Climate Energy

Iberdrola has won a contract to build a substation in Brazil

The Agência Nacional de Energia Elétrica (ANEEL) has granted Iberdrola a contract for the building and operation of the 500kV Estreito substation situated in Brazil. The deal was won by the Spanish developer’s affiliate Neoenergia in a vigorous transmission auction conducted at the S. Paulo stock exchange, and it comprises a €103 million investment.

In Ibiraci, Minas Gerais, the Estreito project consists of a 500kV substation featuring three -300 or +300 Mvar synchronous compensators. In critical situations of large energy imports by Southeast region, the plant will provide improved reliability and operational flexibility, as well as ensure the integrity of So Paulo’s medium and high voltage system.

According to Iberdrola, the maximum timeframe for commercial operation set by ANEEL, Brazil’s power system regulator, is 48 months, which must be met in March of the year 2026, though this limit is expected to be pushed forward. The contract was placed in an international tender by ANEEL with the goal of encouraging investment to upgrade and extend the nation’s transmission networks, with the award values that were on average 66 percent cheaper than market expectations.

According to Iberdrola, the awarded investment will result in a considerable rise in revenue generation and will significantly extend the company’s operations in the Southeast. The developer also stated that the asset offers synergies with other Iberdrola projects during construction, which were factored into the company’s extensive research for the bid.

During the development of the substation, approximately 1700 direct jobs and countless indirect jobs are planned to be produced. In Brazil, Neoenergia has over 3.7GW of the renewable energy in working and serves 15 million clients with electricity.

Iberdrola claims that its new investment plan will increase the worth of group’s regulated assets to about €60 billion by 2030. A portion of its Electricity for All initiative, the developer has set a 2030 goal of providing electricity to over 16 million people who now do not have it.

Dedicated to Brazil

Iberdrola runs a 540,417-kilometer distribution network for a population of about 34 million individuals through its subsidiary Neoenergia. Neoenergia additionally has 3,730.3 megawatts (MW) of the renewable energy in working and serves 15.7 million clients with power.


The company’s new transmission projects, which will be commissioned in the next years, will complement the group’s efficiency plan and generate a stable return for its shareholders, allowing the company to be focused on its core business while also generating more predictable cash flow. Furthermore, the company retains its track record of investment and expansion in the country.

The emissions reduction of the economy plus digital innovation necessitate new electricity consumption models, which necessitate distribution networks. Smart grids enable a new integrated power system that adapts to customer needs while ensuring the inclusion of more renewables, which is a critical pillar for the energy revolution.

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