What do we say to fossil fuel? 'Not today - Ørsted History
As this piece is the first in a series of many, we shall start by introducing our concept. As you might have noticed, we categorised this article in the "leaders of the transition" section. Our idea is to present companies who are currently the top, the best, the leaders in the ecological transition. In the hopes that their story will inspire others to follow their path and engage in the transition.
"At Ørsted, our entire business is focused on addressing the climate emergency, the most pressing societal challenge of our time. Our commitment to helping create a world that runs entirely on green energy is our commitment to helping limit climate change, which is central to progressing action on the UN Sustainable Development Goals."
What better way to start this series on leaders of the transition than by writing on Ørsted; the company rated by Forbes as #1 most sustainable company. I guess the introductory quote is already setting up the scene for what it is all about. Ørsted is a Danish company and one of the major companies in the energy sector in Denmark. Its evolution in sustainable transition is most probably one of the most noticeable in history as the company started as a producer of fossil energy, coal and petrol at first and then expanded to natural gas. In November 2017, the company divided and Ørsted focussed their energy on renewables.
The most striking about this company is undoubtedly their dedication to a greener future. The company's website does not have a single page without the words "green" or "sustainable". In the context of a developing green market, it is refreshing to see a company dedicated to providing real solutions and having a real impact instead of having an extensive greenwashing campaign to appear green.
A bit of history
Ørsted was created in 2017, yet its incredible transition can be traced back to 1973 in the aftermath of the oil crisis. In the early '70s, Denmark's energy production was highly dependent on imported oil and most notably oil from the Middle East. We learnt one thing in 1972, and in many other instances in history, is that being almost solely dependent on one source of energy for production or trade might not be the most ingenious strategy. Thus, Denmark was hit pretty hard by the rising costs of petrol and consequently adopted a new energy policy. The government hence created a company, the Dansk Olie & Naturgas (DONG), in charge of with extracting natural resources like oil and natural gas directly from the North Sea. Which, I agree, might not be the most sustainable practice.
Still worried about energy independence and production, the Danish state and the company decided to diversify their energy production methods and heavily invested in the production of the first-ever offshore wind farm in 1991. It was a cornerstone for the company's strategy as it will continue to develop additional projects in the field of renewable energy. In 2005, DONG grew and merged with electricity-production and distribution companies. This merging changed the whole strategy of the now bigger DONG from an energy producer to producer and distributor. By doing so, it allowed for a smarter distribution of selected sources of energy production. Further by controlling both production and distribution, the company has better control over the finance and trade prices, giving it more flexibility in adapting to international and European markets.
In 2017 DONG Energy announced the sale of its hydrocarbons branch (a ballsy move for DONG) and decided to focus on the development of renewable energy sources. In November, it became Ørsted.
Innovations and Leadership
In 2018 the company estimated that the world market for renewables would more than triple over the period 2015 and 2030. Today the company's catalogue of renewable energy production source is impressively large. As I mentioned above, the company started in 1991 with an offshore wind farm. As it turns out, Ørsted is now the very much unmatched global leader. As of 2018, the company's share in the offshore wind energy production is roughly equal as ¼ of the worldwide market. By 2020, Ørsted wants to support the annual electricity usage of 16Mil Europeans through offshore winds. "In 2019, our green energy solution helped avoid 11.3 million tonnes of carbon emissions – equal to removing more than 5.7 million cars from the street for a year." Now that is what I call having an impact!
While being the company's core activity, offshore wind farms are not its only branch of activity. Most notably, the Bioenergy sector is considered a critical solution for Ørsted. The plan is to substitute biomass heat to coal heat to provide sustainable and carbon-neutral energy to Danish households. In about a decade, the company's biomass heat production already shut down three coal-fired power plants in the country. The Biomass conversion programme is planning to completely shut down the country's last remaining coal power plants by 2023 and produce electricity and heat using biomass and natural gas. Can't wait to be in 2023 to see the results. Nonetheless, the dedication to the company to not only denouncing the adverse effects but also offering an alternative sustainable solution is commendable.
Commitment and Targets
In 2006 the share of energy production was balancing in favour of fossil fuel-based with only 17% of the output being from renewable sources. That was already an achievement as in 2006 - climate change was not yet a marketing argument. Ten years later, in 2016, they had already the threshold of 50% renewable. This massive increase is the result of creative investments and a dedicated research and innovation department, continually working on expanding and improving their offshore wind farm.
Today their performances are simply astonishing. Renewable resources generate 86 % of their energy production; 42% from offshore winds; 31% from biomass; 13% from onshore winds. The remaining output is generated 9% by coal and 5% by gas. Although, the goal is to reach 99% of renewable energy sources by 2025 using offshore wind and biomass alone! All in all, Ørsted is an inspiring company that should inspire all others.
- Firstly and as it is the main topic of this blog, it is astonishingly competent in the field of sustainability. It outclasses by far the large majority of energy-producing and distributing companies. I want to state again that the goal for 2025 is to provide electricity to 16Mil Europeans while having 0 Co2 emissions. Also, the passion for the environment is real and the ambitions to become carbon neutral are not the end line as many more projects are developed to make sure we do not destroy the ecosystems by the obsessively twitting or writing articles on sustainability on old power-hungry laptops!
- Secondly, it is a hub for innovation and is boosting the research on magnetism and sustainable energy production. To be fair, I studied political science, so I am not the best equipped to discuss the current research. Nonetheless, having a successful company as a leader in sustainable innovation is stirring the competition and motivating other companies to develop their sustainable designs. Further, it reassures the investors to see that a company whose preoccupation is sustainability makes money.
- Thirdly let's not forget that Ørsted is not a charity and manages to make all of this progress while staying profitable. Its market is even expanding as it aims to provide electricity to an additional 1Mil people during the next three years. The extended market, coupled with the lesser costs of renewable energy Ørsted seems to be on the excellent path to reward well all who participated in its success!
More information on Ørsted's website!