2022-08-04 16:03News

4 August 2022

Mundus Nordic Green News

Wind power giant Vestas' costs are hit extremely hard

With the threat of a gas supply pause from Russia, wind power is a vital part of the solution to Europe's energy shortage. However, shipping and raw materials cost explosions are now brutally hitting wind power giant Vestas. In the first quarter of 2022, it posted an operating loss equivalent to SEK 3.5 billion, not counting extraordinary costs. Vestas lowered its full-year forecast from profit to loss. The company expects a negative operating margin of 0-4%, but over time, the medium-term target of a 10% operating margin is maintained.

On top of that, Vestas took a vast write-down equivalent to SEK 6 billion when the company pulled out of Russia and closed plants in China and India. Given the increased costs, the company raised prices by 11% in the first quarter, but that was not enough because in the last week of March, the price of steel, a key component of wind turbines, rose by 46% and freight costs were ten times higher than 18 months ago. With costs so volatile, this is becoming extremely challenging for Vestas. CEO of Vestas, Henrik Andersen, says they will deliver wind turbines to customers on time at the expense of profitability.

Henrik Andersen predicts that the wind industry will soon run out of capacity. Despite the enormous losses this year, Vestas began plans to build up its offshore wind capacity, and the company relies on an order backlog equivalent to SEK 200 billion. Europe's energy crisis and the ambition to phase out Russian gas and oil are also expected to drive demand in the coming years, with the political inertia of wind project licences the main deterrent to Vesta's investments.


Sweco wins large agreement for Danish Energy Island

Following a tender process, the Danish Energy Agency has selected Sweco as the technical advisor for Energiøen (The Energy Island) in the North Sea for the next nine years. The agreement is worth DKK 400 million, with a ceiling of DKK 600 million. Sweco will provide technical advice to the Danish Energy Agency for the remaining tendering, design, construction and final handover phases of Energiøen. The Energiøen project will go out to tender in September 2023, so the goal of Sweco's work over the next 12 months is to develop a solid and future-proof concept for Energiøen that provides targeted bidding opportunities for as many participants and consortia as possible. Sweco says it is pleased to offer existing and potential employees the opportunity to work with one of the most exciting and demanding projects ever undertaken. It is also the largest construction project in the history of Denmark.

Nordiske Medier

Ørsted’s CO2 emissions increase

Ørsted has pledged to reduce its CO2 emissions by 98% by 2025. However, from 2019 to 2021, Ørsted's CO 2 emissions increased by 16%. Ørsted had previously announced that it would stop using coal at its plants by the end of the first quarter of 2023, but in the intermediate phase they are obliged to use coal when the market demands it. The situation will worsen in 2022 due to the tight energy situation in Europe. Ørsted had to sign additional coal contracts and it is building up a stock of 800,000 tons of coal to supply the Danish market with heat and electricity. Ørsted's climate plan is based on developing renewable energy sources, closing fossil plants, or converting them to biomass. Although emissions are currently in the wrong direction, Ole Thomsen, head of Ørsted's power plant business, says the company is on the right path to going green by developing wind energy, shutting down coal, and replacing some gases in remote heating systems. He still believes the company can meet its 2025 target.


PostNord brings electrification to heavy transport with Einride

PostNord began using Einride's heavy-duty trucks to transport goods from its Bauhaus warehouse to its stores in Norrköping and Linköping in June this year. The vehicle combination is the first of its kind in Sweden, and the truck is 100% powered by electricity, which means a reduction of 140 kg of CO2 emissions per day. Mathias Krümmel, CEO of PostNord Sweden, says that until now, it has been challenging to find alternatives to heavier means of transport because of the lack of infrastructure for charging and the difficulty of finding new programs that work for their business. With our platform, Einride says, transport emissions can be efficiently and cost-effectively reduced by 93%. 


About Mundus Nordic Green News

The Nordic countries are some of the most dynamic and successful economies in the world. They are also leaders in sustainability, from renewable energy, biofuels, carbon capture and storage and the hydrogen economy, circular economy business models and battery development, the Nordics are pioneers in policy design, technology development and consumer uptake. Mundus Nordic Green News is covering this transition for the international community. Every day we curate the stories of most relevance to international businesspeople and policy experts from the flow of news. Mundus Nordic Green Indices summarise the meta-data from our daily coverage to enable easy tracking of trends. We supplement these with our own opinion pieces and commentary.