Ignitis Group is setting more ambitious Green Generation and emissions targets

Renewables-focused integrated utility Ignitis Group has announced in its strategy update and Strategic plan 2023–2026 that it is increasing its ambitions related to Green Generation development and emissions reduction.

The updated strategy was published on Tuesday. It focuses on delivering 4–5 GW of installed green and flexible capacities by 2030, mostly focusing on offshore wind, onshore hybrid, P2X and storage technologies. Up until now our target was 4 GW. Additionally, Ignitis Group now aims to reach net zero by 2040–2050. This goal was set for 2050 in the previous strategy.

“Our updated strategy describes the energy sector as an ecosystem and our commitment to maximise sustainable value. Thus, we are updating our purpose, which is creating a 100% green and secure energy ecosystem for current and future generations, says Darius Maikštėnas, CEO of Ignitis Group.

According to the Strategic plan 2023–2026, the Group will invest EUR 2.2–2.8 billion in order to double the Green Generation installed capacity to 2.2–2.4 GW by 2026 compared to 1.2 GW in 2022. We are planning to direct around 55% of the investments towards the development of green and flexible capacities, and around 45% towards the expansion of a resilient and efficient electricity distribution network.

Ignitis Group is planning to continue its commitment to maintain the credit rating of ‘BBB’ and above over the 2023–2026 period. We are expecting the Group’s adjusted EBITDA in 2026 to be within the range of EUR 470–550 million compared to EUR 332.7 million in 2021 and EUR 469.3 million in 2022.

The strategy reiterates our commitment of 3% annual dividend growth, representing a dividend yield over 2023–2026 within the range of 6.3–6.9%.

Ignitis Group is also committing to maximise sustainable value by directing its strategic focus towards decarbonisation, OHS, employee experience, diversity and creating sustainable. Over 85–90% of investments over the period of 2023–2026 will be sustainable and Taxonomy aligned. The sustainable share of our adjusted EBITDA in 2026 will reach at least 75.0%. We are committed to maintaining environmental, social and corporate governance (ESG) leadership.  Our strategy reflects our focus on the home market – the Baltic states, Poland and Finland. We also explore new opportunities in other EU Member States on the energy transition path.

You can find the updated strategy and strategic plan of Ignitis Group here: https://ignitisgrupe.lt/en/strategy

Strong Q1 2023 results

The adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of Ignitis Group in Q1 2023 amounted to EUR 149.9 million and was 34.6% higher compared to Q1 2022. The growth was mainly driven by the Reserve Capacities segment, where we utilised an option to earn additional return in the market by fixing a positive forward clean spark spread. The result of the Customers & Solutions segment, which turned positive due to better B2B performance, also contributed to the overall result. However, B2C activities continued to be loss-making (EUR -16.4 million). The Green Generation segment remained the largest contributor to the adjusted EBITDA of Ignitis Group (46.7%) despite the lower power prices.

Compared to Q1 2022, Ignitis Group's investments almost doubled to EUR 120.8 million with 76.32% directed towards Lithuania. The growth was primarily driven by Investments in new Green Generation segment’s projects and higher investments in the Networks segment.