Ørsted unveils plans to reach carbon neutrality by 2025

Ørsted wants to become a carbon-neutral company by 2025, before removing all carbon emissions across its supply chain and energy trading by 2040.

Ørsted plans to install 20GW of offshore wind and onshore wind by 2025 - up from the 7.6GW it has today, according to Windpower Intelligence.
Ørsted plans to install 20GW of offshore wind and onshore wind by 2025 - up from the 7.6GW it has today, according to Windpower Intelligence.

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It hopes to completely phase out coal by 2023 and install 20GW of offshore and onshore wind and solar PV by 2025 — up from the 7.6GW it has today, according to Windpower Intelligence.

By phasing out fossil fuels and boosting its renewables fleet, it will have reduced its carbon emissions by 98%, Ørsted stated.

For the remaining 2%, the Danish company intends to switch its company car fleet to electric vehicles, before offsetting any residual emissions “through verified, measurable and additional carbon removal projects, it added.

The developer plans to invest DKK 200 billion (€26.7 billion) in green energy between 2019 and 2025, it stated.

All of the above

In a conference call, CEO Henrik Poulsen said that the company was open to green energy investment anywhere in the world.

“There are no markets where we are staying away because we find the regulatory framework unattractive,” he told reporters. 

“We’re active in most markets around the world.”

However, he admitted it currently had no firm plans for onshore wind development beyond the US, where it re-entered the onshore wind sector through its acquisition of Lincoln Clean Energy in 2018.

“We really feel that we have plenty of opportunities for the time being, but I would certainly not rule it out further down the road," Poulsen explained.

Ørsted has a pipeline of 9.1GW of approved renewables capacity worldwide and the developer is also eyeing up “six or seven” offshore wind power auctions in 2020 ------ specifically tenders in Maryland, New York, and New Jersey in the US, as well as for the Hollandse Kust Noord project in the Netherlands, and Taiwan and Japan.

“We’re entering auctions all the time so we could end up exceeding our (capacity) targets," Poulsen said.

Supply chain

To reach its 2040 targets Ørsted will need to incentivise suppliers to decarbonise, Poulsen explained.

He added that the company was engaging its top suppliers to make sure that they decarbonise their production.

“This will be part of our assessment for suppliers: whether they are contributing to the fight against climate change,” he said. 

“It will be difficult to work with Ørsted if you are not part of the journey.”

Hydrogen investment

The developer is at a “very early stage” with its understanding of hydrogen and Poulsen explained the company wanted a better understanding of the technology’s financial and technical implications. 

To this end, Ørsted is currently engaging with “heavy industry companies”, which Poulsen sees as “natural off-takers” for hydrogen. 

For now, Poulsen believes Ørsted’s role should be investing in electrolysers and production facilities, before, eventually, financing technologies to further refine hydrogen into methanol and ammonia.

Ørsted secured funding for a 2MW electrolysis pilot project located beside a biomass power station in Copenhagen in December. The site will use electricity generated by two nearby 3.6MW wind turbines.

Poulsen said if the pilot is successful, the developer would consider larger-scale hydrogen plants.

'Very satisfactory' 2019

Ørsted made a full-year operating profit (Ebitda) for 2019 of DKK 17.5 billion - down 42% from Ebitda in 2018, or up 17% when an exceptional DKK 15.1 billion sale is excluded from the previous year’s total.

More than half of its record-high DKK 30 billion Ebitda for 2018 had come from the sale of a 50% stake in its Hornsea One site, which is due to be the world’s largest offshore wind farm.

CEO Henrik Poulsen described 2019’s Ebitda as “very satisfactory”.

The developer boosted its earnings from operational onshore and offshore wind farms by 30% to DKK 14.8 billion, due to the ramp-up of generation at offshore wind farms and at new onshore wind farms and a full-year contribution from onshore.

Its net profit of DKK 6.1 billion was down 69% year on year.

The green share of Ørsted’s heat and power generation reached a new high of 86% due to the developer increasing its onshore and offshore wind capacity and decreasing its use of coal and gas.

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