Ørsted Flies High on UK Offshore Wind

Danish offshore wind developer Ørsted reported DKK 3 billion (EUR 402.7 million) net profit in the first quarter of 2018, a 150% spike compared to the same period last year, largely due to a strong performance of operating wind farms in the UK.

Ørsted reported DKK 3.2 billion in profits from operating wind farms in the first quarter of 2018, a 51% jump compared to the same period last year.

The increase was attributed primarily to the ramp-up of the Walney Extension, Race Bank and Burbo Extension offshore wind farms in the UK as well as higher wind speeds, especially in the UK, which led to a 43% rise in generation for the period.

Operating offshore wind farms generated 3TWh of electricity in Q1 2018, as compared to 2.1TWh in Q1 2017. In the UK, Orsted recorded a 100% jump in generation for the period, which rose from 1TWh in Q1 2017 to 2TWh in Q2 2018. Power generation in Denmark decreased by 14%, while German offshore wind farms performed on par with the Q1 2017.

”The offshore wind business has performed very well in the first quarter with high yields from our operating assets and good progress on our construction projects,” Ørsted CEO Henrik Poulsen said.

The company raised its share of renewable energy from 56% in Q1 2017 to 68% in Q1 2018.

Overall, Ørsted recorded an operating profit (EBITDA) of DKK 5.5 billion, up 68% compared to 2017. The return on capital employed (ROCE) increased to 27% in Q1 2018 compared to 17% in Q1 2017.

Due to the operationally strong start of the year, the company has increased its EBITDA guidance for 2018 from DKK 12-13 billion to DKK 12.5-13.5 billion. The increase is due to an operationally strong start to the year as well as a positive outcome of an arbitration related to a gas purchase contract.

”The selection of the preferred bidder or bidders in the Massachusetts auction will expectedly be announced in late May. In addition, the result of the 3.5GW grid allocation in Taiwan is expected within weeks,” Poulsen said.

”We participate in this auction with our four Greater Changhua offshore wind projects. In April, we submitted a bid in the auction in Connecticut, competing for 200MW of offshore wind capacity. We also submitted bids in the German auction, where we expect to receive the results within weeks.”