Neoen sees bigger appetite for RE as Europe shuns Russian power

French renewable power producer Neoen should benefit from more demand for green energy in Finland, Italy and France as Europe looks to become independent from Russian gas, the company’s chief executive said on Monday.

The European Union has announced plans to expand its clean energy capacities as it looks to cut dependency on Russian gas by two-thirds this year, following Russia’s invasion of Ukraine and piling Western sanctions.

“There will be a need to add to renewable energy quite quickly and in large volumes,” Chief Executive Xavier Barbaro said in a call with journalists.

Neoen, which specialises in solar farms, onshore wind and energy storage, announced an 11% increase in core profit at 300 million euros ($329 million), landing within its 295-310 million euro target range.

It expects to grow its 2022 EBITDA some 20-25% this year to 360-375 million euros, and confirmed its guidance for annual double-digit growth until 2025. The guidance is in line with Neoen’s forecast prior to Russia’s invasion.

Barbaro said Neoen was particularly well-placed to benefit from more demand in Finland as Russia’s smaller neighbour looks to wean itself off the country’s electricity, as well as Italy – which imports a large part of its gas from Russia.

In its home country, Barbaro said the group had already been advised the crisis in Ukraine would impact the conclusions of a report on an ongoing project there.

“I think projects will be better accepted and deployed more rapidly,” said Barbaro. “There is a real willpower to quickly increase energy sovereignty in France and elsewhere.”

Though the impact should be “extremely strong” in Europe, Barbaro predicted a smaller impact, if any, in Latin American and in Australia, where Neoen produces the bulk of its electricity.

He said the group was not materially affected by higher metal prices resulting from sanctions on resource-rich Russia, and noted that it was not present in either Russia or Ukraine.