Danish multinational energy company Ørsted has announced plans to exit a number of offshore wind energy markets, make job cuts and scale back its development targets in response to rising costs within the renewables industry.

The company will exit offshore markets such as Norway, Spain and Portugal, and deprioritise activities in Japan.

It also lowered its renewable capacity targets from 50GW to 35–38GW by 2030.

This revised capacity still represents a significant increase from the current installed capacity of 15.7GW, with an expected installed capacity of 23GW by 2026.

Ørsted will now focus on a leaner development strategy for floating offshore wind and power-to-X technologies.

Group president and CEO Mads Nipper stated: “We have prioritised projects within our portfolio and are implementing significant changes in our business, including revising our operating model to reduce risks.

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By GlobalData

“We now present a robust business plan, and with an uncompromising focus on value creation, we plan to more than double our current installed renewable energy capacity by 2030.”

In November 2023, the company scrapped the development of the Ocean Wind 1 and Ocean Wind 2 projects.

It has also withdrawn from the US Skipjack Wind 1 and 2 projects and will reposition them. It is now focused on the north-east Atlantic for its US offshore portfolio.

Adjustments in US offshore projects have led to significant impairments and contract termination costs, negatively impacting the company’s credit metric projections.

Ørsted is expecting capital expenditure relief of DKr35bn ($5.1bn) between 2024 and 2026, compared with projections made in June 2023.

Development expenditure will be reduced by DKr3bn during the same period.

In light of these portfolio changes, Ørsted will pause dividend payments for the financial years 2023–25.

To achieve a further reduction of DKr1bn in fixed costs by 2026, Ørsted is planning to cut between 600 and 800 jobs globally, beginning with 250 redundancies in 2024.

Ørsted board of directors chairman Thomas Thune Andersen has announced his resignation, effective in March 2024.