Ørsted (company) explained

Ørsted A/S
Type:Aktieselskab
Predecessor:Dansk Naturgas A/S
Elsam
Energi E2
NESA
Københavns Energi
Frederiksberg Forsyning
Key People:Mads Nipper (CEO)[1]
Thomas Thune Andersen (Chairman)
Industry:Electricity generation
Products:Electricity
Revenue: (2023)[2]
Operating Income: (2023)
Net Income: (2023)
Assets: (2023)
Equity: (2023)
Num Employees: 8,905 (FTE, end 2023)
Foundation: (as DONG Energy)
Location City:Fredericia
Location Country:Denmark

Ørsted A/S (formerly DONG Energy) is a Danish multinational energy company. Headquartered in Fredericia, Denmark, Ørsted is the largest energy company in Denmark. The company adopted its current name on 6 November 2017. It was previously known as DONG.

As of January 2022, the company is the world's largest developer of offshore wind power by number of built offshore wind farms.[3] Ørsted developed approximately 30% of the global offshore wind power installed capacity, excluding mainland China.[4] Globally, Ørsted produces 90% of its energy from renewable sources, and has an objective of exceeding 95% by 2023 and 99% by 2025. The company has a goal of net zero generation by 2025 and no carbon emissions by 2040.[5]

History

Origin

Ørsted has its origin in the Danish state-owned company Dansk Naturgas A/S. The company was founded in 1972 to manage gas and oil resources in the Danish sector of the North Sea. After some years, the company was renamed to Dansk Olie og Naturgas A/S (DONG), meaning Danish Oil and Natural Gas. At the beginning of the decade of the 2000s, DONG started to expand itself into the electricity market by taking long positions in electricity companies. In 2005, DONG acquired and merged Danish electrical power producers Elsam and Energi E2 and public utility (electricity distribution) companies NESA, Københavns Energi and Frederiksberg Forsyning. The result of the merger was the creation of DONG Energy. The merger was approved by the European Commission on 14 March 2006. In 2002 Elsam had installed the 160 MW Horns Rev offshore wind farm, which was the first large-scale offshore wind farm in the world.[6] [7] [8]

In 2005, DONG Energy acquired 10.34% in the Ormen Lange gas field (operated by Shell). The share of gas reserves allocated to DONG Energy are approximately 40e9m3.The following year, DONG entered a 20-year contract for one billion cubic meters of natural gas per year from 2011, from Gazprom in Russia through Nord Stream 1 and Germany. The deal included that DONG delivers 600 million cubic meters per year (for 15 years) from the Ormen Lange gas field to Gazprom in United Kingdom.[9]

In 2007, DONG and Wingas (partly owned by Gazprom) agreed to a gas swap, where DONG delivers gas to Wingas UK, while Wingas delivers the same amount to DONG in North Germany.[10] The deal was criticized as "damaging to European interests".[11]

Use of fossil fuels

At about the time of the 2009 United Nations Climate Change Conference in Copenhagen, DONG Energy adopted the "85/15 vision" strategy, with the aim of changing from a company with 85% of activities fossil fuel based to a company 85% based on green energy activities.[12]

In 2009, the Gazprom->DONG contract was doubled to 2 bcm/year for 18 years, beginning in 2012.[13] However, Gazprom records showed that DONG only bought 15% of that amount in 2012 and 2013.[14]

In 2009, DONG Energy sold its fiber broadband in northern Zealand to TDC A/S.[15]

In 2010, the company started a cooperation with Dutch .[16] However, in 2014 DONG Energy withdrew its consumer activities from the Dutch market.[17] [18] In 2010, DONG divested Norwegian power companies Salten and Nordkraft.[19]

In September 2013, DONG Energy sold a power cable accessing the London Array wind farm to its partners, E.ON and Masdar for around $728 million.[20]

Focus on offshore wind power

By 2012, DONG Energy had a wind turbine capacity of 794 MW and planned to add another 594 MW the following year.[21] In 2013, the company finished the construction of the 400 MW Anholt Offshore Wind Farm off the Danish island of Anholt in the Kattegat at a cost of 10 billion Danish kroner (€1.35 bln). DONG Energy was the only bidder in the process.[22] [23] [24] The following year, DONG Energy divested its last onshore wind turbines, focusing on offshore wind power.[25] of which DONG Energy had 3,000 MW in 2015;[26]

As part of the restructuring plan to fund offshore wind projects, in January 2014 the company sold an 18% stake to New Energy Investment S.a.r.l., a subsidiary of Goldman Sachs, while Danish pension funds, ATP and PFA Pension acquired 4.9% and 1.8% accordingly. The deal was heavily criticised and caused a split of the ruling coalition of Helle Thorning-Schmidt.[12] [27] Six cabinet ministers and the Socialist People's Party withdrew from the government.[28] On 9 June 2016, some of these shares were sold in an IPO at Copenhagen Stock Exchange.[29] In 2015, DONG Energy had a deficit of 12 billion DKK, the largest of any Danish company ever.[30]

DONG Energy was listed on the Copenhagen Stock Exchange in June 2016. At the same time, it divested its ownership shares of five Norwegian oil and gas fields to Faroe Petroleum.That year, the company was voted number 11 on the Clean200 list.[31] [32]

In 2017, DONG Energy completed decommissioning of the world's first offshore wind farm, Vindeby Offshore Wind Farm.[33]

Name change

In 2017, the company decided to phase-out the use of coal for power generation, and it sold off its oil and gas business to Ineos for US$1.05 billion.[34] After selling its oil and gas business the company announced its transition to renewable energy was fulfilled and changed its name to Ørsted after the Danish scientist Hans Christian Ørsted, citing that DONG was inappropriate considering they no longer owned any oil and natural gas assets.[12] [35]

In 2018 Ørsted acquired Deepwater Wind to expand offshore wind in the US.[36]

In 2018, a gas price arbitration case was closed between Gazprom on one side, and Ørsted, Shell and others on the opposite side.[37]

In 2019, Ørsted divested an electricity distribution network for $3 billion.[38]

On 9 September 2020 it was revealed that Mads Nipper, former CEO of Grundfos, will take over as CEO from Henrik Poulsen on 1 January 2021.[39]

In 2020 developer Ørsted sold a 50% stake in the Greater Changhua 1 Offshore Wind Farm in Taiwan to Caisse de depot et placement du Quebec and Cathay PE for $2.7 billion.[40]

In 2022, Ørsted began rewilding the seabottom near some of its offshore wind farms.[41]

Operations

Ørsted considers Denmark, Sweden, the United Kingdom, Germany and the Netherlands as core markets of corporation.[42] However, in 2015 they also received a lease from the US agencies the Department of the Interior and the Bureau of Ocean Energy Management, which, in the lease, handed over some sea area in the United States for wind park development, specifically in New Jersey.

Oil and gas exploration and production

Before the divestment of its oil and gas upstream assets to Ineos in 2017, DONG Energy's core areas of oil and gas exploration and production lay in the southern part of the Norwegian North Sea and the Danish part of the North Sea, Barents Sea, west of Shetland, and in the central region of Norway (gas production). The reserve base was expected to be of oil equivalent.[43] In 2016, it produced of oil equivalent.[43]

In 2016, DONG Energy agreed to sell its oil and gas pipelines to Energinet.dk.[44] [45] It owned oil and gas pipelines which extend from the Danish part of the North Sea to Nybro and the Swedish gas transmission network (Nova Naturgas). DONG Energy co-owned the Tyra West – F3 pipeline pipelines, which create a link from the North Sea Danish section to the Netherlands natural gas hub in Den Helder, the DEUDAN pipeline from Jutland to north of Hamburg in Germany, and the Langeled pipeline from Nyhamna terminal in Norway to Easington in the UK. DONG Energy also owned a share of the Norwegian gas pipeline system.

Power production

Ørsted is the largest power producer in Denmark with market shares of 49% for electricity production and 35% for heat production. It also owns power production facilities and projects in Germany, Sweden, the Netherlands, Norway and the United Kingdom.

Ørsted is the largest offshore wind farm company in the world[46] with a market share of 16%.[47] Ørsted surpassed 1,000 offshore wind turbines in 2016.[48] In Denmark, it operates the 209 MW Horns Rev 2 offshore wind farm.[49] [50] In the United Kingdom Ørsted operates Barrow and Burbo Bank offshore windfarms and will construct Walney and Gunfleet Sands I and II wind farms.[51] [52] In addition, it is building the world largest wind farms, the 1,200 MW Hornsea 1 and the 1,386 MW Hornsea 2.[53] [54] [55] In North America it is a joint-venture partner in multiple proposed offshore wind projects, including the Block Island Wind Farm, Revolution Wind, South Fork Wind, and Sunrise Wind, all off the southern coast of New England.[56] The company was also developing Ocean Wind, an offshore wind farm on the Atlantic coast near Atlantic City, New Jersey, until it was cancelled in October 2023, and Skipjack Wind, southeast of the mouth of Delaware Bay. The company also has interests in onshore wind farms in Texas, Kansas, Nebraska, and Illinois.

Ørsted was until 2017 [57] the largest shareholder (51%) of offshore wind turbine installer A2SEA,[58] while Siemens owns the other 49%.[59] Ørsted also has 30% of subsea cabling installer CT Offshore.[60]

Ørsted has been developing Borssele 1 and 2 wind farms in the Netherlands since 2021.[61]

Shareholders

Ørsted is listed at the Nasdaq Copenhagen stock exchange.[62] The Danish Government holds the majority of Ørsted shares (50.1%).[63] Capital Group Companies, EuroPacific Growth Fund's, and SEAS-NVE holds over 5% of shares.[64] According to a political agreement, the Danish Government shall maintain a majority in the company until 2025.[65] Reduction of the ownership below 50% requires political agreement of Danish parties.

See also

External links

Notes and References

  1. News: Ørsted appoints Mads Nipper the next CEO of Ørsted . Ørsted appoints Mads Nipper the next CEO of Ørsted .
  2. Web site: Ørsted Annual Report 2023 . Ørsted . 4 April 2024.
  3. Web site: Our offshore wind farms. 2022-02-04. orsted.com. en.
  4. Web site: Ørsted Annual Report 2021.
  5. News: Storrow . Benjamin . How one fossil fuel company became a green giant . . 9 September 2020 . 10 September 2020 .
  6. http://www.power-technology.com/projects/hornsreefwind/ Horns Rev I Offshore Wind Farm, Denmark
  7. http://www.4coffshore.com/windfarms/horns-rev-denmark-dk03.html Horns Rev 1 (Denmark) offshore wind farm
  8. http://www.modernpowersystems.com/story.asp?storyCode=2017033 Horns Revolution
  9. Web site: Gazprom, DONG sign gas supply deal . www.ogj.com . . https://web.archive.org/web/20220531193542/https://www.ogj.com/pipelines-transportation/article/17280923/gazprom-dong-sign-gas-supply-deal . 31 May 2022 . 23 June 2006 . live.
  10. Web site: A/S . Ørsted . 070205 Agreement between DONG Energy - WINGAS and Wintershall . GlobeNewswire News Room . en . 5 February 2007.
  11. Web site: DONG's Ruslandseventyr skader europæiske interesser . . https://web.archive.org/web/20220531183741/https://www.information.dk/indland/2007/08/dongs-ruslandseventyr-skader-europaeiske-interesser . 31 May 2022 . da . 22 August 2007 . live.
  12. News: Ørsted: The oil giant that went from dirty fuel to clean energy in a decade . Clowes . Ed . The Daily Telegraph . subscription . 20 October 2020 . 25 October 2020.
  13. Web site: Gazprom and DONG Increase Gas Supply to Denmark - LNG Carriers . www.gulfoilandgas.com . https://web.archive.org/web/20171002161222/https://www.gulfoilandgas.com/webpro1/main/mainnews.asp?id=9301 . 2 October 2017 . 1 October 2009 . live.
  14. Web site: BINDSLEV . JOACHIM CLAUSHØJ . Henrik Poulsen nedtoner Gazprom-problem . https://web.archive.org/web/20140829104747/https://shippingwatch.dk/Offshore/article6976648.ece . 29 August 2014 . da . 28 August 2014 . live.
  15. News: TDC køber DONGs fibernet . TDC buys DONG's fiber network . . 17 November 2009 . 4 October 2017 . Danish . live . https://web.archive.org/web/20171005000319/https://www.business.dk/digital/tdc-koeber-dongs-fibernet . 5 October 2017.
  16. DONG Energy strengthens its position in the Netherlands . DONG Energy . 14 October 2010 . 8 April 2017 . live . https://web.archive.org/web/20170409112422/http://www.dongenergy.com/en/investors/company-announcements/company-announcement-detail?omxid=977352 . 9 April 2017.
  17. Eneco neemt klanten en medewerkers over van DONG Energy Sales B.V. . Eneco acquires customers and employees from DONG Energy Sales B.V. . Eneco . 21 January 2014 . 8 April 2017 . Dutch . live . https://web.archive.org/web/20161027081551/http://nieuws.eneco.nl/eneco-neemt-klanten-en-medewerkers-over-van-dong-energy-sales-bv/ . 27 October 2016.
  18. News: Dong Energy siger farvel til skidt investering . Dong Energy says goodbye to bad investment . Jakob . Ussing . Signe Ferslev . Pedersen . . 21 January 2014 . 8 April 2017 . Danish . live . https://web.archive.org/web/20170116083658/http://www.business.dk/green/dong-energy-siger-farvel-til-skidt-investering . 16 January 2017.
  19. http://www.offshorewind.biz/2010/10/12/divestment-of-stakes-in-nordkraft-and-salten-kraftsamband-has-been-approved-denmark/ Divestment of stakes in Nordkraft and Salten Kraftsamband has been approved
  20. News: DONG sells link to world's largest wind farm for $728 million . Karolin . Schaps . Reuters . 10 September 2013 . 8 April 2017 . live . https://web.archive.org/web/20150924184522/http://www.reuters.com/article/2013/09/10/us-dong-eon-london-array-idUSBRE9890NP20130910 . 24 September 2015.
  21. Web site: Wittrup. Sanne. Dong Energy øger vindkraften med 75 procent i 2013 . Ingeniøren. 1 November 2012. 1 November 2012 . live . https://web.archive.org/web/20121104235303/http://ing.dk/artikel/133784-dong-energy-oeger-vindkraften-med-75-procent-i-2013. 4 November 2012.
  22. Web site: Dong gets green light for 400MW Anholt despite high prices . Bjartnes . Anders . 22 June 2010 . Recharge . 23 June 2010 . live . https://web.archive.org/web/20100628104053/http://www.rechargenews.com/energy/wind/article218455.ece . 28 June 2010.
  23. Hanne, Windemuller. Anholt Offshore Wind Farm will be the largest in Denmark Danish Energy Agency, 2 July 2010. Accessed: 27 November 2010.
  24. Web site: Anholt Offshore Wind Farm. DONG Energy. 25 April 2018. live . https://web.archive.org/web/20120123052620/http://www.dongenergy.com/EN/business%20activities/renewables/Offshore_wind_farms/Pages/Anholt_Offshore_Wind_Farm.aspx . 23 January 2012.
  25. Fribo, Adam. "Dong sælger de sidste landmøller " Ingeniøren, 23 December 2014. Accessed: 24 December 2014.
  26. Web site: Dong runder 3000 MW havmøllekapacitet. https://web.archive.org/web/20150522160914/http://energiwatch.dk/secure/Energinyt/Renewables/article7726020.ece. dead. 22 May 2015.
  27. News: Goldman Deal on Danish Energy Splits Copenhagen Coalition . Peter . Levring . Christian . Wienberg . . 30 January 2014 . 31 January 2014 . live . https://web.archive.org/web/20140131071728/http://www.bloomberg.com/news/2014-01-29/goldman-1-5-billion-bid-imperils-danish-government-re-election.html . 31 January 2014 .
  28. News: Levring . Peter . Christian . Wienberg . In Denmark, Goldman Sachs Deal Ignites Political Crisis . 6 February 2014 . . 12 February 2014 . live . https://web.archive.org/web/20140207020756/http://www.businessweek.com/articles/2014-02-06/in-denmark-goldman-sachs-deal-ignites-political-crisis . 7 February 2014.
  29. http://globenewswire.com/news-release/2016/06/09/847240/0/en/Nasdaq-Copenhagen-Welcomes-DONG-Energy-To-List-On-Its-Main-Market.html Nasdaq Copenhagen Welcomes DONG Energy To List On Its Main Market
  30. News: DONG leverer det største underskud i danmarkshistorien . DONG falls the largest deficit in the history of Denmark . Michael Korsgaard . Nielsen . 4 February 2016 . . Danish . 1 October 2016 . live . https://web.archive.org/web/20161223021902/http://www.business.dk/energi/dong-leverer-det-stoerste-underskud-i-danmarkshistorien . 23 December 2016.
  31. News: Toyota, Tesla and Vestas ranked among world's top green companies . . 15 August 2016. 5 September 2016. live . https://web.archive.org/web/20160905115722/https://www.theguardian.com/environment/2016/aug/15/toyota-tesla-and-vestas-ranked-among-worlds-top-green-companies . 5 September 2016.
  32. Web site: CARBON CLEAN 200: INVESTING IN A CLEAN ENERGY FUTURE . TOBY HEAPS . MICHAEL YOW . ANDREW BEHAR . 2016 . 10 September 2016. live . https://web.archive.org/web/20170116144749/http://static1.squarespace.com/static/579bd6e8414fb5125750d050/t/57b1ea14d482e94594339e47/1471277588692/Clean200_Q3-16_AYS%2BCK_20160815.pdf . 16 January 2017.
  33. News: Dong completes Vindeby removal . 6 September 2017. 16 March 2017. live. https://web.archive.org/web/20170906144919/http://renews.biz/108374/dong-completes-vindeby-removal/ . 6 September 2017.
  34. DONG Energy completes the divestment of its upstream oil and gas business to INEOS . 29 September 2017 . DONG Energy . 1 October 2017 . live . https://web.archive.org/web/20171001214139/http://www.dongenergy.com/en/investors/company-announcements/company-announcement-detail?omxid=1623311 . 1 October 2017.
  35. News: So Long, DONG: Danish Energy Giant Changes Name While Dropping Fossil Fuels . 2 October 2017 . Julian . Spector . Greentech Media . 4 October 2017 . live . https://web.archive.org/web/20171005050813/https://www.greentechmedia.com/articles/read/dong-energy-changes-name-while-dropping-fossil-fuels . 5 October 2017.
  36. Web site: Ørsted acquires Deepwater Wind and creates leading US offshore wind platform. orsted.com. 21 May 2019.
  37. Web site: Gazprom: Arbitration case over gas prices against Ørsted and other players has closed . energywatch.com . en . 16 May 2018.
  38. Web site: Ørsted sælger Radius for 21,3 mia. kroner . . da . 18 September 2019.
  39. Web site: Ørsted appoints Mads Nipper the next CEO of Ørsted. 11 October 2020. orsted.com. en.
  40. News: Jones . Jeffrey . Caisse invests in wind power project in Taiwan as part of green push . The Globe and Mail . 28 December 2020 . 30 December 2020.
  41. Web site: Ørsted to Rewild Offshore Wind Farms . Offshore Wind . 17 May 2022.
  42. Web site: BSIC. 2019-10-06. Gone with the wind: Orsted sells domestic utility unit in $3.2bn deal to SEAS-NVE. 2021-08-31. BSIC Bocconi Students Investment Club. en-GB.
  43. News: DONG Energy Receives Regulatory Approval To Divest Oil & Gas Business To INEOS . Hill . Joshua S. . 29 September 2017 . Clean technica . 1 October 2017.
  44. Danish State to take over oil and gas pipelines . DONG Energy . 1 October 2017 . live . https://web.archive.org/web/20171001214202/http://www.dongenergy.com/en/investors_/Pages/Sale-of-the-oil-and-gas-infrastructure.aspx . 1 October 2017.
  45. News: DONG's offshore gas pipelines to be sold to Danish TSO . 21 September 2015 . ICIS . 1 October 2017 . live . https://web.archive.org/web/20171001213122/https://www.icis.com/resources/news/2015/09/21/9925750/dong-s-offshore-gas-pipelines-to-be-sold-to-danish-tso/ . 1 October 2017.
  46. News: Denmark's Dong Energy shifts from fossil fuels to renewables . Clark . Pilita . 17 March 2017 . . 8 April 2017 . live . https://web.archive.org/web/20170409111009/https://www.ft.com/content/99150262-d368-11e6-b06b-680c49b4b4c0 . 9 April 2017.
  47. Web site: Offshore wind: Europe far ahead, Siemens largest by far. 19 August 2016. 6 October 2016. live. https://web.archive.org/web/20161009102413/http://energypost.eu/offshore-wind-grows-fits-starts/. 9 October 2016.
  48. Web site: DONG Energy Surpasses 1,000 Wind Turbines Installed At Sea. CleanTechnica. 25 October 2016. 30 April 2020.
  49. http://www.4coffshore.com/windfarms/horns-rev-2-denmark-dk10.html Horns Rev 2 (Denmark) offshore wind farm
  50. http://www.lorc.dk/Knowledge/Offshore-renewables-map/Offshore-site-datasheet/Horns-Rev-2-Offshore-Wind-Farm/000036?free=horns+rev Horns Rev 2
  51. http://www.4coffshore.com/windfarms/gunfleet-sands-united-kingdom-uk07.html Gunfleet Sands offshore wind farm (United Kingdom)
  52. News: DONG Energy Invests in UK Offshore Wind Farms . Oil Voice . 3 December 2007 . 16 December 2007 . live . https://web.archive.org/web/20090413173334/http://www.oilvoice.com/n/DONG_Energy_Invests_in_UK_Offshore_Wind_Farms/9a96469e.aspx . 13 April 2009 .
  53. News: Dong commits to Hornsea build. 3 February 2016. renews.biz. live. https://web.archive.org/web/20160204093546/http://renews.biz/101385/dong-commits-to-hornsea-build/. 4 February 2016.
  54. World's largest offshore wind farm to be built in the UK. 3 February 2016. Department of Energy and Climate Change. live. https://web.archive.org/web/20160203150334/https://www.gov.uk/government/news/worlds-largest-offshore-wind-farm-to-be-built-in-the-uk. 3 February 2016.
  55. News: DONG Energy To Build World's Largest Offshore Wind Farm At 1,386 MW . Hill . Joshua S. . 12 September 2017 . Clean technica . 1 October 2017.
  56. Web site: About Us . 2022-10-22 . Ørsted US .
  57. Web site: GeoSea acquiert A2SEA cfe. www.cfe.be. 2019-10-21.
  58. News: Siemens catches wind with A2Sea move . . NHST Media Group . 29 June 2010 . 16 November 2010 . live . https://web.archive.org/web/20120929011325/http://www.upstreamonline.com/live/article219032.ece . 29 September 2012.
  59. http://www.offshorewind.biz/2010/10/13/antitrust-authority-approves-siemens-as-equity-partner-in-a2sea-denmark/ Antitrust authority approves Siemens as equity partner in A2SEA
  60. http://www.maritimedanmark.dk/?Id=9312 DONG becomes co-owner of CT
  61. Web site: Buljan . Adrijana . 2021-11-12 . Ørsted Completes Borssele 1 & 2 Investment Financing . 2023-11-21 . Offshore Wind . en-US.
  62. Web site: ORSTED, Ørsted, (DK0060094928) - Nasdaq Nordic.
  63. Web site: Poulsen to stand down as Ørsted CEO. 2021-08-31. www.windpowermonthly.com. en.
  64. Web site: Ørsted.com - Love your home. www.dongenergy.com. 25 April 2018. live. https://web.archive.org/web/20171007000037/http://www.dongenergy.com/en/investors/shares/major-shareholders. 7 October 2017.
  65. Web site: Dong Energy: Risk Assessment for Shareholders of the Proposed 1500 MW Coal-fired Power Plant near Greifswald, Germany.

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