Orsted, the world’s leader in offshore wind energy developments, announced this Wednesday is ramping up investment to $57 billion by 2027; its goal is to become the world’s number 1 green energy developer.
Firstly, the danish company sold its oil and gas portfolio back in 2017; which benefited the company in terms of leveraging from policies that helped companies implement the Paris Climate Agreement.
Secondly, as energy transition has become urgent in the energy industry, oil major have been heavily investing in green energy; Total, BP, Shell are accelerating transition and making strong investments in the sector. Total even rebranded the company to fit more accurately into a new business model.
Thirdly, according to Reuters, the biggest wind energy developer in Europe, Iberdrola, announced earlier this year it would spend $150 billion euros (USD$182 billion) by 2030 to triple its renewable energy capacity.
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Orsted faces growing competition
Consequently, Orsted announced a planned investment of $350 billion danish crowns, which is USD$57 billion, to bolster its capacity and bring down competition. Investment would be exercised through 2027; and is up from an original target of USD$200 danish crowns by 2025.
In addition, Orsted’s CEO, said. “Our aspiration is to become the world’s leading green energy major by 2030.” Such target would also see the company’s installed renewable energy capacity quadrupled to 50 gigawatts by 2030; while its original target was 30GW.
Furthermore, the investment expansion would focus more on green hydrogen and onshore wind energy. However, Orsted objective may prove to be trickier that its sounds. For Nordnet analyst Per Hansen; “the question is if Orsted can keep their profitability when the market is growing and the competition intensifies.”
Finally, according to Reuters, the company’s shares were down 4.8% at 881.6 crowns, after the announcement. Despite, Citi analysts said the stock was already pricing in strong growth despite growing competition.