EDP Renewables boss upbeat about US power ramp-up and battery boom

EDP Renewables has shrugged off a dip in profits by promising a new spate of asset rotations and presenting analysts with a surprisingly bullish outlook for its US business.

Net profit at the renewables arm of Portuguese utility EDP slipped to €93m ($106m) in the first half of 2025, down 56% on the same period last year, even though the company achieved a 12% increase in power generation compared with last year.

The downturn was partly due to lower electricity prices in Europe and also attributed to lower capital gains from the sale of mature wind and solar assets.

But CEO Miguel Stilwell d'Andrade told analysts on an earnings call to expect an upturn in asset rotation transactions “over the next days and months”.

One such transaction materialised almost immediately, with the signing of an agreement to sell a 150MW onshore wind portfolio in Greece to a joint venture between Italy’s Enel and Macquarie Asset Management.

EDPR said the Greek transaction had secured €700m of its €2bn asset rotation proceeds target for 2025.

“We are on track to deliver [the 2GW of new capacity promised this year] and the asset rotation plan is proceeding as expected,” said Stilwell d'Andrade.

He referred to two more signed agreements and three additional deals that are currently under binding bids.

“It's important to have demand, and then it's important to have good prices, and I think we're seeing both of those processes with robust number of parties participating in the non-binding and binding offers, so I think that's holding up quite well in 2025,” he stated.

EDPR is also in the final stages of negotiations to acquire assets for 2026 capacity addition target of 1.5GW. The company is promising to deliver returns of 270 basis points above theweighted average coupon (WAC) rate from any fresh assets.

Undaunted by Trump

Stilwell d'Andrade, who is also head of parent company EDP, was upbeat about EDPR’s underlying profits in a six-month period when the company’s average selling price was down 9%.

He noted that lower prices in Europe and South America, were partially offset by stronger pricing in North America and told analysts that the company remains bullish about the outlook for renewables in the US.

This was partly due to a forecasted 70% increase in demand through 2050 but also to "increased clarity" following passage into law of President Trump's One Big Beautiful Bill, Stilwell d'Andrade said, even though it ultimately curtails incentives for renewables projects.

“At the end of all of this process, we continue to see strong fundamentals to capitalise on the opportunities ahead and we continue to believe strongly that renewables remains the most competitive source of power.

It's the only technology that is really ready to connect at scale today, certainly over the next couple of years, to meet this (US) demand,” he stated.

This demand is coming through in pricing dynamics for near-term connection projects and also for longer-term contracts, including "increasing appetite for 20-year contracts", the EDPR boss said.

EDPR still expects to see some additional clarification on the tax credit rules in relation to what constitutes the start of construction on relevant projects.

But Stilwell d'Andrade said he was satisfied with the visibility on tax credits through to December 2028, meaning about 1.5GW of solar and wind capacity contracted under the old legislation can be placed in service by then “without further start of construction or safe harbour limitations”.

“Post-2028, we are currently working to secure additional safe harbor capacity potentially all the way through to 2030,” he added.

On battery storage, he said the situation was better with "no need for safe harbouring and tax credits are protected well through 2030 and beyond”.

The EDPR boss said he expects battery storage to play a significant role in its growth in the US with "very good, typically double-digit returns".

European battery boom?

While continental Europe is yet to experience a push for batteries on the scale of the US, Stilwell d'Andrade said EDPR is observing the “unprecedented daily price spreads” caused by the rising penetration of renewable energy.

Several European countries have seen daytime solar sometimes driving prices sometimes to zero or even into the negative, followed by a frequent jump in the evening hours driven typically by the marginal price of gas.

“This is a great situation for assets with flexible capabilities and a strong signal for the energy arbitrage business case. We've been holding back from investments on batteries over the last couple of years, but we believe that over the next months and years, there will be an increased focus on promoting batteries in several countries,” he stated.

He referred to new grid scale battery auction opportunities coming up in Poland and Spain but, on the latter, noted that the two Iberian nations need to put a regulatory framework in place.

"There is not a lot of investment going into batteries in either Spain nor Portugal because of a lack of regulation. We've been advocating for quite a long time now that there should be capacity payments which would remunerate batteries for fast frequency response, for example, or other types of ancillary services."