Spanish utility Iberdrola is exploring the sale of its smart metering business in the UK, with the aim of raising £1bn ($1.27bn).

The move comes amidst growing investor interest in the smart metering sector, as reported by Reuters.

The company is working with the Royal Bank of Canada as an adviser for the deal.

The sale process is at an early stage and no deal is guaranteed. Iberdrola and RBC have declined to comment.

The potential sale could support Iberdrola's recently announced £24bn investment plan for its British arm, ScottishPower, until 2028. Two-thirds of the investment has been earmarked for power transmission and distribution networks.

ScottishPower manages 2.5 million smart meters through its unit, SP Smart Meter Assets.

Smart meters provide real-time electricity consumption data, helping households and suppliers save money.

The UK's Department for Energy Security and Net Zero reports that 37 million smart and advanced meters have been installed across Great Britain at the end of September 2023.

Investor interest in the smart metering sector has increased, as demonstrated by recent acquisitions.

EQT and Singapore's GIC acquired a majority stake in Calisen, while Arcus' Horizon Energy Infrastructure merged with KKR's Smart Metering Systems.

Iberdrola has increased its focus on upgrading power grids amidst high interest rates and debt costs in the renewable sector.

The company has invested €36bn in the UK since merging with ScottishPower in 2007, making the UK a key investment destination.

In August 2024, Iberdrola expanded its UK operations by acquiring a majority stake in Electricity North West, in a deal that valued the company at €5bn.

The acquisition positions the UK as a leading market for Iberdrola, with a regulated asset base valued at €14bn (more than £11bn).