Gold prices steady ahead of Fed decision; weekly weakness noted
Introduction & Market Context
EDP Renewables (EDPR) reported its first quarter 2025 results on May 8, showing solid operational growth despite pricing challenges in key markets. The company’s stock responded positively with a modest 0.25% increase following the announcement, as investors digested a mixed but generally encouraging performance report. With a current share price of €8.08, EDPR continues to trade significantly below its 52-week high of €16.30, reflecting ongoing challenges in the renewable energy sector amid high interest rates and supply chain pressures.
Quarterly Performance Highlights
EDPR delivered a 5% year-over-year increase in recurring EBITDA to €477 million in Q1 2025, driven primarily by increased generation capacity and operational improvements. The company’s installed capacity reached 19.3 GW, representing a robust 17% increase compared to the same period last year.
As shown in the following comprehensive performance overview:
Electricity generation grew by 10% year-over-year to 10.9 TWh, benefiting from both expanded capacity and stronger renewable resources, particularly in the US market where resource recovery was notable. However, this volume growth was partially offset by a 5% decline in average selling prices to €57/MWh, primarily due to lower wholesale prices in European markets.
The company’s operational asset base remains well-diversified geographically and technologically, with a strong focus on contracted revenues providing stability:
Electricity sales increased by 5% to €624 million, with the volume growth outweighing the price decline. Notably, recurring net profit excluding asset rotation gains showed impressive growth, increasing threefold year-over-year to €66 million, highlighting the strength of the underlying business despite lower asset rotation activity in the quarter.
The following chart illustrates the key drivers behind EDPR’s recurring EBITDA performance:
Operational Efficiency and Cost Management
EDPR demonstrated significant progress in operational efficiency during Q1 2025, with adjusted core OPEX per average MW in operation decreasing by 9% year-over-year to €41,900. This improvement reflects the company’s focus on cost control initiatives, including a 4% reduction in headcount through internal reorganization.
The efficiency gains are clearly visible in the following metrics:
The ratio of core OPEX to revenues improved by 4 percentage points to 25.1%, further enhancing profitability margins. These efficiency measures are particularly important as the company navigates a challenging market environment with high interest rates and competitive pressures.
Strategic Initiatives
EDPR continues to execute on its growth strategy, with approximately 2 GW of new capacity additions planned for 2025. The company emphasized that all these projects are already under construction and progressing on time and on budget, with about 70% scheduled for commissioning in the fourth quarter.
The geographical breakdown of these planned additions shows a continued focus on core markets:
The asset rotation program remains a key component of EDPR’s financing strategy, with the company reporting it is on track to achieve expected proceeds of approximately €2 billion in 2025. Currently, €0.2 billion in transactions have been signed, with an additional €0.8 billion in advanced stages expected to be signed before summer, and €1.0 billion in mid-stage processes targeted for the second half of the year.
The following chart shows the current status of the asset rotation program:
In the US market, EDPR highlighted its strategic shift toward domestic manufactured equipment and US suppliers, implemented in 2022-2023. The company noted that import tariffs are expected to have a limited impact on its contracted capacity additions for 2025-2026, with 1.0 GW planned for 2025 and 1.3 GW for 2026.
Forward-Looking Statements
EDPR maintained its 2025 guidance, projecting recurring EBITDA of approximately €1.9 billion, including about €0.1 billion from asset rotation gains. The company expects generation to reach 41-43 TWh, up from 36.6 TWh in 2024, while the average selling price is anticipated to be around €55/MWh, slightly below the Q1 2025 level of €57/MWh due to expected lower wholesale prices in Europe.
The detailed 2025 guidance is presented below:
The company also provided clarity on its investment and financing plans for 2025, targeting gross investments of approximately €3 billion, to be funded through a combination of asset rotation proceeds (€2 billion), tax equity proceeds (€1 billion), and organic cash flow. EDPR aims to reduce its net debt to approximately €8 billion by the end of 2025, down from €8.9 billion at the end of Q1.
This financial roadmap is illustrated in the following chart:
Industry Outlook and Positioning
EDPR emphasized the critical role of renewables and storage in meeting growing electricity demand, particularly in the US and Europe. The company cited industry analyses projecting significant cumulative capacity additions in the US, reaching approximately 394 GW by 2030.
In Europe, EDPR highlighted the European Commission’s continued focus on electrification and energy independence, including plans to increase the electrification rate to 32% by 2030 and install 100 GW of renewable energy sources annually until the end of the decade.
The company positioned itself well to capitalize on these trends, emphasizing its diversified asset base across currencies, regulatory frameworks, and energy markets, which provides support for growth optionality. With over 85% of its capacity in North America and the European Union, and approximately 70% of generation contracted long-term, EDPR maintains a relatively low-risk profile while pursuing growth opportunities.
In closing remarks, CEO Miguel Stroud Andrade emphasized that "renewables together with storage remain absolutely critical technologies to satisfy electricity demand," and expressed confidence in the US market, noting "strong demand for power and that renewables is one of the chief technologies that can actually supply that power."
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.