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Ørsted: The oil giant that went from dirty fuel to clean energy in a decade

Orsted Energy wind turbines - Christopher Furlong/Getty Images
Orsted Energy wind turbines - Christopher Furlong/Getty Images

Despite presenting itself to the world as a haven of environmentalism, Copenhagen was hiding a dirty secret when it hosted the UN’s climate change summit in 2009.

One of Denmark’s largest state-owned companies at the time was Dong Energy (now Ørsted), which was responsible for one-third of the country’s carbon dioxide emissions.

Dong, or Danish Oil and Natural Gas, has existed in different forms since 1972, formed as a company to extract and sell Denmark's vast fossil fuel reserves. But by the time the UN conference rolled around in 2009, Dong had already made up its mind: it would begin a decades-long transition from dirty fuel to clean energy.

Company executives have since said that the company decided on what it called an ‘85/15 vision’.

“At the time, 85pc of our power and heat production was black and 15pc was green,” said Jakob Askou Bøss, a senior executive at the company in charge of strategy.

“Our chief executive, Anders Eldrup, said that within a generation, Dong would flip that ratio around, so that 85pc would be green and 15pc black.”

Many scoffed at the idea, questioning whether the company would ever be profitable again. But a decade later, Ørsted – as the company is now known – has a market capitalisation approaching that of oil titan BP’s.

From 2010, the company began divesting from power companies, whilst pumping more money into wind farms. One of the most contentious moments of Dong’s turnaround came in 2014, when the company sold 18pc of its equity to investment bank Goldman Sachs for $1.5bn.

The money would be spent on Dong’s ambitious offshore wind projects, it said at the time. But the decision to allow Goldman Sachs to invest in a national utility was controversial, and led to the resignation of six cabinet ministers.

Nevertheless, the company pressed ahead with its transformation, selling off oil and gas assets that it owned in Norway and the North Sea.

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This process was completed in 2017, when Dong finalised the sale of its remaining oil fields to London-based chemicals giant Ineos, owned by Britain's third richest man, Sir Jim Ratcliffe, for $1bn.

With its exit from fossil fuels fulfilled, the company changed its name to Ørsted, after the influential Danish scientist Hans Christian Ørsted.

Since then, Ørsted has set out on an unstoppable march to dominance in the renewable energy sector. In 2020, it has grown quickly - in contrast to the steep declines of Shell and BP.

Ørsted has built the world’s largest wind farm in the UK’s North Sea, a 174-strong array of turbines located 100km off the coast of Hull, and has fields in the US, Taiwan, Germany, and The Netherlands.

It is now the largest offshore wind farm developer in the world, and is viewed as a model for the successful transition from fossil fuels to green power.

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