The “Renext” project will adapt the renewed part of Equinor to the new tasks. – We must be prepared for a competition that will be tougher, says Equinor’s renewed director Pål Eitrheim.
In recent years Equinor has gradually expanded its operations from controlling oil and gas, to also include a number of large offshore wind projects, such as the British Doggerbank and upcoming developments in the USA and Poland.
Now the renewed part of the company is on its way to a new stage. After working on obtaining licenses and expanding the first projects, the company will largely focus on developments and operations.
This requires a change in renewable business. That’s why Equinor has now launched the in-house project Renext.
Equinor has always had the ability to adapt before we have to do so, says Equinor’s director of renewable energy Pål Eitrheim to E24.
– That’s why we started a project called Renext, which will develop and simplify the renewable organization with the goal of positioning ourselves in the future and becoming more competitive, he says.
The renewable portion of Equinor does not fluctuate with prices like the oil and gas portion, but it has a different kind of risk and somewhat more profits. Over time, a return is expected 4-8 percent. Now, the business needs a slightly different facility, Etterheim points out.
With the Renext project, we will look at preparation in project development and procurement, energy commercialization, and access to capital and financing forms for renewable businesses, he says.
One of the goals of this setup is to be able to better integrate assets and businesses that we might find ourselves buying or otherwise acquiring, he says.
Entering a new phase
He will lead the Renext Magne Hovden project, now in Singapore. The goal is to equip Equinor to increase competition, and manage the company’s many upcoming projects.
The competitive picture has changed, and ensuring that we are fast enough and adapted to the competitive situation has affected the timing of this project, says Etterheim.
– We are now entering a new phase, he says.
Eitrheim notes that the revolving segment Equinor has previously driven a lot of business development, but in the future it will be more about developing and operating a number of major projects.
There are other requirements for Equinor’s renewable unit solutions. We are transitioning from a typical early stage organization to one that will solve heavy industrial tasks. He says this is not due to the fact that we lost any auctions, but something we’ve been thinking about for a long time.
“We will do it when we want, not when we have to,” Etterheim continues.
He explains that the goal is to make sure that the way the company is organized and operates puts it in a position to deliver growth plans that have been brought to market in what will be a very competitive landscape, according to the director of renewable energy.
Equinor has ambitions to increase its renewable capacity from 0.7 gigawatts to 12-16 gigawatts in 2030, and has secured licenses for much of this. Among the projects that will contribute are Britain’s Dogger Bank, the US Empire Beacon projects, Poland’s Baltic projects, Korea Firefly and Donghae 1.
I am satisfied with the level of ambition and do not need to rush it. Etterheim says the availability of good, profitable projects is a rare commodity.
There are not many projects that we can compete with to achieve the profitability goals we have set ourselves. But we must prepare for competition that will be tougher in the coming years, says Equinor’s renewed director.
Energy companies such as Germany’s RWE and oil companies such as BP and Shell have recently raised large sums to secure offshore wind licenses.
I think the Ukraine war affects politics
Energy and security policy in Europe is changing after the Russian invasion of Ukraine. Eitrheim believes the green turn will accelerate, and sees opportunities for offshore wind players.
– It’s a tragic situation and some terrible pictures are coming out of Ukraine. Etterheim says it affects everyone.
– I have worked in the energy industry for a long time and have seen how crises lead to change, and I am convinced that the situation in Europe now will change the rules of the game, both in terms of security and energy policy, he adds.
He believes that many European countries with coastlines see untapped potential for offshore wind.
I expect the level of ambition and ability to achieve this to rise until 2030. He adds that climate considerations and the desire to secure jobs have now been complemented by a geopolitical dimension that we have seen so tragically recently.
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