the coming years, giving us further opportunities for additional growth. We are also building an optimal position ahead of the auction expected in U.S. and Asia-Pacific markets.
We already have 3,600 MW in Vineyard Wind area, eligible to compete in tenders in the U.S., like one already open in Massachusetts for those expecting Rhode Island and New York for 2021 and 2022. Also, we have 2,000 MW ready to participate in an auction in the next three years in Japan. We are working on the forthcoming tenders in Taiwan to secure new pipeline there. Finally, other opportunities are arising in the U.S., like a big area lease sale for over 7 GW of the state of New York and New Jersey. As anticipated, last quarter had a progress in multiple alliances with companies from several sectors, willing to improve their carbon footprint and take advantage of the investment opportunities arising from electrification. This is the case of leading Spanish insurance company, Mapfre.
We have formed a co-investment vehicle to accelerate the build-out of solar PV and onshore wind in Spain with a target of more than 1,000 MW just in the first phase. In the last month, we have already allocated 225 MW of this vehicle, and 100 MW will be integrated in the third quarter. For Iberdrola, this alliance provide visibility to the value of our pipeline, as well as a new growth platform, optimizing our financial structure and generating additional revenues from development, construction, and maintenance of the projects. We are also expanding other alliance to promote decarbonization with companies from different industries. Like energy, where we are partnering with offshore wind development, as I have just explained. Chemical and manufacturing for the electrification of industrial processes with heat pumps, electric boilers, and ovens, along with dedicated PPAs, and for the use of green hydrogen in high-temperature processes.
In zero-emission mobility, we have a close agreement with the leading car manufacturers like Volkswagen, Renault, Mercedes, or Irizar in heavy transport. With public administration as Glasgow City Council for human bus fleets. Retail companies like Mercadona and Makro, developers of electric charging systems such as Wallbox, a company in which Iberdrola is a relevant shareholder, that will be soon trading in the New York Stock Exchange. Additionally, we have signed relevant agreements like the one with Cummins to install in Spain one of the largest electrolyzer manufacturing plants in Europe. The consensus about the need to speed up decarbonization is becoming unanimous, involving governments, citizens, and investors who are pushing for more sustainable and electrified models. There is a clear political support to green investment, identified as a great opportunity to generate wealth, employment, competitiveness, and better social models.
All major economies have committed to achieve net zero emission and are accelerating their carbon reduction target. Also, several governments are organizing business summits to attract international green investment in the context of increasing competition for capital like Choose France, organized by President Macron, which I attended last month in Versailles, or the U.K. summit, to which I have been invited next October. All countries are also putting investment in renewables, networks, storage or green hydrogen at the center of the recovery plans to build back better from the pandemic. The next generation funds, the UK Green Industrial Revolution, or the American Jobs Plan are three relevant examples. The sense of urgency is higher than ever. The International Energy Agency has just warned that the CO2 emission for electricity generation will increase again by 3.5% in 2021 and by 2.5% in 2022, which will lead to all-time high.
To mobilize the huge investment required in the transition, it's also fundamental to have full consistency between energy policies and regulatory frameworks, as well as more agile permitting processes for clean energy projects. The European Union is probably the best example of the execution in this respect. Shortly after adopting new climate law, they increased the EU emission reduction target from 40% to at least 55% by 2030. Last week, the European Commission published the Fit for 55 legislative package to deliver on this commitment. As President von der Leyen has highlighted, Europe is now the first continent that presents a comprehensive architecture to meet the climate ambition.
The package includes legislative proposals to reform carbon price as the fundamental instrument to cut emissions in the European Union, strengthening the emission trading system for industry and power generation, and creating a second ETS on buildings and road transport. It also proposes measures to increase the share of renewable sources in energy mix, rising binding targets from 32% to 40% by 2030, and then efficiency of it to 33% by 2030 as well. To promote electric mobility with a target of 100% of zero-emission new cars by 2035, and a specific objective to deploy charging infrastructures. Finally, the package also covers energy taxation, one of the most relevant pending reforms in the EU, with an ambitious plan to comply with the polluter pays principle and increase consistency among the member states. We expect all these proposals to progress in the coming months.
Other countries have also published relevant regulation in the last months. Like Brazil, which is preparing a comprehensive set of measures to minimize impact of the current drought. As you know, last December, the Ministry of Mines and Energy and ANEEL, the regulator, renegotiated the debt outstanding from the past hydro canon through the extension of concession. Now, although rationing is currently not expected, as new power plant and transmission line make the situation very different compared to the previous droughts. The government has created a committee with different minister to monitor the situation. It has reviewed the system of flags, increasing surcharges to customers. In the U.K., the sector appeal to some aspect of the RIIO-T2, linking mainly to regulatory returns, is ongoing.
All distribution companies have submitted draft business plan to Ofgem for the next regulatory period, with increase in investment in the range of 15% to almost 50%, 30% in the case of ScottishPower. In Spain, the Climate Change and Energy Transition Act was finally approved with a remarkable consensus, and the bill for creation of a national fund for the sustainability of electricity system is progressing through the legislative process. This measure will distribute the cost of renewable current almost fully supported by electricity bill among all energies, allocating the decarbonization effort fairly and establishing a level playing field. In addition, the government recently submitted a draft bill that will impact non-polluting technologies obliged to pay for CO2 they do not emit.
As stated by rating agents, analysts, and several organizations, these unexpected changes will seriously harm the regulatory stability and predictability and legal certainty, which are essential to attract green investment and to guarantee security supply in the coming years. I am confident that over the process, a balanced solution will be reached, fully consistent with European guidelines and in accordance with the principle polluter pays, but whatever does not pollute pays as well. The U.S., the Connecticut Regulatory Authority approved new rates for our gas subsidiary until 2023. Also in line with other states, resiliency bills was passed in New York, asking all utilities to identify climate change vulnerabilities and propose three years plan to increase investment related with the storm impact. This will be an opportunity to improve the system security of supply.
The transaction with PNM Resources, the New Mexico, Texas utility, is progressing well. All federal authorization has been received, and the Public Commission of Texas also approved the merger, having only pending approval of New Mexico. We expect final closing in the last quarter of the year. Moving to the group financial performance, the resiliency of our business model is strong cash generation, and our ongoing balance sheet management measures resulted in even stronger ratios. Operational cash flow grew 8%, reaching EUR 4,246 million, and leading to an improvement of 160 basis points to our FFO to adjusted net debt to 23.6%. Following our performance, credit agencies have reaffirmed our debt rating for Iberdrola. In addition, our liquidity position reached EUR 17.6 billion, securing access to financing in very competitive terms.
Since January, we have also signed EUR 10 billion of new green financing, sustainable commercial paper, and credit line linked to sustainability indicators, consolidating our global leadership in green and sustainable financing with almost EUR 32.4 billion outstanding. As part of our commitment to environmental, social, and governance criteria, which have been the foundation of our business model for decades, in line with the 17 Sustainable Development Goals now fully integrated in our strategy. Iberdrola was the first mover in the energy transition, having closed all our coal and oil plants well before competitors, and investing heavily in renewable energy networks and storage. As a result, our emissions currently stand at just 43 g of CO2 per kWh , and we will achieve zero emissions already by 2030, 20 years ahead of EU targets.
Iberdrola is also the largest corporate issuer of green bonds worldwide, and we have fully implemented the recommendation of the Task Force on Climate-Related Financial Disclosures. We delivered this result, demonstrating that fighting climate change is the best way to create wealth and jobs. Since the beginning of last year, we have awarded purchase of EUR 18 billion, supporting 400,000 jobs globally through our supply chain, with 6,000 new hires, and reinforcing our commitment to learning and development with four times more hours of training per employee than average in Europe. Finally, our governance sustainability system continues to receive several international recognition from Corporate Knights or the Ethisphere Institute, among others.
We are constantly adopting best practice in corporate governance in matters as sustainability or diversity and inclusion, or climate action, with a new commitment for our Board of Directors to approve and update annually a plan with the aim of becoming carbon neutral. This was one of the items approved in our last Annual General Meeting, celebrating a month ago in a fully virtual format for the second time. Attendance was close to 63% of the share of the capital, with a very high participation of institutional investors, mainly international. All the proposals received a massive support from shareholders with an average favorable vote around 98%. Another approved proposal was a supplementary dividend of EUR 0.254 per share, which added to the interim dividend of EUR 0.168 per share already paid, leads to a total remuneration of EUR 0.422 per share, a 5.5% increase versus the previous year.
I will now hand over to CFO, who will present the group financial results in further detail.
Thank you, Chairman, and good morning, everybody. Let me advance, before I start, two non-recurrent tax impacts in the second quarter of the year. EUR 463 million, corresponding to the U.K. deferred taxes approval, as the Chairman has explained. That will start on April 2023, it doesn't have any cash impact in our accounts. EUR 245 million positive after-tax impact due to the reversal of the retroactive Spanish hydro canon corresponding to the years 2013 and 2014 after a court ruling in April, that it is reflected with EUR 265 million at the EBITDA level and in the net financial results with another EUR 62 million. First half reported EBITDA was EUR 5,444 million, up 10% versus last year, excluding EUR 108 million of COVID impact and the EUR 265 million due to the hydro canon. Our adjusted EBITDA increased 3.8%.
FX impact has been EUR 287 million after the valuation of real, more than 18%, and the dollar, more than 9%, while the British pound remained stable. Excluding also FX impact, our EBITDA would have grown around 10%, showing the real recurrent performance of the EBITDA. Revenues increased 30.9% to EUR 18.7 billion and procurements 21.7%, reaching EUR 10.2 billion. Gross margin rose by 5.7% to EUR 8.5 billion and 10.6% excluding COVID and FX impact. Net operating expenses rose 3.2% to EUR 2.1 billion as groups growth is almost compensated by FX positive impacts. Excluding FX, net operating expenses grew to EUR 109 million due to the contribution of new businesses, including Neo Distribuição Brasília from the 2nd of March, Infigen, and Aalto Power. Analyzing the results of the different businesses and starting by Networks, its EBITDA grew 10.6% to EUR 2.6 billion and 18.5% excluding EUR 203 million negative FX and COVID impact.
The latter will be partially recovered. EBITDA grew in all geographies. As you can see in the slide, Spain contributed 33%, Brazil 26%, the U.S. 21%, and the U.K. 20%. In Spain, EBITDA was up 5.8% to EUR 836 million due to the impact of EUR 25 million of positive settlements from previous years as a consequence of improvements in quality and regulated topics, and 12% lower net operating expenses, and despite lower remuneration that, as you know, has come down in 2021 from 6% to 5.58%. In Brazil, EBITDA grew 64% to BRL 4,351 million , driven by positive impact from tariff updates and inflation adjustment in our distribution companies and increasing contribution from transmission assets. Energy distribution Brazil contributed with BRL 50 million.
In the U.S., EBITDA IFRS was or IFRS EBITDA was 13.7% up to $670 million due to the increase in investments and to past cost recognition, but affected still by higher storms than last year. That will be reconciled in the next years. Excluding COVID impact on demand, EBITDA would have grown around 16%. U.S. GAAP EBITDA amounted $830 million, $140 million over our IFRS EBITDA, mainly due to the difference in the timing of accounting of the levies that in IFRS are fully accounted in the first quarter and in U.S. GAAP through the year. Finally, in the U.K., EBITDA grew 3% to GBP 445 million, thanks to the higher asset base. Demand is still affected by COVID, will be recovered in 2023.
In renewables, EBITDA rose 63% to EUR 2,005 million and 45% excluding the negative FX impact, and EUR 265 million positive impact from the Spanish hydro canon reversal. This growth is driven by Spain, the U.S., Mexico, and Brazil. Production increased almost 17%, with 8.8 more installed capacity that reached 35,676 MW and a higher load factor due to hydro, with higher average price in Spain and the U.S. In Spain, EBITDA was EUR 990 million, EUR 690 million over last year, thanks to higher price of the supply business and 29% higher output with 38% higher hydro, 12% higher onshore production, and 138% higher solar production, whose installed capacity already has reached 1,430 MW. It also include, as mentioned, EUR 265 million from the hydro canon accounted at the levies level. Excluding this non-recurring positive impact, EBITDA would have still grown by EUR 425 million.
In the U.S., EBITDA increased 42% to $448 million, with positive contribution from the Texas cold snap and new capacity, and despite a 3% lower output with 2 percentage points lower wind resource than last year. In the U.K., EBITDA fell 7.7% to GBP 304 million due to a 16% lower onshore production and lower prices, partially compensated by higher offshore production due to East Anglia ONE contribution. Let me point out that it has been the lowest wind conditions in the last 30 years in the U.K. in this first half. In our international energy business, EBITDA fell 2.9% to EUR 172 million due to lower production from Wikinger and higher development costs, despite Infigen and Aalto Power increased contribution. In Brazil, EBITDA grew 30% to BRL 350 million, thanks to the extension of the hydro concessions to recover costs from previous years.
In Mexico, EBITDA rose 112% due to the higher operating capacity coming from Pier and Santiago onshore wind farms and Cuyoaco. Generation and supply EBITDA decreased 41% to EUR 808 million and 38%, excluding negative effects and COVID impact. The business has been negatively affected by lower thermal output, higher prices, negatively affecting our Spanish business as well as cold snaps in Mexico and Europe. On the positive side, the U.K. showed a better performance. In Spain, the EBITDA was down 58% to EUR 350 million, with flat output due to higher renewable production and energy purchases at higher prices, with output already sold at fixed prices and the additional negative hit from the Filomena storm, while COVID improved its negative impact. In Mexico, the EBITDA fell 21% to $336 million, negatively affected by the Texas cold snap for around $70 million.
In addition, there has been an increase in access fees of over EUR 20 million. In the U.K., EBITDA grew 21% to GBP 135 million with higher sales despite COVID effect, mainly due to weather condition and improved margins, especially in gas. Excluding COVID, EBITDA grew 11%. Brazil added BRL 251 million to the EBITDA, highlighting the better performance from our CCGT plant and improvement of COVID impacts versus the first half of last year. In our international energy business, EBITDA was -16%, affected by cold snap development costs and lower sales due to COVID. EBIT was up 20% to EUR 3.6 billion. Excluding FX, COVID, and Spanish hydro canon, EBIT grew 13.2%. D&A remains stable at EUR 2 billion due to the fact that FX has compensated the 7.3% growth, mainly due to the larger asset base and activity.
Provisions were down 18% to EUR 203 million, as a consequence of the lower bad debt provisions related to COVID compared to the first half of 2020, as collections are improving. Net financial expenses grew EUR 72 million to EUR 472 million, mainly linked to positive FX hedges in the first half of last year, partially compensated by other non-recurring accounted for in the Q2, mainly the accrued interest from the hydro canon that amounted EUR 62 million. Debt-related cost remains stable, -EUR 31 million due to the higher cost of debt that increased 19 basis points to 3.38% from 3.19% due to higher costs of our Brazilian inflation-linked debt, more than offset at the EBITDA level, compensated by a 5% lower average net debt. Our reported credit metrics improved due to the following reasons.
The adjusted net debt decreased EUR 515 million to EUR 36.6 billion, despite the investment efforts, thanks to the hybrid issues. Second, our resilient business model, improving our cash flow generation. Our 12-month FFO grew 6% to EUR 8,625 million. Our adjusted net debt to EBITDA improved to 3.4x . Our FFO adjusted net debt grew 1.6 percentage points to 23.6%. Our retained cash flow over net debt improved to 21.2%, and our leverage ratio strengthened to 41.6%. Adjusted net profit grew 8.4% to EUR 1,844 million, compared to last year's of EUR 1,702 million. Adjusted net profit excludes extraordinary impacts, including COVID, hydro canon, and non-recurring items, but not FX impact, as we consider FX part of the risk that brings being a global player. Reported net profit was EUR 1,531 million, 18% below last year due to the accounting of the U.K. corporate tax, as explained previously. Thank you very much.
Now the Chairman will conclude the presentation.
Thank you, Pepe. To conclude, this set of results shows that in this unpleasant period, we have continued to make progress ahead of our plans and deliver results in line with our forecast in the first half of the year. We have accelerated our investment in renewables, adding 3,000 MW in 12 months, with 8,500 MW under construction. The rate case closed in the last months, for instance, in New York, are driving additional investment and result in networks, also boosted by the contribution of new transmission projects. Both businesses, coupled with ongoing improvement in operating efficiency, have more than compensated the complex situation of generation and supply in the period affected by high commodity prices, extreme weather, and COVID-19. We've also managed to further improve our financial strength, as reflected in our key ratios, and reaffirming our leading position in green and sustainable financing.
We expect this positive trend will improve even more in the second half as a result of the acceleration of capacity addition, with 3,000 new megawatts expected in the second half and the recovery of wind resource to usual levels, more in U.S. and U.K. Increasing results in networks reflecting additional investment in new regulatory frameworks and the normalization of business conditions in retail, allowing to reaffirm today our net profit guidance for 2021. Over the last month, we have also focused on expanding our footprint to create new platform and ensure additional growth in the years to come. Taking advantage of increasing investment opportunities linked to decarbonization all over the world and our track record of innovative clean energy solution and new technologies such as offshore wind, confirming our role as an engine for industrial development and job creation.
Fully in line with our two-decade commitment to social market economy that creates value for all shareholders, employees, and the shareholders they serve. In just one year, we have agreed large-scale corporate transactions in networks in the U.S. and Brazil that strengthen our position in two of our fastest growth markets. We have also expanded our presence in offshore wind in new markets, from France and Germany to Sweden and Poland and Europe, Japan, South Korea, Taiwan in Asia. We have reinforced our position in Australia. We have leading presence in the green hydrogen value chains and the new initiative to promote electrification in transport and industrial processes. In other words, Iberdrola is today stronger in the businesses and the geographies than had driven our growth in the last 20 years.
It has more than enough options to deliver even higher growth rates in the 20 years to come. You can be sure that the management team and the 40,000 women and men who make up Iberdrola are more than ever committed to continue this success history. We will be more than happy to answer your questions. Thank you.
Let us say a few words on the news that have been appearing in the last weeks about the Cenyt case. Maybe there are some questions on this as well. This is an issue of 17 years ago, when at least 21 Spanish companies and some government bodies contracted a registered and legal security company called Cenyt. From the moment Iberdrola knew about this in 2018, we did all the compliance and internal audit procedures as well as fully independent forensic by PwC.
In addition, we have a legal opinion from the international law firm Baker McKenzie, saying that there is no illegality or irregularity by members of the board of directors or senior management, and all the corporate governance procedures have been properly working. We are talking about an order of EUR 25,000 + VAT for services provided in Romania for an employee of a subsidiary, Iberdrola Renovables Energía, of a subsidiary of Iberdrola parent company, Iberdrola, S.A. Like a granddaughter. Be sure that we will take all legal action to defend, on one hand, the reputation of the company, and on the other, the interest of our shareholders. We will continue informing you with full transparency as usual. Let us now move on to the Q&A session, the first question comes from Fernando Lafuente, Alantra, and is regarding the EBITDA guidance for 2021 after this strong H1.
I think in the first half, the results are progressing better than expected, as you mentioned. Operating performance continues to be very good.
We have accelerated investment in capacity additions. We have new rate cases in Europe and addition growth in transmission. We have improved our financial strength. What we expect in the next month is higher renewable operating capacity and the recovery of wind resource, especially in the United States and U.K., who has been very poor. The acceleration of net book result as a result of investment in transmission, especially in distribution, and as well as some new regulatory framework, which is going to be coming to force in the next few months as well. I hope the improvement in retail after the normalization of the non-recurrent effect, with that, Pepe has already mentioned the cold snap, and we hope in the COVID as well. That's why thanks to all these things, that we are affirming our guidance for 2021, as I mentioned before.
Next question, since I have in mind bit the record of people interested. It's around the CO2 draft proposal of clawback. It's coming from Alberto Gandolfi, Goldman Sachs, James Brand, Deutsche Bank, Jorge Guimarães, JB Capital, Rob Pulleyn, Morgan Stanley, Javier Garrido, JP Morgan, Javier Suarez, Mediobanca, Harry Wyburd, Bank of America Merrill Lynch, Stefano Bezzato, Credit Suisse, Elchin Mammadov, Bloomberg, and Jorge Alonso, SocGen. In summary, are five main questions. First is chance to be approved. Second, timing. Third, has it been discussed with the European Union? Fourth, impact on Iberdrola, finally, possibilities to be improved.
I think the first thing I would like to say is that this draft bill is not a good news. I think it's a surprise to everyone after three years of a clean, a clear direction and energy policy. I think we've been already passing through a period which I think very, let's say, abnormal, because traditionally our regulatory authorities used to give surprises time to time. I think that is not the case, that has not been the case, and suddenly that was a surprise. A surprise for trying to solve something that is going not to solve. I think I would like to explain you more or less what is the situation in this moment of the prices. Approximately 90% of the energy of Spain today is not affected by the spot prices because they're already fixed prices.
From this 90%, approximately 15% are already residential, which I think with less than 10 kilowatts, that with the measure where the government has already taken at present, the diminishing for this, the VAT, they have not only not paid more, they are paying less, around EUR 5 less per month because they have already fixed price that we, the company, we are already absorbing because we make already this contract with fixed with them. In the industry, the industry and the service, which is the 75% of the total energy consumed in the country, is not at all affected because most of them are already fixed prices and they have already agreed with the commercial companies or they already agree with the operators.
The only one which are affected is 10% of the energy, which are those residential customers with that already they use what they call the PVPC, the price for the small consumer, which is regulated, and because of the decision of this government, the previous government, is already supporting the volatility, hourly volatility of the market. Probably, is the only country in Europe we have already such because everybody is already using, as we had in Spain before, already some kind of baskets of prices which can already provide already a fixed price for a long period of time. Nevertheless, with the measures taken by the government in terms of reducing VAT and taking into consideration that almost 70% of the bill is related to fixed prices, which is all regulated part of this one, only 30% is affected by energy.
That represents with the today's prices, which are already higher than those they were already the average of the previous year by EUR 30, EUR 40, the impact, daily impact of those consumers is EUR 0.12 per customer daily. That means less than EUR 4 per month. That's it. I think that has a very easy solution, is to move toward prices, basket prices, which can already fix the price for those customers which are more affected at present on that one. Saying that, I'm quite convinced that during the process of approval, they can already be improved on the terms of actually. The fact, the CNMC has already made certain technical improvements, we can already improve this situation. I think in terms of the chances to be approved, I don't know. I think that has to pass through the Parliament, and I think probably it's going to take several months.
Now it's on the State Council. We have to make their own report. I don't know how long it's going to take. Related to you, of course, we are talking with you about that one. I think we are already just informing about the situation because it's precisely a contradiction. What about the Fit for 55 is already being proposed. I think Fit for 55 is precisely saying they apply the principle who pollutes, pays. I think that is who pollutes pays, who is not polluting pays as well. With this law, why not in five years' time, somebody, whatever government, this one or another government, can already as well try to do the same thing with the technologies which are today being built or another sector? Steel industry has already made certain transformation of their production, reducing CO2, using another kind of thing.
They have to pay because now they are benefiting of the higher prices of carbon. I think it's something which is absolutely contradiction, and we have already been, of course, explaining to the European Union. In Iberdrola, we should see what is the result of that one, but certain it's going to be several hundred million euros if that is happening. I think we have to take certain decision because in certain situations of low gas prices, and high prices of carbon, even the income or the revenue is going to be less than the taxes we have to pay. You can see that is already a situation that we have to be very careful because we cannot be ready to produce in a situation in which every megawatt we produce is more we have to pay than we have ready to receive.
The position to be improved, I'm sure then that there are already possibilities because I think I understand the position of the government. They are already pressed because of these prices, but the point is simple, is to explain what I'm saying. The impact of these prices is only to the 10% of the energy already sold in Spain, and that is representing EUR 0.0012 per day per customer. That is easy to be solved, making already a basket of energy using the forward prices, which are lower than those prices we have today. Using another thing that we offer, for instance, for these small consumers, using, for instance, a fixed price for nuclear as the French are already doing or another countries are already doing. There are solutions.
We can already achieve the same result without making already this disservice on the regulatory orthodoxy, which are already generating, I understand your position, already nervousness, which has not already been in line with what has already been done up to now, which I insist, has been very orthodox and doing the things very well in the right direction in all the bill we have been passed up to now from this government.
Next question comes from Rob Pulleyn, Morgan Stanley, Harry Wyatt, Bank of America Merrill Lynch, and Elchin Mammadov for Bloomberg. Impact of the inflation in our business.
The global disruption in supply chains caused by COVID-19 has increased, as I mentioned, the raw material prices in the short-term. My feeling is that is going to be correct progressively. I said we have not expect significant things in 2021 and 2022 in our structure. I said already by 2025, the numbers we are making with today's situation is just 4% in our investment plan. Which I think is something which is already digestible. I think you know most of our equipment is purchased globally. We have already advanced orders, as I mentioned, for EUR 18 billion since the beginning of 2020, with the prices were lower. All our investment decision and the construction is made with a very high share of the CapEx cost already fixed.
I think I would like to say 80%, 90% of those one which are in construction, all these already fixed. As well, major equipment contracts have some sort of price indexation with generally hedged. I would like to say one project which I think is the one thing in my mind which already can be affected, which is committed to be already in operation in 2025, which is Park City Wind offshore. We have the PPA signed, we have not still already fixed the site, all the purchase, all the equipment necessary, not the turbine, not the substation, not all the infrastructure. I think for now, still we have a few years before we start the construction. I think we expect that this situation improve.
I think by memory is the only one which can be already affected, but I think it's a minor part in comparison with the total investment we have to make, which I mentioned almost 80%, 90% are fully hedged and fully covered in this moment. Also, I think if that increase in prices become structural for the future, I think that certain will be already reflected in pricing. In the same manner, it was already decreasing prices when the equipment reduced the price as well. I would like to transmit you tranquility in the sense that for now to 2025, almost all our investment is already covered with exception of this Park City, by memory, which I think that one which is already the most important. If it's structural, the prices in the future will be adjusted according with that one.
According with increase in the raw materials.
Next question comes from Alberto Gandolfi, Goldman Sachs. In light of the European Union Recovery Fund money, can you tell us what upgrades to investments do you envisage from it? What could be the D&A or net income upside from this in the period 2022-2026?
As you know, the Spanish Recovery, Transformation and Resilience Plan has been already approved by European Commission. We know the Spanish government is working on the processes to allocate these funds. I think you know that Spain is going to receive close to EUR 9 billion in the next 2 months. We are already, in this moment, responding to the request for proposal linked to our business. As I mentioned in last presentation, we have already presented several projects, I think 175 projects, I think it was 180 projects, in very different field, from floating offshore wind, green hydrogen, electric mobility, energy storage. All together can already mobilize close to EUR 30 billion and generate something like 60,000 jobs. I think I would like to stress that our business plan is not dependent at all on this project.
I think that will be something more, if we get some of those things, will be an upside in our plan. I think not one of those are already included in our business plan. I don't know how long it's going to take. I think another day it was announced something on the area of the car industry for electric vehicles. I think even in that one, it was announced the total amount they would like to allocate in that one, but they still has not already approved any other project because they have to be made under a competitive system. We don't know how is going to be the system, and we don't know much about that one. Sorry, not to be able to say more because unfortunately, it is one of the secret better maintained. I think we have not at all information.
Everybody's talking to me about it and saying, "Well, with your relation with the government, you have to know something." I don't know anything. Even in some of the projects, theoretically, you are already part of what has been announced, I think we don't know how, when, and which place it's going to be built. I'm sorry not to be able to say more because I don't know more about that.
José Javier Ruiz, Barclays, send this question. Could you update on the closing of PNM acquisitions? Will PNM have to increase the benefit to rate payers during the negotiation?
You talk about PNM?
PNM. Yeah, right.
Well, I think it's no changes from our previous conference call. I mentioned already, we have all the federal permits, which is something like 20 or 25 permits of different areas. We have already the permit of Texas, and we have already are now in talks with New Mexico. I think there are hearings expected by 20 or 22 of August. I hope that in this hearing, the thing will be clarified. We are expecting that all will be already clear. I think our expectation is in the fourth quarter to have already just to complete all this one. I think that is what I can say about PNM.
Okay. Next question comes from Manuel Palomo, Exane, and Javier Garrido, JP Morgan. I think that has been almost answered in your premium when you talk about the CO2 global draft legislation, but I'm going to read it. High power price environment in Spain. Can you elaborate on the expected impact of the current high power prices in H2 2021 and in 2022? When do you expect to start to see the benefit in your earnings, if any? Views about how the Spanish government will deal with the strong increase in power prices and how do you expect the wholesale market to evolve in the coming years with the expected increase in renewables installations?
As I mentioned, I think my feeling is that is a temporary situation. I think it's mainly due to these high commodity prices, and I think the forward prices, I think in the case of the gas, as far as I know, is due to the lack of the stocks. The companies and the countries are already filling the stock. They were already at minimum. I think something I would like to say very clearly is that we utilities or companies like ours, so we are not benefiting of these high prices. I think that is something I would like to state very strongly. I think what I mentioned before about the consumers, 90% of the LNG already not affected, is because we are already absorbing this cost. That's why, among other reason, why our retail business is being affected negatively in that one.
I think apart of that one, you know the situation we faced at the beginning of the year with Filomena, in which we had already as well, just very high prices and high demand. I think we have not hedged all this demand, and that's why we were forced to buy this one. Also in those what we are already just, we have to produce, in some cases, we are not enough, and we are forced to buy. I think we are affected negatively on that one. I think that is something I would like to stress because the high prices is not already improving our result. Today's high prices are already affecting negatively our P&L globally. I don't know, Paco, you would like to stress something more in this respect?
No, I think I have nothing more to add. That's the situation, and this is what we are suffering this year.
Next question comes from Alberto Gandolfi, Goldman Sachs, and Javier Suarez, Mediobanca, and it's a follow-up of our introduction that we make about the Cenyt case. Can you give us your read of what is going on with these court cases against Iberdrola in Spain?
Well, as Ignacio mentioned, we have been reading about this issue in the press for almost three years without having access to the dossier, because we were not part of the process. Even if we asked to be part of the process, the judge doesn't deny to be part of the process. Finally, we have access to that one. As Ignacio said, during this period, I think without having access to the dossier, we put in place all our corporate governance and control procedures, from internal audit to compliance, and even we use already independent forensic made by PricewaterhouseCoopers. As you can imagine, we have already had legal advice from national and international law firms. Also we have already got a legal opinion from Baker McKenzie. I think, Ignacio, that is on the documents.
That's right.
We presented. You can read that one. All of them, internal and external law firms, the legal opinion from Baker, all of them have reached the same conclusion. Nothing illegal or irregular was done by any member of the Board of Directors or senior management. The governance procedures are working properly. I think that is what I can say. I think that is the information we can already say. I think nothing illegal, irregular was done by no one member of the board of directors, senior management, and the governance procedure has already worked properly. I can tell you, we have already had something like 40 meetings of the committees, the Boards, and we have already analyzed and talked about that one without having the access. When we have access to the dossier, no new findings were there we have not really properly analyzed. That's it.
On page 21 of the presentation, you can find this document legal opinion from Baker McKenzie. Next question comes from Elchin Mammadov, Bloomberg. Output and prices hedged in the coming years.
Paco?
Okay. Thank you, Chairman. For 2021, we have 100% of estimated price-driven output already hedged at around EUR 75 per MWh, let's say. For 2022, we have three-quarter of the year around 74% of estimated price-driven already hedged at above EUR 80 per MWh. This is in Spain. In the U.K., we have almost 100% of the two years already sold or closed or hedged at similar prices in pounds.
Next question comes from Jorge Guimarães, JB Capital. Is it possible to clarify the impact of hydro canon on recovery at EBITDA and net income? At EBITDA was EUR 265 million and net income EUR 245 million. Is the difference just coming from taxes, or is also something included in financial results?
Pepe?
Okay.
Let me say what we have is EUR 265 million gross at the EBITDA level, +EUR 62 million gross at financial expenses. In gross terms, it's EUR 327 million divided, EUR 265 million at EBITDA and EUR 62 million in financial expenses. If you take away the taxes, this EUR 327 million becomes EUR 245 million, which is what we stated to compare the impact with the EUR 463 million of the U.K. taxes that is also net. That is how you reach the EUR 245 million.
Stefano Bezzato and Jorge Guimarães. Stefano Bezzato, Credit Suisse, and Jorge Guimarães, JB Capital. Can you elaborate on the drivers for the very weak performance of generation and supply in Q2 in Spain? How much of this is driven by margins being transferred to the renewable business?
Paco.
Yes. In Spain, the key question has been, let's say two halves. The first half is the transfer or the contract between renewables and generation and supply business. This accounts for EUR 200 million. The other half, the other EUR 200 million, comes from two main issues. One, let's say 15% of this, about 30% is technical constraints, is due to the fact of the higher payments we have made as a supplier because we have had generation that has been forced by the grid in Spain for the network constraint. The rest is about EUR 170, comes from the fact of having sold the energy last year for the future, I mean for this year, within an environment of very low prices.
That's the typical fact that when you have to sell the future, and the environmental or the prices of the moment where you are, the spot price and even the forward prices are very low, you are not able to pass all the margins and all the cost, well, all cost for sure, but not all the margins you want. That's the other EUR 170. That's account for EUR 200 + EUR 200. 200 has no effect because appear on renewables and the other EUR 200 are the one that I mentioned.
May we ask, sorry, Rob Pulleyn, Morgan Stanley. Yes, you can, Rob. What the COVID impacts are in H1 and why they are still 2/3 of the level in H1 2020 last year, rather than having fallen more?
Unfortunately, we are saying that everything is moving back to normality, but I think the first time that our people and the people are able to move freely in some countries, like Britain, is very recent. Same in the United States., I think, in which still there are certain restrictions of the people to go to the office, et cetera. I think the main consequences of the COVID, apart from the demand in the past, already is the bad debt in retail. I think the bad debt is already. I think if the people cannot really go to try to recover that one, or the people cannot go to the bank for paying, et cetera. I think we are already facing this problem. The things are recovering.
I think the amount is less than it was, but still it's already time for being full normality, mainly for diminishing this bad debt because we are collecting as much as to come to normality in collection. There are countries which are going better, which is the case of Brazil, but I think still it's not full normality on that one.
Next question comes from Alberto Gandolfi, Goldman Sachs. Would you consider a spin of the offshore business to fund your 22 GW pipeline?
Well, I think that question, it was passed to me, I think, in the last presentation. As I mentioned that time, we are always studying all potential measures to optimize our balance sheet and our financial profile. I think certain areas attractive, this one, so we are already looking with very detailed on that one. Why? I think in offshore, we have 1,300 MW in operation. They're contributing already EUR 600 million EBITDA. We have more than 2,600 MW under construction. As I mentioned, there are at least 4,000 MW offshore, which can be already in operation by 2030, with almost EUR 30 billion investment. No decision is taken, but we are analyzing with very detail, and I think if we take any decision, we will inform you about that one.
Certainly it's an area that we are already analyzing, and we are in an area where we see that we have some hidden values inside, and in due time, we will see how can be already being materialized. Nothing is decided yet.
Reasons to enter in the Vietnamese market? Could you please share your views on the updated renewables target in Japan?
I used to say that the pandemic, during this time of confinement, even if many people has been unable to travel, but I think the new technology has already facilitate to them to do a lot of deals and transaction. I think our expansion in Asia has already been almost made thanks to the pandemic period. I think we went to Australia, we went to Japan, we went to Taiwan. We have reached agreement with Korea. We are now looking for this in Vietnam. What is we are seeing there? I think it's a country where they are already giving potential growth in this one. I think the agreement with this is a portfolio of almost 550 MW-600 MW. There are five wind farms and 50 MW of floating photovoltaic project. I think we expect to start operation between 2022 and 2024.
You have to know, Vietnam has an objective of 20 GW renewable by 2030. The regulation there is quite attractive, which I think that can already provide us this possibility of being in this country. Same thing in terms of Japan. In Japan, I think it's a target capacity almost 45,000 MW already offshore, which I think we would like to be part of these possibilities. Always are there the same one. We would like to go to countries with a good potential in which we can use our skill and knowledge and capabilities. I think certain we have already developed certain knowledge and skill and capabilities in offshore, and we would like to come to those countries which have already provide legal certainty and with attractive regulatory environment, and using our skill and our experience.
That is what we've been doing, I think, during this time with this Asian expansion already.
Question 15, Harry Wildwood, Bank of America Merrill Lynch, and Javier Suarez, Mediobanca. Can you elaborate in your view of the EC Fit for 55 proposal and the implication for the group?
Well, I think, we've been during 20 years already moving in one direction, which was not precisely the direction that most of government and competitors and business leaders were already as supportive. They were already as against almost everybody in this direction. For us, seeing this sort of legal regulatory framework, I think we see as a great opportunity because that can really generate wealth, employment, and investment, and we can really use all our skills and accelerate whatever we are been developing for many, many years. Certain, I think now is a consensus, global political consensus, to promote this decarbonization. My concern on that one, and I think that is something which is well reflected, a part of the objectives in terms of renewables, in terms of energy efficiency, in terms of the new ETS sectors, as well.
I think it's the fact that they're trying to make a full consistency between policies and regulatory framework and fiscal framework as well. The fact that they're saying that in terms of taxation, any modification in taxation has to be approved by the 27, I think is good news. I think we can avoid these situations, surprises that we've been already supporting in our country for so many years. Whatever thing to transform Europe in a real energy union, I think that should be great, because we can already move across Europe with much more facility than we are already today.
We have already, with such differences between countries in taxation, with such differences in the permitting process, with such differences between what the politicians said that regulation facilitate, I think all those things, as much as can be unified, standardized, and facilitate the things, as much better should be for achieving the net zero and achieving the target of the decarbonization. If that does not happen, it should be impossible. I think I mentioned before that the last International Energy Agency report is saying that the carbon emission in 2021 continues increasing, and the carbon emission in 2022, if nothing changes, is going to continue to increase. When we move fast, if we try to unify all our effort to apply the principle who pollutes pays, or we cannot achieve that one. With measures which are already just disincentivizing those which are already polluting.
For already trying to maintain those ones which are polluting in a better situation, we will not achieve the target. I think that is my point. I think it is an ambitious plan, but it is reflecting the demand, social demand, for trying to diminish that one. You see the situation of floods in Germany. I think all those are depending on that one. Another day, one of our board members was mentioning that in Brasília, they had never seen already a storm of, I don't know how to say, granizo. I don't know. A kind of snow in Brasília. It is ice already, yes, raining ice. It has never happened, but it has already happened in Brasília, and it was affecting already the service during this time. I think that is why I think it is a good news.
Hail. Hail, sorry. Hail is the right word. Brasilia with hail. It's incredible.
Next question comes from Javier Garrido, JP Morgan. Iberdrola has outlined the sale of 780 MW of renewable developments. What gains would you expect of the sale, and when should they be booked in your account?
I don't know the detail, but I think we are always looking opportunities to maximize the value of the pipeline. I imagine that one should be something which probably they are not really been interesting for them to build, and therefore they find out somebody which are already ready to pay something for development, and they see that it is better to obtain a better return selling the development instead of building and operating that one. I don't know the detail, but I think, Ignacio, you can already say. I think it's something that we look continually the opportunities of that one. I don't imagine it is much. I think you can already inform me that one, you obtain the information. I don't know what it is.
Last question comes from Jorge Guimarães, JB Capital. "How is the Tâmega hydro project in Portugal evolving? When should we expect it to be totally online and producing? 2021 for the first stage and 2023 for the final one?
I think as far as I know, it's going well. You know we've been not allowed to travel to Portugal. I plan to go this during my summer holidays. I'm already just very close to Portugal, and I will try to use one of my holiday days for visiting that one. As far as I know, the thing is going very well. I think the information I got is that one of the power plant Gouvães, this year, is going to be already just in operation. It's already 100 MW, 120 MW. Another one, Daivões, I think probably as well can be already by the year-end. It's another 100 MW, 120 MW. The thing which still we are ready, the major part of the project is going to be by the year-end already in operation.
What we call Alto Tâmega, which is the big dam, which is already at the north of another two, I think they are already now in construction, and that the plan was to be completed by 2024, I think. I think the two first large group, which is what is the storage, I think they will be in operation by the year-end this year. I can already in the next presentation of results, I can already give you more detail because I'm going to visit that one during the summer.
Okay. Just please let me now give the floor to Mr. Galán to conclude the event.
Thank you very much for taking part in this conference call. If you have any doubt, as always, our investor relations team, we are available for any additional information you may require. If we have not already had the opportunity to meet you before, have a good holiday for those we are going to take, and we'll be in touch in the next presentation or result in October. Thank you and good summer for everybody. Thank you.