Orsted Business Model Canvas

Orsted's partnerships with national and regional governments and regulators are fundamental to its operations. These alliances are critical for obtaining necessary project permits, securing grid connections, and establishing supportive policy frameworks. For instance, in 2023, Orsted faced challenges with permitting timelines in the United States, which directly affected the economic viability of some of its offshore wind projects, highlighting the direct impact of regulatory processes.

These relationships are vital for navigating the intricate regulatory environments inherent in large-scale infrastructure development, thereby de-risking significant capital investments. The company actively engages with policymakers to advocate for stable and predictable regulatory conditions, which are essential for long-term project planning and execution. In 2024, continued focus on streamlining permitting processes remains a key objective for the offshore wind industry, including Orsted.

Key aspects of these partnerships include:

• Securing Permits and Approvals: Collaborative efforts with agencies like the Bureau of Ocean Energy Management (BOEM) in the US are paramount for the authorization of offshore wind farm construction and operation.
• Grid Connection Agreements: Partnerships with national grid operators, such as Energinet in Denmark, are essential for integrating renewable energy sources into the existing power infrastructure.
• Policy Advocacy: Engaging with governments to shape favorable policies, including renewable energy targets and tax incentives, directly influences project economics and investment decisions.
• Navigating Regulatory Changes: Proactive dialogue with regulators helps Orsted anticipate and adapt to evolving environmental and safety standards, mitigating potential project delays and cost overruns.

Ørsted actively collaborates with leading universities and research institutions worldwide to push the boundaries of renewable energy technology. For instance, its ongoing work with institutions like the University of Oxford focuses on optimizing monopile foundation designs for offshore wind farms, a critical element for cost reduction and structural integrity. These partnerships are instrumental in tackling complex technical challenges, from enhancing the efficiency of energy conversion to improving the integration of advanced grid management systems.

These academic collaborations directly contribute to Ørsted's innovation pipeline, fostering the development of next-generation renewable energy solutions. By leveraging cutting-edge research, Ørsted aims to further reduce the levelized cost of energy (LCOE) for offshore wind and other green technologies. For example, research into advanced materials and manufacturing techniques for turbine blades, often conducted with academic partners, can lead to lighter, stronger, and more durable components, boosting overall energy output and extending operational lifespans. This strategic engagement not only enhances Ørsted's intellectual property portfolio but also solidifies its position as an industry leader in driving sustainable energy advancements.

• Driving Innovation: Partnerships with universities like the University of Oxford focus on optimizing monopile foundation designs for offshore wind, directly impacting cost and efficiency.
• Addressing Technical Challenges: Collaborations help solve complex issues in areas such as foundation stability, energy storage integration, and advanced materials science for wind turbines.
• Enhancing Efficiency and Cost Reduction: Research outcomes aim to improve energy capture, reduce manufacturing costs, and increase the lifespan of renewable energy assets.
• Strengthening IP and Leadership: These alliances bolster Ørsted's knowledge base and reinforce its standing as a pioneer in the green energy sector.

Ørsted's intellectual property and proprietary technology are crucial for maintaining its competitive advantage. This includes a robust portfolio of patents covering specialized designs and optimized processes for wind turbine foundations, efficient grid integration, and streamlined project development. Innovation in areas like advanced monopile foundation design and sophisticated asset portfolio optimization tools are key to protecting Ørsted's technological edge.

The company's commitment to innovation is reflected in its patent activity. In the second quarter of 2024, Ørsted experienced a notable increase in patent filings, with a particular focus on advancements in emissions reduction technologies and broader renewable energy solutions. This strategic expansion of its intellectual property portfolio underscores its dedication to pioneering new frontiers in the green energy sector.

• Patented Foundation Designs: Innovations in monopile foundation technology enhance stability and cost-effectiveness in offshore wind installations.
• Grid Integration Solutions: Proprietary technologies ensure seamless and efficient connection of renewable energy sources to the power grid.
• Project Development Optimization: Advanced tools and processes streamline the complex lifecycle of renewable energy projects, from planning to operation.
• Focus on Emissions Reduction: Recent patent filings highlight Ørsted's commitment to developing and protecting technologies that further reduce carbon emissions in the energy sector.

Ørsted's business model relies heavily on its skilled workforce, comprising approximately 8,300 employees as of 2024. This human capital includes highly specialized engineers, project managers, environmental experts, and technical staff who possess deep knowledge across the renewable energy project lifecycle. Their collective expertise is fundamental to the successful development, construction, and ongoing operation of offshore wind farms and other green energy infrastructure.

The dedication of Ørsted's employees is particularly vital as they navigate the complexities and challenges inherent in the rapidly evolving renewable energy sector. This specialized talent pool drives innovation, ensuring the company remains at the forefront of technological advancements and operational efficiency. Their commitment is a key resource enabling Ørsted to achieve its ambitious growth targets and contribute to the global energy transition.

• Highly Specialized Expertise: Ørsted employs engineers, project managers, and environmental specialists critical for renewable energy project execution.
• Employee Count: Approximately 8,300 individuals formed Ørsted's workforce in 2024, representing a significant human capital investment.
• Value Chain Coverage: Staff expertise spans the entire renewable energy value chain, from development to operations and maintenance.
• Industry Dedication: Employee commitment is a key factor in navigating industry challenges and driving innovation in green energy.

Ørsted actively engages local communities, NGOs, and the public to foster support for its renewable energy ventures. This dialogue is crucial for addressing environmental and social considerations head-on, ensuring projects align with societal expectations. For instance, in 2023, Ørsted continued its commitment to transparent communication through numerous community meetings and public consultations across its global project portfolio.

Educational initiatives are a cornerstone of Ørsted's engagement strategy. By partnering with environmental organizations, such as The Nature Conservancy, Ørsted aims to raise awareness about the benefits of renewable energy and the importance of biodiversity. These collaborations are designed to build a shared understanding and create a positive impact that extends beyond energy generation.

• Community Dialogue: Ørsted conducted over 100 community engagement events in 2023, specifically focusing on offshore wind projects in Europe and North America.
• Environmental Partnerships: Collaborations with environmental NGOs have led to the implementation of biodiversity action plans at several Ørsted sites, with a reported 15% increase in positive ecological outcomes in monitored areas by the end of 2023.
• Public Awareness Campaigns: Ørsted invested in public outreach programs in 2023, reaching an estimated 5 million individuals with information on renewable energy transition and its benefits.
• Stakeholder Feedback Integration: Feedback from over 5,000 stakeholders in 2023 directly influenced the design and mitigation strategies for new projects, particularly concerning visual impact and local employment opportunities.

Ørsted actively collaborates with its suppliers to embed sustainability throughout its value chain. A key focus is ensuring all suppliers adopt 100% renewable electricity, mirroring Ørsted’s own operational commitment. This collaborative approach extends the company’s green energy vision beyond its direct operations, creating a unified front for decarbonization.

To facilitate this, Ørsted provides clear guidelines and support to help suppliers meet the renewable electricity target. This partnership is crucial for achieving broader climate goals. For instance, in 2023, Ørsted continued to engage with its key suppliers on decarbonization strategies, aiming to influence upstream emissions.

• Supplier Engagement: Ørsted works closely with its supply base to integrate sustainability, including the goal of 100% renewable electricity usage by suppliers.
• Decarbonization Vision: This initiative extends Ørsted's commitment to green energy, fostering a shared ambition for a low-carbon future across its entire value chain.
• Support and Guidance: The company offers specific guidelines to assist suppliers in achieving their renewable energy targets, promoting a collaborative path to sustainability.

Financial institutions and institutional investors, including banks, pension funds, and investment firms, are key partners for Ørsted. They are particularly interested in financing large-scale green infrastructure projects and companies demonstrating robust Environmental, Social, and Governance (ESG) performance. These entities are crucial for securing project financing and facilitating divestment strategies.

Ørsted actively engages with this segment through its dedicated green finance initiatives and strategic divestment programs. For instance, in 2023, Ørsted issued green bonds totaling €1.5 billion, attracting significant interest from institutional investors seeking sustainable investment opportunities. This demonstrates their role in providing capital for Ørsted's renewable energy developments.

• Banks: Provide project financing and corporate loans for renewable energy developments.
• Pension Funds: Invest in Ørsted's long-term assets, seeking stable, sustainable returns.
• Investment Firms: Act as intermediaries for capital raising and participate in equity and debt markets.
• ESG Focus: These investors prioritize companies with strong sustainability profiles, aligning with Ørsted's core business.

Ørsted engages with local communities situated near its project sites, acknowledging the direct impact of both construction and operational phases. This includes fostering strong relationships with landowners who lease their property for onshore wind and solar installations, recognizing their vital role in project development.

Building positive relationships and ensuring tangible local benefits are paramount for securing the social license to operate. Ørsted's commitment extends to creating a positive impact on nature and society, demonstrating a dedication to shared value creation.

In 2024, Ørsted continued its focus on community engagement, with initiatives designed to provide direct economic and social benefits. For instance, many projects include provisions for local job creation during construction and ongoing operational revenue sharing or community funds. Ørsted's approach emphasizes transparency and collaboration, aiming to integrate projects harmoniously with the local environment and economy.

• Local Employment: Ørsted projects often prioritize local hiring for construction and maintenance roles, contributing to community economic development.
• Community Benefit Funds: Many projects establish funds that support local initiatives, infrastructure improvements, or environmental projects, as seen in various European and North American developments.
• Landowner Partnerships: Long-term lease agreements with landowners provide stable income streams and foster mutually beneficial relationships, crucial for renewable energy infrastructure.
• Stakeholder Dialogue: Continuous engagement through public meetings and consultations ensures community concerns are addressed, promoting social acceptance and project success.

Orsted generates revenue through partnerships and divestments, often referred to as farm-downs. This involves selling partial ownership stakes in its renewable energy projects, both during development and after they become operational, to other investors. These transactions are crucial for recycling capital, allowing Orsted to fund new projects and manage its financial exposure.

This strategy is a key part of Orsted's financial management. For instance, the company has set an ambitious target to secure between DKK 70 billion and DKK 80 billion from divestments covering the period from 2024 through 2026. This demonstrates a clear commitment to leveraging these partnerships to fuel future growth.

• Capital Recycling: Farm-downs free up capital that can be reinvested into developing new offshore wind farms and other renewable energy assets.
• Risk Management: By bringing in partners, Orsted shares the financial risk associated with large-scale, capital-intensive projects.
• Strategic Partnerships: These divestments can also forge valuable relationships with strategic investors who bring additional expertise or market access.
• Divestment Target: Orsted aims to achieve DKK 70-80 billion in divestment proceeds between 2024 and 2026.

Orsted generates revenue by selling heat and electricity produced from biomass at its bioenergy facilities. This income stream diversifies its portfolio beyond renewable energy sources like wind and solar. In 2024, the company produced a significant 6.9 terawatt-hours (TWh) of thermal energy, contributing to its overall financial performance.

• Revenue from Bioenergy: Sales of heat and power from sustainable biomass.
• Diversification Strategy: Complements wind and solar operations.
• 2024 Thermal Output: 6.9 TWh of thermal energy produced.