News | Headlines


Ørsted to cut up to 800 jobs and pause dividend


Denmark Finance


Ørsted, which is developing the world’s largest offshore wind farm, the £8bn Hornsea 3 array off the UK in the North Sea, is to cut hundreds of jobs and pause its dividend in an attempt to recover from a financially difficult 12 months. The various measures it plans to take include cutting its target for developing renewable energy capacity by 2030, reducing it from 50 GW to 35-38GW.


Its chair, Thomas Thune Andersen, will step down after almost a decade in the role, after the two senior executives who left the business in November.


The company, which is majority owned by the Danish government, said the reset plan was designed to make it a leaner and more efficient company. Ørsted has struggled in the face of high inflation, supply-chain disruption and rising interest rates, which have hit the wind farm industry. The company has also experienced problems in the USA in attempts to secure tax credits.


Last year, Ørsted, which has 12 wind farms in the UK, cancelled two big offshore wind farm


projects in the USA, the Ocean Wind I and II schemes, citing a sharp rise in costs. It took a 28.4bn Danish kroner (£3.3bn) hit as a result of the decision. The company had also raised doubts over the cost of the Hornsea 3 project early last year. However, in December it reaffirmed its commitment to the 2.9 GW development.


Ørsted’s Board of directors has now approved a new business plan with the ambition of 35-38 GW of installed capacity by 2030 and updated financial targets, following the completion of a comprehensive portfolio review. Part of the plan is to cut up to 800 jobs globally, pull back from markets in Spain, Portugal and Norway, and suspend dividend payments to shareholders covering the 2023-25 financial years.


Mads Nipper, Group president and CEO of Ørsted, commented: “We have prioritised projects within our portfolio and are implementing significant changes in our business, including revising our operating model to reduce risks. We now present a robust business plan, and with an


Plan for 100 MW green H2 in Finland


Finland Hydrogen economy Oulu Energy is in the initial stages of planning what it believes will be a ground-breaking 100 MW hydrogen production plant in Oulu, northern Finland, marking a significant step towards clean energy production. The initiative aligns with Oulu Energy’s broader objective of achieving carbon neutrality by the year 2030. Collaborating on the project planning is Finnish company P2X Solutions, currently engaged in the construction of a hydrogen production plant in Harjavalta, western Finland. The project, located in the Laanila industrial area, encompasses an array of key components that include an electrolysis plant with a capacity of up to 100 MW, a carbon capture plant, hydrogen and carbon dioxide storage facilities, and an additional processing plant capable of producing end products such as methane or methanol.


This venture marks Oulu Energy’s inaugural foray into the realm of hydrogen projects and holds significance on a European scale. Beyond the scope of environmental benefits, the project is poised to foster development opportunities for industry, and create new businesses and jobs in the Oulu region. Initial estimates suggest that the project could generate 200–400 GWh hours of heat


plant


energy every year as a by-product, which could be seamlessly integrated into the district heating network. Simultaneously, the project could recover oxygen for industrial applications.


The project also seeks to explore the potential of utilising biogenic flue gases from local industry and power plants in the further processing of hydrogen, aligning with a holistic approach to sustainable energy solutions. ‘Biogenic’ refers to gases such as CO2


from


combustion that are produced by human activity.


The developmental phase of the project is to be led by P2X Solutions Ltd, a specialist in green hydrogen and Power-to-X technology. The company is involved in the construction of Finland’s inaugural industrial-scale green hydrogen and synthetic methane production plant in Harjavalta and Joensuu in western Finland.


The current phase of Laanila project development involves a comprehensive examination of the plant’s feasibility, consideration of potential locations, and an impact assessment. The critical investment decision is anticipated for the autumn of 2025, with the earliest operational readiness of the plant estimated to be in 2028.


6 | March 2024 | www.modernpowersystems.com


uncompromising focus on value creation, we plan to more than double our current installed capacity of renewable energy by 2030.” Besides reducing capital expenditure and project development costs, Ørsted pauses dividends for the financial years 2023-2025. It will also accelerate its divestment programme. Divestments are expected to contribute with proceeds of approximatley DKK 115 billion towards 2030, of which about DKK 70-80 billion are expected in 2024-2026.


In addition, Ørsted will look at measures to become a leaner and more efficient organisation and has set a target to reduce its fixed costs by DKK 1 billion by 2026 compared to 2023, on a like-for-like basis. This will include a reduction of 600-800 positions globally. Not all reductions will result in redundancies, but there will be redundancies throughout 2024, and today, Ørsted is announcing that approx. 250 people globally will be made redundant and leave Ørsted within the coming months. The company expects to achieve a return on capital employed (ROCE) of approximately 14 % on average during 2024-2030.


Prysmian signs €2 bn contract for EGL2 link


UK Transmission & distribution Prysmian has finalised a contract worth in the region of €1.9 billion with Eastern Green Link 2 Ltd, a joint venture of SSEN Transmission and National Grid Electricity Transmission plc, the UK transmission network owners. Under the contact, Prysmian will deliver a 2 GW capacity HVDC cable system for the Eastern Green Link 2 (EGL2) network development project to further connect the Scottish and English grids. “Once completed, the electric ‘superhighway’ cable link will unlock the rich renewable energy capacity of Scotland and significantly increase the UK’s capacity to deliver clean energy … ” commented Hakan Ozmen, EVP Transmission BU, Prysmian.


This contract follows the selection of Prysmian as the exclusive preferred bidder in May 2023 and a subsequent commitment made in June 2023 to assure Prysmian’s continued capacity availability for the project. The new connection is due to be operational in 2029.


Prysmian will design, manufacture, install, test and commission the cable system, which will among the first contracted in the UK to utilise 525 kV HVDC (high voltage direct current) technology with extruded XLPE insulation.


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