Orsted bolstered by strong gas, CHP earnings in 2021

Danish energy firm Orsted saw "exceptionally good performance" at its natural gas and its biomass and coal-burning combined heat and power (CHP) plants in 2021, the company said on February 2, helping to offset low wind speeds and negative impacts from the energy crisis.

The world's largest offshore wind developer generated 24.3bn Danish kroner ($3.7bn) in EBITDA during the year, up 34% versus the result in 2020. But excluding a 8.4bn kroner gain from farm-outs at wind farms, earnings were down 13% at 15.8bn kroner.

"While we did expect a decline in EBITDA at the beginning of the year, the composition turned out differently than anticipated, driven by very strong performance by our CHP plants and gas business, whereas low wind speeds and the energy crunch led to a larger than expected negative impact on our offshore wind assets," the company said in its results.

Earnings from wind and solar assets were down 12% at 15bn kroner, whereas EBITDA from CHP plants soared 188% to 3.2bn kroner and from its gas business by 345% to 1.8bn kroner.

Orsted was one of the most coal-intensive companies in Europe in the late 2000s, but has since transformed itself into a leader in offshore wind, with a 25% share of the global market.

The company has also been scaling back its gas operations over the years. In late 2019, it sold its then loss-making LNG business to commodities trader Glencore. It aims to completely phase out its gas business by 2040.