(Reuters) – Renewable energy group Orsted (ORSTED.CO) will invest 475 billion Danish crowns ($68 billion) to achieve a 2030 goal to install 50 gigawatts (GW) of power capacity, it said in an investor update on Thursday.
The Danish company said the plans were fully self-funded and it expected to exceed goals set in 2021 for earnings before interest, tax, depreciation and amortization (EBITDA) as well as for return on capital employed (ROCE).
Orsted’s share price rose 6.0% by 1039 GMT to reach a two-week high, outperforming a 0.6% rise in Copenhagen’s benchmark stock index.
“We’re on track to outperform our previous EBITDA and ROCE targets for 2020-2027, confirming the significant value in our portfolio of renewable projects,” Chief Executive Mads Nipper said in a statement.
Orsted, the world’s No. 1 offshore wind farm developer by gigawatt capacity, operates 15.5 GW of renewable energy assets. Capacity of 4.9 GW is under construction and projects representing another 10.6 GW have been awarded, it said.
Demand for green energy is rising, but the wind industry, which requires high upfront investment has been hit by cost inflation and high interest rates.
Orsted’s share price has more than halved since peaking in January 2021.
The company said it was cooperating closely with suppliers to secure competitive prices and ensure sufficient value in projects for which it had not yet made final investment decisions.
It could reconfigure or exit projects if it finds the profitability does not meet the criteria for a final investment decision, it said.
Orsted’s “fully self-funded” investment plan suggests that the company won’t need to raise more equity from shareholders, Bernstein analysts said.
PLANNED BRITISH, POLISH PROJECTS
At its capital markets day in London, Orsted said it expects to take a final investment decision on its planned 2.8 gigawatt (GW) Hornsea 3 offshore wind farm in Britain this year.
Orsted warned in early March that the project may not go ahead without more British government support such as tax breaks.
Rasmus Errboe, Orsted’s CEO of Europe, also said the company sees sufficient value creation in its planned Baltica 2 offshore wind project in Poland but has decided to “reconfigure” the Baltica 3 project – potentially getting a bigger turbine and adding more capacity.
Orsted has a joint venture with Polish state-owned utility PGE (PGE.WA) to develop the wind farms which currently have a combined capacity of 2.5 GW and were scheduled to come online this decade.
David Hardy, CEO of Americas, said the company will focus solely on the mid-Atlantic and north-east wind markets of the U.S. east coast.
It has decided to “reconfigure” its planned 1.1 GW Ocean Winds 2 offshore wind project, which could possibly lead to a delay in the 2029 timeline or different technology being used.
Orsted’s 1 GW Skipjack Wind project will also probably be delayed due to issues with the required transmission system.
($1 = 6.9523 Danish crowns)