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Birmingham Post
Birmingham Post
David Laister

Orsted achieves record earnings as sale of huge stake in Hornsea Two brings strong return

Orsted’s sale of a huge stake in world-leading wind farm Hornea Two propelled it on to record earnings in 2022.

The offshore wind giant, which has established a major operations and maintenance presence in Grimsby - from where it serves hundreds of turbines and employs hundreds of people, with both figures set to grow again - has recorded operating profits of £3.8 billion.

Globally active, the Danish headquartered business has driven the UK market to new heights. The Hornsea Zone is breaking records in scale and cost efficiency, with two of the four projects now powering British homes and businesses.

Read more: Humber Renewables Awards 2023 now open for entries

Mads Nipper, group president and chief executive, told how the £1.3 billion gain from the sale of 50 per cent stakes in the 1.3GW Hornsea Two, as well as Borkum Riffgrund Three - a 900MW German site - had contributed more than a third of the earnings alongside generation activity in a vital year for renewables and energy security. The company retains responsibility for the running of the farms.

Mr Nipper said: “In a year with unusual market conditions, not least the very volatile energy prices and a substantial increase in inflation, we're happy to achieve a record-high operating profit for 2022.

“We achieved strong operational performance with our assets remaining fully operational and having robust availability rates.

“Furthermore, we achieved significant strategic results across our business, and we remain confident in our long-term financial estimates and growth ambitions. The world is facing a climate crisis, and it's indisputable that a transition to a sustainable energy system is needed. We're ready to be part of this much-needed renewable energy build-out."

Mads Nipper, chief executive and and group president of Orsted. (Orsted)

As reported last March, French financial giants AXA IM Alts and Crédit Agricole Assurances formed a consortium to take an equal share of Hornsea Two, located 89km off the East Yorkshire coast in a £3 billion deal. It completed in September.

Glennmont Partners, one of Europe’s largest fund managers focusing exclusively on clean energy infrastructure, completed the £1 billion deal for Borkum a month earlier.

Of the "recycling of capital" to support further growth additions, Mr Nipper said: "The farm-down of Hornsea Two was one of the largest renewable energy M&A transactions ever with a valuation that underpins the attractiveness of our offshore wind assets."

July’s award of a contract for difference for its next UK build - Hornsea Three, set to move the ‘world’s largest’ title on again was highlighted in major progress in offshore wind in 2022, so too the commissioning of Hornsea Two.

Hornsea Three achieved a strike price of £37.35 in the biggest ever renewables auction. The 2.85 GW project will generate a further 1,200 jobs in long term operation and maintenance in Grimsby and the wider supply chain. It is expected to be commissioned in 2027.

By 2030 the company now expects to have at least 800 people working out of the East Coast Hub on Royal Dock - around double the current numbers.

A US final investment decision on South Fork, off the East Coast as well as significant steps in floating wind in Scotland and Spain were flagged, with construction ongoing in Taiwan with commissioning anticipated in the second half of this year on Greater Changua One and Two.

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