‘Renewable majors’ will pioneer green energy transition, says Orsted CEO

COPENHAGEN: Danish offshore wind specialist Orsted aims to become one of a handful of future “renewable majors” that will lead a global transition from fossil fuels to green energy, the company’s chief executive said.

Orsted has gone through a rapid transition since 2012 when CEO Henrik Poulsen took the helm, shedding its oil and gas business and phasing out coal to become almost entirely green.

The group, which has installed about a quarter of the world’s offshore wind capacity, is seeking to expands in energy storage, onshore wind and possibly solar power in order to build scale and bring the cost of renewable energy even lower.

“Scale is important,” Poulsen said at an event in Copenhagen this week. “We must both geographically and technologically build a much wider and bigger platform for the future.”

The company, which has so far mainly developed offshore wind farms in Europe, is already involved in battery storage projects and last week agreed to buy U.S. onshore wind farm developer Lincoln Clean Energy in a $580 million deal.

“If you look to 2030, I think we will have something called renewable majors, in the same way as we now have oil majors,” Poulsen said.

He predicts the handful of such renewable majors could include Spain’s Iberdrola, Italy’s Enel and U.S. company NextEra.

“Orsted has a real and solid opportunity to become one of the future renewable majors,” he said.

NextEra has about 20 gigawatt (GW) of installed renewable energy capacity, Iberdrola about 15 GW and Orsted about 12 GW.

Sam Arie, who leads European utilities research at UBS, refers to these companies as possible future “wind and solar majors”.

“You will quickly get to a point where you have some very big wind and solar players with 30-40 GW capacity. If you look a bit further, they could have 50 or 100 GW,” Arie said.

Building scale is important as the biggest factor for renewable energy companies when bidding for new projects is how much they pay for the wind turbines and solar panels.

“That is very similar to the oil and gas business, where it’s not easy being a contractor to an oil major because you’re constantly squeezed on costs,” he said.

Last year, Orsted sold its oil and gas business to Ineos and has also put its Danish power distribution business up for sale.

Source: in.reuters