Repsol will invest $550 million in Italy’s first renewable energy projects

LONDON (Reuters) – Spanish oil company Repsol will develop more than 1.7 gigawatts of renewable energy projects in Italy at a cost of about 500 million euros ($550 million), the company’s head of renewables told Reuters.

Some European oil and gas companies such as Shell and BP have expressed caution about the shift to renewables in recent months amid record profits amid record oil and gas prices, but Joao Costeira, executive director of low-carbon technology at Repsol, said Repsol plans to stick to its renewable targets.

“We should never confuse market discontinuities or breakdowns – no matter how important and dramatic, as in the case of the impact of the war in Ukraine – with long-term trends,” he said in an interview.

Repsol aims to increase its renewable capacity globally to 6 GW by 2025 and 20 GW by 2030, up from around 2 GW today.

“We feel comfortable with the goals we have set, both in terms of volume and profitability,” Costeira said.

Over the past few years, returns on renewable energy projects have come under pressure due to rising raw material and component costs and supply chain issues.

However, Costeira said Repsol’s target of a double-digit return on investment in renewables is still achievable.

“We have also observed an increase in energy prices, we have observed an increase in the prices of green certificates and we are already seeing a stabilization of the costs of some components,” he said.

“We think this may be a transition year, but in the medium term we feel very satisfied with our target,” he said.

Repsol said it expects to spend about a quarter of its capital expenditure on renewable energy projects this year.

The Italian portfolio will include 943 megawatts (MW) of wind power and 825 MW of solar power, with construction of the first projects starting later this year and early next year, with the majority of the portfolio operational from 2025.

The majority of Repsol’s existing renewable energy portfolio is located in Spain, with some capacity also located in the United States, Chile and Portugal.

($1 = 0.9084 euros)

(Reporting by Susanna Twidale; Editing by Mark Potter)