Orsted plans to invest Dkr475bn (€63.75bn) under its 2023-2030 investment package but will maintain a strict adherence to value creation, with developments under scrutiny and an exit of Vietnam’s development sector.
While the company remains upbeat about core markets such as the North Sea, it has been putting economic viability under the microscope and vowed to “walk away” from projects entirely if necessary, a Capital Markets Day heard on Thursday.
Poland’s combined 2.8GW Baltica 2 and 3 sites received differing judgements. Chief executive of Europe Rasmus Errboe said the company “now sees value creation on Baltica 2” and is working towards COD in “2027” but for Baltica 3 “the story is slightly different”.
He said Orsted and 50/50 partner PGE of Poland have agreed “to take a step back” and reconfigure Baltica 3, with COD now expected “no later than 2029”. This review includes cancelling contracts and retendering, considering larger turbines, as well as looking to tie-in a nearby 210MW lease to scale up the project and benefit the business case for Baltica 3.
This strategy led Orsted to alter its goal of 30GW of offshore capacity by 2030 to 28GW, although chief executive Mads Nipper said this could increase if enough potential pipeline assets come good.
The 2023-2030 spend of Dkr475bn aims to achieve around 50GW of renewable capacity. Of this sum, Dkr335bn (70% of total) will be ploughed into the offshore sector, DKK 115bn (25% of total) towards onshore, and DKK 25bn (5% of total) for P2X and bioenergy.
Regionally, Europe will claim 40%-50% of the funding, with the Americas getting 35%-40%, and Asia Pacific receiving 10%-15%.
Nipper noted that group EBITDA, excluding new partnerships, is now at 13%-14%, with the 2023 figure sum at DKK 21.5bn and 2030 forecast in the range of DKK 50bn-55bn.
Return on capital employed (ROCE) has risen to 14% for the 2023-2030 period from 11%-12% for the previous 2020-2027 forecast.