Wednesday, June 02, 2021
Declaration of war with billions
Orsted wants to become the largest green energy company
In the next five and a half years, the Danish company Orsted wants to invest a mid-double-digit billion amount and become the world market leader in renewable energies. Investors are skeptical.
The Danish energy company Orsted is aiming for the top position on the world green electricity market. The world’s largest offshore wind farm operator set new targets for investors. Investments of around 200 billion crowns were previously planned by 2025, and now it will be 350 billion (around 47 billion euros) by 2027.
“Our goal is to become the world’s leading provider of green energy by 2030,” said CEO Mads Nipper. Orsted intends to more than quadruple its installed renewable energy capacity to around 50 gigawatts from the current 12 gigawatts by the end of the decade. The group develops, builds and operates offshore and onshore wind farms, solar parks, energy storage and biogas plants.
The company, formerly known as Dong Energy, parted with its oil and gas business in 2017 and focused on renewable energies. Currently more than a quarter of the installed capacity for offshore wind power worldwide comes from the house of the Danes.
Orsted is now fueling the competition among the large corporations, including RWE. Experts have warned of a price explosion, for example in tenders for wind farms. The Spanish green electricity giant Iberdrola plans to invest around 150 billion euros by 2030. Oil companies such as Total, BP or Shell are also ready if they want to open up new areas of business.
Orsted shareholders reacted skeptically. The papers lost almost six percent. “The question is whether Orsted can maintain its profitability when the market grows and competition intensifies,” said Nordan analyst Per Hansen. The group is currently worth around 50 billion euros on the stock exchange.
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