Iberdrola's Avangrid Plans $20B Investment in U.S. Power Grid by 2030

Iberdrola SA is gearing up for a significant expansion in the United States, with its subsidiary Avangrid Inc. announcing a massive $20 billion investment in the country's power infrastructure by the year 2030. This considerable financial commitment aims to enhance and expand the existing power grid, potentially opening doors for new energy generation initiatives.

The timing of this investment aligns with the rising energy demand in the U.S., driven by the rapid growth of manufacturing and data centers. According to Avangrid's statement, energy consumption by data centers has tripled over the last ten years and is anticipated to double or even triple again by 2028. Lawrence Berkeley National Laboratory, in a report dated December 20, 2024, projects that data centers might consume between 6.7% and 12% of the nation’s power by that year.

Specifically, data center energy consumption has escalated from 58 terawatt-hours (tWh) in 2014 to 176 tWh in 2023, with expectations for it to soar to between 325 and 580 tWh by 2028. This scenario underscores the urgent need for grid modernization.

The announcement from Avangrid was made during CERAWeek in Houston, Texas, a premier energy conference where Iberdrola's executive chair, Ignacio Galán, and Avangrid's CEO, Pedro Azagra, engaged with top U.S. policymakers. Discussions with Energy Secretary Chris Wright and Interior Secretary Doug Bergum highlighted the critical investment needed in energy infrastructure to meet growing demands, positioning the U.S. as a prime investment hub for Iberdrola and Avangrid's ambitious grid upgrade plans.

Avangrid boasts a $50 billion portfolio covering 23 states, employing over 8,000 individuals. It serves over 3.3 million electricity and gas customers in the Northeast and maintains 10.5 gigawatts of generation capacity, enough to power more than three million homes.

In recent developments, Avangrid secured two offshore wind lease areas in the Gulf of Maine. These areas—OCS-A 0564 and OCS-A 0568—span 98,565 acres and 124,897 acres, respectively, and could potentially deliver 3 Gigawatts of clean power, aiding the energy needs of the New England region and contributing to the U.S.'s 30 GW offshore wind goal.

Despite these advancements, the recent policy shift under President Donald Trump has introduced some uncertainty. The administration has mandated a halt on new or renewed wind project approvals pending a comprehensive review of federal wind leasing and permitting practices, as outlined in a presidential memorandum on January 20, 2025.

Last year, Iberdrola solidified its investment strategy by taking full control of Avangrid, purchasing the remaining 18.4% of shares it did not previously own. As a result, Avangrid has delisted from the New York Stock Exchange and continues operations as a private entity headquartered in Connecticut.

The merger is expected to streamline Iberdrola's investment efforts in the U.S., enabling more effective participation in infrastructure projects related to grid and renewable energy. These initiatives are projected to foster robust local economic benefits and create numerous direct and indirect jobs, ultimately enhancing the reliability and resilience of the U.S. power grid in response to escalating utility and data center demand.