Iberdrola and Ørsted posted strong financial results for Q1 2020 despite the COVID-19 pandemic and have maintained that their 2020 outlook remains unchanged. Renewables offer sustainable growth and is better positioned to tackle the economic impacts of the COVID-19 pandemic, says GlobalData, a leading data and analytics company.

Somik Das, Power Analyst at GlobalData, comments: “Ørsted reported an operating profit of DKK6.8bn ($1bn), witnessing a growth of 33% in Q1 2020 over Q1 2019. Simultaneously, Iberdrola recorded an increase in net profit by 5.3% over Q1 2019, owing to the growth in its renewable business. It is evident that these companies continued following their initial 2020 financial guidance despite COVID-19. Maintaining liquidity and carrying out investments have been the key factors ensuring their strong performanceduring the pandemic.”

Both Ørsted and Iberdrola implemented hedging strategies to mitigate the impact of the COVID-19 pandemic. The companies are maintaining liquidity to manage the impact of deferred payments and to keep their operational and construction activities on schedule.

Das adds: “Renewable producers have managed to weather the COVID-19 pandemic crisis better than producers from fossil fuels such as coal because in most electricity systems grid operators are obliged to purchase clean energy first. This means that the declining power demand and negative electricity prices have hit fossil fuel-based generation the most. In developed markets, the ongoing drop in electricity demand combined with the drop in gas prices has led to several coal-based generation plants closing down. Owing to the lack of demand, fossil fuel-focused businesses could not stimulate investments when compared to the clean energy-focused companies.”