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.
“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.”