Struggling Ørsted slashes wind targets by 25%

Chairman Thomas Thune Andersen has also announced his decision to step down at the forthcoming AGM on March 5, and ‘to become a leaner and more efficient organisation’, the company will cut 600-800 jobs around the world.

Last year the firm confirmed it was pulling out of two offshore projects, Ocean Wind 1 and Ocean Wind 2, in the US, now saying it will primarily focus its US offshore portfolio in the north-east Atlantic.

It has also now announced plans to exit other offshore markets, including Norway, Spain and Portugal, and will be ‘de-prioritising development activities in Japan’ and ‘planning for a leaner development within floating offshore wind and P2X’ (electricity conversion, energy storage and reconversion pathways from surplus renewable energy).

“Project cancellations and phasing of capital expenditure across the portfolio will result in approx. DKK35 billion (€4.7 billion) of capital expenditure relief in 2024-2026 compared to the numbers presented at the Capital Markets Day in June 2023,” the company says.

“As a result of the review, Ørsted now believes that it has a more robust portfolio of projects, and it has refocused its offshore strategy for the US. The portfolio changes will result in approx. DKK3 billion (€402 million) of development expenditure reductions in 2024-2026 compared to the numbers presented at the Capital Markets Day in June 2023.”

The company has paused dividends up to 2025.

“In order to improve our competitiveness, ensure value creation, and ensure our ability to attract capital to the renewable build-out, we will make Ørsted a leaner and more efficient company,” said Mads Nipper, group president and CEO. “This will include reducing the number of positions across the company. We are committed to carrying this through in a fair and respectful manner.”

While sounding rather bleak, the firm says it expects its EBITDA to increase to up to DKK43 billion (€5.7 billion) in 2030, corresponding to an annual growth (CAGR) of 8% from 2023 to 2030.

“2023 was a challenging year for Ørsted,” said outgoing chair Thomas Thune Andersen. “We have learned from the challenges and we are announcing a robust business plan with revised strategic growth ambitions for 2030. The plan has been developed in close collaboration between the executive management team and the Board of Directors, and we are confident that this is a robust plan that will secure our continued long-term growth.”