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Ørsted is slashing investment and dropping its targets for developing new renewable energy as part of a second drastic attempt to restore its struggling share price and boost confidence in its strategy.
The world’s largest offshore wind developer said it would cut planned investment to 2030 by 25 per cent, less than a week after it replaced predecessor Mads Nipper with new chief executive Rasmus Errboe.
The state-backed company announced on Wednesday plans to prioritise building existing projects as it tries to recover from a troubled foray in the US.
It also faces a difficult environment for offshore wind with the election of Donald Trump, while attempting to maintain its investment-grade rating and avoid new fundraising to shore up its balance sheet.
The move highlights the challenges facing global attempts to move away from fossil fuels, with some other developers also scaling back their renewables ambitions due to flagging returns or practical challenges.
The announcement came hours after Equinor, Norway’s state-owned energy group and a major Ørsted shareholder, said it was also cutting renewables targets and instead planned to pump more oil to boost shareholder returns and cash flow.
Nipper presided over a nearly 80 per cent slump in Ørsted’s share price over the past four years as interest rates rose and hype over green stocks faded.
He tried in February last year to arrest the slide by announcing up to 800 job cuts, slashing targets for renewables, suspending the company’s dividend and pulling out of three offshore wind markets.
But the group’s shares slumped again after it announced in January further writedowns connected to its US offshore wind business, which has been stymied by high costs and strains in the supply chain.
In a statement ahead of its annual results on Thursday, Errboe said the company’s “number one priority” for the next three years was to finish building the 8.4 gigawatts of offshore wind under construction around the world — a vast portfolio capable of powering millions of homes.
He added that the company “continues to believe in the long-term fundamentals for offshore wind and renewables more broadly” and highlighted predictions that global demand for electricity would double by 2050.
Under its new plans, Ørsted is scrapping its target of developing 35-38GW of renewables by 2030, and is cutting investment plans for 2024-2030 by 25 per cent to DKr210bn-DKr230bn ($29.3bn-$32.10bn).
Finishing its offshore wind projects and other technology under construction would take its total installed capacity from about 18GW today to more than 27GW in 2027.
In a potential sign of further job cuts to come, the company said it would also be “right sizing our cost base and organisation continuously”.
The company insisted the business plan would not require raising new equity. It is still aiming to restore dividends in 2026.
Errboe added: “The market remains challenging, but delivering on this programme will solidify our position as the undisputed global leader in offshore wind.”
Analysts at RBC said: “It is a positive step, given the funding challenges for the business and the lack of credit given for growth by the market.”
