Naturgy accelerates biogas focus amid market volatility

Naturgy is accelerating its pivot to biogas as it repositions its strategy in response to energy market disruption and geopolitical uncertainty.

The Spanish energy firm, chaired by Francisco Reynés, is re-evaluating its €6.4 billion investment plan for 2025–2027, originally presented in February, in the wake of Spain’s historic blackout in April and the global impact of shifting US trade policy.

According to CE NoticiasFinancieras, approximately €2.15 billion had been earmarked for renewable energy - including wind and solar - but falling prices and system reliability concerns have prompted a rethink.

Redeia, the national grid operator, has prioritised nuclear, hydro and gas-fired generation following the outage, leaving some renewable installations operating at a loss.

Biogas, however, is emerging as a viable alternative. Naturgy, whose major shareholders include Criteria Caixa, CVC Capital Partners, BlackRock, and IFM Investors, sees biogas as a stable, lower-carbon energy source that complements existing infrastructure.

Unlike intermittent renewables, biogas can be stored and dispatched flexibly, making it a strategic asset in a grid facing pressure from climate-related and political instability.

As part of its repositioning, Naturgy is also seeking to improve its capital structure and market visibility.

The company recently concluded a €2.3 billion voluntary share buyback, aiming to boost liquidity and regain inclusion in major global indices such as MSCI.

Naturgy has committed to reintroducing the repurchased shares to the market over the next two years to support a healthier free float.

While the company awaits the findings of a government investigation into the blackout - expected to focus more on competitors Iberdrola and Endesa - it is preparing to meet potential regulatory demands for more resilient infrastructure and sustainable energy development.

Reynés, who also leads Criteria Caixa, is expected to play a key role in aligning both organisations behind a broader transition strategy.

In the face of market volatility and a possible change in Spain’s political leadership, Naturgy’s move toward biogas may offer a practical and profitable path forward.