Comparing Orsted financial calculations with the YOUWINd model

Today Orsted published their new ambitious goals for the coming years: “Ørsted sets new, ambitious targets for the group’s long-term strategic and financial development – to invest DKK 200 billion in green energy towards 2025”

See further here:
https://orsted.com/en/Company-Announcement-List/2018/11/1852037

We found it very interesting that the company revealed the IRR values of their latest offshore wind farms won in a bid against harsh competition.

“Ørsted has won a series of offshore wind projects in competitive tenders since 2015 (Borssele 1&2, Hornsea 2, Gode Wind 3&4, German Cluster 1, Greater Changhua 1&2a and 2b&4 and Revolution Wind). The expected unlevered lifecycle IRR for these projects is 7.5-8.5% (average weighted capacity)”.

It is surprising that the IRR is minimum 7,5% but bear in mind that this is unlevered (not including financing costs) and in 2019 prices.

We couldn’t resist using these figures and compare to the YOUWINd model.

Fair to say the results are staggeringly close and then with the custom model calculation function it is easy to tweak parameters to fit the IRR value in the press release perfectly.