Dong Energy in the Uk
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Leading the energy transformation DONG ENERGY IN THE UK LEADING THE ENERGY TRANSFORMATION 2017 DONG Energy in the UK Leading the energy transformation Contents Chairman’s foreword 6 Green energy 24 Communities 2016 was a landmark year for DONG Energy, with the company We are committed to ensuring that our presence contributes to sustainable undergoing a remarkable period of change and transformation. This growth and development where we operate. We work to be responsive to 12 Environment 28 People included the successful completion of the biggest IPO in Danish history, our communities, listening to their concerns and to local area needs. We as DONG Energy was included in the OMX C20 index on Nasdaq launched our third Community Benefit Fund, a £10 million fund to support 16 Building a sustainable offshore wind industry Copenhagen. We also announced our intention to divest our oil and projects in communities near our construction activities in the North East gas business. of England. Growth and change is no less striking at a national level. The UK is our We support and develop the UK’s supply chain capacity. We announced largest market for wind power and we are one of the largest inward an investment that will enable the construction of the UK’s first offshore investors in the North of England. We took our investments in the North wind tower manufacturing facility, underlining our commitment to West to £5.4 billion with the construction of Burbo Bank Extension and including UK content in our offshore wind farms. Walney Extension Offshore Wind Farms. In addition, we took major strides forward with our pipeline of projects in construction and development, We are investing in initiatives that build local skills from the very start taking the Final Investment Decision (FID) to build Hornsea Project One of the educational journey, such as ring-fencing funding from our and receiving development consent for our Hornsea Project Two. Community Benefit Funds to focus on Science, Technology, Engineering and Maths (STEM) education. Our Operations & Maintenance (O&M) division continues to expand and we announced our game-changing East Coast O&M Hub, which will be We’re also a company that invests in its own employees. We are proud the base of operations for our wind farms in the North East. of our Danish heritage, which expresses itself in many aspects of the company. None more so than in our approach to the health and welfare 2016 saw DONG Energy reinforce its position in the UK as an innovator of the people who are at the heart of making this extraordinary change Group performance through its other business activities. possible. We took the FID on the company’s first biotechnology plant to derive statistics energy from waste and began construction. We also launched innovative products and solutions for our industrial and commercial energy customers, including the ability to buy green energy without the usual premium. Revenue in 2016 Operating profit (EBITDA) Net profit GBP GBP GBP However, change is taking place at a fundamental level too, as the 6.7 bn 2.1 bn 1.3 bn balance of our operations shifts. Increasingly, our focus and our growth is moving to the parts of the UK where we are operating and constructing our wind farms. With this change comes responsibility. Brent Cheshire, UK Country Chairman Gross investments Interest-bearing net debt 1.6 bn GBP 0.4 bn GBP Group safety: lost-time injury Carbon emissions gCO2e/kWh frequency (LTIF) 224 1.8 days 2 DONG Energy in the UK DONG Energy in the UK 3 Our geographic footprint Leading the energy transformation Our geographic footprint Sweden ° Anholt (400MW) Denmark Studstrup Herning Kyndby Middelgrunden (20MW) Horns Rev 1 (160MW) ° Asnæs ° Skærbæk 2x Horns Rev 2 (209MW) ° Esbjerg Svanemøllen H.C. Ørsted Avedøre 1&2 ° Nysted (165MW) Walney Extension (659MW) ° Westermost Rough (210MW) ° Barrow (90MW) ° ° Gode Wind 1 (330MW) Walney 1&2 (367MW) ° ° Gode Wind 2 (252MW) West of Duddon Sands (389MW) ° Burbo Bank Extension (258MW)* ° ° Hornsea 1 (1,200MW) ° Burbo Bank (90MW) ° Borkum Riffgrund 1 (312MW) Borkum Riffgrund 2 (450MW) ° Race Bank (573MW) ° REnescience Northwich ° Lincs (270MW) Germany Borssele 1&2 (700MW) ° Netherlands Symbols United Kingdom ° Gunfleet Sands 1&2 (173MW) In operation ° London Array 1 United States – Business development Taiwan – Business development Under construction (630MW) Enecogen Business development (MW) Total wind farm capacity In operation ° Formosa 1 Bay State Wind Under construction ° ° Ocean Wind Sale of power and/or gas Power distribution in Denmark * In operation at time of printing. 4 DONG Energy in the UK DONG Energy in the UK 5 Green energy Leading the energy transformation Green energy DONG Energy is developing green and reliable energy systems, helping the countries in which we operate to move away from fossil fuels. We are leading the way in significantly reducing the cost of offshore wind. We are installing the largest turbines in the world for the first time at Burbo Bank Extension here in the UK and finding efficiencies at every stage of construction and operation. We are helping our UK industrial and commercial energy customers make their energy use more flexible, contributing to a more balanced energy system. We are also helping to tackle the UK’s waste challenge; we have nearly completed our first UK biotechnology plant, which will produce low carbon energy from waste. 6 DONG Energy in the UK DONG Energy in the UK 7 Green energy Leading the energy transformation Decarbonising power in the UK Offshore wind is the fastest-growing renewable energy technology and is therefore a substantial contributor to the reduction of CO2 emissions from the power sector. During 2016, in addition to operating eight offshore wind farms around the UK coast, DONG Energy was constructing four new offshore wind farms, as well as developing two further projects. Symbols In operation Under construction Construction: Hornsea Project One Capacity: 1.2GW Final Investment Decision taken on the world’s largest offshore wind farm. Development: Hornsea Project Two** Development Consent Order (DCO) received from the Department for Business, Energy and Industrial Strategy. Development: Hornsea Project Three** Construction: Walney Extension Community Consultation under way in North Capacity: 659MW Norfolk. Construction of the onshore substation Energy from waste: REnescience Northwich and cable routes under way in preparation for offshore works in 2017. DONG Energy has developed a bespoke and innovative biotechnology to create energy from waste. The Walney Extension (659MW) Westermost Rough (210MW) technology, called REnescience, not only has a high biogas yield and produces materials for recycling, but also ° ° Barrow (90MW) ° Walney 1&2 (367MW) ° has a far lower carbon footprint than waste management methods such as incineration. West of Duddon Sands (389MW) ° ° Burbo Bank Extension (258MW)* ° Hornsea 1 (1,200MW) ° Burbo Bank (90MW) Race Bank (573MW) The technology uses enzymes to digest organic matter from residual, * ° Comparative Carbon Footprint of REnescience Technology Construction: Burbo Bank Extension Lincs (270MW) Capacity: 258MW ° unsorted household waste. Through a process of anaerobic digestion, it [Measured in Kg CO2-eq per ton waste] Construction completed ready for final then produces gas that will be used to generate energy. commissioning and inauguration in 2017. In addition to recycle-ready materials, this clean process, free from incineration, will also produce a ‘digestate’ that can be used as a fertiliser Construction: Race Bank Capacity: 573MW for non-food crops, or for soil restoration. Gunfleet Sands 1&2 (173MW) ° ° Onshore cable routes completed. Offshore construction commenced with the installation Substantial progress was made in 2016 in the construction of our first ° London Array 1 (630MW) ° of foundations and the first of two offshore REnescience facility in Northwich, Cheshire, which is due to open in 2017. substations. Commissioning should complete in 2017. With this facility – the first in the world to use this technology – we 332 291 78 reaffirm our commitment to investing in the UK as a place for innovation in energy infrastructure. Incineration Source separation REnescience Source: 1. Danish Technical University; Own calculations 2. Danish Technical University Lifecycle Analysis 3. Ricardo Environmental Consulting; Own calculations 4. Danish Technical University; Own calculations, The Danish Environmental Protection Agency * In operation at time of printing. ** Map reflects only projects in operation and under construction. 8 DONG Energy in the UK DONG Energy in the UK 9 Green energy Leading the energy transformation Helping our UK business energy customers DONG Energy’s flexibility solutions to operate more sustainably Following several years of research, development and discussions with existing customers, our in-house innovation team have developed a unique At DONG Energy, we want to enable businesses to contribute to a more cost effective and balanced energy range of new products to help our customers optimise their energy use and reward them for making their electricity demand more flexible. system, which is less dependent on energy generated from non-renewable sources. In the last year, we have taken bold steps to help our customers operate more sustainably. Premium-free green electricity An innovative approach to flexibility In April 2016, we launched a new initiative for To have a cost effective, sustainable and There are many schemes