Ørsted aims for 50 GW of renewable energy by 2030

By: Tom Russell 02/06/2021 Ørsted

General Windfarms

Ørsted has unveiled new strategic ambition accelerate the global build-out of renewable energy and set the ambition to reach approximately 50 GW of installed capacity by 2030. The company plans to invest approx. DKK 350 billion in green energy from 2020 to 2027.

Approximately 30 GW will come from offshore wind, with 17.5 GW from onshore wind and solar PV, and 2.5 GW from other renewables, including sustainable biomass, renewable hydrogen, and green fuels. Of the DKK 350 billion of investment, 80% is expected to be within offshore wind, including renewable hydrogen, and 20% onshore.

In the period 2020-2027, Ørsted expects a growth in operating profit (EBITDA) from offshore and onshore assets in operation of approx. 12% a year on average, reaching a level of DKK 35-40 billion in 2027. The growth rate assumes that all offshore projects where Ørsted does not already have a joint venture partner are farmed down to a 50% ownership stake.

Ørsted has high visibility on future earnings, with approx. 90% on average of Ørsted’s operating profit (EBITDA) for the period 2020-2027 coming from regulated or contract-based activities.

Going forward, Ørsted’s targeted range for the fully loaded unlevered lifecycle spread to weighted average cost of capital (WACC), at the time of bid/final investment decision (FID) whichever comes first, for our offshore and onshore projects will be 150-300 basis points, which is consistent with the implied value creation spread from our last guided return. The targeted rate is not a hurdle rate and, consequently, there could be projects that deviate from the targeted range.

The average return on capital employed (ROCE) for 2020-2027 is expected to be 11-12%.

Mads Nipper, Group President and CEO of Ørsted, said: “Our aspiration is to become the world’s leading green energy major by 2030. With the offshore wind industry’s largest concrete development pipeline, our global development organisation, and our industry-leading commitment to innovation, it’s our clear aspiration to remain the global market leader in offshore wind. In onshore wind and solar PV, with our proven track record in scaling and delivering attractive value and as a top-5 developer in the US, it’s our aspiration to become one of the world’s top 10 players in onshore renewables. In renewable hydrogen and green fuels, we’ve built a strong platform with industry-leading offtakers, and we intend to grow this platform to become a global leader in renewable hydrogen.

"With the opportunities we see across all of our segments, we now set the ambition of reaching approx. 50 GW of installed renewable energy capacity by 2030, more than quadrupling our installed capacity over the next decade.

"With this strategic ambition, we’re positioning Ørsted to be a leading player in a future energy system with more renewable energy which will be much more integrated across technologies and tied together by new infrastructure and increased digitalisation.

"Being named the world’s most sustainable energy company for now three years in a row, it’s our aspiration to be a globally recognised sustainability leader and to accelerate our efforts to operate our company in an even more sustainable way. That’s why we now set the ambition that no later than 2030, all new projects commissioned must have a net-positive biodiversity impact, fully supporting that the transformation to green energy must take place in a sustainable way and in harmony with nature.

"Furthermore, we are today, with immediate effect, announcing a ban on the landfilling of wind turbine blades. Going forward, Ørsted commits to either reusing, recycling, or recovering 100 % of all blades coming from repowering or end-of-design-life decommissioning of our onshore and offshore wind farms.

"It’s our aspiration to be a leading catalyst for the global green energy transition towards a world that runs entirely on green energy and to be the preferred partner for our customers, local communities, suppliers, and joint venture partners, enabling all our stakeholders to realise the green transformation and its benefits.”

Over the past decade, Ørsted built a portfolio of 12 GW of installed renewable capacity. Ørsted is well established within the world of offshore wind since pioneering the first offshore wind farm Vindeby in 1991. In 2022, Ørsted will have completed what is poised to be the world's largest offshore wind farm, the 1.4 GW Hornsea Two offshore project of the UK's east coast.

For more information on offshore wind farms worldwide, click here.

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