IBERDROLA has its roots in Spain’s industrialisation in the early 20th century, when Hidroeléctrica Ibérica was formed. But with the integration of ScottishPower and Energy East, and the transformation of IBERDROLA into a major multinational group, this heritage has widened and now extends back into the nineteenth century on the other side of the Atlantic.
Without imagining what lay ahead, in 1840 a group of American entrepreneurs formed the Hartford City Light Company, setting in train the creation of Energy East on the eastern seaboard of the US, which would later become IBERDROLA USA.
Meanwhile, thousands of kilometres away in Spain, a similar process was underway. In 1901 in Bilbao, a group of entrepreneurs headed by the engineer Juan de Urrutia established Hidroeléctrica Ibérica at a time of great demand for energy and driven by an unwavering commitment to society.
The years of coal and steam were soon over and Europe became immersed in a process of change that resulted in the Second Industrial Revolution. At the time, hydraulic resources that could be transformed into energy sources took centre stage; for Spain they represented the opportunity to join the select group of the most advanced nations. This resulted in the construction of the Quintana Martínez Galíndez hydro power plant on the Ebro river, supplying power to Bilbao.
Initiatives to supply electricity to homes began to expand across Spain and in 1907 Hidroeléctrica Ibérica shareholders created Hidroeléctrica Española to supply Madrid and Valencia. A decade later José Orbegozo and a group of Basque entrepreneurs started the Saltos del Duero hydroelectric system, inaugurating in 1935 the country's first hydroelectric facility: the Ricobayo power plant.
The First World War forced the industry to seek new sources of energy and to install large distribution networks. Amid huge instability, the US power companies began to consolidate with a view to securing the necessary solidity to withstand the economic and financial uncertainty. However, no one foresaw the magnitude of the stock market crash of 1929, which brought these emerging groups to the verge of ruin. In Spain, which had experienced a period of economic growth at the start of the 20th century, the industry suffered a severe setback in 1936 whose impact would be felt for the following two decades: the Civil War abruptly halted development, destroyed facilities and made maintaining the little equipment that remained extremely difficult.
Spain suffered international isolation in the 1940s and experienced extreme difficulty in acquiring technology and materials, prices of which were soaring. It was against this backdrop that Hidroeléctrica Ibérica and Saltos del Duero joined forces to form Iberduero.
After the Second World War (1939-1945) the number of distribution lines in the US grew sharply, with companies such as New York State Electric & Gas, Central Maine Power, Rochester Gas & Electric and Southern Connecticut Gas perfecting their networks and customer service.
To satisfy burgeoning demand major hydroelectric and thermal projects were initiated in Spain which are still considered supreme feats of engineering. These include the Aldeadávila dam in Salamanca with its huge arch and unique network of tunnels. Another notable technological achievement in the mid 20th century was the Alcántara hydroelectric plant, with its hollow dam (which meant considerably fewer materials were used in its construction).
It was with the same spirit of endeavour demonstrated by US and Spanish entrepreneurs that the South of Scotland Electricity Board came into being in 1955, paving the way for the creation of ScottishPower forty years later. In 1959 the South of Scotland Electricity Board embarked on one of the most ambitious engineering projects in the sector: the Cruachan hydroelectric plant.
In the 1960s the spectacular development of nuclear energy marked another step forward for the companies that would eventually comprise the IBERDROLA Group. In the US the RE Ginna plant was started up and the amount of manufactured gas distributed was steadily reduced, replaced by natural gas. In Spain the Santa María de Garoña nuclear plant was built and came on stream in 1971.
The 1970s were marked by the search for new sources of energy, consolidation and the challenges posed by the huge surge in demand and output. In the US companies expanded while subsidiaries were formed to serve the largest possible number of customers. Like so many times before, this period was again marked by an emergency: the oil crisis. The electricity industry in fact played a pivotal role in the recovery and entered an irreversible privatisation process which culminated in the complete deregulation of the industry.
And, finally, we reach the 90s, a decade which got underway with the foundation of ScottishPower (1990). This company combines generation, distribution and retail and its structure became the template for the rest of the UK. Two years later Hidroeléctrica Española and Iberduero joined forces to become Spain’s largest private electricity utility: IBERDROLA. The competitive environment in which the company came into being ensured that it went on to play a key role both in Spain and internationally.
In the final years of the 20th century the major electric utilities began operating as true multinationals. IBERDROLA was no exception and, under the stewardship of Iñigo de Oriol, rapidly expanded its presence in Latin America.
While ScottishPower and IBERDROLA were formed in Europe, in 1998 Energy East Corporation came into being in the US following New York State Electric & Gas’s acquisition of Central Maine Power, Southern Connecticut Gas Company, Connecticut Natural Gas Company, Berkshire Gas Company and RGS Energy Group (the parent of Rochester Gas & Electric).
From 2001, following the arrival of Ignacio Galán, IBERDROLA underwent a wide-ranging transformation. With growth driven by its core business, the Company bolstered its position as a global leader in the development of clean energies, combining growth with increased operating efficiency and a strong and stable financial position. As a result, IBERDROLA enjoyed profitable growth and acted with foresight in the first decade of the current century. In 2001, the Company decided to focus on the energy sector, investing in generation and networks in Spain, Mexico and Brazil. It also decided to invest heavily in wind energy, which was about to take wing thanks to the impetus provided by the Kyoto Protocol. As a result, IBERDROLA doubled in size and earnings in just five years.
In 2007, the Company embarked on a major international expansion process, increasing its presence in the UK and United States via the integration of ScottishPower and Energy East (now IBERDROLA USA). This marked a milestone in the history of the company, which has gone from being a local leader to a major global player. Its growth and diversification have enabled the company to become one of the world's top utilities with a significant presence in the most attractive markets.
In pursuit of its aims IBERDROLA has embarked on a fresh phase of growth in 2011, mainly in the international sphere, and has signalled its intentions with the purchase of the Brazilian company Elektro for US$2,400 million.
The combination of endeavour, talent, experience and competitiveness from this integration has resulted in a group active in over 40 countries with around 33,000 employees and some 30 million customers. With numerous challenges on the horizon and a large project pipeline, IBERDROLA is set to continue making history.