Renewable energy firm Ørsted gets boost from offshore wind earnings amid net profit decline

Ørsted plans to develop up to 5GW of offshore wind off Ireland’s coast and the company awaits detail on the second offshore energy auction this year.

Danish renewable energy company Ørsted, which has a significant presence in Ireland, is looking at other markets for offshore wind development amid fatigued progress in the onshore energy sector in Europe.

The company posted a jump in operating profit driven by an increase in its offshore site earnings from projects in locations such as the US and Taiwan.

“In Europe, we’ve taken the strategic decision to prioritise other markets for onshore renewables, and consequently we’ve signed an agreement with Engie under which they will acquire our onshore wind and solar assets in France,” said Mads Nipper, group president and chief executive of Ørsted.

Earlier this year, industry representative group Wind Europe said the EU is falling behind on its wind energy goals despite recent progress.

The EU built 17 gigawatts (GW) of new wind energy in 2023, slightly up on 2022, but Wind Europe said “it’s not enough to reach the EU’s 2030 targets”, which may have spooked developers like Ørsted.

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The 8% jump in Ørsted’s earnings before interest, taxes, depreciation, and amortisation to 7.5bn Danish kroner (€1bn) in the first three months, compared to the same period a year earlier, boosted the company amid an overall net profit decline of 19% to 2.6bn Danish kroner due to higher tax expenses in the US.

The company reiterated its full-year guidance following a 18% surge in its offshore site earnings.

It also indicated it remains committed to offshore wind development in Ireland, through a contract with State energy provider ESB, despite planning backlogs which have caused major headaches for the renewable energy sector.

Ørsted plans to develop up to 5GW of offshore wind off Ireland’s coast and TJ Hunter, senior director for development and operations at Ørsted UK & Ireland, said his eyes are fixed on the detail underpinning the upcoming second offshore renewable energy auction which is expected later this year.

Meanwhile, Vestas returned to profit last year from a loss in 2022 when higher raw material costs hit margins and supply chain problems hampered its ability to deliver orders. It is still battling to fully overcome the challenges, however.

- Additional reporting by Reuters