The CEO of Denmark’s largest energy company, DONG Energy, has just confirmed the company’s plans to sell its oil and gas business unit as the company transitions to become a “global leader in renewables” like solar and wind.
According to Dong Energy CEO Henrik Poulsen, wind turbines could soon supply most of the UK’s electricity, pointing to the falling cost of green energy as evidence that wind and solar power could replace fossil fuels quicker than expected.
Poulsen said technological advances in the energy industry meant wind power could end up supplying more than half of the UK’s electricity demand.
Forty-four years after it was set up for Denmark’s North Sea oilfields, Dong Energy has now become UK’s largest windfarm operator with stakes in planned or existing projects able to produce five gigawatts (5GW), more than the planned Hinkley Point C nuclear reactors.
Dong Energy confirmed it was seeking buyers for its North Sea oil and gas business, and Poulsen said the decision was more than simply financial.
“The company has an ambition of leading the energy transformation of leading the transition to renewables,” he said. “That’s been driving us for the past few years and we see this as the natural step to transforming to be fully focused on green energy.”
Poulsen also added that the fact that oil prices have been stubbornly low for the past two years had nothing to do with the sale, saying that the decision is a “matter of vision and strategy and not the oil price”.
The company is “engaging with potential interested buyers”, said Poulsen, insisting that a glut of oil assets for sale would not hamper the process. He said the division had already sold less profitable, high-cost assets that would have made it less attractive to a buyer.
Poulsen was speaking as Dong Energy released third quarter results that showed a jump in profit to £400million, compared with just £55million last year. Much of the improvement came from proceeds of the sale of Dong’s gas distribution grid in Denmark.
Accounting for 42% of operating profit, renewables overtook oil and gas as the company’s biggest source of earnings during the quarter.
The firm has no plans of changing its name, which is short for Danish Oil and Natural Gas, despite the sale of its oil business.