Q2 2021 Financial Highlights and Offshore Wind Build-Out Plan
Energy risk management
Risk picture
•
.
•
We manage energy market risks to protect Ørsted against price volatility and
to ensure stable and robust financial ratios that support our growth strategy
For Offshore, a substantial share of energy production is subsidized through
either fixed tariffs or green certificates. Remaining exposure is hedged at a
declining rate up to five years
Onshore mitigate their power exposure by entering into long-term power sales
agreements and commodity hedges
Markets & Bioenergy manage their market risk actively by hedging with
derivatives in the energy markets up to five years
Offshore exposure
14%
Onshore exposure
Hedging of open exposure
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•
Open energy exposure is reduced actively
Minimum hedging requirements are determined by the Board of Directors. In the
first two years, a high degree of hedging ensures stable cash flows
The degree of hedging is declining in subsequent years. This is due to: 1) reduced
certainty about long-term production volumes and 2) increasing hedging costs
in the medium to long term: both spread costs and potential cost of collateral
Offshore minimum power hedging requirement
100
40
86%
25%
75%
Subsidized exposure
Market exposure
Power purchase agreements
Market exposure
Note: expected exposure 2021-2025, as of 31/12/2020
75
50
25
0
1
2
3
4
5
Years
Note: actual hedging level is significantly higher
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