Corporación Acciona Energías Renovables, S.A. (ANE) Earnings Call Transcript & Summary

Welcome to the Acciona Energias First Half Results for the year '22. With me today, on my right, Rafael Mateo, CEO; and on my left, Arantza Ezpeleta, Chief Financial and Sustainability Officer. And in the floor to answer your questions, should be necessary, the core of our management team. Let me begin by looking out the window to note that what only a few years back we spoke about as a hypothesis is now unfortunately becoming the norm. The weather, the summer is probably no longer a freak event or a circumstance that will happen in the future. What was for years accurately predicted by the scientific consensus has now become a recurrent reality. It is likely that we are tilting towards the more pessimistic scenarios of climatic consequences of CO2 concentration and not only will extreme climatic events become the norm, but they will also no longer mostly affect the developing world. It is now us the rich world, those who produce about 75% of global greenhouse gas emissions, the ones we are suffering directly and meaningfully the consequences of climate change. Hopefully, this will make us react at the pace and with the convention required because there is an urgent need for commitments to materialize, policies to be activated and above all, huge investments to be made. And it is precisely high prices for energy and emission rights, the signals that should accelerate the deployment of that massive amount of capital investment essential for decarbonization. Then the challenge of energy independence at this conundrum, only between January and May 2022, the generation of solar and wind power may have saved Europe fossil fuel inputs in the order of USD 50 billion at least. There shouldn't be any question that renewables are no longer rich countries' environmental luxury, but the only feasible, timely and technologically available option. Ladies and gentlemen, Acciona is undoubtedly in the right industry at the right time, but it is indeed not by coincidence. We have been investing heavily for over 20 years and we need to double our efforts for the next 20. And with us, a massive amount of private capital must be attracted into this industry to have at least a minimum chance of avoiding the approaching climatic chaos. Unfortunately, however, we are suffering a myriad of regulatory measures that undermine investors' confidence by tempering with 2 of our most important investment rules. One, the game rule book shouldn't change after the match has started or once the long-term investment has been made, and two, effectively capping the upside of an investment while not providing symmetrical downside cover destroys the investment equation. They are both most powerful investment deterrents. But all investors fundamentals, particularly those of companies that pioneered the industry start shaking when precisely those who champion renewables and encourage us to invest for the long term now find some fossil fuels acceptable fight to cap CO2 prices or impose regulatory changes or special taxes that penalize the companies which have contributed and will contribute the most to the change in the energy paradigm. How will we deal with the next energy challenge, 10 or 15 years down the road, for example, will hydrogen investments, when profitable, if ever, be submitted to a windfall tax? Will battery storage floating offshore or electric mobility be penalized by future governments if they ever become successful investments because energy transition, like any other technological transition, works very much like venture capital. You succeed in the small part of your investment, you survive in the majority and you blatantly fail in another few. If you penalize the positive ones, the portfolio fails to perform. Acciona is nearly EUR 10 billion investment in renewable energy in Spain over the past 20 years, follows that exact pattern. All in all, acceptable market returns in our core technologies for the first 10 years, far below market return over the last 10 years after the regulatory reforms of 2012 and good returns in the first half of 2022. But that's how long-term investment works; favorable market make up for bad times. The growing trend of demonizing profitability or imposing regulatory changes every time there's an exogenous event, whether a financial crisis, a geopolitical tension or public budget shortage sends the most unsettling message to investors and plays a key role in diverting investment destination. Because, of course, the whole world is experiencing high energy prices, but it is precisely in this context where regulatory stability is tested and in those regions where regulatory stabilities are paramount importance and routed into good policymaking, subsidy mechanism for vulnerable consumers are the preferred solutions. But despite the contradictory regulatory signals in some places, all in all global policies are going in the right direction and support the secular trends that underpin the renewable energy sector. By 2026, global renewable electricity capacity is forecast to rise more than 60% based on 2020 levels to the order of 4.8 gigawatts, equivalent to the total current global pack capacity of fossil fuels and nuclear combined. In the first half of 2022 alone, renewable energy generation grew by 10%, curving the overall CO2 emissions intensity of the electricity sector by more than 2%. This is also great news for the climate. On the private side, in recent years, we've also seen a true acceleration of demand for carbon-free energy with new records to corporate PPAs expected for this year too, reinforced with new present priorities such as security of supply and price stability. We are particularly proud of the 1.7 terawatt hour of PPAs that we have signed in recent months with Spanish industrial producers, providing them with clean energy at affordable long-term prices. The markets are now anticipating higher long-term energy prices and it is in the short term, we are seeing PPA prices move up significantly; on the one hand, because of alternative fossil price volatility, on the other because of the acute scarcity value of advanced renewable energy projects. A growing number of them are being delayed due to supply chain and permitting difficulties, speculative investors who despite aggressive auction bids fail to deliver or the sheer frustration of long-term investors booked by recurrent contradictory regulatory signals. Against that, and despite significant opposing forces, the medium term is looking very promising in several regions where until recently, it was a foggy time to make investment decisions given the increase in CapEx and the cost in capital. There was a dilemma on whether to invest at peak CapEx and rising financial costs or wait for a clearer environment with PPA prices reflected a higher -- where PPA prices reflected a higher CapEx scenario. And fortunately, we can now comfortably say that this dilemma is behind us and that the outlook for future energy prices fully reflects and offsets the higher investment cost scenario. All in all, Acciona Energias is very well prepared even more so after the successful IPO to navigate this new challenging market and to contribute to solve the urgent environmental crisis, providing secure, affordable and independent renewable energy. The current state of the equity markets and their own performance since the IPO underscore the higher strategic economic value of our large and efficient operating fleet of renewable energy assets, probably now impossible to replicate. But also the value of our development pipeline, our balance sheet strength, our access to capital markets and our reputation as a pure determined and uncompromised global renewable leader, provide us with distinct competitive advantages, particularly valuable in this volatile economic environment. As I assess the uncertainties facing the world, I'm convinced that we're on the right track. We seek to seize the opportunities for profitable growth while maintaining a balanced risk profile focused on operational excellence. In essence, it's about building a business that has great positive impact in the planet and in the present and future generations. Thank you very much. I hand over the floor to Rafael Mateo, CEO.

Thank you, Jose Manuel, and good morning to everyone. We are presenting today a good set of first half results. This can be seen across all the lines in the P&L and also in terms of cash flow generation, which during half one largely covered our investment needs as well as the payment of the dividend on last year's results. The numbers are driven by the high commodity environment across all our key markets, not just Europe, also the U.S., the Australia and so on. This year, our sales were a bit more open to market prices and the rollover of hedges has allowed us to increase our cheap price. Lower financial costs on the year-on-year comparison also helped to drive the bottom line, which half one 2022 is still showing the impact of the IPO recapitalization in half one 2021. With respect to the balance sheet and our ability to fund growth, Fitch recently reaffirmed its investment grade rating of BBB- with a stable outlook. Our debt as of June is flat relative to December at EUR 2 billion, and we expect to be around 1.5x net debt-to-EBITDA ratio at year-end, which I believe puts the company amongst the best capitalized companies in the sector. We have also completed very recently the Standard & Poor's ESG evaluation annual update, and we have increased our score to 87 points, remaining the top energy company within their coverage. All of these elements help us to have a privileged access to the funding markets. So during the first half of the year, we issued our second green bond, a 10-year bond ahead of a very significant base rate. In April, we also issued our inaugural U.S. private placement, 50 years note, leaving us the access to this liquid and a stable market with the preference for very long turns. Both transactions were very substantially oversubscribed and very efficient in cost. The financial results in this first part of the year put us firmly on the track to meet the outlook we set out at the beginning of the year. On the commercial policy side, I'd like to mention that we have been very active during this first half of the year in managing our risk, deploying our generation to supply strategy and doing it with conviction. We have signed, as Jose Manuel said, 1.7 terawatts hour, close to 20% of our Spanish output with industrial clients, mostly on a 10-years basis with regulated volumes of electricity with a short receivable regulatory life being replaced by long-term contracts. And outside of Spain, demand for greenfield PPAs remains also very strong and prices are naturally moving up. But in our view, they still need to increase further, given the high CapEx cost scenario and rising cost of funding. On the growth side and the supply chain, I will elaborate in detail in a second, but in summary we have record capacity under construction, more than 2 gigawatts, but capacity additions in 2022 will be lower than we planned. Our expectation for year-end have fallen from approximately 830 megawatts to around 540 megawatts, and the anti-circumvention process in the U.S. has meant that the module supply in the U.S. market during 2022 will remain heavily constrained in our 2 projects in this market and final construction stage will partially slip into 2023. In the Slide 7, we take a deeper look into the supply chain challenges. We have taken many actions during the last 12 months to contain the risk of further projects delays and price increases. In terms of our certain projects, we have been concentrated in the Spanish market with a combination of wind and PV projects, also in Australia with the construction of the MacIntyre project, the largest in our history, and we have around 1.3 gigawatts of solar PV projects in the U.S. that are under construction or just starting. In Australia and in Europe, we have been working hard to resolve the challenge in logistics in the supply of equipments in contractors, in permitting and so on. And we have looked in shipping contracts for Europe and Australia, the supply of modules for Europe and the EPC contract for MacIntyre. We think the risks here are now contained and we know well today where we stand. With respect to the U.S. market, it has been very tough to secure logistics at a very good fixed price and with security of supply in terms of space, but we have managed to do it. That leaves us with the critical issue of the supply of the PV models themselves. And the U.S. anti-circumvention petition and the subsequent investigation has done a lot of damage to a supply market that was already under pressure. But having said that, now the 2-year waiver on the tariffs is a very positive news, allowing the PV demand to continue growing in this American market. By other side, our main supplier of modules manufactured in Southeast Asia will not be able to provide us with the volumes that we need and that we had contracted. But in this context, we have recently closed an additional contract with an Indian Tier 1 supplier that meets our expectations and requirements in terms of quality, ESG and pricing that will together with our existing contract will cover our 1.3 gigawatts of the U.S. needs during 2022 and 2023. In the U.S. market, we are also optimizing the work of the EPC contractors amongst the different sites to adapt the lack of module in projects that are all but ready and other projects that are just starting with the construction work. I want to note here that while other players have abandoned projects who are totally uncertain about resuming their plans, we are completing our Fort Bend and High Point projects in the U.S. that are under construction at the moment and starting with the construction of Union and Red-Tailed Hawk project in Texas. In the slide, we have been included also our estimate of whole CapEx unit cost as we've all seen since the pandemic and post-Ukraine war relative to 2020. In summary, the sector is looking at CapEx increasing by close to 20% and although commodities and cost seems to have homepass the peak, polysilicon price is still very high prices and very expensive. In terms of the CapEx cost for our projects at hand that representing around 3.4 gigawatts of capacity under construction, both -- about starting the construction or have been completed in '21 and so far in '22, our CapEx has increased by high single-digits relative to our initial expectations, so significantly lower than the market. I'd like to note that we had higher headroom enough in these projects and that around 30% of the sales were not contacted from a revenue perspective. So we have the ability to contain the impact. Turning now to the Slide number 8 in our construction plan -- in this slide, you can see the evidence of the strong acceleration in the activity. We closed 1.5 gigawatts of projects starting construction during half one, taking the total to 2.1 gigawatts, which we will maintain at year-end with the completion during the second part of the year of close to 500 megawatts and the start of the construction of another 500 megawatts. Our construction plans, like everyone's else may be behind schedule due to supply chain and the related challenges. But the acceleration in our levels of activity is unstoppable. In 2023, we are going to see a dramatic change in the rate of megawatts installed with the completion of the MacIntyre project or most of our near-term USPP program, which amount 1.3 gigawatts and lower investment in Spain and in Latin America. In Slide number 9, we have included some good level of details of the projects with some of the key projects. We have included a chart with -- showing the progress of the preconstruction and construction activities. In Slide 10, I want to briefly mention the progress beyond the immediate progress under construction. I believe that 2023 could be the year for the takeoff of Brazil in Spain. And during the second half of 2022, we will have news of our progress with the Brazilian development projects and the second wave of the Spanish projects that are awaiting today the connection to the grid and are awaiting today also the [indiscernible] permitting, respectively. In Spain, apart from the 1.1 gigawatts of capacity that is awaiting biometer permitting in the very immediate short term, we are also awaiting the result of the Mudéjar Nudo action where we are bidding for interconnection rights for close to 900 megawatts in a joint venture with Falck Renewables renewals. I want to mention the award of a 12-year regulated PPA for 72 megawatts in Croatia, that although small will be very attractive projects in terms of return. Finally, we have included in the slide all the developments with respect to the offshore wind activity, where we have been tendering alongside with SSE in Poland for the seabed rights, and also to comment about the progress that we are making in the floating offshore market becoming today the largest shareholder in the French floating structure specialist company, Eolink, as well as being shortlisted for the European funds in 2 demonstration projects that we are partners in. In Slide 11, you can see our energy balance for Spain in 2022 and the potential for 2023. I want to highlight that we are very actively managing our commercial policy and our sales at risk in a very volatile environment. Not only in terms of power prices, but also in terms of regulatory intervention and in terms of the acceleration of the maturity of our regulated assets in Spain in the context of very high electricity prices in the short term. With respect to 2022, we are basically done for the year in terms of hedging with close to 5 terawatts hour closed at prices around EUR 130 per megawatt hour through financial hedges and supply contracts. Most of these positions were contracted before the changes in the last windfall extension regime. And with respect to 2023, we anticipate that at this stage, lower regulated volumes next year as more assets are reaching full payback of the regulatory capital. In the current context of higher and more volatile power prices, our risk models, as well as the common sense are recommending that we are -- we should temporarily increase our exposure to the market prices. In addition to that, the current windfall tax mechanisms in Spain and the lack of regulatory visibility or further regulatory actions all support against the hedging. We have, for the time being, contracted 3.4 terawatt-hours of power generation volume for next year, 2023, with significant generation to supply long-term contracts, signed at prices that naturally reflect longer-term average rather than the expected spot prices in 2023. All in all, our average locked-in price for the time being is EUR 110 per megawatt-hour for 2023. Depending on the evolution of the regulation in power prices, we could potentially increase our 2023 hedging position by another 2.5 terawatt-hour in Spain through a combination of financial heads or supply contracts. I want to stress that although our global philosophy of contracting energy 80-20 remains in place, in this environment, we have to be more dynamic, more flexible and we need to adapt to our policy to the very volatile and challenging circumstances. We need to be prepared to have a slightly higher open position for a while, both in Spain as well in certain other markets. Thank you for your attention. And let me hand over to Arantza to underpin the financial economics.

Thank you, Rafael. Let me start with the key figures. Revenues reached EUR 2.2 billion with flat production, average prices increasing by 70% and energy supply volumes increasing both in volume and price. EBITDA for the period amounted to EUR 909 million, up 71%, mostly due to the Spanish business and with international EBITDA falling as last year included extraordinary profits in the U.S. market. Earnings before tax and net income increased strongly to EUR 570 million and EUR 390 million, respectively, driven by EBITDA growth and lowest interest charges, but we have negative items like the EUR 35 million impairment of our Ukraine assets and a EUR 61 million negative charge related to the mark-to-market of certain hedged contracts in the U.S. that goes through the P&L. Net investment cash flow amounted to EUR 770 million in the first half, relative to the investment for the year 2022 as a whole, which could go up to EUR 1.2 billion. Net debt at EUR 2 billion is flat with operating cash flow in the first half been largely sufficient to cover the investment needs as well as the annual dividend. In terms of operating data, as we said, output is flat with weak resourcing in Spain both in hydro and wind and worse than expected production outside of Spain. Prices are strongly increasing, particularly in Europe and that flows to higher EBITDA generation margins. In Slide 14, we include our most relevant social and environmental indicators with generally good progress across the board. The proportion of women in executive and management post increases by almost 3% to 25% as a result of new hires and promotions internationally, and this is starting to reflect the strengthening of our leadership programs in female talent these past years. In Chile, we have 25% of the O&M workforce being women when this was 0 in 2020. Following the implementation of the social impact management methodology, we have 114 projects going in 12 countries. The accident frequency index fell and is below our target for the year. In terms of environment, our Scope 1 and 2 emissions fell by 5.9% due to the reduction in electricity consumption in some facilities and lower gas consumption in our only concentrated solar plant. We have 4 decarbonization projects ongoing, including the electrification of the vehicle fleet and installation and monitoring of the SF6-free switchgears at our plants. Waste center landfill has been also reduced, thanks to less wasting construction projects continuing with the reuse of 100% of the legally recoverable slag and ash from the biomass plants and increasing the percentage of the recovered waste due to the use of slag as fertilizer. We have been active on the green financing front and reaffirmed our industry-leading escort in the Standard & Poor's ESG assessment. In the Slide 15, you can see the investment during the period with roughly EUR 500 million of CapEx, mostly in generation assets in the U.S., Spain and Australia and close to EUR 270 million of net CapEx deferrals related to some completed plants in Mexico and Australia. Moving to the Slide 16, we saw the movement in the net debt over the period with the operating cash flow of EUR 838 million including positive working capital related mostly to the hydro levy refund and to a lesser extent, to the banding mechanism in the Spanish regulated assets. This cash flow was close to fully covering the EUR 770 million net investment cash flow and the investment of the 2021 dividend of EUR 92 million. Starting now with a review of the Spanish and international generation businesses, let me move to Slide 17. In Spain, the average price during the first half of last year was EUR 58.6 megawatt-hour, while in the second half it increased to EUR 164.4 megawatt-hour. In the first 6 months of 2022, the average Spanish pool price was EUR 206 megawatt-hour, driven basically by the exceptional natural gas prices. In terms of hydro, it is one of the driest years in recent history and results are the lowest in the last 5 years. In Slide 18, we have laid out the main drivers for the Spanish generation revenues. Output was down 6% due to the low wind and hydro resource, volumes from assets that are receiving regulatory income this year represented 1.7 terawatt-hours or 35% of the 4.9 terawatt-hours of consolidated production in Spain. Achieved prices were high despite the lower regulatory income and the banding adjustment for those asset vintage that we expect to remain regulated in the next 3-year period starting January 2023. Wholesale production that was hedged amounts to 2.2 terawatt-hours or 45% of total, and achieved a price of EUR 125 megawatt-hours. Unhedged wholesale output obtained a price of EUR 202 megawatt-hour just under the EUR 206 megawatt-hour average price in the Spanish market. All in all, the Spanish achieved price was EUR 169 megawatt-hour, EUR 37 megawatt-hours below the average market price, mostly due to hedging and combined with a 6% lower output resulting in EUR 833 million of generation revenues. In Slide 19, generation EBITDA in Spain grew as a result of the price drivers just discussed and despite the lower output. Total EBITDA amounted to EUR 676 million with EUR 670 million related to generation and EUR 6 million from supply and others. In Slide 20, you can see some statistics on the main markets we operate, but perhaps it's easy to see the evolution in Slide 22. In Slide 21, you can see the volumes are generated in the main regions where we operate, as well as the achieved prices and result in revenues. Output during the first half grew by close to 7% to 5.3 terawatt-hours and close to 4% on a like-for-like basis. This is still significantly below our expected levels due to low resource and growing curtailment in certain regions. Achieved price fell by 12% -- 11%, sorry, on average, despite power prices generally up in almost all of our markets. This decline is explained due to the fact that last year, the U.S. business benefit from producing energy during the Texas storm and capturing high prices there. In summary, generation revenues in the international business fell by 5% to EUR 358 million. In Slide 22, we saw the revenues and EBITDA per region. Total international EBITDA fell by 27% to EUR 234 million with generation EBITDA falling by 18% to EUR 251 million. Thank you very much. And let me hand back to Jose Manuel to start the Q&A session.

Thank you, Arantza. So we have received a number of questions which I will read out and pass on to my colleagues, mostly pass on to my colleagues. The first question we have is about the capacity growth targets for 2022 and '23, and that comes from Jorge Guimaraes at JBCM, from Oscar Najar, from Royal Bank of Canada; Fernando Garcia, Roberto Ranieri from Stifel and CaixaBank. Rafael, please.

In terms of the capacity additions in 2022, you have seen in the presentation that we are going to add 540 megawatts during the 2022. This is because we delay something around 290 megawatts from 2020 to 2023, mainly 2 projects in the U.S. market PV projects because the delays in the import of PV panels from China and from Asia to the U.S. during the anti-circumvention period. For the next year, for 2023, we will end the year 2022 with 2.1 gigawatts under construction, but during 2023, we are adding some projects, especially in Spain Ayora PV plant in Valencia and some others that are close to receive the environmental approval. So our idea is to connect 2.5, 2.6 gigawatts to the grid in 2023.

Okay. And a follow-up question to that one from the same group of investors is whether we are -- whether we maintain our 10 gigawatt target for '25.

Yes, yes, we are going to maintain the target. So as you had seen in the presentation, we are accelerating the development and construction of the project. That's clear that this year because several reasons there is some delay, but in the future, we are doing more. It's interesting to know that in 2 of our hubs in the Australia and in the U.S., we have simultaneously 1 plus 1.5 gigawatts under construction that are going on track. So we are maintaining today our targets of 20 gigawatts at the end of 2025.

Then we have a question from Oscar Najar whether we are expecting the second-half results and '23 results -- whether we're expecting that take into account our hedges -- the hedges in place. Arantza, I think you can answer this one.

Yes. So the profitability for the second half of the year should not be the same as first half as the very uncertain cap is already in place and the power prices that we are seeing in the forward market are lower than the ones that we've seen in this first half. In the first half, the power prices in Spain were EUR 206 megawatt hours as I was mentioning before and for the second half, we are seeing forward prices around EUR 150 megawatt hours. As per 2023, I would say that it is too early to say. Forward pressures, we are seeing them strengthening further. They're moving strongly, higher than EUR 200 megawatt, but there are still many uncertainties. So it's difficult to be able to anticipate what the results would be at this stage.

Okay, thank you, Arantza. Now there is a question on what the new tax or potential tax which we've come across this morning of 2% on revenues will entail for us? We can't say. We know very little. In fact, what we know public. We don't know whether it's going to be charged on all revenues, on generation and therefore there is little we can add to what is public. Then in -- this from Fernando Garcia, what is the positive impact on P&L from the change in Spanish regulation of renewables in 2022? Arantza, please.

Yes. So it is broadly neutral in those assets that will continue to be regulated from next year onwards, as the lower regulatory income is compensated by a low -- by a higher banding price. And we are recognized, we need you to know that banding adjustment on the same vintages that we were doing for the previous year from 2021.

Okay. From Fernando Garcia, Royal Bank of Canada, the -- he asks whether we have any impact on the anti-circumvention and delays on the anti-circumvention and whether we will have projects in time. We do. There is an impact, but why don't you take it, Joaquin Ancin, please?

Yes. Hello, everybody. We are not having -- we are impacting in our cost or time frames for the projects. What we have -- it's more, let's say, tranquility. We are more confident that we will not have any problem with the projects that we have currently under construction, as Rafael was mentioning. We have been driven to pass around 200 plus megawatts from 2022 to 2023, but that now it's all done. So we have already managed to secure all these new suppliers. So that's it. So the real impact is in our confidence on the projects moving forward.

Thank you, Joaquin. From Stifel, Roberto Ranieri, we have a question to provide an update on the split of PPA driven revenues versus power market prices and revenues in terms of percentage. Why don't you take it, Santi?

You know our commercial policy is set by increased analysis. So it's not independent of regulation on marketing its geographies. So in the first half of this year, we had our 76% of our production covered with PPAs, hedged regulation et cetera. In the presentations, there are more details about Spanish business where we need to be particularly active with regulation of prices and regulation. In 2022, in Spain, we basically hedged with customer regulation on financial hedge at level, so we were -- now we are above 80% of our volume for 2023. In the presentation, you have also the previous years. We have around 55% covered it in regulation and hedged and we could do another 20%, 25% depending again how the regulation is going on the forward prices development.

Thank you, Santi. Okay. Question number 8, in the case of -- from Ranieri at Stifel. In case of M&A whether we see implied multiple expansions and if we are interested in the NL assets in Australia? Jose, why don't you take that one?

In terms of multiples, it's difficult to generalize given our diverse geographical presence. However, it is true that we are seeing strong M&A activity in some of our key markets, particularly in Europe and in the U.S. In some cases assets being -- and projects being transacted at relatively high multiples. We think that that is a reflection of the strong fundamentals and momentum in our sector in general. But we remain disciplined and we look for assets. We're in no rush to grow at all costs. So we look for assets and opportunities that represent good value and that have a good strategic fit and we are seeing a number of those as well. So we continue to look out for those, but are in no rush to compete where we think those prices are being bid up. In terms of the second part of the question around the -- that talked about disposal of NL assets in Australia, we're not currently looking at it, given that it's an operating portfolio and I believe it's -- the sale is for a stake in that portfolio to finance development pipeline. And that is not particularly the sort of transaction that we would be interested in.

Thank you. Next question is the impact on the -- from JP, Caixa and Kempen, Garrido Trindade -- Flora Trindade and Chabran, the impact from the Spanish claw-back in 2022 and if it would be extended into 2023. Rafael, will you take that?

Well, the windfall tax during 2022 have been a very limited impact from a financial perspective, thanks to the hedge we put in place before from 2021 to 2022 according with our commercial -- conservative commercial policy. By the way the hedges are at prices below the current market prices. The hedges are not incentivized by the potential claw-back extension. If the claw-back is extended for the second half of 2023, it will penalize hedge or not depending on the rules for the new exemption.

Thank you Rafael. Question -- next question, expectations for supply chain issues and CapEx inflation in second half of 2023 -- in second half of '22 and 2023. Why don't you take this one, [ Quincho ]?

Yes. Thanks, Jose Manuel. Yes, we are not expecting major implications after the ones that we already had in the current projects under construction. So as Rafael mentioned during the presentation, we are forecasting an overall rule, close to 20% CapEx increase from what we had, let's say, pre-pandemic. In our projects under construction, the average of our extra CapEx have not been so high. So we have managed to, let's say, contain more or less the extra CapEx that has been important but not so much. And for the projects for the second half, we will have just minor negotiations with contracts under operation. And for next year projects all these increasing CapEx have been already taken into account into the new approvals. So we are expecting to meet our targets or even if things seems to be improving a little bit in commodity prices to be even with some upsides for projects that will come next year.

Thank you. Okay. Next question is from Arthur Sitbon, Morgan Stanley, and he asks whether the EUR 1.36 billion of EBITDA for 2022, which would imply a second half 2022 EBITDA down year-on-year, and we find it possible or likely, or do we find it too conservative? Let me just say that we do not comment on consensus, but if I may, I would just say that, yes, we believe it's conservative. And then there is another question, which I'm not sure I understand, but, and then I'll pass it on to Rafael. Role of Acciona Energias in the current energy crisis in Europe.

Well, our role is that we are very clear example of a -- and a demonstration of the correct solution for the energy crisis in Europe. So, we are demonstrating that we can depend on fossils that we don't have and we are the most rated and the only solution for the future in Europe as doing more and more and more renewables without losing time as we did in the past.

Indeed, yes, I mean the role is there is a growing role for Acciona and Acciona likes in this part of the world and everywhere else. The current emissions problems, cost problems, supply problems, all the variables that are affecting the energy sector are particularly enhanced by the independence, the lack of supply in Europe and the energy independence -- the need to enhance our energy independence in Europe. So naturally the role of Acciona and Acciona likes in Europe is key, is essential. Let me see if we have any more questions. I don't think there are any more questions. So with that, I thank you on behalf of the team and Acciona, my own, very much for your presence in this results presentation. And we look forward to seeing you in the next call. Thank you very much. Goodbye.