Dong Energy
A/S plans to invest about 10 billion kroner ($1.8 billion) a year on offshore
wind projects to offset a “challenging” environment for gas plants as it ceases
to build new coal power facilities, its chief said.
That’s
about what the world’s largest developer of offshore wind parks spent last year
on turbines installed at sea. “We think that is around that level we will be
working at in the coming years,” Anders Eldrup, chief executive officer of the
Fredericia, Denmark-based company, said by phone.
Dong
announced today that Eldrup, who spoke in an interview on March 9, is stepping
down as chief executive. Finance director Carsten Krogsgaard Thomsen will be
acting CEO until a new chief executive is found, it said, adding that there
will be no change in the company’s strategy.
Dong is
focusing on renewable sources for electricity generation to shift from fossil
fuels and cut emissions as the rising cost of gas depresses profits for burning
the fuel. Profitability of burning gas in the U.K. has fallen 75 percent to
1.62 pounds ($2.54) a megawatt-hour in the last six months, according to
Bloomberg calculations using broker data.
“It seems
to be quite challenging times for the CCGTs,” or combined-cycle gas turbine
plants, Eldrup said. The company doesn’t have “precise investment plans” for
new plants as they are “not very profitable” now, he said. Dong operates gas-
fired power plants in Norway, Denmark and the Netherlands and opened its first
in the U.K. in south Wales last year.
“It’s a
combination of the price of gas to the price of power because it is that
conversion that gives a margin,” Eldrup said.
No
Coal-Fired Plants
Dong will
not invest in new coal-fired power plants as it seeks to cut by half its
carbon-dioxide emissions from electricity and heat generation compared with
2006 levels by 2020. The company plans to convert “about half” of its remaining
coal stations to use biomass, Eldrup said.
The
company, with about 1.3 gigawatts of operating offshore wind farms and 1.1
gigawatts under construction, plans to build 3 gigawatts of offshore wind by
2020, Eldrup said. Dong may make investments of 10 billion kroner a year for
the next two to three years in offshore wind, he said.
Dong will
fund new offshore wind plants with company revenue and from selling shares in
existing projects, Eldrup said. Dong agreed to sell 50 percent of a German park
for 4.7 billion kroner to Kirkbi A/S, the parent company of Lego Group, and
Oticon Foundation on Feb. 23, its fifth such sale.
Nations are
promoting clean energy to curb emissions and meet European Union goals. The
U.K. is planning to build 18 gigawatts of offshore wind by 2020 from about 2
gigawatts now while Germany targets about 10 gigawatts by the same year.
“We are
constantly surveying the market for future projects,” Eldrup said. Germany, he
noted, is an “interesting place and our close neighbor.”
Eldrup is
resigning “by mutual consent,” the company said today. Krogsgaard Thomsen was
named acting CEO as Dong started a process to find a permanent replacement.
To contact
the reporter responsible for this story: Sally Bakewell in London at Sbakewell1@bloomberg.net
To contact
the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
"Recalibration of Free Choice"– Mar 3, 2012 (Kryon Channelling by Lee Caroll) - (Subjects: (Old) Souls, Midpoint on 21-12-2012, Shift of Human Consciousness, Black & White vs. Color, 1 - Spirituality (Religions) shifting, Lose a Pope “soon”, 2 - Humans will change react to drama, 3 - Civilizations/Population on Earth, 4 - Alternate energy sources (Geothermal, Tidal (Pedal wheels), Wind), 5 – Financials Institutes/concepts will change (Integrity – Ethical) , 6 - News/Media/TV to change, 7 – Big Pharmaceutical company will collapse “soon”, (Keep people sick), (Integrity – Ethical) 8 – Wars will be over on Earth, Global Unity, … etc.) - New !
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