Formerly known as DONG, Danish energy firm Ørsted has managed to move away from coal, gas and oil to reinvent itself in the renewables market – and now aims for carbon neutrality by 2025. By Anthony Harrington

The transformation of the Danish green energy company, Ørsted, from its roots in oil and gas and coal-fired power generation to a company that today aims to be carbon neutral by 2025, both in its own operations and in the energy it generates, is amazing by any standards. 

As Duncan Clark who heads up Ørsted in the UK explains, the company started out life as DONG Energy, a wholly state-owned company. DONG was well known in the oil and gas sector and, in Denmark, it provided electricity and heat from a portfolio of coal-fired power stations to supply Danish homes. 

It began life as Dansk Naturgas A/S in 1972, with a mission to manage oil and gas resources in the Danish sector of the North Sea. The name changed over time to Dansk Olie Naturgas A/S, which abbreviated to DONG. It changed its name to Ørsted in 2017 to reflect its growing international stature, its evolution away from its fossil fuel based past and a commitment to all future investments being in renewable energy.  

Today, Ørsted is the world’s largest developer of offshore wind energy, accounting for just under 30% of the world’s installed offshore wind generation capacity. As Clark explains, the company already has the world’s largest offshore wind farm, and has developed a massive gigawatt wind farm off the Yorkshire coast, and is developing offshore wind farms that will be double this size.

“We are a renewable energy company that prides itself on taking tangible action to create a world that runs entirely on green energy. Our aim is to develop and deploy market-leading green energy solutions that benefit both the planet and our customers,” says Clark. 

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“Climate change is one of the biggest threats facing the world today, and we believe that the solution lies in deploying renewable energy resources on a much larger scale than anything we have seen so far. We want to revolutionise the way we power people, particularly as far as heating and transport are concerned. 

“These two areas, heating and transport, rely largely on fossil fuel-derived energy, and account for some 80% of energy usage in developed countries. Moving to renewables generation to meet the needs of these two sectors will have a hugely positive effect in the battle to avoid disruptive climate change,” he comments. 

He points out that the UK is already the world leader in offshore wind generation, with more capacity installed than any other country. “Offshore wind already powers over 7.5 million UK homes a year and by 2030 the UK will be getting about a third of its electricity from offshore wind,” he comments. 

Ørsted is playing a major role in building out the UK’s offshore wind generation capacity. “We have come a very long way since DONG Energy made its decision to prioritise and focus on green power. We have industrialised the whole process of large project delivery and we have worked hard to drive down the cost of green power,” he notes.

Getting the cost of electricity through either offshore or onshore wind generation down to competitive levels requires working very closely with supply chains, the financing side of the industry and regulators. 

While driving its own progress towards zero carbon, Ørsted is also paying very close attention to ensuring that its supply chain partners focus on decarbonising their own operations and processes. “We have totally transformed our own carbon footprint as we have exited the oil and gas business. It was a great source of pride to us that we were ranked as the world’s most sustainable company in 2020 so we take working with our supply chain partners to green up the whole generation process, very seriously,” Clark says.

Over time, Ørsted has moved a considerable distance away from its roots as a state-owned company. The Danish state still owns 50 percent of the company, but the other 50 percent of its shares are traded on the stock market. 

“As a company, we have mobilized totally behind the vision of a world running entirely on green energy. We set ourselves some very demanding emissions reduction targets and we have worked very hard on reducing the carbon intensity of the electricity that we provide. At the same time, we continue to look very carefully at the carbon footprint of all our activities. “Our goal is to have a zero-carbon impact from our direct activities by 2025.  There will be some residual carbon footprint at that time, but we will deal with that through state-of-the-art carbon offsetting schemes,” he comments.

“Encouraging and helping our supply chain partners adopt best practice in this regard is very important for us, and our target is by 2040 to be completely net zero including our supply chain.”

Clark says that Ørsted is hugely appreciative of the Scottish government’s goal of becoming a net-zero carbon economy by 2045. “This has to be multi-decade goal. It is a huge transition for any economy to make and requires concrete steps to be taken now. The energy transition is going to be the major challenge for our generation. We have had a long history of fossil fuel usage that has created a tremendous momentum in a particular direction. Changing this is hard Making those legal commitments now, as a government, sends the right signals to the public and to industry. We’re delighted to be playing our part in this,” he notes. 

Clark argues that this is now a very exciting time to be in renewable power generation. “We have now reached the point where renewables have hit the sweet spot. It is now the cheap option, and building up a portfolio of renewables generation assets makes sense for most countries around the world.”

"We are now seeing the beginning of the next stage of the energy revolution - the creation of a hydrogen industry where renewables will generate hydrogen to be used in industry and transport. There is an emerging race between ambitious nations to take the next step and develop a clean hydrogen economy, taking the transition beyond electricity alone and to cover all our energy needs.”

The UK is targeting 40 GW by 2030 and expects 80 Gigawatts or more offshore wind generation build-out by 2050. That in itself will be transformative. “All the energy markets, from the wholesale market to the way the government incentivises green power, will evolve through the course of this transition. It will be good news for the consumer, and it will also be a great step forward in the fight to prevent catastrophic climate change,” he comments.

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Firm is powering ahead with ambitious ten-year plan for Scottish waters

IN June this year Crown Estate Scotland launched the ScotWind seabed leasing round for offshore wind projects. 

This enabled investors and developers to register their interest in obtaining an option agreement to lease areas of the seabed around Scotland. These are all areas that have been outlined as suitable sites for offshore wind in the Scottish Government’s Sectoral Marine Plan for Offshore Wind Energy. 

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The company's Burbo Bank offshore wind farm in Liverpool Bay produces enough electricity to power over 80,000 UK homes annually

Ørsted already has the largest offshore wind farm in UK waters and, as head of their UK business Duncan Clark notes, the company has some very ambitious plans for further developments in the seas around Scotland. “This next round of offshore site leasing opportunities, with the allocation of seabed sites and development rights, is hugely exciting,” Clark says. 

He points out that developing a large offshore wind farm is typically a ten year journey, so the sooner one begins the process, the better. 

“You have to bring together all the planning and technical assessments, along with working through the grid connection issues. 

"This is the first time in a long time that the authorities have opened up a major new offshore bidding round for sites in Scottish waters and it is a real game changer,” he says.

Clark points out that with the new renewables generation capacity that will follow from this, over the course of the next decade, we will in all probability see new breakthrough uses for renewable energy. 

“We can definitely see a relatively rapid take up in the electrification and decarbonisation of transport, and we could also see the provision of heat to buildings and to industry moving away from fossil sources and towards electricity and clean fuels,” he comments.

It may also give a real boost to the move to use renewable energy to produce hydrogen to fuel an emerging hydrogen economy in Scotland in particular, and in the UK as a whole. 

“The fossil fuel era enabled societies to develop to the point where we are today, but there is now a pressing need to clean up our industries and our transport infrastructure. 

"We have seen both onshore and offshore wind turbines more than doubling in size and capacity over the last decade, and this has helped to drive down the cost of wind generation. That trend is continuing, particularly offshore,” he comments.

The sector is already looking to floating structures which will enable wind farms to be positioned in much deeper waters, in addition to the current fixed foundations for offshore wind turbines, embedded in the sea floor.

“Scotland has brilliant wind resources but much of its coastal area shelves away steeply, creating deep water challenges. This is all about maturing the technology for floating offshore wind so that the cost of construction and generation is competitive with fossil fuel generation,” he comments.

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Timeline for the journey to net zero

IN 2006, Ørsted, which was then known as DONG Energy, used over 6.2 million tonnes of coal heating Danish homes. By 2017, when the company changed its name to Orsted, that had been reduced to 1.1 million tonnes. 

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Ørsted sold Stigsnæs Power Station to a Danish consortium

By 2023 the company has a target of phasing out coal completely. Over the past decade Ørsted has shut down three coal-fired power plants in Denmark. Power plants that play a key role in generating heat to Danish households and industry have been converted from coal to certified sustainable biomass. One remaining coal-fired power plant will be shut down by 2023.

Taking the company’s 2006 carbon footprint on coal production as a baseline of 100 percent, this meant that by 2017 the company had reduced its carbon footprint by 67% and by 2023, this will have grown to a total reduction of 96%

This has been driven by the company’s massive drive into wind generation. In 1991 it launched the world’s first wind turbine, at Vindeby. This had a diameter of 35 metres for its rotor blades, and stood 52.5 metres high, just about level with the clock on Big Ben. 

In 2017 the company installed what was then the world’s largest wind turbine, at the Burbo Bank Extension. This had a diameter of 164 metres and a total height of 195 meters. In 2018 the company’s wind farms powered 12.5 million homes. By 2025 this will have grown to 30 million homes. 

By 2025 Ørsted will be carbon neutral as far as its operations and energy generation are concerned.

By phasing out fossil fuels and installing 20GW of renewable energy, its  carbon emissions will have been reduced by at least 98% by 2025, as compared with 2006.
 

ØRSTED GOALS

lContinue to reduce carbon emissions beyond 98% by switching to a fleet of electric vehicles in the company car fleet, in line with the EV100 requirements and finding other reduction opportunities in the energy generation and operations.

lOffset any residual emissions through verified, measurable and additional carbon removal projects.

By 2030
Build more than 30GW of green energy across technologies – enough to power more than 50 million people.

By 2032
Reduce emissions from energy trading and in the supply chain by 50%, as compared with 2018, to align carbon reductions across the entire carbon footprint with the 1.5°C pathway.

By 2040
Carbon neutral footprint a decade ahead of the 1.5°C pathway by driving out remaining emissions from energy trading and from the supply chain.

 

  • This article was brought to you as part of our Climate For Change campaign in association with our partner Ørsted