REG-Ørsted A/S Ørsted awarded contract for world’s single biggest offshore wind farm

Oersted A/SAnnouncement

07/07/2022 07:45

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   Ørsted A/S (Orsted)
   Ørsted awarded contract for world’s single biggest offshore wind farm

   07-Jul-2022 / 08:32 CET/CEST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   7.7.2022 08:32:40 CEST | Ørsted A/S | Inside information

   The UK Department for Business, Energy and Industrial Strategy (BEIS) has
   awarded Ørsted a contract for difference for its Hornsea 3 offshore wind
   farm. The project was awarded at an inflation-indexed strike price of GBP
   37.35 per MWh in 2012 prices.

   With a capacity of 2,852 MW, Hornsea 3 will produce enough low-cost,
   clean, renewable electricity to power 3.2 million UK homes, making a
   significant contribution to the UK Government’s ambition of having 50 GW
   offshore wind in operation by 2030 as part of the British Energy Security
   Strategy. 

   Hornsea 3 will play a key role in the ongoing development of a larger and
   sustainably competitive UK supply chain to support the next phase of the
   UK’s offshore wind success story. Ørsted has already announced a
   multi-million pound agreement for Hornsea 3 to be the first and lead
   customer at SeAH Wind’s monopile factory in Teesside, underpinning SeAH’s
   investment decision to establish a new, globally competitive monopile
   factory in the UK.

   Hornsea 3 will contribute significantly to Ørsted’s ambition of globally
   installing 30 GW offshore wind by 2030. Ørsted currently has approx. 7.5
   GW offshore wind in operation, approx. 3.5 GW under construction, and
   another almost 11 GW of awarded capacity under development including
   Hornsea 3. 

   Martin Neubert, Deputy Group CEO and Chief Commercial Officer at Ørsted,
   says: “Offshore wind once again proves itself as a homegrown source of
   clean energy at large scale that will help the UK achieve its climate
   targets and increase energy independence while creating local jobs and
   industrial development. 

   “We remain fully committed to financial discipline. The strike price is
   inflation-indexed and the contract comes with a level of merchant
   flexibility. We have already secured capacity with key suppliers for
   around two thirds of Hornsea 3’s CAPEX. Also, we can unlock significant
   synergies by taking a global portfolio view in procurement and by
   utilizing Hornsea 3’s size and location adjacent to our existing UK East
   coast wind farms with close to 4 GW in operation.” 

   Hornsea 3 will be located 160 km from the Yorkshire coast, and Ørsted
   expects to commission the wind farm in 2027. When Hornsea 3 comes online,
   Ørsted’s Hornsea zone – comprising Hornsea 1, 2 and 3 – will have a total
   capacity of in excess of 5 GW, making it the world’s largest offshore wind
   zone covering the power consumption of approx. 5 million UK homes.

   Duncan Clark, Head of Region UK at Ørsted, says: "This is another landmark
   for offshore wind in the UK. Not only will Hornsea 3 provide low cost,
   clean energy for millions of homes in the UK, it will also deliver
   thousands of high quality jobs and billions of pounds of investment in the
   UK’s offshore wind supply chain.

   "Successive governments deserve credit for providing the regulatory and
   policy certainty for continued investment in offshore wind – Ørsted alone
   expects to further invest around 14 billion pounds in the UK to the end of
   this decade. This has allowed the cost of offshore wind to fall rapidly
   and to become the thriving industry it is today, with private companies
   expected to invest 155 billion pounds and almost 100,000 people to be
   employed in the sector by 2030.

   “Now more than ever there is a need for the further development of
   renewable energy, not only to address the increasing threats from climate
   change, but also to increase the stability and resilience of energy
   supply. We look forward to working with government and industry colleagues
   to accelerate the deployment of offshore wind.”

   Hornsea 3 will support up to 5,000 jobs during its construction phase with
   up to a further 1,200 permanent jobs both directly and in the supply chain
   for the long operational phase. Hornsea 3 will be operated from Ørsted’s
   operations and maintenance hub in Grimsby. 

   The Hornsea Zone will also include Ørsted’s Hornsea 4 project, which could
   have a capacity of approx. 2.6 GW. Hornsea 4 is currently going through
   the planning process with a decision expected in early 2023.

   About the contract
   Ørsted will build Hornsea 3 including transmission assets (offshore and
   onshore substations and export cables). When the wind farm has been fully
   commissioned, Ørsted will, in accordance with UK regulation, divest the
   transmission assets to a new owner. Ørsted expects to take final
   investment decision on Hornsea 3 within 18 months and potentially as soon
   as by end of 2022.  

   The two-way contract for difference (CfD) for Hornsea 3 runs for up to 15
   years starting after commissioning of the wind farm, which is planned for
   2027. The strike price is inflation-indexed up to and throughout the CfD
   period. The nominal starting price per MWh will be determined based on the
   strike price plus accumulated inflation from 2012 until the CfD starts.
   After the CfD ends, Hornsea 3 will receive the market price for
   electricity or enter new power purchase agreements. 

   The information provided in this announcement does not change Ørsted’s
   financial outlook for the 2022 financial year or the expected investment
   level announced for 2022.
       
   Facts about Ørsted’s offshore wind farms in the UK
   Ørsted has invested approx. GBP 14 billion in the UK to date and
   anticipates spending another GBP 14 billion to the end of this decade.
   Ørsted fully or partly owns the following offshore wind farms in the UK
   totaling 6.2 GW:

   •    Hornsea 2 (2022), 1,320 MW
   •    Hornsea 1 (2019), 1,218 MW
   •    Walney Extension (2018), 659 MW
   •    Race Bank (2018), 546 MW
   •    Burbo Bank Extension (2017), 259 MW
   •    Westermost Rough (2015), 210 MW
   •    West of Duddon Sands (2014), 389 MW
   •    London Array (2013), 630 MW
   •    Lincs (2013), 270 MW
   •    Gunfleet Sands demo (2013), 12 MW
   •    Walney (2012), 367 MW
   •    Gunfleet Sands (2010), 173 MW
   •    Burbo Bank (2007), 90 MW
   •    Barrow (2006), 90 MW

   For further information, please contact:

   Group Media Relations
   Tom Christiansen
   + 45 99 55 60 17
    1 tomlc@orsted.com  

   UK Media Relations
   Paul Haines
   +44 788 014 9088
    2 pauha@orsted.com 

   Investor Relations
   Rasmus Keglberg Hærvig
   + 45 99 55 90 95
    3 IR@orsted.com  

       About Ørsted A/S

   The Ørsted vision is a world that runs entirely on green energy. Ørsted
   develops, constructs, and operates offshore and onshore wind farms, solar
   farms, energy storage facilities, renewable hydrogen and green fuels
   facilities, and bioenergy plants. Moreover, Ørsted provides energy
   products to its customers. Ørsted is the only energy company in the world
   with a science-based net-zero emissions target as validated by the Science
   Based Targets initiative (SBTi). Ørsted ranks as the world’s most
   sustainable energy company in Corporate Knights' 2022 index of the Global
   100 most sustainable corporations in the world and is recognised on the
   CDP Climate Change A List as a global leader on climate action.
   Headquartered in Denmark, Ørsted employs 7,016 people. Ørsted's shares are
   listed on Nasdaq Copenhagen (Orsted). In 2021, the group's revenue was DKK
   77.7 billion (EUR 10.4 billion). Visit  4 orsted.com or follow us on
   Facebook, LinkedIn, Instagram, and Twitter.

       Attachments

     •  5 Hornsea 3 CfD company announcement.pdf

   News Source: Ritzau

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   ISIN:          DK0060094928
   Category Code: MSCM
   TIDM:          Orsted
   Sequence No.:  173106
   EQS News ID:   1392563


    
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References

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