Ørsted Announces Strategic Shifts Amid Industry Challenges

Danish offshore giant restructures, exits markets, and cuts jobs in response to US project setbacks and market dynamics.

Orsted-Taiwan-SOV-780x470

Danish offshore wind leader Ørsted has announced significant strategic shifts in response to formidable challenges encountered over the past twelve months, coupled with substantial impairments and additional costs stemming from its US offshore ventures. In an endeavor to mitigate risks and streamline operations, Ørsted unveiled plans to withdraw from key markets, including Norway, Spain, and Portugal, alongside a substantial reduction in its workforce, potentially affecting up to 800 positions. This strategic realignment aims to foster a leaner and more efficient organizational structure.

The decision encompasses the cessation of Ocean Wind 1 and Ocean Wind 2 offshore wind projects, alongside the repositioning of the Skipjack Wind project, with a renewed focus on the North-East Atlantic within its US offshore portfolio. Furthermore, Ørsted has outlined intentions to deprioritize project development in Japan, particularly within floating offshore wind and power-to-x initiatives, with a concerted effort to optimize costs and realign strategic market objectives.

As part of its revised strategy, Ørsted anticipates significant relief in capital expenditure totaling approximately $5 billion between 2024 and 2026, supplemented by accelerated farm-downs and divestment initiatives targeting proceeds of around $16.5 billion by 2030, with a substantial portion anticipated within the next two years.

In tandem with these measures, Ørsted foresees a global reduction in its workforce ranging between 600 and 800 positions, with approximately 250 individuals expected to depart the organization in the near term. Concurrently, Thomas Thune Andersen, Chairman of the Board, has announced his forthcoming resignation, effective at the upcoming annual general meeting in March.

Despite its current renewable installed capacity standing at 15.7 GW, projected to surge to approximately 23 GW by 2026, Ørsted has revised its long-term renewable capacity target downwards from 50 GW to a range of 35-38 GW by 2030, reflecting the exigencies of the challenging market landscape witnessed in recent years.

| |

Last news