Orsted has set out a new ambition to reach an installed renewable energy capacity of 50GW by 2030.
It said that 30GW will come from offshore wind, 17.5GW from onshore wind and solar PV, and 2.5GW from other renewables, including sustainable biomass, renewable hydrogen, and green fuels.
To support this ambitious build-out, Orsted plans to invest Dkr350bn (€47bn) in green energy from 2020 to 2027, accelerating average yearly investments by around 50% since the last Capital Markets Day announcement in 2018.
Of this, 80% is expected to be within offshore wind, including renewable hydrogen, and 20% within onshore.
The Danish developer currently has 12GW of installed renewable capacity and had a 30GW by 2030 target in place previously.
Looking ahead, the global build-out of renewable energy is expected to accelerate significantly, supported by governments around the world committing to ever more ambitious renewable-specific targets to limit global warming, said the company.
By 2030, the global installed capacity of renewable energy is expected to almost triple.
Offshore wind is expected to grow by a factor of 7 and onshore renewables by a factor of 2.5-3, it said.
This massive build-out of renewable energy presents unparalleled growth opportunities for Orsted, according to the company.
Orsted group president Mads Nipper said: “Our aspiration is to become the world’s leading green energy major by 2030.
“With the offshore wind industry’s largest concrete development pipeline, our global development organisation, and our industry-leading commitment to innovation, it’s our clear aspiration to remain the global market leader in offshore wind.
“In onshore wind and solar PV, with our proven track record in scaling and delivering attractive value and as a top-5 developer in the US, it’s our aspiration to become one of the world’s top 10 players in onshore renewables.
“In renewable hydrogen and green fuels, we’ve built a strong platform with industry-leading offtakers, and we intend to grow this platform to become a global leader in renewable hydrogen.”
Furthermore, Orsted has announced a ban on the landfilling of wind turbine blades with immediate effect.
Going forward, the developer has committed to either reusing, recycling, or recovering 100% of all blades coming from repowering or end-of-design-life decommissioning of our onshore and offshore wind farms.
In the period 2020-2027, Orsted expects a growth in EBITDA from offshore and onshore assets in operation of 12% a year on average, reaching a level of DKK35-40bn in 2027.
The growth rate assumes that all offshore projects where Orsted does not already have a joint venture partner are farmed down to a 50% ownership stake.
Orsted has high visibility on future earnings with 90 % on average of Orsted’s operating profit (EBITDA) for the period 2020-2027 coming from regulated or contract-based activities.
Going forward, Orsted’s targeted range for the fully loaded unlevered lifecycle spread to weighted average cost of capital (WACC), at the time of bid/final investment decision (FID) whichever comes first, for our offshore and onshore projects will be 150-300 basis points.
It said this was consistent with the implied value creation spread from its last guided return.
The targeted rate is not a hurdle rate and, consequently, there could be projects that deviate from the targeted range.
The average return on capital employed (ROCE) for 2020-2027 is expected to be 11-12%.