Danish Power Company Ørsted Extends 100% RE Target To All Suppliers

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Leading Danish power company Ørsted has asked all its suppliers to use 100% renewable electricity by 2025 and claims to be the first energy company in the world to do so. The action is aimed toward realizing 2040 net-zero target.

As per the official statement, Ørsted has reduced its scope 1 and 2 emission intensity by 87% since 2006 and is well on track to become carbon-neutral in its own energy generation and operations by 2025. Ørsted said that it continued its large-scale build-out of renewable energy and is fully committed to science-aligned climate action. That’s why Ørsted is working to address suppliers’ emissions linked to component manufacturing, transportation, installation, and operation of renewable energy assets as the next frontier in its decarbonisation endeavour.

To reach its targets, Ørsted relies on collaboration across the supply chain. The company is now taking the step to extend its 100 % renewable electricity target from its strategic suppliers to all suppliers.

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Mads Nipper, Group President and CEO, Ørsted, said, “A sustainable future for our planet requires a rapid transition to renewable energy and limiting global warming to 1.5 °C. That’s why the renewables industry must lead the pack by decarbonising its own supply chain.”

Renewable electricity is a readily available means to reduce emissions. With this new target, Ørsted claims that it is setting an expectation that all its suppliers cover 100% of their electricity use with renewable electricity by e.g. investing in on-site renewable electricity assets, entering into power purchase agreements (PPAs) tied to renewable energy projects whose realisation depends on securing financing, or purchasing renewable electricity certificates. Ørsted will support its suppliers with renewable electricity guidelines to help select the best solutions.

The Decarbonisation Programme

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Ørsted established its supply chain decarbonisation programme in 2020 and began working with its strategic suppliers, who represent over 60% of Ørsted’s total procurement spend and the most high-impact carbon-intensive categories, to decarbonise its offshore wind supply chain. As part of the programme, Ørsted has set a clear expectation for its strategic suppliers to use 100 % renewable electricity in the manufacturing of wind turbines, foundations, cables, substations, and other components and services by 2025 – with the aim of generating learnings and best practices so that scaling up this target to all suppliers can be done more quickly.

Collaborating Across Industries

Ørsted said that it also recently joined the 1.5 °C Supply Chain Leaders initiative, a platform for leading companies to share their commitment and learnings from engaging with their supply chains to limit climate change. The company held that it leads the initiative’s 100% renewable energy group.