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Nine years ago, having 85 percent of „black” energy and 15 green, we decided to switch it the other way aroundWe are now at the point where around 70 percent of our energy production is renewable, by 2025 we will be carbon-neutral. It turned out to be a good business to settle those targets early – says Anders Holst Nymark, Global Public Affairs Lead at Ørsted in an interview with BiznesAlert.com.
BiznesAlert.com: What did the transition from fossil fuels to renewable sources of your company look like?
Anders Holst Nymark: About ten years ago we were one of Western Europe’s most coal-intensive utilities, at that time we were called Dong Energy. We had an upstream oil and gas business, and pretty much back in COP15, nine years ago, having 85 percent of „black” energy and 15 green, we decided to switch it the other way around. That was a long-term ambition back then. We were watching the offshore wind energy become a global trend.
What about the economic side of this decision?
At that time it was a strategic target, because we saw a lot of long-term reasoning to transform into green energy, like climate science. We are now at the point where around 70 percent of our energy production is renewable, by 2025 we will be carbon-neutral. We divested our oil and gas business, all our coal plants have either been shut or transformed into sustainable biomass, and we enlarged our profits in the meantime. It turned out to be a good business to settle those targets early, we invested in the offshore wind, because we saw a great potential in it. Of course, it has also been difficult in the energy industry and there have been some difficult years, like the financial crisis. Back then offshore wind energy was an expensive investment, but now it is cheaper than new oil, coal or gas fired plants.
Have you got advice for other companies for how to transform from fossil fuels to green?
A long-term transition to renewables is inevitable. Ten years ago it was more of a moral obligation to do so, and I think it still is, but nowadays if you look at the financial side, it’s cheaper to build green energy than energy based on fossil fuels. We don’t see any reasons not to accelerate the green transformation. But still, every company has its own legacy and should make decisions on its own.
Are offshore wind farms a stable source of production? Can they balance the coal plants?
No energy system is converted from one energy to another. But there is no doubt that if you look at the Baltic Sea, there is a huge potential for offshore wind. Just the Baltic Sea has the economic potential that is three times of Poland’s consumption of power today. There is a big business reason for Poland to invest in it. We see that the government is sending signals that they are moving in that direction.
Do renewable sources need a conventional source, like gas, for a backup?
In Denmark, wind energy is 40 percent. There is a long way to go when we get into situation where we can’t manage the fluctuations. Of course we will need other technologies than just wind or just solar. Storage can solve some problems, maybe we will have to look more closely at hydrogen. Many technologies will have to compliment each other. What we can do now is to build the ones that are the cheapest, manage the power in our existing systems and then we can create better connections between countries, because then we will be able to absorb much more variable energy – wind doesn’t blow everywhere at the same time. Market forces will help us create more sensible balance in the system.
Interview conducted by Bartłomiej Sawicki
