Ørsted A/S (DOGEF, OTC)
Annual report, fiscal year 2023


## Orsted Annual report 2023



## Contents

## 三

Management’s review \( ^{*} \) 

Annual reporting in 2023 ..... 4

## Overview

Strategic ambitions 6
Performance highlights 7
Letter to our stakeholders 9
Our footprint 14

## Outlook

Financial and ESG outlook 2024 ..... 16
Financial targets and policies ..... 18

## Strategy and business

Revenue and earnings 20
Strategic aspiration and growth platform 22
Executing our strategy 24
Business model 26
Our strategy to foster a fast and sustainable build-out 29
Risks and risk management 34

## Results

Follow-up on 2023 guidance 39
Dividend 40
Five-year summary 44
Fourth quarter 45
Quarterly summary, 2022-2023 50

## Corporate governance

Governance framework 52
Board of Directors 54
Group Executive Team 58
Summary of our remuneration report 61
Shareholder information 62

## 0

## Sustainability statements \( ^{*} \) 

Preparing for the Corporate Sustainability
Reporting Directive ..... 66

## General

Creating value through sustainability 68
General basis for preparation 69
Double materiality assessment 70
Double materiality assessment outcome 71
Double materiality assessment methodology 77
Interests and views of our stakeholders 79

## Environment

Taxonomy-aligned KPIs (incl. voluntary disclosures) ..... 81
Climate change ..... 87
Biodiversity and ecosystems ..... 102
Resource use and circular economy ..... 107

## Social

Own workforce ..... 112
Workers in the value chain ..... 120
Affected communities ..... 123

## Governance

Business conduct ..... 127

## Appendix

Disclosure requirements and incorporation by reference ..... 132
Statement on sustainability due diligence ..... 135
Statement on the use of the EU legislation ..... 136
Calculation factors ..... 138
Alignment with TCFD recommendations ..... 139
Alignment with TNFD recommendations ..... 140
Additional data points below materiality thresholds ..... 141

## Ⅱ

Financial statements

## Consolidated financial statements

Consolidated statement of income ..... 144
Consolidated statement of comprehensive income ..... 144
Consolidated balance sheet ..... 146
Consolidated statement of shareholders' equity ..... 146
Consolidated statement of cash flows ..... 147

## Notes

## Parent company financial statements

Income statement ..... 233
Balance sheet ..... 233
Statement of changes in equity ..... 234
Notes ..... 235

## Management’s statement, auditor’s reports, and glossary

Statement by the Executive Board and the Board of Directors 243
Independent Auditor's Reports 244
Statement by the Supervisory Board on selected ESG data in the Sustainability statements 249
Glossary 251



## Management's review

→ Hornsea 2, the North Sea, the UK






## Annual reporting in 2023

Preparing for the Corporate Sustainability Reporting Directive (CSRD) in our annual report

From 2024, the 'Corporate Sustainability Reporting Directive' (CSRD), a new EU directive, will require companies to report on their environmental and social impact activities. To meet these requirements, a set of European Sustainability Reporting Standards (ESRS) have been adopted by the EU.

In 2023, we decided to develop the 'Sustainability statements', a new section in our annual report for 2023. The sustainability statements have been prepared with reference to the ESRS. In 2023, our aim was to adapt as much as possible of the fundamental structure of the standards and to integrate it with the other parts of the annual report in the best way possible. We have done this by using the 'Incorporation by reference' option.

As a result of the new section, we will no longer publish separate ESG performance or sustainability reports.

Furthermore, our statutory corporate governance report has been incorporated into the governance section of the annual report.

## Get an overview of all of our reporting material by downloading our reports and investor presentations.

In our remuneration report, you will get a transparent and comprehensive overview of the remuneration of our Executive Board and our Board of Directors.

In our green bond impact report, you will get an insight into our green bond portfolio and the sustainability impact from our projects financed with green bonds. Outstanding green bonds and green hybrid bonds currently account for more than 88% of  \( Ø^{rated} \)  total portfolio of bonds and hybrid capital.

→ See our reports at orsted.com



## The cover photo is from our offshore wind farm Hornsea 2 in the North Sea

Hornsea 2 is operated and maintained from our East Coast Hub in Grimsby, the UK, which supports a workforce of over 600 people.

The wind farm spans an area of 462 square kilometres (1.78 square miles) and powers over 1.4 million UK homes with renewable energy.



## Overview

6 Strategic ambitions
7 Performance highlights
9 Letter to our stakeholders
14 Our footprint

→ Orsted has taken final investment decision and is ready to build the 920 MW Greater Changhua 2b and 4 offshore wind farms in Taiwan – marking a major step forward in Asia Pacific’s decarbonisation journey. Onshore work and component fabrication is underway, with the project set for completion by the end of 2025.






## Strategic ambitions



Installed renewable capacity by 2030
Cross capacity, GW

Offshore ☐ P2X
☐ Onshore ☐ Bioenergy

Science-based 2040 net-zero target, validated by SBTi
CHG emissions intensity, CO₂e/kWh
☑ Science 1-3 (excl. natural gas sales)

1 See page 91 in section 'Climate change' for details on the new set of interim 2030 targets currently undergoing SBTi's validation process.

 \( ^{2} \)  The targeted range is not a hurdle rate, and, consequently, some projects might deviate from the targeted range.

14%

Average ROCE
2024-2030



Dividend pause in 2023-2025
Dividends are paused for the financial years 2023-2025. Target to reinstate dividend payments thereafter.



Group EBITDA (excl. new partnerships and cancellation fees)
DKbN



150-300 bps

Targeted range for spread to WACC \( ^{2} \)  at time of bid/FID (whichever comes first) for individual projects

## Net-positive
biodiversity impact

On all new renewable energy projects commissioned no later than 2030



We exclusively deploy green and sustainable long-term financing, and all projects are taxonomy-aligned.



Ban on landfilling
→ Zero wind turbine blades to landfill
→ Zero solar panels to landfill

40:60
women:men

Gender balance in our total workforce by 2030

↓ More on our strategy on pages 22-23.



## Performance highlights

## Profits and return

☑ Excl. new partnerships and cancellation fees ☐ New partnerships ☐ Excl. impairments and cancellation fees ☐ Cancellation fees

## 18.7

Operating profit (EBITDA)
DKKbn

EBITDA totalled DKK 18.7 billion. EBITDA excluding cancellation fees (DKK -9.6 billion) and new partnerships (DKK 4.3 billion) amounted to DKK 24.0 billion.



## Return on capital employed (ROCE)

2023

2022

2021

12.9%

17%

15%

ROCE was -14.2% for the year. Adjusted for impairments and cancellation fees, ROCE amounted to 12.9% in 2023.

## Profit for the year
DKKbn

2023

2022

2021

14.9

15.0

10.9

Profit for the year was DKK -20.2 billion. Profit for the year excluding cancellation fees (DKK -9.6 billion) and impairments after tax (DKK -25.4 billion) amounted to DKK 14.9 billion.
Cash flow and balance sheet



Gross investments
DKKbn

Our gross investments reached DKK 38.5 billion and was driven by our construction of wind and on-bay solar assets.

Interest-bearing net debt
DKKbn

2023

2022

2021

Our net debt increased to DKK 47.4 billion.



Credit metric (FFO/adjusted net debt)

2023

2022

2021

29%

43%

26%

The credit metric funds from operations (FFO) relative to adjusted net debt amounted to 29% in 2023.

## Follow up on outlook announced for 2023

24.0

EBITDA realised DKKbn

Guidance (1 Feb.): 20-23

With EBITDA excluding new partnerships and cancellation fees totalling DKK 24.0 billion, earnings came in above our original guidance of DKK 20-23 billion.

38.5

Investments realised DKKbn

Guidance (1 Feb.): 50-54, (10 Aug.): 44-48, (1 Nov.): 40-44

Investments were lower than expected at the beginning of the year, primarily due to timing related to our US and Taiwanese portfolios and the decision to cease the development of Ocean Wind 1 and 2.



## Environment



## Installed renewable capacity
GW

Installed renewable capacity increased by 4% to 15.7 GW in 2023, mainly due to the commissioning of the onshore wind farms Sunflower Wind, Lisheen 3, Ballykeel, and Les Diu Huit and 80% of the solar farm Old 300.

## Greenhouse gas emissions intensity
CO₂e/kWh

☐ Scope 1-2 ☐ Scope 1-3 (excl. natural gas sales)



The greenhouse gas intensity from our heat and power generation and other operating activities in 2023 was 38 gCO₂e/kWh, compared to scope 3 (excl. natural gas), the greenhouse gas intensity was 80 gCO₂e/kWh. The decrease was driven by the lower generation and coal usage at our CHP plants, fewer projects reaching COD, and higher wind and solar generation.

## 49%

Greenhouse gas emissions (scope 3), million tonnes, CO \( _{2} \) e

Our scope 3 greenhouse gas emissions were reduced by 49%, mainly due to a 47% decrease in natural gas sales and a 94% decrease in emissions from commissioning of renewable assets as only four onshore sites reached COD in 2023.

## Social

2.8

3.1 in 2022/3.0 in 2021

Safety
Total recordable injury rate (TRIR)

We saw a further improvement in our safety performance in 2023.

34.66

33.67 in 2022/31.69 in 2021

Gender balance (women:men)

The gender balance in our total workforce was improved in 2023, with 41% of all new hires being women.



Employee satisfaction
Index 0-100, 2021/2022/2023

In 2023, our employees satisfaction survey, People Matter, showed a high satisfaction and motivation score of 76, placing us in the top quartile of our benchmark peer group.

## Governance

## Nationality and gender

Diversity in the Board of Directors and the Group Executive Team (all members).

In 2024, we will hold our first international election for employee-elected board members.






# Looking ahead to deliver
on our updated ambition

## Letter to our stakeholders

Despite a year with strong underlying business progress, 2023 marked a year with substantial challenges for Ørsted. In the autumn of 2023, we took the tough but necessary decision to cease development of our Ocean Wind 1 offshore wind project in the US in the form it was awarded by the New Jersey Board of Public Utilities.

In the wake of the COVID-19 pandemic and Russia’s invasion of Ukraine, Ocean Wind 1 had been faced with a variety of challenges, such as higher costs of capital (US risk-free rate increasing by approx. 300 bps from the award in 2019), cost inflation, supply chain challenges, and slow permitting. As explained in our interim financial report for the first nine months of 2023, the decision to cease the development was taken after additional supplier delays further impacted the project schedule, which led to an additional significant delay to the project.

In addition, we had updated our view on certain assumptions, including tax credit monetisation and the timing and likelihood of final construction permits. Finally, continued increases to long-dated US interest rates had further deteriorated the business case.

In addition to the impairments we recognised in the third quarter on Ocean Wind 1 and other of our US projects, the decision to cease development of Ocean Wind 1 resulted in significant costs for terminating contracts, driven by high commitments prior to reaching final investment decision (FID).

We have reviewed our Ocean Wind 1 project and are implementing the learnings into our operating model to reduce risks in the development and execution of projects, with a particular focus on monitoring of and updates on project execution, including risk reviews with the Group Executive Team and the Board of Directors, structured external reviews for select projects, internal peer assessments, contingency planning, and monitoring of suppliers. Furthermore, we will prioritise inflation protection in offtake arrangements in future projects.



↑ Mads Nipper and Thomas Thune Andersen.



## “

## In the UK, we reached a significant milestone when our offshore wind farm Hornsea 3 reached FID. With a capacity of 2.9 GW, it will be the world’s single largest offshore wind farm.

We will continue our work to manage future break-away profiles by scrutinising financial commitments before taking final investment decision (FID) to avoid high capital commitments relative to project maturity and by ensuring greater flexibility on project time-lines and commissioning dates as well as phasing of CAPEX. We will use the breadth of our execution portfolio and our deep, industry-leading capabilities to ensure greater resilience to external shocks or supply chain weaknesses across the portfolio.

Our fundamental strategic choices on technologies and regions are unchanged. We aim to be the world leader in Offshore and a regional player in Onshore and P2X in Europe and the US. However, we have revisited our portfolio to prioritise growth options with the highest potential for value creation. In the US, our offshore wind portfolio will primarily be focused towards the North-East Atlantic, and to reduce development costs, we are exiting several offshore markets (e.g. Norway, Spain, and Portugal), deprioritising development activities in Japan, and plan for a leaner development within floating offshore wind and P2X. As a result of this, we have updated our ambition for installed renewable capacity to 35-38 GW by 2030, which is more than a doubling of our current installed capacity. By 2026, we expect to have an installed capacity of 23 GW.

For Offshore, the 2026 contribution will be based on projects already under construction or awarded (assuming rebuild award to Sunrise Wind), whereas the Onshore contribution will come from a mix of projects under construction and in our pipeline.

We will go beyond decarbonising energy systems and proactively enhance nature through biodiversity initiatives to deliver a sustainable build-out, which is net-positive to society. We are confident we can deliver on this commitment as our underlying business of operating assets remains strong as reflected in our underlying financial performance, which was above our initial guidance.

## Capital structure

The costs related to terminating our Ocean Wind 1 project as well as lower forward power prices, further supply chain delays and costs to mitigate this, increasing capital expenditures (per MW) and OPEX due to cost inflation and supply chain bottlenecks have negatively impacted our credit metric (FFO/adjusted net debt) projections in 2023. Therefore, we have taken and will continue to take measures to ensure a robust balance sheet, supporting long-term growth and capital structure resilience towards 2030.

Besides reducing our growth ambition, and thereby reducing capital expenditures and project development costs, we have decided to pause dividends for the financial years 2023-2025 and will accelerate our divestment programme. In addition, we have set a target to reduce our fixed costs by DKK 1 billion by 2026 compared to 2023, on a like-for-like basis, by simplifying our organisation and increasing our efficiency.

We have updated our financial targets to reflect our new strategic ambition for installed capacity by 2030. We maintain our targeted value creation of 150-300 bps spread to WACC when we bid in tenders or take FDIs. Based on the GW ambition and value creation target, we expect our EBITDA to increase to approx. DKK 39-43 billion in 2030, corresponding to an annual growth (CAGR) of 8%. Additionally, we expect to achieve a return on capital employed (ROCE) of 1.4% on average towards 2030.

In 2026, we expect EBITDA to reach approx. DKK 30-34 billion. To enable our build-out, we have a DKK 270 billion investment programme towards 2030, of which we expect to use approx. DKK 130 billion by 2026. To support this programme, we expect farm-downs and divestments to contribute with proceeds of approx. DKK 1.15 billion towards 2030, of which DKK 70-80 billion is expected in 2024-2026.

In 2023, we recycled capital of DKK 8 billion by divesting the remaining 25% of the offshore wind farm London Array to funds managed by Schroders Greencoat and farming down 50% of Gode Wind 3 in Germany to funds managed by Glenmont Partners from Nuveen. We have identified a portfolio of assets, which we aim to farm down or divest in 2024 and the coming years. As of now, we have selected Cathay Life Insurance as preferred bidder for the acquisition of a 50% ownership stake in Greater Changhua 4.

Strategic and operational progress remains strong While our current situation has required adjustments to our growth trajectory, our traction and underlying momentum remained strong in 2023. Our large portfolio of renewable assets continued to grow within both Offshore and Onshore with several projects reaching COB and FID. Our renewable share of heat and power generation amounted to 93% in 2023. We advanced three large offshore wind projects with a total capacity of 4.5 GW to FID, one in the UK, the US, and APAC, respectively.

In the UK, we reached a significant milestone when our offshore wind farm Hornsea 3 reached FID. With a capacity of 2.9 GW, it will be the world's single largest offshore wind farm. Hornsea 3 will provide low-cost renewable energy for the UK and deliver thousands of high-quality jobs and billions of pounds of investment in the UK's offshore wind supply chain. Additionally, we received development consent for Hornsea 4



from the British authorities, enabling us to continue the development of the project. The possible future addition would create an offshore wind cluster in excess of 7 GW.

In APAC, another important achievement was reached with the FID of our 0.9 GW offshore wind farms Greater Changhua 2b and 4. We expect completion of the wind farms by the end of 2025. Additionally, we are finalising Greater Changhua 1 and 2a, which are Taiwan's first large-scale offshore wind farms. The last four of the 11.1 turbines will be installed in the spring of 2024 with subsequent COD in Q2 2024. With a total capacity of more than 1.8 GW, these wind farms represent a significant contribution to Taiwan's transition to new energy sources and its decarbonisation journey.

The US is still an important region for us, and in November, we took FID on our offshore wind farm Revolution Wind, which we own in a 50/50 partnership with Eversource. The 0.7 GW wind farm has an attractive forward-looking value creation and will power more than 350,000 homes across Rhode Island and Connecticut. At South Fork in New York, we are in the final stages of constructing what will be New York's first offshore wind farm. We expect COD in Q1 2024.

In January 2024, we signed an agreement with Eversource to acquire their 50% share of Sunrise Wind. The acquisition is subject to the successful award of Sunrise Wind in the ongoing New York 4 solicitation for offshore wind capacity, signing of an OREC contract with New York's energy agency, NYSERDA, entry into long-form acquisition agreements, receipt of construction and operations plan (COP) approval, and relevant regulatory approvals. If the project is not successful in the solicitation, the existing OREC contract for Sunrise Wind will be cancelled per the state's requirements, and our 50/50 joint venture with Eversource will remain in place. In that scenario, the joint venture will evaluate its next steps.

In Germany, our offshore wind farms Code Wind 3 and Borkum Riffgrund 3 are progressing according to plan with CODs in 2024 and 2025, respectively. The wind farms will have a total capacity of 1.2 GW once completed.

We continue to explore new value-creating opportunities for offshore wind. In Ireland, we entered into a partnership with ESB, the leading utility company in the country, to jointly develop an Irish offshore wind portfolio.

Furthermore, we were granted a 1.6 GW electricity business license (EBL) by the Korean Ministry of Trade, Industry & Energy for an offshore wind project located 70 km off the coast of Incheon City.

Our Onshore business continues to grow. In 2023, four projects with a total capacity of 0.6 GW reached COD, and we added several new assets to our portfolio.

In the US, we completed the onshore wind farm Sunflower Wind in Kansas, and in Arizona, we began the construction of Eleven Mile Solar Center, a solar and battery energy storage system (BESS) with

## Selected events

March

920 MW

FID on offshore wind farms Greater Changhua 2b and 4 (920 MW), Taiwan. COD expected in 2025

May

Construction commenced on carbon capture project, Kalundborg Co₂ Hub, Denmark

August

Divestment completed of remaining 25% of the UK offshore wind farm London Array to funds managed by Schroders Greencoat

September

201 MW

Completion of onshore wind farm Sunflower Wind (201 MW), Kansas, the US

Acquisition of Eversource's share of uncontracted offshore wind seabeds, including Lease Area 500 in the US

November

Development of US offshore wind projects Ocean Wind 1 and Ocean Wind 2 ceased

Impairments on US projects, primarily relating to Ocean Wind 1

FID on US offshore wind farm Revolution Wind, Rhode Island (704 MW)
Implementation of changes to executive management: Daniel Lerup (CFO) and Richard Hunter (COO) stepped down

Grant of 1.6 GW electricity business license for Incheon offshore wind project in Korea

December

50%

Completion of divestment of 50% of German offshore wind farm Code Wind 3 to funds managed by Glennmont Partners from Nuveen

Partnership with Breakthrough Energy Catalyst, the European Commission, and the European Investment Bank on FlagshipONE in Sweden. Breakthrough Energy Catalyst acquired 15% equity share of the project

FID on Garenreen Solar Farm, first phase (81 MW), Ireland

29 GW

FID on UK offshore wind farm Hornsea 3 (2.9 GW). COD expected in 2027

January

Agreement signed to acquire Eversource's 50% share of Sunrise Wind (924 MW), New York

February

35-38 GW

Updated capacity target for 2030




↑ Offshore wind farm construction in progress in the North Sea, Germany.

expected completion in 2024. In Texas, the construction of our 471 MWhc Mockingbird Solar Center is going as plan-ned, with COD expected in the second half of 2024.

We continue to develop our European onshore renewables portfolio. In the UK, we entered our first solar project in 2023, One Earth Solar Farm, a 740 MWhc solar project with associated battery storage. If built, it will be one of the largest solar farms in the country. Additionally, we took FID on phase one of Garenneien, our first solar project in Ireland, and in January 2024, the onshore wind farm Garrfanwyn in Tipperary reached FID. We secured contracts for both projects in the Irish Government's third onshore auction. Lastly, we entered a partnership with renewable energy developer Terra Solar to develop a portfolio of Irish solar projects with a capacity of up to 400 MWhc.

In our P2X business, the construction of our Flagship-One project has started. It is the largest e-methanol project under construction in Europe, and we expect it to start production in 2025. To support this innovative project, Breakthrough Energy Catalyst will acquire a 15% equity interest in FlagshipONE and provide a grant, subject to the fulfilment of funding conditions. In addition, FlagshipONE is also expected to receive a grant from Horizon Europe and a quasi-equity investment from EIB through InvestEU.

In December, we embarked on the construction of the two carbon capture and storage (CCS) facilities in our project Ørsted Kalundborg CO₂ Hub, which has been awarded a 20-year contract by the Danish Energy Agency (DEA). During 2025, the Ansæs and Avedere combined heat and power plants will begin to capture and store biogenic carbon.

## Financial results

EBITDA totalled DKK 18.7 billion in 2023 compared to DKK 3.2 billion in 2022. EBITDA excluding new partnerships and cancellation fees amounted to DKK 24.0 billion, an increase of DKK 3.0 billion compared to 2022 and above our guidance of DKK 20-23 billion. Earnings in 2023 were impacted by a provision of DKK 9.6 billion for cancellation fees related to ceasing the development of the Ocean Wind 1 project. EBITDA from new partnerships in 2023 contributed with DKK 4.3 billion and was related to the divestment of London Array and the 50% farm-down of Code Wind 3.

Earnings from sites in operation in Offshore more than doubled to DKK 20.2 billion in 2023 due to ramp-up of generation at Greater Changhuak 1 and 2a and Hornsea 2, and as the negative effects from hedges in 2022 were not repeated in 2023. Earnings from Onshore decreased due to lower-than-expected power prices and wind speeds and availability issues at some of our assets in the US.

Similarly, earnings in Bioenergy & Other decreased due to lower power prices and lower optimisation opportunities related to gas storages and sourcing contracts.

In 2023, we recognised impairments of DKK 26.8 billion, with the majority (DKK 19.9 billion) relating to Ocean Wind 1.



## “

## We have learned from this year's challenges, and we are adapting our operating model to further strengthen our ability to shape and lead our industry.

ROCE was 14.2% for the year. Adjusted for impairments and cancellation fees, ROCE amounted to 12.9% in 2023. Profit for the year amounted to DKK-20.2 billion. Excluding impairments (after tax) and cancellation fees, profit for the year was DKK 14.9 billion.

## Employees and safety

We value our employees at Ørsted, and we are pleased that our employee satisfaction measured in our annual employee survey showed 76 in 2023, which is at level with last year and within the top 25% percentile of our external benchmark.

Equally important is our strong safety culture, which is anchored in our organisation. In 2023, we further reduced our total recordable injury rate (TRIR) to 2.8, down from 3.1 last year. We are very pleased with this development and will continue to focus on reducing it even further.

As part of our ambition to reduce our fixed costs and increase our efficiency, we will be reducing a number of positions in the organisation and unfortunately also see redundancies. We are committed to carrying through these redundancies in a fair and respectful manner. Maintaining and improving the motivation and well-being of our remaining employees remain a key priority to us.

## Looking ahead

The year 2023 turned out to be a challenging year for the renewable industry in general and for Ørsted in particular. And while the pressures on the renewable industry continue, we have seen positive initiatives from politicians and governments to support a sustainable and viable build-out of the industry. In Europe, the Net-zero Industry Act proposed by the European Commission and the shared Action Agenda agreed by the North Sea countries and the European Commission are signs of this and supplement the US Inflation Reduction Act from 2022. However, the pace with which it is moving forward needs to be accelerated.

In the offshore industry, awarded prices must reflect the higher cost and interest levels across markets. Recently, the UK government significantly increased the maximum CFD level for the upcoming auction in 2024, and in New York, we saw higher PPA prices in the state's third offshore wind solicitation round. These are positive signs for the industry. Focusing solely on concession payments as key decision criteria in auctions risks putting additional pressure on the supply chain and leaves limited room for investing in scaling manufacturing capacity.

For offshore wind, regaining momentum is crucial to realise the strong value proposition it offers for societies and its key role in the renewable energy transition. We continue to engage stakeholders and partners to jointly overcome challenges to create a renewable, secure, and affordable energy system.

We are dedicated to restoring our capital structure, and we will work disciplined towards our long-term growth ambition for 2030 through prioritised growth options with the highest potential for value creation.

We have learned from this year’s challenges, and we are adapting our operating model to further strengthen our ability to shape and lead our industry.

We remain optimistic about the future of the renewable energy industry. The global ambitions for renewable energy have never been higher. Most recently, we saw this at COP28 where more than 130 governments agreed to work together to triple the world's renewable energy capacity by 2030.
We are confident we can be a key contributor in accelerating the renewable build-out in the years to come.



Mads Nipper
Group President and CEO



Thomas Thune Andersen
Chair of the Board of Directors



## Our footprint



## 27.8 GW

## Renewable capacity

Consisting of 15.7 GW in operation (installed), 8.3 GW under construction (FID'ed), and 3.7 GW awarded. In addition, we have substantiated pipelines of 16 GW in Offshore and 11 GW in Onshore.

See page 92 Overview by business unit for more information.

## Capacity
GW

## United States of America



## United Kingdom and Ireland



## Continental Europe



## APAC

Offshore 1.9

## Capacity

In operation
Under construction
Awarded



## Outlook

16 Financial and ESG outlook 2024
18 Financial targets and policies

→ In 2023, we became the first energy company to join the Global Offshore Wind Alliance, committing to accelerating offshore wind deployment globally and contributing to the alliance’s ambitious targets.






## Financial and ESG outlook 2024

## Group EBITDA guidance

Our EBITDA guidance does not include earnings from new partnership agreements and also excludes impact from potential changes in cancellation fees relating to ceasing the development of Ocean Wind 1.

Operating profit (EBITDA) excluding new partnership agreements and cancellation fees is expected to be DKK 23-26 billion in 2024.

As in previous years, we could see offsetting effects between the business units compared to our directional guidance.

## Offshore – lower

Earnings from sites are expected to increase in 2024 compared to 2023:

- Ramp-up of generation from Greater Changhua 1 and 2a, South Fork, and Goede Wind 3.

- Total power generation expected to increase by approx. 15%.

- Inflation adjustment on ROC and CfD farms, partly offset by lower prices on merchant assets and a step down in subsidy level for our older German assets.

- Partly offset by lower positive impact from reversal of temporary IFRS 9 adjustments.
Earnings from existing partnerships are expected to decrease compared to 2023, mainly driven by:

• positive effects from wake and warranty provisions in 2023 not expected to be repeated in 2024

• higher costs related to M&A activities.

‘Other, including project development’ in Offshore is expected to increase compared to 2023, mainly due to:

• internal costs related to the close-down of the Ocean Wind 1 project being expensed

- a higher share of costs being expensed rather than capitalised (no increase in underlying cost base).

## Onshore – significantly higher

Earnings in Onshore (excluding new partnership agreements) are expected to increase compared to 2023.

The positive impact on EBITDA in 2024 is driven by:

- ramp-up of generation from the wind part of Helena Energy Center, Eleven Mile, Old 300, Sunflower Wind, and Mockingbird

• higher expected availability in the US

- total power generation expecting to increase by approx. 30%

• partly offset by slightly lower prices

- project development and general costs expected to be in line with 2023.

Guidance on 2024 EBITDA without new partnerships and cancellation fees DKKbn



<table><tr><td>Outlook 2024</td><td>2023 Realised</td><td>2024 Guidance</td></tr><tr><td>Financial outlook, DKK billion</td><td></td><td></td></tr><tr><td>EBITDA (without new partnerships, excl. cancellation fees)</td><td>24.0</td><td>23-26</td></tr><tr><td>Offshore</td><td>19.1</td><td>Lower</td></tr><tr><td>Onshore</td><td>3.0</td><td>Significantly higher</td></tr><tr><td>Bloenergy &amp; Other</td><td>1.5</td><td>Significantly higher</td></tr><tr><td>Gross investments</td><td>38.5</td><td>48-52</td></tr><tr><td>ESG outlook</td><td></td><td></td></tr><tr><td>Greenhouse gas emissions intensity (scope 1, 2), CO2e/kWh</td><td>38</td><td>Lower</td></tr><tr><td>Greenhouse gas emissions intensity (scope 1-3 excl. natural gas sales), g CO2e/kWh</td><td>80</td><td>Higher</td></tr><tr><td>Greenhouse gas emissions from natural gas sales (scope 3), million tonnes CO2e</td><td>3.9</td><td>Higher</td></tr><tr><td>Gender balance - gender with lowest representation (female)</td><td>34</td><td>Higher</td></tr></table>

Our EBITDA guidance for the Group is the prevailing guidance, whereas the directional earnings development per business unit (and component) serves as a means to support this. Higher and lower indicate the direction of the business units' earnings relative to the results for 2023.



## Bioenergy & Other – significantly higher

Earnings from CHP plants (including ancillary services) and 'Gas Markets & Infrastructure' are expected to increase compared to 2023.

The positive impact on EBITDA in 2024 is driven by:

• earnings from our CHP plants, which are expected to increase as 2023 were negatively impacted by the high costs of biomass and coal relative to the market price of power. This was partly offset by lower prices and market spreads in 2024

• earnings from our offshore oil and gas pipelines in 'Gas Markets & Infrastructure', which are expected to increase due to the anticipated re-opening of the Tyra gas field (not owned by Ørsted) in April.

## Gross investments

Gross investments for 2024 are expected to amount to DKK 48-52 billion, mainly driven by:

• Offshore (Greater Changzhou 2b and 4, Revolution Wind, Sunrise Wind, South Fork, Hornsea 3, Borkum Riffgrund 3, Gode Wind 3, and Baltic 2)

• Onshore (Mockingbird, Elven Mile, and projects from our substantiated pipeline in both the US and Europe).

Our gross investments guidance for 2024 assumes that we acquire full ownership of Sunrise Wind in H1 2024.

## Uncertainties, prices, and hedges

The most significant uncertainty to the operating profit in 2024 is the power generation, which depends on wind conditions, ramp-up of new wind and solar assets, asset availability, timing of possible farm-downs, and the attractiveness of spreads on our CHP plants.

Our wind and solar PV assets are largely subject to prices that are indexed to inflation or are fixed nominal, implying a high degree of revenue certainty, setting aside the above-mentioned volume risk. This means that we know the price (or minimum price) per generated MWh for most wind farms in Denmark, the Netherlands, the US, and Germany and for the CfD wind farms in the UK. For our British ROC wind farms, we also know the subsidy per generated MWh, which we will receive in addition to the market price.

In 2024, 81% of our expected revenue from our wind and solar PV assets will be inflation-indexed or fixed nominal. The remaining 19% will be exposed to fluctuations in power prices. Our hedging approach is to hedge up to 70% of this remaining merchant exposure. For 2024, we have hedged approx. 60% of this, leaving Ørsted with an unhedged price exposure of 8% from generation from our wind and solar PV assets. See note 6.2 'Energy price risks'.

High gas and power price volatility could impact earnings for the year through optimisation possibilities of our gas storage and sourcing contracts as well as higher balancing and intermittency costs. In addition, a delay in the reopening of the Tyra gas field could adversely impact earnings from our gas activities.

## Greenhouse gas emissions

The greenhouse gas emissions intensity for scope 1 and 2 is expected to decrease in 2024 due to higher renewable generation, and as we expect to cease coal-based power generation in August. However, as all scope 3 emissions from renewable assets are included from COD, we expect the scope 1-3 emissions to increase as more of our renewable assets reach COD in 2024.

Due to the anticipated reopening of the Tyra gas field in April, we expect more gas delivered under our contract with The Danish Underground Consortium (DUC). Therefore, we expect an increase in our scope 3 emissions from natural gas sales.

## § Forward-looking statements

The annual report contains forward-looking statements, which include projections of our short- and long-term financial performance and targets as well as our financial policies.

These statements are by nature uncertain and associated with risk. Many factors may cause the actual development to differ materially from our expectations.

These factors include, but are not limited to, the impact of the COVID-19 pandemic, the wake and blockage effects, precipitation levels, the development in power, coal, carbon, natural gas and renewable energy prices, market rates, the ability to uphold hedge accounting, changes in legislation, regulations, or standards, the renegotiation of contracts, the impact of the energy transition, the energy market, reliability of supply, and market volatility and disruptions from geopolitical tensions.

Read more about the risks in the chapter on 'Risks and risk management' and in note 6 'Risk management' in the financial statements.

Furthermore, the proceeds we can realize from our anticipated farm-down and divestments as part of the measures we take to support a robust capital structure are subject to uncertainty.



## Financial targets and policies

<table><tr><td>Financial targets</td><td>Target</td><td>Year</td></tr><tr><td>Fully loaded unlevered lifecycle spread to WACC at the time of bid/FID \( ^{1} \)</td><td>150-300 bps</td><td>Continuous</td></tr><tr><td>Group EBITDA excluding new partnerships and cancellation fees</td><td>DKK 30-34 bn</td><td>In 2026</td></tr><tr><td></td><td>DKK 39-43 bn</td><td>In 2030</td></tr><tr><td>Average return on capital employed (ROCE)</td><td>−14 %</td><td>2024-2030</td></tr></table>

 \( ^{1} \)  Targeted range for spread to WACC at time of bid/FID (whichever comes first) for individual projects. The targeted range is not a hurdle rate, and consequently, there could be projects that deviate from the targeted range.

<table><tr><td>Financial policies</td><td>Target</td></tr><tr><td>Rating</td><td>Solid investment grade with Moody&#x27;s/FSAP/Fitch.</td></tr><tr><td>Capital structure</td><td>Above 30% FFO/adjusted net debt</td></tr><tr><td>Dividend policy</td><td>No dividend payments for the financial years 2023-2025. Target to reinstate dividend from the financial year 2026.</td></tr></table>

Forward-looking statements are described on page 17.

## Capital Markets Update

On 6 February 2024, we have updated our strategic growth ambition and financial targets and policies. The updated targets and policies are presented below.

## Financial targets

We have three key financial targets to support our self-funded build-out of approx. 35-38 GW of renewable capacity by 2030. The financial targets cover (see details in the table to the left):

• spread to WACC on investments

- EBITDA

- ROCE.

Financial policies and capital allocation
The Board of Directors has decided to pause dividend payments for the financial years 2023-2025. Hereafter, the target is to reinstate dividend payments.
To ensure we have financial robustness and the strength to operate in the international energy and financial markets, we target a solid investment grade rating with all three major ratings agencies. This includes an FFO/adjusted interest-bearing net debt credit metric above 30%.

We will continue to invest our capital according to the following principles, in order of priority, to ensure a robust balance sheet to support a fully self-funded business plan to 2030:

• We target FFO / adjusted interest-bearing debt above 30%.

• We target to reinstate dividend payments for the financial year 2026.

• We will invest in value-creating growth opportunities.



## Strategy and business

20 Renewable energy market
22 Strategic aspiration and growth platform
24 Executing our strategy
28 Business model
29 A call to action to foster a fast and sustainable build-out
34 Risks and risk management

→ 2023 saw us expand our Irish solar portfolio, partnering with renewable energy developer Terra Solar to develop a pipeline of projects that now total over 600 MWs.

We also took final investment decision on phase one of Carreenleen Solar Farm, marking our first solar investment in Ireland. Located outside of Carlow town, this 61 MWsolar development project is expected to be operational by 2026.






## Renewable energy market

The outlook for the renewable energy market is promising. By 2050, it is expected that almost 70 % will come from wind and solar PV alone (IEA). This shift is supported by increasingly larger renewable energy projects and a significant scale-up of transmission infrastructure connecting several markets.

At the COP28 climate change conference in Dubai, more than 130 governments, including the European Union, agreed to work together to triple the world's installed renewable energy capacity by 2030.

Towards 2030, we are anticipating exponential growth in the renewable energy market, with total combined capacity (offshore wind, onshore wind, solar PV, and energy storage) reaching more than 4,200 GW, excluding China (BNEF).

Offshore wind is expected to increase by a combined average growth rate (CAGR) of 2.1% in 2024. We are anticipating up to 40 GW of offshore wind capacity to be auctioned. Forecasts for onshore renewables (wind, solar PV, and energy storage) indicate a CAGR of approx. 12 %, and global targets to meet forecasted demand for P2X now exceed 260 GW of installed electrolyser capacity by 2030. However, reaching the 2030 ambition will require significant acceleration by the industry and governments through a doubling of the current rate of investment, scaling up through a mix of technologies, and addressing current barriers within the industry.
Across the renewables market, we are seeing positive signs of these ambitions, such as rising political momentum, increased support for offshore agreements, new sources of demand, and improved system integration and flexibility management.

In September, the European Union updated its Renewa-ble Energy Directive to reach 42.5 % renewable energy consumption by 2030, requiring a massive increase in installed renewable capacity. Following this, the European Commission presented a European Wind Power Action Plan in 2023 to help maintain a healthy and competitive wind energy supply chain. Additionally, the European Commission proposed a Net-Zero Industry Act to strengthen the European manufacturing capacity of net-zero technologies and overcome barriers to scaling up the capacity. Some initiatives are already on the table, which will provide significant opportunities for the renewable energy sector. However, to reach the ambition, the pace in which it is being moved forward needs to be accelerated.

In November, the North Sea countries and the European Commission agreed on a shared Action Agenda to coordinate offshore auctions in the North Sea to increase the predictability of demand in the wind power supply chain, which will help facilitate investment in new capacity.

In the UK, the government has further enhanced its commitment to the British Energy Security Strategy established in 2022 by announcing its 2023 Energy Security Plan (ESP). For the renewables industry, a key element is the contract for difference (CfD) auctions, which are now held annually. Furthermore, the government significantly increased the administrative strike price for the upcoming auction in 2024. This is a strong signal from the government, recognising the true cost of delivering offshore wind at scale in the current supply chain constrained environment.

In the US, we have seen positive support through the Inflation Reduction Act (IRA), which was put forward in 2022. The IRA provides USD 0.4-1.2 trillion in funding for investments in climate and renewable energy. However, while offshore wind projects commissioned towards the end of the decade will benefit from the IRA as intended, projects with earlier construction and commission schedules are experiencing challenges in qualifying for the support for domestic content due to the short-term lack of an established US supply chain, which is a prerequisite for getting the highest levels of support.

## Offshore wind industry

Offshore wind remains a high growth industry and an important part of the global energy transition. As the only variable baseload power generation technology,

Estimated electrolyser capacity required to meet forecasted renewable H2 demand of 21 Gbps, based on IEA-Announced Pledges Scenario (APS) H2 balance. Regional split indicates location of expected demand (which may differ from supply) and is based on internal estimates applied to IEA data.

Source: BNEF (2022, 2023).










## Political initiatives

Governments are implementing initiatives to meet ambitious future energy targets

## POLICIES AND LEGISLATION IN 2023

## EU Net-zero Industry Act

Strengthen the European manufacturing capacity of renewable energy

DK/BE/NL/DE/NO/FIR/RJ/SE/LU/EU/

North Sea Action Agenda

Integrated energy system by 2050, a sustainable and resilient supply chain in Europe, and a better balance between energy and nature in the North Sea

UK Energy Security Plan

Compliment British Energy Security Plan from 2022

UK FuelEU Maritime and Refuel EU
Require heavy transport energy consumers to decarbonise their energy supply with a minimum obligation for green fuels, such as e-methanol and e-ammonia

## SELECTED TARGETS AND

INITIATIVES IN PREVIOUS YEARS

EU Renewable Energy Directive
Sets on overall renewable energy target of at least 42.5 % binding at EU level by 2030, aiming for 45 %.

Tax credits to incentivise investment in renewable energy, P2X, and energy storage in the US

UK British Energy Security Strategy
Up to 50 GW installed offshore wind capacity by 2030

DK/BE/NL/DE/Energy declaration (North Sea)
65 GW installed offshore wind capacity by 2030
20 GW renewable hydrogen production capacity by 2030
150 GW installed offshore wind capacity by 2050

TU Offshore wind capacity build-out target
20 GW installed offshore wind capacity by 2035

Greece Near-Detox

12 GW installed offshore wind capacity by 2030

European Wind Power Action Plan
Help maintain a healthy and competitive wind energy supply chain
the benefits from offshore wind include high availability factors, the ability to serve land-constrained communities, and the continuous improvement of technology. It serves as a crucial lever for governments and industry to reach their renewable energy targets.

The importance of offshore wind and its fundamental value proposition have never been stronger; however, several industry challenges must first be addressed to realise the required build-out.

Over the last years, we have seen rising LCOe levels due to changing macroeconomic factors and supply chain challenges. While there have been some price increases to power purchase agreements (PPA) and inflation-indexed agreements in certain markets, awarded prices do not yet reflect the higher cost and interest rate levels across all markets. Where prices are not reflective, the developers behind many of the awarded projects are seeking to renegotiate offtake agreements. If unsuccessful, projects may ultimately be terminated. While there has been increased alignment on expectations, the conditions to date have challenged developers to move forward with projects.

In the current market, the gigawatts auctioned by governments does not meet the demand from developers. As a consequence, some governments choose to conduct auctions based on concession payments so the key decision criteria. To compensate for the upfront payments, developers must put additional pressure on the supply chain, which leaves limited room to invest in scaling manufacturing capacity. Moreover, it limits project-specific solutions that create a positive impact on biodiversity, advance social sustainability, and stimulate innovation and system integration.

## Navigating and shaping the future of renewable energy

The current market conditions require a new approach and joint industry action. At Ørsted, we are working to navigate and shape the future of renewable energy by engaging the right stakeholders and partners to jointly overcome challenges and create a secure and affordable renewable energy system. Close collaboration between governments and industry has been critical for the industry’s maturation to date.

For offshore wind, regaining momentum is of mutual interest to realise the strong value proposition it offers for societies and its key role in the green energy transition.

Therefore, among our initiatives, we have developed a seven-point plan on as advice for governments and the industry to build momentum and navigate the challenges facing the offshore wind industry. The seven points are to:

1 acknowledging the challenges and mobilise political commitment to overcome them to instil market confidence and attract capital

2 build a bridge from development to operation for existing projects to enable the all-important ‘next wave’ of projects to drive industry investment

3 bring volumes to market and create foresight for demand to unlock supply chain growth
4 design tenders for sustainable industry growth to de-risk the build-out for both developers and energy consumers

5 introduce strong non-price criteria to ensure delivery and value creation while addressing long-term structural barriers to offshore wind build-out

6 ensure predictable, transparent, and fast permitting without compromising on environmental or social sustainability

7 enable and empower a global and sustainable industry by carefully balancing domestic industrial policies with the needs for a level playing field and the potential synergies of global supply chains.

We believe that governments and industry can work together to weather the current challenges and facilitate future offshore wind deployment.



## Strategic aspiration and growth platform

Our vision is to help create a world that runs entirely on green energy.

Our aspiration is not about gigawatt capacity. Rather, it means reaching leading positions across five pillars: 1) to be one of the world's largest green electricity producers, 2) to be one of the world's largest and most value-creating deplayers of capital to the green energy transformation, 3) to be the world's leading talent platform in renewable energy, 4) to be a globally recognised sustainability leader, and 5) to be a core contributor and catalyst for change towards reaching our vision of a world that runs entirely on green energy.

As with the rest of the industry, we have felt the impact of market challenges over the past few years. This was made especially clear in August when we announced anticipated impairments on our US offshore wind portfolio, in particular attributable to supply chain challenges as well as lack of favourable progress on tax credit guidance and increased interest rates.
We have learnt from these challenges and are adapting to changing market conditions.

Our fundamental strategic choices on technologies and regions are unchanged. We aim to be the world leader in offshore wind and a regional player in onshore renewables and P2X in Europe and the US. However, we have accelerated an adaption of our operating model to better match our rapid expansion into the US and Taiwan and the broader market conditions. We have strengthened our risk processes and expanded regular reviews by senior executives and the Board of Directors.

Based on our portfolio review and given our financial position, we have revised our CW ambition for installed renewable energy capacity. Our ambition is to reach 35-38 GW by 2030, which is more than double our current installed capacity of 15.7 GW. We aim to reach an installed capacity of 23 GW by 2026.

Vision

## Let's create
a world that
runs entirely on
green energy

Growth platform






## Our growth platform



## Gross installed capacity
CW



In offshore wind, we aim to remain a global leader in Europe, the Americas, and APAC, working towards our 2030 ambition of 20-22 GW. In the US, we have refocused our portfolio towards the Northeast Atlantic, and to reduce development costs, we are exiting several markets (e.g. Norway, Spain, and Portugal), deprioritising development activities in Japan, and planning for a cleaner development within floating wind. Towards 2026, the growth contribution will largely be based on projects already under construction or awarded.

In onshore renewables, we are growing our platform across the US and Europe, working towards our 2030 ambition of 1.1-1.3 GW. Towards 2026, the contribution will come from a mix of projects under construction and in the pipeline. In the US, we are prioritising projects in select energy markets with an eye towards maximising value creation, while we focus on four core markets in Europe (Germany, Spain, the UK, and Ireland).

In P2X, we plan for a more lean development and are working towards our 2030 ambition of ~1 GW, with projects in development in the US and Scandinavia.

To enable the build-out, we plan to invest DKK 270 billion in 2024-2030, of which we plan to invest DKK 130 billion through to 2026. The investments will be distributed between technologies with approx. 70 % within offshore, 25 % within onshore, and 5 % within P2X and Bioenergy.
We are also taking action to enhance our capability set. We remain confident in our industry-leading scale, execution abilities, and commercial capabilities, but we want to make sure we stay ahead of competition. To enhance our competitiveness, we are adapting our operating model to fit the more unpredictable market and to increase the effectiveness of our organisation. We are also working on improving our revenue capabilities to take advantage of more and more auctions becoming merchant.

We will continue to collaborate on developing robust integrated solutions with our strategic partners, including leading the structural shift towards corporate demand at scale to deliver electrons at the right place, at the right time, and with the right profile. These efforts are important steps to continue to be a leader within renewable energy.

Despite the current industry headwinds, we believe the future of renewables is bright, and we remain fully confident that we can ensure consistent value creation in the years to come while driving forward the green energy transformation.

The financial targets and policies and the sustainability ambitions supporting our strategic ambition are highlighted on pages 6 “Strategic ambitions” and 18 “Financial targets and policies”.



## Executing our strategy

Across our business, we have made considerable strategic progress during 2023. In the following sections, we have outlined some of our concrete achievements in the past year.

## Offshore wind

In 2023, we took final investment decisions (FIDs) on three development projects, one in each of our three regions: Europe, the US, and APAC, and we further advanced construction of three projects in the regions. We formed valuable partnerships that will help us accelerate the development of offshore wind on the Irish coast and began the deployment of floating offshore wind technologies in Scotland.

We are the world leader in offshore wind, having developed around a quarter of the global capacity installed, excluding China. We have played a key role in maturing the industry and have built more offshore wind farms worldwide than any other company. By the end of 2023, we had 8.9 GW of capacity installed, 6.7 GW of capacity under construction, and a further 3.7 GW of capacity awarded, resulting in a total capacity of 19.2 GW.

Our commitment to offshore wind is highlighted by our status as the first energy company to join the Global Offshore Wind Alliance (GOWA) to accelerate offshore wind deployment and create a global community of action, consisting of governments and companies. Another important milestone has been reached through a pioneering sustainability partnership between Ørsted and Vestas, both recognised as global leaders in renewable energy. Under this partnership, we commit to source low-carbon steel wind turbine towers and blades made from recycled materials from Vestas for all joint offshore wind projects, advancing the agenda for net-zero wind farms.

Strategic progress and expansion of our portfolio
In the UK, a significant milestone was achieved, as our offshore wind farm Hornsea 3 reached FID. With a capacity of around 2.9 GW, the wind farm will become the world's single largest offshore wind farm. Hornsea 3 will provide low-cost, green energy for the UK and deliver thousands of high-quality jobs and billions of pounds of investment in the UK's offshore wind supply chain. For Hornsea 4, we received development consent from the British authorities to continue the development of the project. The possible future addition would create an offshore wind cluster in excess of 7 GW, making it the largest offshore wind zone in the world.

In Asia Pacific, we took FID on Greater Changhua 2b and 4 with expected CODs in 2025. Additionally, we are finalising the construction of Taiwan's first large-scale offshore wind farms, Greater Changhua 1 and 2a. The final four of the 111 turbines are expected to be installed in the spring of 2024, and the wind farm will then reach COD, expectedly in Q2 2024.



↑ Looking up at Hornsea 2 offshore wind farm in the North Sea, the UK.



Offshore wind build-out plan
Gross renewable capacity

~60GW
Opportunity pipeline \( ^{*} \) 

~16GW
Substantiated pipeline \( ^{†} $ 

19.2 GW
+ 5 GW
+ decided + awarded

Sunrise Wind

924 MW

Bottica 2

Bottica 3

1,498 MW

1,255 MW

South East

Revolution Wind

Greater Changhua 1 and 2a

Greater Changhua 2b and 4

German portfolio

Homes3

1,166 MW

2,852 MW

20-22 GW

2030 ambition

15.5 GW

+ decided capacity

150 MW

704 MW

900 MW

920 MW

1,166 MW

8.9 GW
Installed capacity

With a total capacity of more than 1.8 GW, these construction projects represent a significant contribution to Taiwan's transition to new energy sources and its decarbonisation journey.

In the US, we took FID on the 704 MW Revolution Wind project, which we own in a 50/50 partnership with Eversource Energy. Onshore construction has started, and offshore construction will start in 2024, with the completion of the project expected in 2025.

Construction of our German portfolio is progressing. We have finalised installation of foundations for our offshore wind farm Code Wind 3, and at Borkum Riffgrund 3, the installation of foundations has commenced. The wind farms have expected CODs in 2024 and 2025, respectively. Once completed, the wind farms will have a total capacity of 1.2 GW.

At our 130 MW South Fork project in the US, we have installed the first turbines which will send power directly to Long Island, New York. When fully complete, the project will consist of 12 turbines and generate enough renewable energy to power 70,000 US households. Furthermore, we acquired Eversource's 50% stake in Lease Area 500 adjacent to the associated operational assets, and we now own 100% of the area.

 \( ^{*} \)  Projects that have reached a level of maturity, such as secured exclusivity through a lease, secured consent or environmental impact assessment (EIA), or established partnerships but not yet taken final investment decision (FID).

 \( ^{\dagger} \)  Refers to early stage projects, which we are actively pursuing through tenders.
In Ireland, we have entered into a partnership with ESB, the leading utility company in the country, to jointly develop an Irish offshore wind portfolio. With a maritime area more than ten times the size of its Landmass, Ireland is well-positioned to grow a strong offshore sector. The partnership also encompasses an agreement to explore opportunities from renewable hydrogen produced from the projects in the longer term. The first of the offshore wind projects is expected to compete in the next Irish offshore wind auction.

In Korea, we have been granted a 1.6 GW electricity business license (EBL) by the Korean Ministry of Trade, Industry & Energy for an offshore wind project located 70 km off the coast of Incheon City. The license grants us exclusive development rights for the Incheon offshore wind project, which is set to become the largest in Korea on completion, with a capacity to provide renewable energy to over one million Korean households.

In January 2024, we signed an agreement with Eversource to acquire their 50% share of Sunrise Wind. The acquisition is subject to the successful award of Sunrise Wind in the ongoing New York 4 solicitation for offshore wind capacity, signing of an OREC contract with New York's energy agency, NYSERDA, entry into long-form acquisition agreements, receipt of construction and operations plan (COP) approval, and relevant regulatory approvals. If the project is not successful in the solicitation, the existing OREC contract for Sunrise Wind will be cancelled per the state's requirements, and our 50/50 joint venture with Eversource will remain in place. In that scenario, the joint venture will evaluate its next steps.



Onshore wind build-out plan
Gross renewable capacity

~18GW
Opportunity pipeline \( ^{*} \) 

~11GW
Substantiated pipeline \( ^{1} $ 

6.4 GW

Installed capacity

+ decided capacity

French wind farms

Farranory \( ^{3} \) 

German wind and solar farms

Old 300 (remaining 20 %)

Gerrereiden

The solar part of HeliLine Energy Center

Mockingbird

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

Eleven Mile

11-13 GW

2030 ambition

33

45

71

73

81

250

471

471

600

600

4.8 GW

Installed capacity

In the rapidly developing Polish market, we are actively progressing Baltic 2 towards FID later this year, together with our partner PGE. In parallel, we are working collaboratively on the reconfiguration and revised schedule of Baltic 3.

Ceasing development of Ocean Wind 1 and 2
In the US, we took the decision to cease the development of the Ocean Wind 1 project, in the form it was awarded by the NJ BPU. The decision was a consequence of additional supplier delays, leading to significant project delays, which, together with a lower anticipated probability of qualifying for tax credits and increasing interest rates, significantly deteriorated the value of the project. We also decided to cease the development of the adjacent Ocean Wind 2 project as currently awarded by the NJ BPU.

As the OREC we have been awarded for our Skipjack project in Maryland no longer can ensure an investable project, we have decided to withdraw the OREC. In total, the three projects amounted to a capacity of 3.2 GW.

## Farm-downs

During 2023, we reached an agreement with funds managed by Schroders Greencoat, a world-renowned specialist asset manager for renewable energy infrastructure assets, to sell our remaining 25 % minority stake in the offshore wind farm London Array in the UK.

1 Projects that have reached a level of maturity (e.g., reached site control stage), but not yet taken final investment decision (FID).

 \( ^{1} \)  Early development activities initiated.

 \( ^{2} \)  Farranory (43.2 MW) was FIDed in January 2024.

In addition, we concluded an agreement with Glenmont Partners of Nuveen, an infrastructure fund manager, to farm down 50 % of our shares in Good Wind 3.

Following a competitive divestment process, we selected Cathay Life Insurance, Taiwan's leading insurance company, as the preferred bidder for the acquisition of a 50 % ownership stake in our offshore wind farm Greater Changhua 4 in Taiwan. The dialogue with Cathay Life Insurance is progressing well, and the transaction is expected to close in 2024.

## Onshore renewables

In 2023, we added three projects to our assets under construction, and four of our projects reached COD, totaling a capacity of 0.6 GW. By the end of 2023, we had 4.8 GW capacity installed and 1.6 GW capacity under construction.

To reach our ambition of 11-13 GW installed onshore capacity by 2030, we will need to add an additional 4.7 GW to our capacity. The additional capacity will be based on our substantiated pipeline of around 11 GW and other opportunities that may arise.

Strategic progress and expansion of our portfolio
In the US, we now have 15 operational onshore wind farms. In 2023, our 201 MW onshore wind farm Sunflower Wind, located in Kansas, became fully operational, making it our latest edition to our growing US onshore portfolio. Sunflower Wind will be capable of providing renewable energy to more than 70,000 US households.



We are constructing several solar PV farms in the US, further adding to our portfolio. In Texas, the construction of our 471 MW \( _{dc} \)  Mockingbird Solar Center is going as planned, with the installation of modules commencing and COD expected in the second half of 2024. In Arizona, construction has begun on our combined Eleven Mile Solar PV and storage project, with capacities of 300 MW \( _{dc} \)  and 300 MW, respectively. The project is expected to reach COD in Q2 2024.

For the two solar projects Old 300 and the solar part of Helena Energy Center, we have been experiencing detention of module shipments in 2022 and part of 2023. However, for the solar part of Helena Energy Center, most of the modules have now been cleared from US customs and delivered to the sites. For Old 300, 80 % of the capacity has been commissioned. We expect the solar part of Helena Energy Center to reach COD in Q2 2024 and Old 300 to reach COD in Q3 2024.

In 2023, we entered into one of the largest solar PV projects in the UK, One Earth Solar Farm, with a capacity of 740 MW \( _{dc} \)  with associated battery storage. If built, it will be one of the largest solar farms in the country. If constructed, the solar farm in Nottinghamshire will generate enough renewable electricity to power up to 200,000 UK homes. Together with our co-developer PS Renewables, we are aiming for COD before 2030. Additionally, we acquired Carrereneen, one of the largest solar projects in Ireland. With a capacity of 160 MW \( _{dc} \) , Carrereneen will be able to power up to 56,000 Irish homes annually. In December, we took FID on the first phase of the project (61 MW \( _{dc} \) ). In January 2024, we took FID on Farrarony (43.2 MW). We secured contracts for both projects in the Irish government's third onshore action. We expect COD on both projects in 2026. Phase two of Carrereneen (79 MW \( _{dc} \) ) is expected to be completed in 2027.

In Germany, we began construction of our wind farm Bahnen West 1 (50 MW) in September.

Additionally, we entered into a partnership with renewable energy developer Terra Solar, headquartered in Dublin, to develop a portfolio of Irish solar projects with a capacity of up to 400 MW \( _{dc} \) .

During 2023, we signed several offtake contracts, including our first PPA with Google in the US, a 150 MW power purchase agreement spanning a 1.5-year period. The contract covers more than half of the capacity of our 268 MW Helena Wind Farm located in Texas, the US, and was commissioned in mid-2022. With this agreement, we have entered into PPAs with the tech companies Google, Amazon, and Meta in both Europe and the US as well as with Microsoft in the US.

## Evolving technologies

In addition to offshore and onshore renewable technologies, we continue to explore possibilities within P2X and carbon capture.

Strategic progress and expansion of our P2X portfolio During 2023, we entered a new era of sustainable shipping by breaking ground on FlagshipONE, Europe's largest e-methanol project, located in Northern Sweden. We expect the project to start production in 2025.
Breakthrough Energy Catalyst will acquire a 15 % equity interest in FlagshipONE and provide a grant, subject to the fulfilment of funding conditions. Breakthrough Energy Catalyst is a first-of-its-kind model, bringing together government partners and leading organisations from across the private sector to fund and scale emerging climate technologies. With the funding supporting the project, we will seek to sign long-term offtake agreements, creating a new model for the shipping industry to purchase fuel, which will be needed for future projects to secure the capital required to scale the production of green fuels.

In addition, FlagshipONE is also expected to receive a grant from Horizon Europe and a quasi-equity investment from EIB through InvestEU.

In the US, we were awarded funding from the Department of Energy (DoE) as one of seven core industry participants in the US HyVelocity Hydrogen Hub. The vision of the HyVelocity Hub, which has been awarded USD 1.2 billion, is to create the nation's largest renewable hydrogen hub along the Gulf Coast. Our share of the funding is approx. USD 143 million.

## Pioneering carbon capture

In December, we embarked on the construction of the two carbon capture and storage (CCS) facilities in our project Ørsted Kalkundborg CO \( _{2} \)  Hub. It is expected that the project, which was awarded a 20-year contract by The Danish Energy Agency (DEA) in May 2023, will pave the way for capturing and storing 430,000 tonnes of biogenic carbon dioxide, setting a transformative precedent for our carbon reduction efforts. The project includes the installation of carbon capture technology at our wood chip-fired Ansas Power Station in Western



 \( ^{\dagger} \)  One smart wind farm, Dongenal, Ireland.

Zealand in Denmark. In addition, we will install CCS technology at the straw-fired boiler at Avedere Power Station in the Greater Copenhagen area in Denmark. In direct support to the project, Microsoft has agreed to purchase 2.76 million tonnes of high-quality, durable carbon removal over 11 years from the capture and storage of biogenic carbon. This represents one of the world's largest carbon removal offtake agreements by volume to date.



## Business model
Our core activities

We create value by developing, constructing, operating, and owning renewable assets and by providing sustainable energy products to our customers.






## A call to action to foster a fast and sustainable build-out

We need a new, shared vision for how we deliver renewable energy. A vision that accelerates the energy transition in a way that supports our nature and societies as well as a resilient renewable energy industry. Only then can we deliver the transition at the pace and scale we so urgently need.

Renewable energy is the cornerstone in the fight against climate change
The global transition to renewable energy is the most important step we can take to counter climate change. Fossil-based energy continues to make up 74% of global carbon emissions, and any remaining hope of keeping the rise in the global temperature to 1.5 °C hinges on immediate action to transform our energy systems at a speed and scale we have not seen before – more precisely, we need to triple global renewable energy capacity by 2030, as more than 130 governments recently pledged to do at COP28.

To make this happen, we need far more action than current stated policies and commitments. And with the current challenges facing parts of the renewable energy sector, we risk further delays. Delays that we do not have the time for. We must find a way to build renewable energy now – and to do so, we must also build it right.

How sustainable can help accelerate a successful energy transition towards 2030
The global renewable energy build-out will be the largest infrastructure project ever undertaken. It also represents an extraordinary opportunity to create positive value for both climate, nature, and wider society. In addition to decarbonising our energy systems, renewable energy provides clean, affordable, and reliable energy, it improves our quality and health, and it strengthens energy security. And, when done sustainably, we can use it to take even further action for our climate and nature and boost local jobs, supply chains, and socio-economic development.
However, the build-out of renewable energy is currently facing implementation challenges, not least related to supply chain bottlenecks and concerns over impacts to nature and communities. A sustainable approach is not just a desirable goal; we can achieve if we chose to pursue it – it is essential to address these challenges. Building in balance with nature and people is therefore not only the right thing to do but fundamental to enable a transition at pace and scale.

Let's take a closer look at three examples of how a sustainable approach can help tackle some of the key challenges facing the build-out – while delivering a lasting positive impact on wider society.

It can help strengthen supply chain resilience and play a role in decarbonising carbon emission intensive sectors

Resilient renewable energy supply chains are essential to deliver a rapid transition, but bottlenecks and material scarcities are slowing progress in many markets. We can reduce some of these pressures medium- to long-term through a strategic use of decarbonisation and circularity efforts. By considering material mix, increasing recycling and reusing, and innovating for low-emission solutions, we can reduce the demand for virgin materials and alleviate capacity pressures while also diversifying suppliers.

Moreover, by driving decarbonisation efforts throughout the supply chain, the renewable energy sector can make additional contributions to global climate targets. Our supply chains are dependent on carbon emission intensive sectors such as steel and shipping, which account for 7 % and 3 % of global emissions, respectively, and reducing emissions from these is therefore critical to limit global heating. By collaborating with our suppliers and other industries that share the same supply chains, we can help incentivise and drive demand for net-zero solutions. At Ørsted, we work to do this through our science-based net-zero 2040 target validated by the SBTi.

It can support the co-use of land and ocean and help revive nature

The space required for the build-out will be significant, raising the need to find suitable areas at land and ocean where renewable energy can coexist with other users and nature. How we plan and manage the use of space is therefore of huge importance, and to be granted access to build renewables, we need to site thoughtfully. That is, in ways that respect other users, maximise space efficiency, and minimise environmental impacts.

This is of particular importance as we are not only fighting a global climate crisis but also a biodiversity crisis. These two are often portrayed as being conflicting agendas, competing for space. However, they are in fact deeply interconnected, and we can take action to make them mutually supportive. As such, the build-out brings a unique potential to unite action on the two biggest crises of our time if we integrate action on nature protection, restoration, and enhancement into how we build and operate renewable energy.

At Ørsted, we have set the ambition that all new renewable energy projects we commission from 2030 onwards should deliver a net-positive biodiversity impact, and we have built an innovative and business-inclusive approach to get us there.



## It can facilitate community support

and deliver a positive impact on people

A clear majority of the world’s population supports renewable energy. However, for the communities living close to renewable energy projects, support is sometimes replaced by concerns. To maintain the pace and scale of the build-out, it is crucial that we engage and consult with impacted communities to understand their needs and priorities and ensure they benefit from the energy transition too.

In addition, renewable energy is, or will become, a new industry in many parts of the world. We can build it up in a way that generates millions of well-paid jobs. According to the International Energy Agency (IEA), the transition towards net zero will lead to an estimated increase in energy sector jobs of 1.4 million by 2030. We can also use it to boost local supply chains and actively deliver and share benefits with communities through initiatives such as local job and training opportunities or co-ownership of assets. Realising this potential is a core part of how we want to drive the build-out at Ørsted, and we work hard to identify and integrate local jobs, training, and community engagement opportunities into our project delivery.

## Here is how we can do it — a call to action

It is clear that if we are to deliver an energy transition at the pace and scale needed to meet the Paris Agreement, we must build sustainably. This will take ambitious action and enhanced collaboration. We therefore encourage all relevant actors to come together now – to use our voice and respective capabilities to facilitate and push for a sustainable build-out.

## Policy makers:

The starting point is for policymakers to further include environmental and social perspectives beyond price into renewable energy deployment where this is not yet the case. Focusing only on price incentives developers to solely optimise for the minimal cost of energy, undermining efforts to avoid and mitigate sustainability impact and resulting in a missed opportunity for the wider societal value creation the sector can deliver. By incorporating supplementary criteria on societal value in tenders, governments can effectively incentivise such efforts – and simultaneously increase acceptance for the energy transition.

## The renewable energy industry:

A critical step towards rewarding societal value creation is the development of industry standards and measurement frameworks. This will also enable a more transparent and level playing field for which the industry can compete. At Ørsted, we are using our expertise to support this, and we have already made great strides for carbon, creating an industry life cycle assessment (LCA) model for offshore wind together with The Carbon Trust and 11 energy peers to measure and compare carbon emission footprints. We are also collaborating with the Science Based Targets Network (SBTN) to develop a measurement framework for biodiversity and with a range of partners, including the Haas School of Business at the University of California, Berkeley, and the Capitals Coalition, to define how to measure and track social impact that matters to our communities. Further joining forces on this with peers will be a powerful accelerator for success for the industry.

## Other industries:

With a strong and collective demand pool across industries that share materials, we can more effectively incentivise investments in the sustainable solutions we all need. The First Movers Coalition is a great example of this. Here, we are building demand for decarbonised steel and concrete across industries, creating incentives and opportunities for new low-emission technologies, partnerships, and ecosystems along the way. We can expand this approach to many more areas, using our combined power to drive real and fast transformation across supply chains.

## NGOs and academia:

Finally, as an industry, we must continue to work together with NGOs and academia to join forces on advancing research and innovation. By combining our capabilities, we can accelerate learnings on measures and solutions and more strongly advocate for a build-out that is done right and done fast.

## Let's do it right, now

Achieving the renewable energy build-out at the pace and scale needed will be a massive undertaking unlike anything we have done before. We have much work ahead of us, and while the road is far from easy, collectively, we can choose to act now to facilitate the energy transition we so urgently need – in harmony with nature and people. The good news is that we know what is needed and have most of the solutions ready, now we need accelerated action and will to scale a fast and sustainable build-out. Let's do it right, now.



↑ 3D-printed reefs.



## Our approach to sustainability

Sustainability is integral to how we operate as a business. On the following pages, we zoom in on focus areas currently guiding our approach and work. For detailed information on our sustainability efforts, including ambitions, actions, and performance data, please see the 'Sustainability statements' section.

## Creating value through sustainability

Throughout everything we do, we are guided by how and where we can create the most value for both society and our business. We believe being clear on this is crucial to credibly set and deliver on ambitions as well as to direct efforts and resources to where we have the biggest potential for impact.

From a societal perspective, we are guided by how we can best use our position, capabilities, and reach to address our key impacts as a renewable energy developer, including those where we must either mitigate negative impacts or are in a unique position to deliver positive value.

From a business perspective, it is about using sustainability to help strengthen our resilience and ability to compete in a world with both increasing stakeholder expectations and challenges. We work strategically with sustainability to open new doors to customers, partnerships, and commercial opportunities. We employ it to optimise our resource use and secure access to critical materials, new technologies, and talent. And we use it to attract financing and to develop resilient projects that can proactively address stakeholder expectations, avoid delays, and meet permitting and regulatory requirements.
Combined, these considerations have led to the formulation of our four strategic focus areas: Science-aligned climate action; Green energy that revives nature; A green transformation that works for people; and Governance that enables the right decisions – and underlying priorities, see page 33. Together, the four areas respond to our material sustainability risks and opportunities.

Climate change, resource use and circular economy, workers in the value chain, and affected communities (topics E1, E5, 52, and S3 according to the European Sustainability Reporting Standards (ESRS)) are assessed to be our most material sustainability matters, followed by biodiversity and ecosystems, own workforce, and business conduct (ESRS E4, S1, and G1). To read more about how we have identified these through a double materiality assessment, see the 'General' section in the sustainability statements on pages 68-79.

## Delivering on sustainability

– moving from target to action

It is the actions we take in the real world – the impact that we have on the ground – which matter the most. In recent years, we have committed to ambitious, and often long-term, targets. Translating these into tangible action today is a key focus of our work to demonstrate continuous progress and avoid long-term commitments failing to make a short-term impact.

In 2023, we have again taken action to progress across our four focus areas. See selected highlights to the right.

## Selected 2023 highlights across our focus areas



## Science-aligned climate action

Launched partnerships together with our strategic partners to reduce emissions from passenger transport, industrial processes, including towers, blades, and foundations. As the world’s largest offshore wind developer, we play a key role in incentivising investments in low-emission solutions. We have also supported the development of climate but also our customers and business as it will help us meet future demands for net-zero solutions and future-proof operating model in the medium- to long-term.



## Green energy that revives nature

Made important progress towards our net-positive biodiversity ambition, successfully testing our biodiversity measurement framework, which will help us measure biodiversity gains and losses. We have also been and initiating exciting new pilots to further innovate solutions, including our BioReef project in Denmark and our prairie restoration project in the US. These projects are a cornerstone of our approach as we are still learning and exploring along the way on how to best meet our commitment.



## A green transformation that works for people

As a testament to our aspiration to deliver a build-out that works for people, we took action to support the development of a total economic value (TEV) of our jobs and skills-building efforts. This will be an important tool going forward to demonstrate the value we can create for society.

Launched Ørsted's first Youth Panel comprised of eight young climate action leaders outside of Ørsted. By bringing them together with Ørsted's top decision-makers and industry leaders, we aim to create a platform for discussions centered around our sustainability agenda, the panel will serve as a platform for mutual learning and exchange to strengthen our sustainability efforts.



## Governance that enables the right decisions

Launched a series of new initiatives to make our offices even more sustainable, introducing improved waste sorting as well as updated and more inclusive facilities, including spiritual and baby care rooms.




↑ Seagrass in the North Sea.
© Dutch Maritime Productions

Further embedding sustainability across our business Finally, to deliver on our sustainability ambitions, we need a systematic integration of sustainability across our business and decision-making processes to consider and address sustainability risks and opportunities at the right times and in the right places.

Last year, we made the strategic decision that all our future assets should be aligned with the EU taxonomy. Based on the taxonomy, we have now defined a sustainability standard for all Ørsted assets, and we are working to integrate performance requirements into our asset project model and relevant decision gates to ensure that all assets we build are taxonomy-aligned.

We have also defined annual wheels for sustainability involvement for our Board of Directors and top management committees, including our Group Executive Team, Sustainability Committee, and Audit & Risk Committee, and we have integrated sustainability metrics into our bi-annual portfolio review to inform our leadership of how their decisions impact our ability to meet our 2040 net-zero target.

Going forward, we will continue this work along with an increased focus on building sustainability competences across the entire organisation, including for our top management and Board of Directors, to ensure we have the right expertise and understanding of sustainability at all levels.
Altogether, at Ørsted, we work to push the renewable energy transition forward, by being a leading voice for a resilient and sustainable renewable energy industry and by demonstrating how renewable energy, when done right, can create transformational value for both society and business.



## Overview of our strategic sustainability focus areas



## ENVIRONMENT

Science-aligned
climate action

## APPROACH

We scale our green energy business while delivering science-aligned emissions reductions, thereby enabling our customers to also take climate action

## PRIORITIES

• Scale renewable energy deployment
• Decarbonise own operations by 2025
• Decarbonise our supply chains by 2040
• Mobilise sustainable financing

## READ MORE

EU taxonomy, page 8.1
ESRS E1 Climate change, page 87

Sustainable finance: Note 5.1 'Interest-bearing net debt and FFO' in the financial statements, and our green bond impact report







## SOCIAL

A green transformation
that works for people

## APPROACH

We focus our efforts on making the green energy transition just and inclusive

## PRIORITIES

• Respect human rights and the rights of indigenous peoples

- Support equity, diversity, and inclusion in the workplace
- Ensure health, safety, and satisfaction of employees

• Ensure safety of contractors

• Develop skills and talent for the renewable energy sector
• Support local communities

## READ MORE

ESRS S1 Own workforce, page 112
ESRS S2 Workers in the value chain, page 120
ESRS S3 Affected communities, page 123





## GOVERNANCE

Governance that enables
the right decisions

## APPROACH

To deliver on our sustainability goals, we continuously work to integrate sustainability and integrity into processes and decision-making across our organisation

## PRIORITIES

• Promote and enable responsible business conduct

• Conduct proper due diligence of suppliers and partners

• Embed sustainability throughout our business

• Advocate and engage for a sustainable industry

## READ MORE

ESRS G1 Business conduct, page 127

Responsible tax practices: Note 4.1 'Approach to taxes' in the financial statements






## Risks and risk management

Risks are a natural and integral part of our business activities, and our risk profile changes continuously. We aim to mitigate our risks and reduce them to an acceptable level through risk management.

## How we assess risk

Each year, we perform a risk assessment with the overall objective of identifying our most significant business, sustainability, and legal risks. All business segments, regions, and selected staff functions identify and prioritise business risks. An assessment is made of the potential financial impact of individual risks, and whether they are of a short-term (0-2 years), a medium-term (2-5 years), a long-term (5+ years), or a recurring nature. All our risks are then consolidated and evaluated at Group level.

Business risks are defined as incidents that, with some likelihood, will materialise and cause a negative impact on our earnings and costs and hence impact our credit rating and value. Many of our risks are inter-dependent, and movements in the macroeconomic environment will likely impact multiple business risks.

The top six business risks identified are shown to the right where they are illustrated based on their potential impact (post-risk mitigation) on our value and credit metrics over the next years. You can read more about these risks on the following pages.
When we invest in new assets and activities or divest assets, the consolidated risks associated with our portfolio change. Therefore, we assess the impact of a given decision on the portfolio upfront and work systematically with risks.

## How we manage risk

The Board of Directors oversees our risk management in general and have delegated the oversight of our financial and business-related risks to the Audit & Risk Committee. The responsibility for each of the individual risks identified as part of the annual risk assessment rests with a member of the Group Executive Team.

The purpose of our risk management is to identify and quantify our risks and decide how best to manage and mitigate them on an ongoing basis.

In recent years, we have seen substantial adverse impacts on our business from financial risks and risks in relation to the development and construction of assets. This has led us to start implementing a new framework for governing our financial risks. Furthermore, we are implementing the learnings from our review of the Ocean Wind 1 project into the governance of our operating model to reduce risks in the development and execution of projects, with a particular focus on monitoring of and updates on project execution including risk reviews with the Group Executive Team and the Board of Directors, structured external reviews for select projects, internal peer assessments, contingency planning (including more proactive contracting for back-up supply chain capacity), and monitoring of suppliers (including from site visits to track manufacturing progress). Furthermore, we will prioritise inflation protection in office arrangements in future projects.

We will continue our work to manage future breakaway profiles by scrutinising financial commitments before taking final investment decision (FID) to avoid high capital commitments relative to project maturity, and by ensuring greater flexibility on project timelines and commissioning dates as well as phasing of CAPEX.

Besides business risks (incl. financial risks), we also manage risks in connection with legal compliance and sustainability risks, both at a strategic and operational level.

## Development in risks in 2023

We have introduced 'Farm-downs and partnerships' as a new top six risk in 2023 and have seen changes in the relative importance of our top risks from last year.

‘Supply chain and cost inflation’ is now assessed to be our largest risk. Throughout the year, we have seen bottlenecks in several parts of our supply chain, leading to increased costs and risk of delayed projects.

Top 6 business risks
Effect on our value and credit metric
✓/✓ Change in risk quadrant from 2022



1 (#3 in 2022)
Supply chain and cost inflation
2 (#1 in 2022)
Inflation, interest rate, and currency risks
3 (New in 2023)
Farm-downs and partnerships
4 (#2 in 2022)
Power prices and energy markets
5 (#6 in 2022)
Cybersecurity
6 (#5 in 2022)
Competition

Quantification of risks is based on a scenario where the risk occurs with 10 % probability (P90). Our risk assessment is based on the risk assessment for identifying and measuring the accompanying portfolio risks.




↑ Load-out of blades, South Fork, Connecticut, the US.

Such delays were the main driver behind the deterioration of our Ocean Wind 1 project, which led us to cease its development. Furthermore, the financial position of several suppliers in the market is stretched.

‘Inflation, interest rate, and currency risks’ is now assessed to be our second-largest risk. During the year, we have continued to see increasing inflation and interest rates across our markets. Higher interest rates have had an adverse impact on our WACCs and a negative effect on the NPVs of our projects, leading to impairments on our US portfolio.

‘Farm-downs and partnerships’ is placed as our third-largest risk. Higher interest rates and increased global geopolitical uncertainty are negatively impacting investor demand for renewable assets. Furthermore, the recent challenges in the offshore industry have led to multiple renewables companies rebalancing their investments and looking to divest parts of their portfolio, which might increase the supply of renewable assets to potential investors.

‘Power prices and energy markets’ has moved down and is assessed as our fourth-largest risk in 2023. During 2023, energy prices have stabilised at a lower level compared to 2022, resulting in a partial reversal of cash posted for collateral and a reduction of our negative hedge reserve. The combination of lower hedge levels (in accordance with our new energy hedge framework), lower power prices, and fewer trades on exchanges subject to collateral have led to a reduction of this risk.

‘Cybersecurity’ has moved up as our fifth-largest risk. The geopolitical development over the past years has shown that cyberattacks remain a threat to our operations. It is of the utmost importance that we protect our infrastructure and systems from malicious attacks. Furthermore, we can see that the demand for cybersecurity professionals continue to rise and currently outpace availability.

‘Competition’ remains in our top six risks but has dropped to our sixth-largest risk, mainly because other risks have increased in magnitude.

## Extreme events

In addition to our ordinary business risks, we are exposed to risks which have a very small probability of occurring, but which could potentially impact our finances or reputation substantially. These risks include but are not limited to:

• fatal injuries

- direct or indirect consequences of war and geopolitical activity, which may lead to loss of production or assets or disrupt the financial and energy markets through extreme price movements and volatility

- strong hurricanes, typhoons, hailstorms, arctic blasts, or earthquakes, especially in Taiwan and the US, which may lead to the partial loss of offshore and on-shore wind farms, solar farms, and storage assets
- broken pipes at the Nybro Gas Treatment Plant in Denmark, which may lead to personal injury and damage to the environment

• breakdowns at power stations that may lead to personal injury and partial loss of assets.

## Sustainability-related risks

Climate and sustainability-related risks present financial risk to the global economy as well as a risk to our planet as we know it. In Ørsted, climate and sustainability-related risks and opportunities are directly linked to our green vision and strategy, and we address them as an integral part of our daily business.

For several years, we have reported on climate-related risks and opportunities as recommended by the Task Force on Climate-related Financial Disclosures (TCFD). This year, the climate change section in our new sustainability statements and the strategy and governance sections in the management's review cover all relevant TCFD disclosures. A full overview of our TCFD disclosures can be seen on page 139.

In the sustainability statements, we have included a double materiality assessment (DMA). For impacts deemed significant or crucial, we have disclosed our mitigating actions. To read more, see page 70.

Lastly, during 2023, we have assessed whether our taxonomy-eligible activities are taxonomy-aligned by determining if they: 1) contribute substantially to climate change mitigation, 2) do no significant harm to the other environmental objectives, and 3) comply with the minimum safeguards. Our assessment showed that all our eligible activities were aligned.



## 1. Supply chain and cost inflation

## Description

As a global renewable energy developer, we are committed to providing a reliable and cost-effective solution, both in the form of power for the supply of materials, and the supply of materials for the supply of materials for the supply of materials for the supply of materials for the supply of materials

Among other things, we are exposed to highly volatile prices, which are influenced by high global demand with widespread application in various sectors.

As the industry continuously grows with new technological developments and enters new markets, we are exposed to potential bottlenecks in parts of the supply chain if there is no regional supply chain or only a limited number of suppliers capable of meeting future demands.

We are also exposed to counterparty risks if one of our suppliers should default or deliver unsatisfactory terms, which could have an adverse impact to risks, such as import restrictions and price increases related to trade restrictions.

## Potential impact

The inability of our suppliers to deliver on agreed schedules, lack of available production capacity or transportation and installations vessels, and sudden inflation in key materials could result in project delays and budget overruns as well as cancellation of projects.

## Mitigating actions

We enter into volume agreements and source wind turbines from key suppliers in a timely manner to reduce uncertainty, and we have entered into long-term vessel supply contracts. Based on the learnings from our US projects, we are currently adjusting our operating model to strengthen the focus on suppliers and introduce more flexibility and alternatives in our project plans and installation schedules.

To mitigate cost inflation risks, we have implemented a hedging programme for steel and other commodities, which will be rolled out to our asset projects.

Our process for vetting new suppliers is thorough, and we have strict credit risk policies in place to manage credit and counterparty risks.

## 2. Inflation, interest rate, and currency risks

## Description

Our inflation, interest rate, and currency risks are related to the risk in the macroeconomic environment where we operate. Changes to inflation rates, interest rates, and foreign exchange rates all have an impact on the value of our assets.

We are exposed to inflation both directly through the real return but also indirectly through cost inflation and higher interest rates. Approx. 45% of our revenue in 2024-2030 is inflation-indexed and expected to follow the development in consumer prices, thereby protecting the debt value of our assets and equity. However, for assets and in markets where we don't have inflation-indexed PPAs or subsidies, we are exposed to inflation risks where an increase in inflation will adversely impact the expected real value of our revenue.

## Potential impact

Fluctuations in interest rates, inflation, and foreign exchange rates may adversely impact our earnings and the value of our assets.

## Mitigating actions

We actively incentivise investing in assets and entering into contracts with inflation-indexed revenue streams to mitigate cost inflation, and we match our debt with our assets per currency and the same payment structures (modified duration). Hence, our European fixed nominal subsidies are being offset by EUR-denominated fixed-rate debt. In contrast, we have entered into inflation swaps for part of our inflation-indexed revenue in the UK to match our nominal GBP debt. In new markets, we execute interest rate swaps to lock in interest rates before financing is secured.

Our currency exposure is managed by hedging more in the near years and less in the later years over a five-year horizon.

Read more about inflation and interest rate risks in note 6.3 'Inflation and interest rate risks' and about currency risks in note 6.4 'Currency risks'.

## 3. Farm-downs and partnerships

## Description

The partnership strategy in Ørsted continues to be focused on the mining and financial planning and reaching our strategic ambition, with a sizeable number of farm-downs and joint venture partnerships expected in the coming years. This entails risks related to delays, lower proceeds, the lack of potential buyers, regulatory and contractual restrictions, and the macroeconomic environment.

## Potential impact

Failure to complete future farm-downs of projects or delays could lead to an adverse impact on our credit rating and value. Furthermore, increasing interest rates could have a negative impact on investment capacity and on the value extracted from partnerships.

## Mitigating actions

We have years of experience in handling all aspects of divestment and partnership processes with a strong track record of creating value through our partnership model.

Our highly experienced team is capable of not only managing the equity transaction; it also takes lead on structuring the financing package together with or on behalf of the partners.

We continuously engage with current and future investors and partners to help secure demand for our portfolio of assets.

## 4. Power prices and energy markets

## Description

Power price risks primarily originate from the sale of electricity to the power generation in the UK, the US, and north-western Europe. Our CHP plants constitute a spread risk due to the difference between prices of the power generated and the fuel consumed (i.e., biomass, coal, gas, and carbon dioxide allowances).

We are also exposed to second-order risks arising from power price hedges not fully matching our actual revenue exposure (i.e., position, intermittency, and regulation risk). Furthermore, we are exposed to liquidity risk where we are required to post collateral at exchanges if our positions are 'out of the money' (which was the case when the energy prices soared throughout 2022). Lastly, we are exposed to risks related to government intervention (i.e., price caps, taxation of windfall profits, etc.).

## Potential impact

Fluctuations in energy prices and energy policies can have an adverse effect on our earnings or liquidity.

## Mitigating actions

Approx. 80% of our expected revenue from generation of power from renewable offshore and onshore assets in 2024-2030 has no exposure to power price risk as the price is either regulated through subsidies or contracted through CPBAs. This significantly reduces our exposure towards volatility in power prices.

We manage the remaining 20% of our exposure through a hedge framework, under which we hedge up to 70% of the power production volume in the first two years. The 70% is set based on an assessment about uncertainties related to power generation volumes. The hedge level is based on a holistic assessment of the risk profile of the combined offshore and onshore assets as well as the balance between market, credit, and liquidity risks.

Read more about our risk framework and energy price risks in notes 6.1 'Risk framework' and 6.2 'Energy price risks'.



## 5. Cybersecurity

## Description

The cybersecurity risks are a product of individuals, organizations actively working to harm and profit off of DrSet. As a global renewable energy major, we are exposed to several different cyberattack threats: ransomware attacks, data exfiltration attacks, cyber-physical impact attacks, and more. Our adversaries' capacities and capabilities are constantly improving, and we must strive to stay ahead.

Furthermore, the energy crisis and the ongoing war in Ukraine have resulted in an increased cyber threat in a geopolitical context where Russian hackers have been known to target energy grids and assets.

## Potential impact

Minor digital risk events, such as viruses and attempted break-ins, are everyday risks without significant impact. However, major cyberattacks or events may impact all or part of our assets or, in the event of a ransomware attack, have an impact on our financial position.

## Mitigation initiatives

We face different types of cyber risks. Some are related to our assets and some to our systems. Thus, we mitigate cyber risks with several different initiatives, which are continuously assessed and prioritised based on our strategic cybersecurity risk assessment with the aim of lowering our risk exposure.

At our operating assets, we have deployed production cyber defences to enhance protection against onsite and offsite attacks. In addition, we have a top-level information and cybersecurity management system and framework supported by our global governance model. We also have regular trainings and roll-out of new security measures as they are approved.

This way, our cyber capability is continuously improved in order to identify, protect, detect, respond, and recover across the enterprise and production sites.

## 6. Competition

## Description

Global renewable energy markets are expected to grow rapidly over the next decade within all the technologies where we are present. Key drivers for this growth are ambitious government policies and targets and the push from corporates for the green transition. The growth prospect is attracting significant interest from existing and new players.

In offshore wind, the competitive auction and tender mechanism being implemented across the various regions and markets are becoming more competitive and diversified. While the mature European markets increasingly want innovation and system integration (e.g. storage and renewable hydrogen) to play an increasing role in the energy transition, the emerging developing markets in Europe, the US, and Asia Pacific often emphasise costs and job creation as determination criteria. Similarly in Onshore, we see solar PV continuing to gain market shares relative to onshore wind due to cost reductions. As demand hours shift with growing solar penetration, solar PV prices take more valuable, and combined solar PV and storage solutions become necessary to capitalise on higher pricing hours.

## Potential impact

There is a risk that we will not win the targeted capacity in the auctions and tenders in which we participate, or that our value creation from the projects we win ends up being lower than targeted, which might increase pressure on our credit rating metric and our value.

## Mitigating actions

To ensure our competitive edge, we continue to utilise portfolio-scale advantages and knowhow gained from previously executed projects to develop supply chain solutions and reduce costs and risks. Over the last year, we have performed a strategic review of all our assets and regions and are firmer in prioritising the auctions and tenders in which we participate, which limits our DEEX spent before taking final investment decision. Furthermore, we have and will continue to enter into strategic partnerships to strengthen our position in all the regions where we operate.

## Legal compliance

## Description

Risks associated with legal compliance are assessed against the OECD and reputational significance and probability. Our most significant risks are: 1) tax law, 2) financial regulation, and 3) tender law. (1) We operate in tax regimes with different tax rules and rates, and our tax affairs span over corporate tax compliance, transfer pricing, and indirect taxes. (2) We are subject to several financial regulations, such as BRIT, MAR, DHM, Dodd Frank, MFID, SFTR, and AML. The financial regulations are relevant for a large part of our activities. (3) Many of our purchases of goods, services, and work in the EU are subject to EU and local tender rules.

## Potential impact

Failure to comply with the above-mentioned rules and regulations may result in severe legal sanctions, such as imprisonment, fines, and damage claims, but will also impact sourcing processes and subsequently increase the risk of project delays.

## Mitigating initiatives

We have established a comprehensive tax control framework and a mandatory compliance framework, including transfer pricing documentation, in line with OECD recommendations and local requirements. This has been prepared on a contemporary basis to mitigate our tax risks. (2) We have implemented comprehensive policies, procedures, training, and control for relevant parts of our business to ensure compliance with financial regulations. (3) To ensure compliance with tender laws, our legal team carries out training courses for procurement teams in basic tender law and practical courses on how to apply the standard tender documents. The legal team also works closely together with the procurement team on major tenders.



## Results

39 Follow-up on 2023 guidance  
40 Results  
44 Five-year summary  
45 Fourth quarter  
50 Quarterly summary, 2022-2023

→ The northern gannet, Morus bassanus, is a seabird native to the northern Atlantic and Arctic Ocean. Breeding in Western Europe and Northeastern North America, it is the largest seabird in the northern Atlantic. The northern gannet hunts for fish and therefore benefits from Ørsted's work on restoring marine biodiversity in the North Sea where the population of fish is increasing.






## Follow-up on 2023 guidance

## Full-year EBITDA

Operating profit (EBITDA) excluding new partnerships and cancellation fees totalled DKK 24.0 billion compared to our expectations at the beginning of the year of DKK 20-23 billion.

Earnings in Offshore ended up higher than expected, mainly due to a partial reversal of negative temporary IFRS 9 adjustments in 2022 together with good performance by our power trading activities. We also had lower balancing costs due to power prices decreasing at a faster pace than expected. Furthermore, we decided to reduce our project development activities as a result of the adverse developments on our US portfolio, and we had a positive impact from reversal of wake and warranty provisions. This was only partly offset by the divestment of London Array, which was not included in our guidance and resulted in lower site earnings.

Earnings in Onshore ended up significantly lower than expected due to lower power prices, lower wind speeds, and lower availability due to outages at a number of our assets.

Earnings from our CHP plants were lower than expected due to much lower power prices than anticipated.
This led to lower condensing power generation and negative accounting effects from the first-in, first-out principle. This was only partly offset by a compensation from Energinet related to their order in 2022, but recognised in 2023, when we had to continue or resume operations of three power station units.

In 'Gas Markets & Infrastructure', we achieved higher earnings from our gas storage activities than expected.

## Q4 EBITDA

Earnings came in higher than expected in our interim report for the first nine months, primarily due to higher wind speeds for offshore assets, the wake and warranty provision reversals, the compensation from Energinet, and higher earnings on our gas activities.

EBITDA excluding new partnerships and cancellation fees
DKKbn






## Results

## Financial results

## Revenue

Power generation from offshore and onshore assets increased by 5% and totalled 31.1 TWh in 2023. The increase was due to ramp-up of generation from Hornsea 2 and Greater Changhua 1 and 2a, our onshore assets Old 300, Ford Ridge, and Sunflower Wind, and the wind part of Helena Energy Center. The ramp-up of generation was partly offset by lower availability, the farm-down of Hornsea 2 in Q3 2022, and the divestment of London Array in Q3 2023.

Heat generation increased by 3%, mainly due to colder weather, whereas thermal power generation decreased by 26%, mainly due to less attractive spreads for power considering generation.

Our renewable share of generation amounted to 93%, 2 percentage points higher than last year, driven by higher generation from offshore assets due to ramp-up at Greater Changhua 1 and 2a and Hornsea 2. This was partly offset by the farm-down of 50% of Hornsea 2 in Q3 2022.

Revenue amounted to DKK 79.3 billion. The decrease of 31% relative to 2022 was primarily due to the significantly lower power and gas prices across all markets as well as lower power and gas volumes sold.

## EBITDA

Operating profit (EBITDA) for the year amounted to DKK 18.7 billion, DKK 13.3 billion lower than in 2022. In 2023, we had cancellation fees of DKK 9.6 billion related to our decision to cease the development of Ocean Wind 1. In both years, we had significant effects from gains on farm-downs. In 2023, we divested our ownership share of London Array and farmed down 50% of Gore Wind 3, whereas we farmed down 50% of Borkum Riffgrund 3 and Hornsea 2 in 2022. EBITDA excluding new partnerships and cancellation fees was DKK 3.0 billion higher than in 2022 and amounted to DKK 24.0 billion. For further information on our provision for cancellation fees, see note 3.10 (Provision and contingent liabilities' in the financial statements.

EBITDA from offshore sites amounted to DKK 20.2 billion, an increase of DKK 10.3 billion compared to last year. The increase was mainly due to ramp-up of generation from Hornsea 2 and Greater Changhua 1 and 2a in 2023, higher prices on the inflation-indexed CfD and ROC wind farms, lower balancing and BSUoS costs, good performance from our power trading activities, slightly higher wind speeds, and a significant negative impact from hedges in 2022 which was not repeated in 2023.

EBITDA excluding new partnerships and cancellation fees
DKKbn



<table><tr><td></td><td>2023</td><td>2022</td><td>%</td></tr><tr><td>Revenue</td><td>79,255</td><td>114,417</td><td>(31)%</td></tr><tr><td>EBITDA</td><td>18,717</td><td>32,057</td><td>(42)%</td></tr><tr><td>New partnerships</td><td>4,324</td><td>10,993</td><td>(61)%</td></tr><tr><td>Cancellation fees</td><td>(9,621)</td><td>-</td><td>n.a.</td></tr><tr><td>EBITDA excl. new partnerships and cancellation fees</td><td>24,014</td><td>21,064</td><td>14%</td></tr><tr><td>Depreciation and amortisation</td><td>(9,795)</td><td>(9,754)</td><td>0%</td></tr><tr><td>Impairment losses</td><td>(26,775)</td><td>(2,529)</td><td>959%</td></tr><tr><td>Operating profit (EBIT)</td><td>(17,553)</td><td>(37,974)</td><td>n.a.</td></tr><tr><td>Gain (loss) on divestment of enterprises</td><td>234</td><td>331</td><td>(29)%</td></tr><tr><td>Financial items, net</td><td>(1,443)</td><td>(2,536)</td><td>(43)%</td></tr><tr><td>Profit before tax</td><td>(19,026)</td><td>17,609</td><td>n.a.</td></tr><tr><td>Tax on profit (loss) for the year</td><td>(1,156)</td><td>(2,613)</td><td>(56)%</td></tr><tr><td>Tax rate</td><td>(6)%</td><td>15%</td><td>(21.6)%</td></tr><tr><td>Profit (loss) for the year</td><td>(20,162)</td><td>14,996</td><td>n.a.</td></tr></table>






This was partly offset by a negative impact on our merchant exposure due to declining prices after having lowered our hedge ratios for 2023 at a time when prices were higher than the realised levels in the period.

EBITDA from existing partnerships amounted to DKK 0.9 billion in 2023, mainly from adjustment of wake and warranty provisions. This was partly offset by a reduction in earnings from our construction agreement on Greater Changsha 1, due to higher costs and later commissioning of the wind turbines. In 2022, we had positive earnings from a reversal of DKK 0.5 billion of the DKK 0.8 billion warranty provision related to the cable protection system issues at some of our offshore wind farms towards our partners, recognised in 2021, and from an adjustment to wake loss provisions in our German portfolio.

EBITDA from our onshore business amounted to DKK 3.0 billion in 2023, DKK 0.7 billion lower than in 2022. Ramp-up of generation from new assets was more than offset by lower prices in the US and in the UK and Ireland and by lower generation in the US driven by lower availability due to outages at a number of our assets and lower wind speeds.
EBITDA from our CHP plants amounted to DKK 1.2 billion in 2023, a decrease of DKK 4.6 billion compared to the some period last year. The decrease was mainly due to very high power prices and favourable spreads for power condensing generation in 2022 not being repeated in 2023. In addition, earnings from power generation were negatively impacted by the high costs of biomass and coal relative to the market prices in 2023, as the cost is measured using the first-in, first-out (FIFO) principle. The fuel we used during 2023 was bought last year at higher price levels. The opposite was the case in 2022. The negative impacts were partly offset by a compensation from Energinet related to their order in 2022 when we had to continue or resume operations of three power station units.

EBITDA from our gas business totalled DKK 0.6 billion in 2023, DKK 2.6 billion lower than last year. The decrease was driven by strong earnings in 2022, when we were able to lock in gains from optimising the offtake flexibility in some of our sourcing contracts and storage, which was partly offset by our decision to unwind gas hedges related to the Gazprom Export contract.

## Impairment

Due to adverse impacts relating to the supply chain and increased interest rates, combined with a lower anticipated probability of getting additional tax credits, a lower expected value from moneysing these, and the timing and likelihood of obtaining final construction permits for Ocean Wind 1 as well as a change in OREC assumptions for Sunrise Wind, we recognised impairment losses of DKK 26.8 billion in 2023. The majority of these (DKK 19.9 billion) related to our US offshore project Ocean Wind 1. See note 3.2 "Impairments" in the financial statements for further information.
EBIT

EBIT decreased by DKK 37.6 billion to DKK -179 billion in 2023, primarily due to impairment losses and cancellation fees. EBIT excluding impairments and cancellation fees amounted to DKK 18.5 billion in 2023. This was a decrease of DKK 3.8 billion compared to 2022 but an increase of DKK 2.9 billion excluding earnings from new partnerships.

## Financial income and expenses

Net financial income and expenses amounted to DKK -1.4 billion compared to DKK -2.5 billion in 2022. The lower net expenses were mainly due to a gain of DKK 2.4 billion from ineffectiveness on interest rate swaps driven by less funding needs in the US after our decision to cease Ocean Wind 1, partly offset by negative exchange rate adjustments related to internal loans in 2023 versus positive adjustments in 2022, neither of which had impact on cash flow and NIBD.

## Tax and tax rate

Tax on profit for the year amounted to DKK 1.2 billion, DKK 1.5 billion lower than last year. The tax rate was -6% and was affected by non-taxable gains on London Array and Gode Wind 3, unrecognised deferred tax assets related to impairment losses and cancellation fees on our US portfolio, and a reversal of a recognised deferred tax liability in the US related to the tax equity partnership for Ocean Wind 1.

## Profit for the year

Profit for the year totalled DKK -20.2 billion, DKK 35.2 billion lower than 2022. The decrease was mainly due to impairment losses and cancellation fees. Profit for the year excluding impairment losses (after tax) and cancellation fees amounted to DKK 14.9 billion.



## Cash flows and net debt

## Cash flows from operating activities

Cash flows from operating activities totalled DKK 28.5 billion in 2023 compared to DKK 11.9 billion in 2022.

During 2023, we released DKK 9.5 billion, net, in variation margin payments on unrealised hedges ('Change in variation margin') and initial margin payments at clearing houses (part of 'Change in other working capital') as a result of falling and less volatile power and gas prices. In 2022, we tied up DKK 6.9 billion. The development was driven by:

• the variation margin payments, which were a cash inflow of DKK 7.1 billion versus a cash outflow of 10.3 billion in 2022

• the initial margin payments, which were a cash inflow of DKK 2.4 billion versus a cash inflow of DKK 3.5 billion in 2022

• In 2022, we issued parent company guarantees (PCC) in total of EUR 1 billion to reduce our initial margin payments and, to some extent, variation margin payments. The PCC were only partly utilised at the end of 2023.

In 2023, we had a net cash outflow from work in progress of DKK 0.7 billion, mainly from construction work at Greater Changha 1 and the Hornsea 3 offshore transmission asset, partly offset by the divestment of the remaining 50% of the offshore transmission asset at Hornsea 2 and milestone payments from partners in Code Wind 3.
In 2022, we had a net cash inflow of DKK 4.3 billion, mainly from the divestment of the first 50% of the offshore transmission asset at Hornsea 2 to our partner and receipt of milestone payments from partners in Kornburi Riffung 3. This was partly offset by construction work at Greater Changha 1.

In 2023, we received tax equity contributions from partners for Sunflower Wind and South Fork, and in 2022, we received tax equity contributions for the wind part of Helena Energy Center and Old 300, phase 1. This led to a cash inflow from tax equity contributions in 2023, net of the reversal of tax credits recognised in EBITDA, compared to a net cash outflow last year.

Furthermore, “Change in other working capital” was positively impacted by lower receivables and the lower value of gas at storage due to the falling prices in 2023 in addition to the aforementioned release of initial margin payments. In 2022, the positive effect in “Change in other working capital” from lower initial margins was partly offset by higher fuel inventories and lower payables.

## Investments and divestments

Gross investments amounted to DKK 38.5 billion in 2023. The main investments were:

• offshore wind farms (DKK 28.6 billion), including Greater Changha 1, 2o, 2b, and 4 in Taiwan, our portfolio of US and German projects, and Hornsea 3

• onshore wind and solar farms (DKK 9.1 billion), including the construction of Eleven Mile, Mockingbird, Sunflower Wind, the solar part of Helena Energy Center, and our portfolio of European projects.

Cash flows and net debt

<table><tr><td>DKKm.</td><td>2023</td><td>2022</td><td>%</td></tr><tr><td>Cash flows from operating activities</td><td>28,532</td><td>11,924</td><td>139%</td></tr><tr><td>Net cash flows from operating activities</td><td>18,717</td><td>32,057</td><td>(42)%</td></tr><tr><td>Reversal of gain (loss) on divestment of assets</td><td>(5,745)</td><td>(10,885)</td><td>(47)%</td></tr><tr><td>Change in derivatives, excl. variation margin</td><td>(2,812)</td><td>1,645</td><td>n.a.</td></tr><tr><td>Change in variation margin</td><td>7,086</td><td>(10,332)</td><td>n.a.</td></tr><tr><td>Change in provisions</td><td>8,454</td><td>(1,935)</td><td>n.a.</td></tr><tr><td>Other items</td><td>287</td><td>(278)</td><td>n.a.</td></tr><tr><td>Interest expense, net</td><td>1,384</td><td>(563)</td><td>n.a.</td></tr><tr><td>Past tax</td><td>(2,717)</td><td>1,236</td><td>115%</td></tr><tr><td>Change in work in progress</td><td>(722)</td><td>4,271</td><td>n.a.</td></tr><tr><td>Change in tax equity partner liabilities</td><td>374</td><td>(353)</td><td>n.a.</td></tr><tr><td>Change in other working capital</td><td>4,226</td><td>(440)</td><td>n.a.</td></tr><tr><td>Gross investments</td><td>(36,509)</td><td>(37,447)</td><td>3%</td></tr><tr><td>Divestments</td><td>1,542</td><td>25,636</td><td>(94)%</td></tr><tr><td>Other divestments</td><td>(8,435)</td><td>(1,101)</td><td>n.a.</td></tr><tr><td>Net interest-bearing debt at 1 January</td><td>30,571</td><td>24,280</td><td>26%</td></tr><tr><td>Free cash flow</td><td>8,435</td><td>(113)</td><td>n.a.</td></tr><tr><td>Dividends and hybrid coupons paid</td><td>6,613</td><td>6,052</td><td>9%</td></tr><tr><td>Addition of leasing obligations, net</td><td>978</td><td>1,598</td><td>(39)%</td></tr><tr><td>Repurchase of hybrid capital, net</td><td>699</td><td>(1,747)</td><td>n.a.</td></tr><tr><td>Exchange rate adjustments, etc.</td><td>83</td><td>501</td><td>(83)%</td></tr><tr><td>Net interest-bearing debt at 31 December</td><td>47,379</td><td>30,571</td><td>55%</td></tr></table>

Gain (loss) on sale of assets is part of EBITDA but is presented as part of the 'divestment' cash flow. The EBITDA effect is thus reversed in the specification of cash flows from operating activities.

<table><tr><td>Key ratios</td><td></td><td></td><td></td></tr><tr><td>DKKm. %</td><td>2023</td><td>2022</td><td>%</td></tr><tr><td>ROCE, %</td><td>(14.2)</td><td>16.8</td><td>(31.6)</td></tr><tr><td>Adjusted net debt, DKKm</td><td>59,056</td><td>42,075</td><td>40%</td></tr><tr><td>FFO/adjusted net debt, %</td><td>28.6</td><td>42.7</td><td>(14.6)</td></tr></table>

ROCE and FFO/adjusted net debt is specified in notes 2 'Return on capital employed' and 5.1 'Interest-bearing net debt and FFO'.



In 2023, 'Divestments' amounted to DKK 1.5 billion and was related to our divestment of London Array and our 50% farm-down of Good Wind 3 and to our acquisition of Eversource's 50% ownership share of Lease Area 500 and PESC's 25% equity stake in Ocean Wind 1, both in the US. As the two US acquisitions are with non-controlling shareholders, they are not included in 'Gross investments' but as part of 'Divestments'. In 2022, divestments amounted to DKK 25.6 billion and were mainly related to the 50% farm-downs of Hornsea 2 and Borkum Riffgrund 3.

## Interest-bearing net debt

Interest-bearing net debt totalled DKK 47.4 billion at the end of 2023 against DKK 30.6 billion at the end of 2022. The increase was mainly due to dividend payments of DKK 6.6 billion and a negative free cash flow of DKK 8.4 billion.

## Equity and capital employed

## Equity

Equity was DKK 77.8 billion at the end of 2023 against DKK 95.5 billion at the end of 2022. The change in equity was primarily due to the impairment losses of DKK 25.4 billion, net of tax, and cancellation fees of DKK 9.6 billion, whereas the post-tax hedging and currency translation reserve increased by DKK 16.2 billion to DKK -10.3 billion at the end of 2023.

## Capital employed

Capital employed was DKK 125.2 billion at the end of 2023 against DKK 126.1 billion at the end of 2022, with impairment losses and cancellation fees more or less offsetting new investments.

## Financial ratios

## Return on capital employed (ROCE)

Return on capital employed (ROCE) was -14.2% in 2023. The decrease of 31 percentage points compared to last year was attributable to a lower EBIT due to the impairment losses and cancellation fees. ROCE adjusted for impairment losses and cancellation fees in 2023 was 12.9%.

## Credit metric (FFO/adjusted net debt)

The funds from operations (FFO)/adjusted net debt credit metric was 28.6% in 2023 against 42.7% in 2022. The decrease was due to lower FFO and higher NIBD.

## ESG results

Renewable share of heat and power generation
The renewable share of heat and power generation amounted to 93% in 2023, 2 percentage points higher than last year. The increase was primarily due to an increased share of offshore wind generation.

## Greenhouse gas emissions

Our greenhouse gas emissions from heat and power generation (scope 1 and 2) decreased by 37% compared to 2022 to 1.6 million tonnes in 2023. This was primarily due to the decrease in the use of coal at our CHP plants.
Greenhouse gas emissions from our supply chain and sales activities (scope 3) were 49% lower than in 2022, primarily due to a 47% reduction in natural gas sales, lower emissions related to capital goods as we only commissioned four onshore sites in 2023, and lower emissions related to transport of fuels and sale of power.

Our scope 1 and 2 greenhouse gas intensity decreased to 38 g CO \( _{2} \) e/kWh in 2023 against 60 g CO \( _{2} \) e/kWh in 2022. The decrease was a result of a 37% decrease in scope 1 and 2 emissions (numerator) in combination with a nearly unchanged total heat and power generation (denominator).

Our scope 1-3 greenhouse gas intensity (excluding natural gas sales) decreased to 80 g CO \( _{2} \) e/kWh in 2023 against 147 g CO \( _{2} \) e/kWh in 2022. The decrease was a result of the lower scope 1 emissions and lower emissions related to capital goods, fuels, and power sales (numerator) in combination with an unchanged total heat and power generation (denominator).

## Safety

In 2023, we had 73 total recordable injuries (TRIs), of which 50 injuries were related to contractors' employees. In total, this was a decrease of five injuries compared to 2022. The number of hours worked was 25.8 million hours, an increase of 4% compared to 2022. The total recordable injury rate (TRIR) decreased to 2.8 in 2023 from 3.1 in 2022.



## Taxonomy-aligned KPIs

The taxonomy-aligned share of revenue was 86%, EBITDA was 95%, gross investments was 99%, and OPEX was 79% in 2023.

The taxonomy-aligned part of revenue was 86% of total revenue, which was the most substantial decline in revenue from our non-eligible natural gas and power sales activities.

The taxonomy-aligned part of EBITDA increased by 10 percentage points due to a substantial decline in earnings from our non-eligible natural gas sales and fossil-based CHP generation activities.

Read more about our EU taxonomy-aligned revenue and EBITDA reduction in our sustainability statements for 2023.

Revenue 86%

EBITDA 95%

Gross investments 99%

OPEX 79%



## Five-year summary

<table><tr><td colspan="7">Financial statements</td></tr><tr><td>DK/mm</td><td>2023</td><td>2022</td><td>2021</td><td>2020</td><td>2019</td><td></td></tr><tr><td>Income statement</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue \( ^{1} \)</td><td>79,255</td><td>114,417</td><td>77,673</td><td>50,151</td><td>70,398</td><td></td></tr><tr><td>EBITDA</td><td>18,717</td><td>32,057</td><td>24,296</td><td>16,598</td><td>19,020</td><td></td></tr><tr><td>Offshore</td><td>13,817</td><td>19,569</td><td>18,021</td><td>14,451</td><td>14,503</td><td></td></tr><tr><td>Sites, O&amp;M, and Projects</td><td>20,207</td><td>9,940</td><td>13,059</td><td>15,177</td><td>13,092</td><td></td></tr><tr><td>Construction agreements and divestment gains</td><td>6,212</td><td>12,277</td><td>7,535</td><td>1,593</td><td>3,765</td><td></td></tr><tr><td>Cancellation fees</td><td>(9,621)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other, incl. project development</td><td>(1,987)</td><td>(2,648)</td><td>(2,573)</td><td>(2,319)</td><td>(2,354)</td><td></td></tr><tr><td>Costs</td><td>1,975</td><td>3,644</td><td>1,349</td><td>1,112</td><td>1,350</td><td></td></tr><tr><td>Biogeny &amp; Other</td><td>1,253</td><td>6,619</td><td>4,747</td><td>3,551</td><td>3,551</td><td></td></tr><tr><td>Other activities</td><td>407</td><td>225</td><td>179</td><td>210</td><td>166</td><td></td></tr><tr><td>Depreciation and amortisation</td><td>(9,795)</td><td>(9,754)</td><td>(7,972)</td><td>(7,588)</td><td>(6,864)</td><td></td></tr><tr><td>Impairment</td><td>(27,755)</td><td>(29,256)</td><td>(29,129)</td><td>(19,206)</td><td></td><td></td></tr><tr><td>Operating profit (loss) (EBIT)</td><td>(17,853)</td><td>19,774</td><td>16,195</td><td>9,010</td><td>11,588</td><td></td></tr><tr><td>Gain (loss) on divestment of enterprises</td><td>234</td><td>331</td><td>(742)</td><td>10,831</td><td>(63)</td><td></td></tr><tr><td>Net financial income and expenses</td><td>(1,443)</td><td>(2,536)</td><td>(2,166)</td><td>(2,524)</td><td>(1,135)</td><td></td></tr><tr><td>Profit (loss) before tax</td><td>(15,062)</td><td>(17,609)</td><td>(13,277)</td><td>(17,334)</td><td>10,392</td><td></td></tr><tr><td>Taxation</td><td>(1,156)</td><td>(2,613)</td><td>(2,390)</td><td>(1,776)</td><td>(3,101)</td><td></td></tr><tr><td>Profit (loss) for the year</td><td>(20,182)</td><td>14,996</td><td>10,887</td><td>15,537</td><td>7,235</td><td></td></tr><tr><td>Balance sheet</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets</td><td>281,136</td><td>314,142</td><td>270,365</td><td>196,719</td><td>197,860</td><td></td></tr><tr><td>Cash</td><td>77,791</td><td>95,532</td><td>85,137</td><td>97,329</td><td>89,562</td><td></td></tr><tr><td>Shareholders in Ørsted A/S</td><td>56,782</td><td>71,743</td><td>64,072</td><td>81,376</td><td>73,082</td><td></td></tr><tr><td>Hybrid capital</td><td>19,103</td><td>19,793</td><td>17,984</td><td>13,232</td><td>13,232</td><td></td></tr><tr><td>Non-controlling interests</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity holders' equity</td><td>47,379</td><td>30,571</td><td>24,280</td><td>12,343</td><td>17,230</td><td></td></tr><tr><td>Capital employed</td><td>125,170</td><td>126,103</td><td>109,416</td><td>109,672</td><td>106,792</td><td></td></tr><tr><td>Additions to property, plant, and equipment</td><td>37,954</td><td>33,662</td><td>43,941</td><td>28,442</td><td>22,440</td><td></td></tr><tr><td>Cash flows</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash flows from operating activities</td><td>28,532</td><td>11,924</td><td>12,148</td><td>16,466</td><td>13,079</td><td></td></tr><tr><td>Equity</td><td>(38,509)</td><td>(37,447)</td><td>(39,307)</td><td>(26,967)</td><td>(23,305)</td><td></td></tr><tr><td>Divestments</td><td>1,542</td><td>25,636</td><td>21,519</td><td>19,039</td><td>3,329</td><td></td></tr><tr><td>Free cash flow</td><td>(8,435)</td><td>113</td><td>(5,640)</td><td>8,536</td><td>(6,897)</td><td></td></tr><tr><td>Financial ratios</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Return on capital employed (ROCE), %</td><td>(1.42)</td><td>16.8</td><td>14.8</td><td>8.3</td><td>12.2</td><td></td></tr><tr><td>EBITDA/ profit before tax, %</td><td>28.6</td><td>42.7</td><td>26.3</td><td>65.0</td><td>31.0</td><td></td></tr><tr><td>Number of outstanding shares, 31 December, 000</td><td>420,381</td><td>420,209</td><td>420,175</td><td>420,068</td><td>419,985</td><td></td></tr><tr><td>Share price, 31 December, DKK</td><td>374</td><td>631</td><td>835</td><td>1,244</td><td>689</td><td></td></tr><tr><td>Market capitalisation, 31 December, DKKbn</td><td>157</td><td>265</td><td>351</td><td>522</td><td>290</td><td></td></tr><tr><td>Earnings per share (EPS), DKKbn</td><td>(50.1)</td><td>(61.1)</td><td>(50.1)</td><td>(61.1)</td><td>(50.0)</td><td></td></tr><tr><td>Dividend yield, %</td><td>2.1</td><td>1.5</td><td>0.9</td><td>1.5</td><td></td><td></td></tr></table>

<table><tr><td>Business drivers</td><td>2023</td><td>2022</td><td>2021</td><td>2020</td><td>2019</td></tr><tr><td>Offshore</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deiceded and installed capacity, GW</td><td>15.5</td><td>11.1</td><td>10.9</td><td>9.9</td><td>9.9</td></tr><tr><td>Installed capacity, GW</td><td>8.9</td><td>8.9</td><td>7.6</td><td>7.6</td><td>6.8</td></tr><tr><td>Generation capacity, GW</td><td>5.0</td><td>4.7</td><td>4.0</td><td>4.4</td><td>3.6</td></tr><tr><td>Wind speed, m/s</td><td>9.8</td><td>9.5</td><td>9.1</td><td>10.0</td><td>9.2</td></tr><tr><td>Load factor, %</td><td>4.3</td><td>4.2</td><td>3.9</td><td>4.5</td><td>4.2</td></tr><tr><td>Availability, %</td><td>93</td><td>94</td><td>94</td><td>94</td><td>93</td></tr><tr><td>Power generation, GWh</td><td>17,761</td><td>16,483</td><td>13,808</td><td>15,248</td><td>11,965</td></tr><tr><td>Power sales, GWh</td><td>21,448</td><td>23,194</td><td>25,020</td><td>29,152</td><td>27,615</td></tr><tr><td>Onshore</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deiceded and installed capacity, GW</td><td>6.4</td><td>6.2</td><td>4.7</td><td>3.4</td><td>2.1</td></tr><tr><td>Installed capacity, GW</td><td>4.8</td><td>4.2</td><td>3.4</td><td>1.7</td><td>1.0</td></tr><tr><td>Wind speed, m/s</td><td>7.2</td><td>7.4</td><td>7.4</td><td>7.6</td><td>7.3</td></tr><tr><td>Load factor*, wind, %</td><td>36</td><td>40</td><td>42</td><td>45</td><td>45</td></tr><tr><td>Load factor*, solar PV, %</td><td>24</td><td>25</td><td>24</td><td>26</td><td>26</td></tr><tr><td>Availability*, wind, %</td><td>88</td><td>93</td><td>96</td><td>96</td><td>98</td></tr><tr><td>Availability*, solar PV, %</td><td>88</td><td>93</td><td>96</td><td>96</td><td>98</td></tr></table>

1 In 2023, we changed our accounting policy on recognition of revenue from the settlement of failed own-use contracts related to power. The change only impacts revenue and cost of sales with no impact on EBITDA. The comparisons for 2022 have been adjusted, but 2019-2021 numbers are not adjusted. The related power volumes in 2022 and 2023 have consequently been netted. See more in note 1.2 'Basis of preparation'.

 \( ^{1} \)  For 2021-2019, these business drivers are for U5 only.



## Fourth quarter

## Financial performance – Group

## EBITDA

Operating profit (EBITDA) for the fourth quarter amounted to DKK -0.7 billion, DKK 7.4 billion lower than in Q4 2022. In Q4 2023, the decision to cease development of Ocean Wind 1 led to cancellation fees of DKK 9.6 billion. Furthermore, we farmed down 50% of Code Wind 3. Adjusted for new partnerships and cancellation fees, EBITDA was DKK 2.0 billion above Q4 2022 and amounted to DKK 8.6 billion.

Earnings from Offshore sites amounted to DKK 7.2 billion, an increase of DKK 3.4 billion compared to the same period last year. The increase was mainly due to higher wind speeds, ramp-up of generation from Greater Changhua 1 and 2, lower BSU5 and balancing costs, and a significant negative impact from hedges in Q4 2022 which was not repeated in Q4 2023. This was only partly offset by the divestment of London Array.

EBITDA from existing partnerships increased by DKK 1.4 billion and amounted to DKK 0.4 billion in Q4 2023, mainly related to adjustment of wake and warranty provisions. In Q4 2022, we had negative earnings due to delays with commissioning of the wind turbines at Greater Changhua 1 and higher costs for the project, which reduced earnings under the construction agreement.
EBITDA from our Onshore business amounted to DKK 0.5 billion and was DKK 0.3 billion lower than in Q4 2022. Ramp-up of generation from new assets was more than offset by lower availability and significantly lower prices in Q4 2023.

EBITDA from our CHP plants amounted to DKK 0.8 billion in Q4 2023, a decrease of DKK 0.9 billion compared to the same period last year. The decrease was mainly due to very high power prices and favourable spreads for power condensing generation in Q4 2022, which were not repeated this year. In addition, earnings were negatively impacted by accounting FIFO effects. The negative impacts were partly offset by a compensation from Energinet related to their order in 2022 when we had to continue or resume operations of three power station units.

EBITDA from our gas business totalted DKK 0.6 billion in Q4 2023, DKK 1.5 billion lower than in the same period last year. The decrease was driven by a lower positive effect from gas at storage in Q4 2023 than in Q4 2022, and the release of a provision in Q4 2022 related to the close-down of our B2B business in the UK.

EBITDA excluding new partnerships and cancellation fees
DKKbn



<table><tr><td></td><td>Q4 2023</td><td>Q4 2022</td><td>%</td></tr><tr><td>Revenue</td><td>21,530</td><td>30,256</td><td>(29)%</td></tr><tr><td>EBITDA</td><td>(686)</td><td>6,696</td><td>n.a.</td></tr><tr><td>New partnerships</td><td>317</td><td>77</td><td>312%</td></tr><tr><td>Cancellation fees</td><td>(9,621)</td><td>-</td><td>n.a.</td></tr><tr><td>EBITDA excl. new partnerships and cancellation fees</td><td>8,618</td><td>6,619</td><td>30%</td></tr><tr><td>Depreciation and amortisation</td><td>(2,366)</td><td>(2,792)</td><td>(15)%</td></tr><tr><td>Tax</td><td>1,647</td><td>(2,529)</td><td>n.a.</td></tr><tr><td>Operating profit (loss) (EBIT)</td><td>(1,405)</td><td>1,375</td><td>n.a.</td></tr><tr><td>Gain (loss) on divestment of enterprises</td><td>(44)</td><td>32</td><td>n.a.</td></tr><tr><td>Financial items, net</td><td>2,001</td><td>(985)</td><td>n.a.</td></tr><tr><td>Profit (loss) before tax</td><td>557</td><td>460</td><td>21%</td></tr><tr><td>Tax</td><td>(841)</td><td>(789)</td><td>7%</td></tr><tr><td>Tax rate</td><td>151%</td><td>172%</td><td>(21)%</td></tr><tr><td>Profit (loss) for the period</td><td>(284)</td><td>(329)</td><td>(14)%</td></tr></table>



<table><tr><td colspan="4">Cash flows and net debt</td></tr><tr><td>DKKm</td><td>Q4 2023</td><td>Q4 2022</td><td>%</td></tr><tr><td>Cash flows from operating activities</td><td>6,170</td><td>20,915</td><td>(70%)</td></tr><tr><td>EBITDA</td><td>(868)</td><td>6,696</td><td>n.a.</td></tr><tr><td>Reversal of gain (loss) on divestment of assets</td><td>(692)</td><td>57</td><td>n.a.</td></tr><tr><td>Change in derivatives, excl. variation margin</td><td>(4,202)</td><td>(6,543)</td><td>(36%)</td></tr><tr><td>Change in variation margin</td><td>2,690</td><td>8,658</td><td>(69%)</td></tr><tr><td>Change in provisions</td><td>1,000</td><td>1,000</td><td>n.a.</td></tr><tr><td>Other items</td><td>354</td><td>(98)</td><td>n.a.</td></tr><tr><td>Interest expenses, net</td><td>2,259</td><td>(54)</td><td>n.a.</td></tr><tr><td>Paid tax</td><td>(587)</td><td>(28)</td><td>1996%</td></tr><tr><td>Change in work in progress</td><td>(1,761)</td><td>1,830</td><td>n.a.</td></tr><tr><td>Change in tax equity partner liabilities</td><td>(1,000)</td><td>(1,000)</td><td>n.a.</td></tr><tr><td>Change in other working capital</td><td>992</td><td>10,814</td><td>(91%)</td></tr><tr><td>Gross investments</td><td>(13,039)</td><td>(9,826)</td><td>33%</td></tr><tr><td>Divestments</td><td>1,861</td><td>983</td><td>89%</td></tr><tr><td>Free cash flow</td><td>(5,008)</td><td>12,072</td><td>n.a.</td></tr><tr><td>Net interest-bearing debt, beginning of period</td><td>42,892</td><td>45,701</td><td>(6%)</td></tr><tr><td>Free cash flow</td><td>5,006</td><td>(12,072)</td><td>n.a.</td></tr><tr><td>Dividends and hybrid coupon paid</td><td>440</td><td>228</td><td>93%</td></tr><tr><td>Addition to lease obligations, net</td><td>13</td><td>382</td><td>198%</td></tr><tr><td>Issuance of hybrid capital, net</td><td>-</td><td>(1,747)</td><td>n.a.</td></tr><tr><td>Exchange rate adjustments, etc.</td><td>(974)</td><td>(2,121)</td><td>(54%)</td></tr><tr><td>Net interest-bearing debt, end of period</td><td>47,379</td><td>30,571</td><td>55%</td></tr></table>

## Impairment losses

Impairment losses in Q4 2023 had a positive effect of DKK 1.6 billion driven by a decrease in the US long-dated interest rate from 30 September to 31 December 2023, which lowered our WACCs.

## Cash flows from operating activities

Cash flows from operating activities totalled DKK 6.2 billion in Q4 2023 compared to DKK 20.9 billion in Q4 2022.

During Q4 2023, we released DKK 3.0 billion, net, in variation margin payments on unrealised hedges ("Change in derivatives") and initial margin payments at clearing houses (part of "Change in other working capital"), whereas we released DKK 17.4 billion in Q4 2022:

- The variation margin payments were a cash inflow of DKK 2.7 billion versus a cash inflow of DKK 8.7 billion in Q4 2022.

- The initial margin payments were a cash inflow of DKK 0.3 billion versus a cash inflow of DKK 6.7 billion in Q4 2022.

In Q4 2023, we had a net cash outflow from work in progress of DKK 1.8 billion, mainly related to the construction of the Hornsea 2 and Hornsea 3 offshore transmission assets as well as construction work related to Greater Changhua 1 and Borkum Riffgrund 3, partly offset by received milestone payments at Code Wind 3. In Q4 2022, we had a net cash inflow of DKK 1.8 billion, mainly related to milestone payments at Greater Changhua 1 and Borkum Riffgrund 3.
In Q4 2023, we did not receive any significant tax equity contributions, while we received tax equity contribution for phase 1 of Old 300 in Q4 2022.

## Investments and divestments

Gross investments amounted to DKK 13.0 billion in Q4 2023. The main investments were:

- offshore wind farms (DKK 9.7 billion), including Greater Changhua 2b and 4 in Taiwan, our portfolio of US and German projects, and Hornsea 3

- onshore wind and solar farms (DKK 3.0 billion), including the construction of Eleven Mile, Mockingbird, the solar part of Helena Energy Center, and our portfolio of European projects.

In Q4 2023, divestments amounted to DKK 1.9 billion and were mainly related to the 50% farm-down of Code Wind 3.



## Offshore

## Financial results for Q4 2023

Power generation increased by 11.1% to 6.0 TWh in Q4 2023. The increase was due to higher wind speeds and ramp-up at Greater Channagh u 2a. This was only partly offset by lower availability.

Wind speeds amounted to a portfolio average of 11.5 m/s, which was higher than in Q4 2022 (10.7 m/s) and slightly higher than the normal wind speeds expected in the fourth quarter (11.4 m/s).

Availability ended at 92%, which was 3 percentage points lower than in the same period last year. This was mainly due to scheduled outages and component replacements at Walney Extension and Gode Wind 1.

Revenue decreased by 18% and amounted to DKK 16.1 billion.

Revenue from offshore wind farms in operation decreased by 22% to DKK 8.4 billion, mainly driven by lower prices. Revenue from power sales decreased by 14% to DKK 6.8 billion, due to significantly lower power prices and lower volumes sold.

EBITDA decreased by DKK 4.7 billion and amounted to DKK -2.6 billion.

EBITDA from 'Sites, O&M, and PPAs' increased by DKK 3.4 billion and amounted to DKK 7.2 billion in Q4 2023. The increase was due to higher wind speeds (DKK 0.2 billion), ramp-up of generation at Greater Channagh u 2a and 2a, lower balancing and BSUs costs, and a neutral effect from hedges in Q4 2023 vs a large negative contribution from hedges in Q4 2022. This was only partly offset by the divestment of London Array in Q3 2023.

EBITDA from partnerships amounted to DKK 0.7 billion in Q4 2023 and mainly related to the farm-down of Gode Wind 3 and minor changes in our wake and warranty provisions. In Q4 2022, we had negative earnings due to delays with commissioning of the wind turbines at Greater Channagh 1 and higher costs for the project, which reduced earnings under the construction agreement.

EBITDA was negatively impacted by DKK 9.6 billion from cancellation fees related to our decision to cease the development of the Ocean Wind 1 project.

EBITDA from other activities, including project development, amounted to DKK -0.8 billion, slightly lower than Q4 2022.

<table><tr><td>Results</td><td>Q4 2023</td><td>Q4 2022</td><td>%</td><td>2023</td><td>2022</td><td>%</td></tr><tr><td>Business drivers</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Decided (FIDEd) and installed capacity, GW</td><td>15.5</td><td>11.1</td><td>40%</td><td>15.5</td><td>11.1</td><td>40%</td></tr><tr><td>Installed capacity, GW</td><td>8.9</td><td>8.9</td><td>0%</td><td>8.9</td><td>0%</td><td>7%</td></tr><tr><td>Generation capacity, GW</td><td>5.0</td><td>4.7</td><td>7%</td><td>5.0</td><td>4.7</td><td>7%</td></tr><tr><td>Wind speed, m/s</td><td>11.5</td><td>10.7</td><td>7%</td><td>9.8</td><td>9.5</td><td>3%</td></tr><tr><td>Load factor, %</td><td>56</td><td>54</td><td>2%p</td><td>43</td><td>42</td><td>1%p</td></tr><tr><td>Availability, %</td><td>92</td><td>95</td><td>(3%)p</td><td>93</td><td>94</td><td>(1%)p</td></tr><tr><td>Power generation, GWh</td><td>6,011</td><td>5,411</td><td>11%</td><td>17,761</td><td>16,483</td><td>8%</td></tr><tr><td>Denmark</td><td>623</td><td>634</td><td>(2%)</td><td>1,970</td><td>2,084</td><td>(5%)</td></tr><tr><td>The United Kingdom</td><td>3,434</td><td>3,631</td><td>(5%)</td><td>10,687</td><td>10,989</td><td>(1%)</td></tr><tr><td>France</td><td>1,201</td><td>1,201</td><td>0%</td><td>1,201</td><td>1,201</td><td>0%</td></tr><tr><td>The Netherlands</td><td>490</td><td>401</td><td>22%</td><td>1,449</td><td>1,259</td><td>15%</td></tr><tr><td>APAC</td><td>705</td><td>85</td><td>729%</td><td>1,291</td><td>92</td><td>1,303%</td></tr><tr><td>The US</td><td>26</td><td>34</td><td>(24%)</td><td>88</td><td>110</td><td>(20%)</td></tr><tr><td>Power sales, GWh</td><td>6,244</td><td>7,645</td><td>(18%)</td><td>21,448</td><td>23,194</td><td>(8%)</td></tr><tr><td>Power price, LEEA UK</td><td>117</td><td>210</td><td>(44%)</td><td>116</td><td>252</td><td>(54%)</td></tr><tr><td>British pound</td><td>8.6</td><td>8.6</td><td>1%</td><td>8.6</td><td>8.7</td><td>(2%)</td></tr><tr><td>Financial performance, DKKm</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue</td><td>16,058</td><td>19,499</td><td>(18%)</td><td>58,427</td><td>69,261</td><td>(16%)</td></tr><tr><td>Sites, O&amp;M, and PPAs</td><td>8,425</td><td>10,767</td><td>(22%)</td><td>23,304</td><td>23,349</td><td>(0%)</td></tr><tr><td>Power sales</td><td>6,729</td><td>7,787</td><td>(14%)</td><td>27,495</td><td>34,142</td><td>(19%)</td></tr><tr><td>Construction agreements</td><td>784</td><td>916</td><td>(14%)</td><td>6,589</td><td>11,640</td><td>(43%)</td></tr><tr><td>Other</td><td>120</td><td>30</td><td>300%</td><td>1,039</td><td>131</td><td>693%</td></tr><tr><td>Operating profit</td><td>2,611</td><td>2,914</td><td>(9%)</td><td>13,817</td><td>19,569</td><td>(29%)</td></tr><tr><td>Sites, O&amp;M and PPAs</td><td>7,164</td><td>3,746</td><td>91%</td><td>20,207</td><td>9,940</td><td>(10%)</td></tr><tr><td>Construction agreements</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>and divestment gains</td><td>676</td><td>(715)</td><td>na</td><td>5,218</td><td>12,277</td><td>(57%)</td></tr><tr><td>Cancellation fees</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other, incl project development</td><td>(630)</td><td>(937)</td><td>(11%)</td><td>1,987</td><td>(2,648)</td><td>(25%)</td></tr><tr><td>Other</td><td>(1,628)</td><td>(1,994)</td><td>(18%)</td><td>(6,815)</td><td>(7,006)</td><td>(3%)</td></tr><tr><td>Impairment losses</td><td>1,462</td><td>(2,529)</td><td>na</td><td>(25,526)</td><td>(2,529)</td><td>909%</td></tr><tr><td>EBIT</td><td>(2,777)</td><td>(2,429)</td><td>14%</td><td>(18,524)</td><td>10,034</td><td>na</td></tr><tr><td>Cash flow from operating activities</td><td>6,005</td><td>17,728</td><td>(66%)</td><td>21,209</td><td>5,272</td><td>302%</td></tr><tr><td>Gross investments</td><td>(9,690)</td><td>(7,926)</td><td>22%</td><td>(28,613)</td><td>(26,710)</td><td>7%</td></tr><tr><td>Financing costs</td><td>(1,000)</td><td>(1,000)</td><td>0%</td><td>(1,000)</td><td>(1,000)</td><td>(0%)</td></tr><tr><td>Free cash flow</td><td>(1,895)</td><td>10,836</td><td>na</td><td>(5,904)</td><td>4,013</td><td>na</td></tr><tr><td>Capital employed</td><td>83,574</td><td>89,941</td><td>(7%)</td><td>83,574</td><td>89,941</td><td>(7%)</td></tr></table>



## Onshore

## Financial results for Q4 2023

Power generation from our operating onshore assets decreased by 1% compared to Q4 2022 and amounted to 3.4 TWh. The decrease was due to lower availability and lower wind speeds, partly offset by ramp-up of generation at Sunflower Wind. The availability in the US was lower, mainly due to Western Trail going offline in August because of an unplanned transmission line outage. Western Trail was back online in the middle of December.

Revenue decreased by 21% compared to Q4 2022 and amounted to DKK 0.6 billion. The decrease was mainly due to lower prices across the portfolio and a 5% lower USD rate than in Q4 2022.

EBITDA for Q4 2023 amounted to DKK 0.5 billion, which was DKK 0.3 billion lower than Q4 2022. The decrease was due to high earnings in Q4 2022, when we benefitted from the higher power prices in Ireland and the US. In the US, the effect was mostly from ramp-up generation from assets under construction (PPAs do not start until COD). Furthermore, some of our PPAs have upside sharing structures, which allow for capture of additional revenue in periods of high pricing compared to traditional PPAs.

In 2023, we have reclassified costs related to our operating assets from 'Other including project development' to 'Sites' to align with our methodology in Offshore (no impact on total Onshore EBITDA).

<table><tr><td>Results</td><td>Q4 2023</td><td>Q4 2022</td><td>%</td><td>2023</td><td>2022</td><td>%</td></tr><tr><td>Business drivers</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Decided (FIDEd) and installed capacity, GW</td><td>6.4</td><td>6.2</td><td>2%</td><td>6.4</td><td>6.2</td><td>2%</td></tr><tr><td>Installed capacity, GW</td><td>4.8</td><td>4.2</td><td>15%</td><td>4.8</td><td>4.2</td><td>15%</td></tr><tr><td>Wind speed, m/s</td><td>76</td><td>77</td><td>(1%)</td><td>72</td><td>74</td><td>(3%)</td></tr><tr><td>Load factor, wind, %</td><td>36</td><td>40</td><td>(4%)</td><td>36</td><td>40</td><td>(4%)</td></tr><tr><td>Load factor, solar PV, %</td><td>17</td><td>17</td><td>0%</td><td>24</td><td>25</td><td>(1%)</td></tr><tr><td>Availability, wind, %</td><td>85</td><td>91</td><td>(6%)</td><td>88</td><td>93</td><td>(5%)</td></tr><tr><td>Availability, solar PV, %</td><td>98</td><td>99</td><td>(1%)</td><td>98</td><td>98</td><td>0%</td></tr><tr><td>Power generation, GWh</td><td>3,376</td><td>3,425</td><td>(1%)</td><td>13,374</td><td>13,146</td><td>2%</td></tr><tr><td>US wind</td><td>2,640</td><td>2,711</td><td>(3%)</td><td>10,124</td><td>10,389</td><td>(3%)</td></tr><tr><td>US solar PV, MW</td><td>1,000</td><td>1,000</td><td>0%</td><td>1,000</td><td>1,000</td><td>0%</td></tr><tr><td>Europe, wind and solar PV</td><td>344</td><td>326</td><td>6%</td><td>1,119</td><td>837</td><td>34%</td></tr><tr><td>US dollar</td><td>6.9</td><td>7.3</td><td>(5%)</td><td>6.9</td><td>7.1</td><td>(3%)</td></tr><tr><td>Financial performance, DKKm</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue</td><td>598</td><td>758</td><td>(21%)</td><td>2,620</td><td>3,014</td><td>(13%)</td></tr><tr><td>EBITDA</td><td>525</td><td>852</td><td>(38%)</td><td>2,970</td><td>3,644</td><td>(18%)</td></tr><tr><td>EBITDA</td><td>394</td><td>420</td><td>(6%)</td><td>1,256</td><td>2,097</td><td>(40%)</td></tr><tr><td>Tax credits and tax attributions</td><td>590</td><td>712</td><td>(17%)</td><td>2,567</td><td>2,556</td><td>0%</td></tr><tr><td>Other, including project development</td><td>(460)</td><td>(280)</td><td>64%</td><td>(854)</td><td>(1,009)</td><td>(15%)</td></tr><tr><td>Depreciation</td><td>(498)</td><td>(448)</td><td>11%</td><td>(1,957)</td><td>(1,644)</td><td>19%</td></tr><tr><td>Impairment losses</td><td>507</td><td>-</td><td>n.a.</td><td>(927)</td><td>-</td><td>n.a.</td></tr><tr><td>Cash</td><td>534</td><td>404</td><td>32%</td><td>86</td><td>2,000</td><td>(96%)</td></tr><tr><td>Cash flow from operating activities</td><td>(11)</td><td>1,039</td><td>n.a.</td><td>609</td><td>2,509</td><td>(76%)</td></tr><tr><td>Gross investments</td><td>(3,024)</td><td>(1,856)</td><td>63%</td><td>(9,059)</td><td>(10,396)</td><td>(13%)</td></tr><tr><td>Divestments</td><td>(1,138)</td><td>13</td><td>(79%)</td><td>-</td><td>5</td><td>(91%)</td></tr><tr><td>Free cash flow</td><td>(3,032)</td><td>(804)</td><td>277%</td><td>(8,455)</td><td>(7,831)</td><td>8%</td></tr><tr><td>Capital employed</td><td>35,634</td><td>28,463</td><td>25%</td><td>35,634</td><td>28,463</td><td>25%</td></tr></table>



## Bioenergy & Other

## Financial results for Q4 2023

Heat generation increased by 16% in Q4 2023 due to colder weather, and power generation decreased by 26%, mainly due to less attractive spreads for power condensing generation.

Gas sales and power sales decreased by 25% and 30%, respectively, due to a gradual phase-out of our remaining UK B2B activities.

Revenue decreased by 49% compared to Q4 2022 and amounted to DKK 5.2 billion. The decrease was driven by significantly lower gas and power sales, lower power generation, and lower prices.

EBITDA amounted to DKK 1.4 billion compared to DKK 3.6 billion in Q4 2022.

EBITDA from 'CHP plants' was DKK 0.8 billion, DKK 0.9 billion lower than in Q4 2022. This was due to the lower generation and market-based spreads mentioned above. In addition, earnings from power generation were negatively impacted by the high costs of biomass and coal relative to the market prices in Q4 2023 as the cost is measured using the first-in, first-out (FIFO) principle. The fuel we have been using during Q4 2023 was bought last year at the higher price levels. The opposite was the case in Q4 2022. The negative impacts were partly offset by a compensation from Energinet related to their order in 2022 when we had to continue or resume operations of three power station units until June 2024.
EBITDA from 'Gas Markets & Infrastructure' decreased by DKK 1.5 billion relative to Q4 2022 to DKK 0.6 billion. The decrease was driven by a lower positive effect from gas at storage in Q4 2023 than in Q4 2022 and the release of a provision in Q4 2022 related to the close-down of our B2B business in the UK.

<table><tr><td>Results</td><td>Q4 2023</td><td>Q4 2022</td><td>%</td><td>2023</td><td>2022</td><td>%</td></tr><tr><td>Business drivers</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Degree days</td><td>966</td><td>861</td><td>12%</td><td>2,585</td><td>2,548</td><td>1%</td></tr><tr><td>Heat generation, GWh</td><td>2,385</td><td>2,064</td><td>16%</td><td>6,587</td><td>6,368</td><td>3%</td></tr><tr><td>Power generation, GWh</td><td>1,042</td><td>1,409</td><td>(26%)</td><td>4,437</td><td>6,012</td><td>(26%)</td></tr><tr><td>Gas sales, GWh</td><td>3,041</td><td>4,048</td><td>(25%)</td><td>16,680</td><td>31,637</td><td>(47%)</td></tr><tr><td>Power sales, GWh</td><td>628</td><td>934</td><td>(33%)</td><td>2,627</td><td>5,309</td><td>(53%)</td></tr><tr><td>Gas price, TTE, EUR/MWh</td><td>43.3</td><td>94.4</td><td>(54%)</td><td>2,105</td><td>2,065</td><td>(64%)</td></tr><tr><td>Power price, DKK, EUR/MWh</td><td>91.1</td><td>176.2</td><td>(48%)</td><td>89.3</td><td>213.7</td><td>(58%)</td></tr><tr><td>Green dark spread, DKK, EUR/MWh</td><td>(5.4)</td><td>23.3</td><td>n.a.</td><td>(25.8)</td><td>39.5</td><td>n.a.</td></tr><tr><td>Wood pellet spread, DKK, EUR/MWh</td><td>(0.5)</td><td>(6.2)</td><td>(92%)</td><td>4.3</td><td>54.4</td><td>(92%)</td></tr><tr><td>Financial performance, DKKM</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue</td><td>5,235</td><td>10,251</td><td>(40%)</td><td>19,230</td><td>46,243</td><td>(58%)</td></tr><tr><td>EBITDA</td><td>4,354</td><td>4,254</td><td>(1%)</td><td>6,752</td><td>6,619</td><td>(8%)</td></tr><tr><td>CHP plants</td><td>1,456</td><td>1,718</td><td>(51%)</td><td>1,218</td><td>5,851</td><td>(79%)</td></tr><tr><td>Gas Markets &amp; Infrastructure</td><td>589</td><td>2,073</td><td>(72%)</td><td>558</td><td>3,117</td><td>(82%)</td></tr><tr><td>Other, incl. project development</td><td>9</td><td>(182)</td><td>n.a.</td><td>(253)</td><td>(349)</td><td>(28%)</td></tr><tr><td>Depreciation</td><td>(180)</td><td>(287)</td><td>(37%)</td><td>(759)</td><td>(859)</td><td>(12%)</td></tr><tr><td>Impairment losses</td><td>(322)</td><td>-</td><td>n.a.</td><td>(322)</td><td>-</td><td>n.a.</td></tr><tr><td>EBIT</td><td>932</td><td>3,322</td><td>(72%)</td><td>472</td><td>7,760</td><td>(94%)</td></tr><tr><td>Cash flow from operating activities</td><td>358</td><td>738</td><td>(51%)</td><td>2,550</td><td>2,622</td><td>(3%)</td></tr><tr><td>Gross investments</td><td>(374)</td><td>(25)</td><td>1,396%</td><td>(727)</td><td>(267)</td><td>172%</td></tr><tr><td>Divestments</td><td>64</td><td>(4)</td><td>n.a.</td><td>61</td><td>(4)</td><td>n.a.</td></tr><tr><td>Free cash flow</td><td>48</td><td>709</td><td>(93%)</td><td>1,884</td><td>2,351</td><td>(20%)</td></tr><tr><td>Capital employed</td><td>4,655</td><td>5,211</td><td>(11%)</td><td>4,655</td><td>5,211</td><td>(11%)</td></tr></table>



## Quarterly summary, 2022–2023

<table><tr><td rowspan="2">Financial statements
DK/mm</td><td colspan="7">2023</td><td colspan="7">2022</td></tr><tr><td>Q4</td><td>Q3</td><td>Q2</td><td>Q1</td><td>Q4</td><td>Q3</td><td>Q2</td><td>Q1</td><td>Q4</td><td></td><td>Q3</td><td>Q2</td><td>Q1</td><td></td></tr><tr><td>Income statement</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue1</td><td>21,530</td><td>17,441</td><td>14,565</td><td>25,719</td><td>30,256</td><td>31,039</td><td>23,362</td><td>29,760</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>EBITDA</td><td>(866)</td><td>9,173</td><td>3,320</td><td>6,910</td><td>6,696</td><td>12,317</td><td>6,145</td><td>9,429</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating profit</td><td>(2,611)</td><td>8,027</td><td>2,979</td><td>5,412</td><td>2,964</td><td>9,652</td><td>1,064</td><td>5,910</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Sites, O&amp;M, and PPAs</td><td>7,164</td><td>4,050</td><td>3,135</td><td>5,859</td><td>3,746</td><td>467</td><td>2,031</td><td>3,698</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Construction agreements</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>and development gains</td><td>676</td><td>4,245</td><td>340</td><td>(42)</td><td>(715)</td><td>9,765</td><td>601</td><td>2,620</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>and other income</td><td>(9,621)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other, incl. project development</td><td>(830)</td><td>(258)</td><td>(496)</td><td>(405)</td><td>(937)</td><td>(580)</td><td>(728)</td><td>(399)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Onshore</td><td>525</td><td>819</td><td>792</td><td>634</td><td>852</td><td>867</td><td>1,075</td><td>850</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>&amp; Other</td><td>(1,545)</td><td>(1,155)</td><td>(853)</td><td>(717)</td><td>3,069</td><td>1,649</td><td>647</td><td>2,514</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other activities/limitations</td><td>(34)</td><td>162</td><td>132</td><td>147</td><td>141</td><td>(51)</td><td>(11)</td><td>146</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortisation</td><td>(2,366)</td><td>(2,537)</td><td>(2,454)</td><td>(2,438)</td><td>(2,792)</td><td>(2,530)</td><td>(2,304)</td><td>(2,128)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Impairment</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating profit (loss)</td><td>1,467</td><td>(28,422)</td><td>866</td><td>4,472</td><td>1,375</td><td>9,771</td><td>1,311</td><td>7,301</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Gain (loss) on divestment of enterprises</td><td>(44)</td><td>(50)</td><td>159</td><td>169</td><td>32</td><td>124</td><td>67</td><td>108</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net financial income and expenses</td><td>2,001</td><td>(128)</td><td>(1,797)</td><td>(1,519)</td><td>(985)</td><td>(217)</td><td>(486)</td><td>(848)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Profit (loss) before tax</td><td>557</td><td>(21,945)</td><td>(763)</td><td>3,135</td><td>460</td><td>6,905</td><td>693</td><td>6,561</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Taxation</td><td>(1,000)</td><td>(1,000)</td><td>(1,000)</td><td>(1,001)</td><td>(1,000)</td><td>(1,000)</td><td>(1)</td><td>(1)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Profit (loss) for the period</td><td>(284)</td><td>(2,562)</td><td>(538)</td><td>3,202</td><td>(329)</td><td>9,355</td><td>269</td><td>5,701</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance sheet</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets</td><td>281,136</td><td>286,792</td><td>296,466</td><td>306,644</td><td>314,142</td><td>359,578</td><td>320,227</td><td>268,087</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Inventories</td><td>7,791</td><td>78,761</td><td>103,514</td><td>102,826</td><td>95,533</td><td>57,377</td><td>61,276</td><td>76,719</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Shareholders in DART S&amp;S</td><td>56,752</td><td>57,304</td><td>62,379</td><td>78,551</td><td>71,743</td><td>32,413</td><td>40,091</td><td>55,704</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Hybrid capital</td><td>19,103</td><td>19,103</td><td>19,103</td><td>19,793</td><td>19,793</td><td>17,984</td><td>17,984</td><td>17,984</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Non-controlling interests</td><td>1,906</td><td>1,954</td><td>2,066</td><td>4,482</td><td>3,996</td><td>3,380</td><td>3,201</td><td>3,031</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest-bearing debt</td><td>43,279</td><td>42,992</td><td>42,424</td><td>42,361</td><td>35,701</td><td>45,170</td><td>41,440</td><td>36,200</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Capital employed</td><td>125,170</td><td>121,253</td><td>147,471</td><td>138,067</td><td>126,103</td><td>99,478</td><td>102,755</td><td>106,745</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Additions to property, plant, and equipment</td><td>12,064</td><td>10,988</td><td>6,963</td><td>7,939</td><td>9,912</td><td>8,899</td><td>8,724</td><td>5,127</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash flows</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash flows from operating activities</td><td>6,170</td><td>9,796</td><td>2,447</td><td>10,119</td><td>20,915</td><td>(11,309)</td><td>2,355</td><td>(37)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Investing activities</td><td>(1,000)</td><td>(2,194)</td><td>(7,488)</td><td>(16,786)</td><td>(9,658)</td><td>(7,461)</td><td>(6,377)</td><td>(6,521)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Divestments</td><td>1,861</td><td>1,735</td><td>(2,038)</td><td>(16)</td><td>983</td><td>22,459</td><td>267</td><td>1,927</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Free cash flow</td><td>(5,008)</td><td>2,327</td><td>(7,089)</td><td>1,335</td><td>12,072</td><td>(3,267)</td><td>(3,750)</td><td>(4,942)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Financial ratios</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Return on capital employed (ROCE), % LTM</td><td>(14.2)</td><td>(13.7)</td><td>13.2</td><td>13.8</td><td>16.8</td><td>24.4</td><td>14.8</td><td>19.0</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Efficiency ratio</td><td>(0.9)</td><td>(0.9)</td><td>(0.9)</td><td>(0.8)</td><td>(0.9)</td><td>(0.9)</td><td>(0)</td><td>(0)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Number of outstanding shares, end of period</td><td>420,381</td><td>420,381</td><td>420,381</td><td>420,381</td><td>420,361</td><td>420,381</td><td>420,381</td><td>420,381</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Share price, end of period, DKK</td><td>374</td><td>385</td><td>645</td><td>583</td><td>631</td><td>608</td><td>742</td><td>849</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Market capitalisation, end of period, DKKbn</td><td>157</td><td>162</td><td>271</td><td>245</td><td>265</td><td>255</td><td>312</td><td>357</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Earnings per share (EPS), DKK</td><td>(1.6)</td><td>(53.8)</td><td>(1.4)</td><td>6.7</td><td>1.2</td><td>22.3</td><td>0.3</td><td>13.2</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

<table><tr><td rowspan="2">Business drivers</td><td colspan="7">2023</td><td colspan="7">2022</td></tr><tr><td>Q4</td><td>Q3</td><td>Q2</td><td>Q1</td><td>Q4</td><td>Q3</td><td>Q2</td><td>Q1</td><td>Q4</td><td></td><td>Q3</td><td>Q2</td><td>Q1</td><td></td></tr><tr><td>Offshore</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Decided (FIDEd) and installed capacity, GW</td><td>15.5</td><td>12.0</td><td>12.0</td><td>12.0</td><td>11.1</td><td>11.1</td><td>11.1</td><td>11.1</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Installed capacity, GW</td><td>6.9</td><td>8.9</td><td>8.9</td><td>8.9</td><td>8.9</td><td>7.6</td><td>7.6</td><td>7.6</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Generation, Company&#x27;s, GW</td><td>5.0</td><td>5.0</td><td>4.9</td><td>4.7</td><td>4.5</td><td>3.8</td><td>4.2</td><td>4.3</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Wind speed, m/s</td><td>11.5</td><td>8.6</td><td>8.1</td><td>10.9</td><td>10.7</td><td>7.7</td><td>8.4</td><td>11.3</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Load factor, %</td><td>56</td><td>33</td><td>29</td><td>53</td><td>54</td><td>28</td><td>35</td><td>54</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Installed capacity, GW</td><td>9.2</td><td>9.3</td><td>9.3</td><td>9.3</td><td>9.3</td><td>9.2</td><td>9.3</td><td>9.3</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Power generation, GWh</td><td>6,011</td><td>3,544</td><td>3,044</td><td>3,162</td><td>5,411</td><td>3,246</td><td>3,324</td><td>4,502</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Power sales, GWh</td><td>6,244</td><td>3,948</td><td>4,158</td><td>7,098</td><td>7,645</td><td>3,483</td><td>5,258</td><td>6,808</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Onshore</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Decided (FIDEd) and installed capacity, GW</td><td>6.4</td><td>6.2</td><td>6.2</td><td>6.2</td><td>6.2</td><td>5.1</td><td>4.9</td><td>4.7</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Installed capacity, GW</td><td>4.8</td><td>4.8</td><td>4.6</td><td>4.5</td><td>4.2</td><td>4.2</td><td>4.0</td><td>3.6</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Wind speed, m/s</td><td>7.6</td><td>6.2</td><td>6.7</td><td>6.1</td><td>7.7</td><td>6.0</td><td>7.8</td><td>7.9</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Load factor, wind, %</td><td>36</td><td>27</td><td>35</td><td>45</td><td>40</td><td>28</td><td>47</td><td>47</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Installed capacity, GW</td><td>7.2</td><td>3.7</td><td>3.0</td><td>3.6</td><td>3.0</td><td>3.0</td><td>3.0</td><td>3.0</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Availability, wind, %</td><td>85</td><td>85</td><td>92</td><td>91</td><td>91</td><td>92</td><td>92</td><td>96</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Availability, solar PV, %</td><td>98</td><td>98</td><td>98</td><td>99</td><td>99</td><td>96</td><td>99</td><td>99</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Power generation, GWh</td><td>3,376</td><td>2,927</td><td>3,321</td><td>3,750</td><td>3,425</td><td>2,723</td><td>3,795</td><td>3,203</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Onshore</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Degree days, number</td><td>966</td><td>53</td><td>409</td><td>1,157</td><td>861</td><td>98</td><td>448</td><td>1,141</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Heat generation, GWh</td><td>2,385</td><td>234</td><td>790</td><td>3,178</td><td>2,064</td><td>239</td><td>823</td><td>3,243</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Installed capacity, GW</td><td>4,002</td><td>781</td><td>917</td><td>1,697</td><td>1,409</td><td>1,363</td><td>1,402</td><td>1,393</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Power sales, GWh</td><td>628</td><td>566</td><td>556</td><td>677</td><td>904</td><td>1,339</td><td>1,466</td><td>1,690</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Gas sales, GWh</td><td>3,041</td><td>3,555</td><td>4,016</td><td>4,468</td><td>4,046</td><td>5,706</td><td>8,891</td><td>12,993</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

†. In 2023, we changed our accounting policy on recognition of revenue from the settlement of failed own-use contracts related to power. The change only impacts revenue and cost of sales with no impact on EBITDA. The comparisons for 2022 have been adjusted. The related power volumes in 2022 and 2023 have consequently been netted. See more in note 1.2 'Basis of preparation'.



## Corporate Governance

52 Governance framework  
54 Board of Directors  
58 Group Executive Team  
61 Summary of our remuneration report  
62 Shareholder information

→ Together with our partner Eversource, we celebrated the sail away of the first American-built offshore substation, setting sail from a Texas port to the South Fork project site and marking a significant step in the US offshore wind industry.

More than 350 US workers across Texas and Kansas supported the construction of the offshore substation.






## Governance framework

The overall and strategic management of the company is anchored in a board of non-executive directors.

As a publicly listed company, Ørsted shall provide a statement on how we address the recommendations on Corporate Governance issued by the Danish Committee on Corporate Governance. Our statement can be found (here). In 2023, we decided not to webcast our annual general meeting and therefore only partly complied with Recommendation 1.2.1 as accounted for in our 2023 corporate governance statement. Besides this, we comply with all recommendations. Going forward, we have decided to webcast general meetings.

## Shareholders and general meetings

The Danish State is our majority shareholder with a 50.1% ownership share. The Danish State exercises its ownership interest in Ørsted in accordance with the ordinary governance setup in Danish companies. The Danish State’s ownership policy (only in Danish) is available on: fm.dk/udgivelser/2015/april/statens-ierskabspolitik/.

The shareholders of Ørsted exercise their right to vote at the general meeting through a one-share-one-vote principle. The general meeting adopts decisions in accordance with the ordinary Danish rules. Due to our majority ownership by the Danish State, we have a bespoke quorum requirement, as proposals to amend our articles of association or dissolve the company require that the Danish State participates in the general meeting and supports the proposals.

The general meeting appoints a board of non-executive directors (the Board of Directors), who, together with the executive directors appointed by the board, are responsible for the management of the company.

## Board of Directors

The Board of the Directors is, together with the executive directors appointed by the board, responsible for the management of the company.

In 2022, our general meeting approved to expand our scheme for employee-elected board members to cover employees globally, and we will hold our first international election in Q1 2024. Our Board of Directors currently comprises twelve members, eight members elected by the general meeting and four members elected by the employees.

The Board of Directors is responsible for the overall strategic management of the company. The Board of Directors lays down the company’s strategy and makes decisions concerning major investments and divestments, the capital base, key policies, control and audit matters, risk management, and significant operational issues. You can see the most important tasks in 2023 on the next page.
The Board of Directors monitors and oversees progress related to our sustainability strategy and that our sustainability targets are achieved, including our ambitious net-zero carbon reduction targets for scope 1-3 emissions. ESG and sustainability priorities are an integral part of the decision-making governance of the Board of Directors, and an update on our sustainability targets and progress is presented to them annually.

The Board of Directors annually reviews the required competences for its composition. In 2023, the ESG competence was further detailed to bring it in line with the EU Corporate Sustainability Reporting Directive (CSRD). The list of required competences can be found on orsted.com/competences-overview.

We have a diverse Board of Directors. With three female board members out of the eight elected by the general meeting, we have a 37.5% female representation, which is an equal representation under Danish law.

The age of our board members spans from 48 to 69 years old among board members elected by the general meeting and from 29 to 56 years old among board members elected by the employees. Our board members have different educational backgrounds within finance, economics, geophysics, and engineering and professional experience from the energy or other industries, private equity, private investments, and academia. A description of the individual board






<table><tr><td>Meeting attendance</td><td colspan="2">Board of Directors</td><td colspan="2">Audit &amp; Risk Committee</td><td>Nomination &amp; Remuneration Committee</td></tr><tr><td>Board members</td><td>Ordinary</td><td>Extraordinary</td><td>Ordinary</td><td>Extraordinary</td><td></td></tr><tr><td>Thomas Thune Andersen</td><td>7/0</td><td>9/0</td><td></td><td></td><td>3/0</td></tr><tr><td>Lene Skole</td><td>7/0</td><td>8/1</td><td></td><td></td><td>3/0</td></tr><tr><td>Annica Bresky \( ^{1} \)</td><td>6/0</td><td>7/1</td><td></td><td></td><td></td></tr><tr><td>Andrew Brown \( ^{1} \)</td><td>6/0</td><td>7/1</td><td></td><td></td><td></td><td></td></tr><tr><td>Jørgen Kildholt</td><td>7/0</td><td>9/0</td><td>6/0</td><td>4/0</td><td></td></tr><tr><td>Julia King \( ^{1} \)</td><td>7/0</td><td>8/1</td><td></td><td></td><td>2/0</td></tr><tr><td>Peter Korsholm</td><td>7/0</td><td>7/2</td><td>6/0</td><td>4/0</td><td></td></tr><tr><td>Dieter Wemmer</td><td>7/0</td><td>7/2</td><td>6/0</td><td>4/</td><td></td></tr><tr><td>Benny Cabel</td><td>7/0</td><td>9/0</td><td></td><td></td><td></td></tr><tr><td>Lene Skole &amp; Tomas Rondala</td><td>7/0</td><td>9/0</td><td></td><td></td><td></td></tr><tr><td>Alice Florence Marion Valliene</td><td>6/1</td><td>9/0</td><td></td><td></td><td></td></tr><tr><td>Anne Cathrine Collet Yde</td><td>7/0</td><td>9/0</td><td></td><td></td><td></td></tr></table>

The numbers indicate how many meetings in 2023 the members have attended or not attended, respectively, during the year.

 \( ^{1} \)  Joined the Board of Directors on 7 March 2023.

 \( ^{2} \)  Joined the Nomination & Remuneration Committee on 7 March 2023.

members, including their other executive positions, independence, and how the individual board members contribute to the required competencies, can be found in the following pages. Their meeting attendance during 2023 can be found above.

The Board of Directors evaluates its performance annually. The 2023 board evaluation was conducted by distributing a customized online survey to all members of the Board of Directors and the Group Executive Team, and findings were subsequently discussed at a board meeting. The overall score was satisfactory, although slightly lower than 2022. In 2022, the Board of Directors identified two overriding themes regarding the division of responsibilities between the Board of Directors and the Executive Board and the information to the Board of Directors regarding talent management and succession. Since the evaluation, various initiatives have been launched to address the findings, and in the 2023 board evaluation, the general feedback was that progress had been made.

The general meeting determines the remuneration for the members of the Board of Directors for the financial year in which the general meeting is held. In the separate remuneration report, you can read more about the remuneration of the Board of Directors. Below, you can find a link to the remuneration report and a link to our statutory report on data ethics, prepared in accordance with the Danish Financial Statements Act, section 99 d.

→ orsted.com/remuneration2023 orsted.com/data-ethics2023

## Important tasks 2023
– managed by the Board of Directors

Investments, acquisitions, and divestments
Final investment decision on the offshore
wind projects Hornsea 3, Revolution Wind,
and Greater Changzhou 2b and 4.

Decision to cease development of the Ocean Wind 1 and 2 offshore wind projects.

Build-out of our offshore wind portfolio, including bids into tenders in the US and Germany, the acquisition of the remaining 50% share of Lease Area 500 from Eversource, and entry into an agreement with ESB to jointly develop an Irish offshore wind portfolio.

Divestment of the remaining 25% share of the London Array Offshore Wind Farm to fund management by Schroders Greenwich, divestment of 50% of the offshore wind farm in Code Wind 3 to Glenmont Partners, and divestment of the Hornsea 2 transmission assets to Diamond Transmission Corporation Limited and HCL Infrastructure PLC.

## Other tasks

Decision to replace the CFO and COO, including the appointment of an interim CFO and interim COO.

Oversight of risk review, portfolio review, strategic review, and actions to improve capital structure.
Strategy review to present progress and strategic updates as part of the Capital Markets Day in June 2023.

Issuance of green senior bonds to finance our global build-out of renewable energy and green growth ambition and refinancing of hybrid capital.

Oversight of financial results and guidance, including impairments on our US offshore wind portfolio.

Discussion of sustainability differentiation and board governance with regards to ESG and sustainability.

Oversight and discussion of the development of our sustainability statements, including preparing for EU’s Corporate Sustainability Reporting Directive (CSRD).

Oversight of the results from the 2023 employee satisfaction survey, including the focus areas identified by the Group Executive Team.



## Board of Directors



Thomas Thune Andersen
*1955, Denmark
Helhim

Elected by the general meeting
Independent

2014 Joined as Chair
2023 Most recently re-elected
2024 Current election period expires

## Experience

Extensive international leadership experience from leading positions in a P&O Italia - Morocco and executive directorships in listed and privately held companies within the energy, critical infrastructure, and other sectors.

Executive functions in other enterprises
Chair: VRK Holding A/S, Lloyds Register Group
and others; and Lloyds Register Foundation.
Members: Bjørn Kjaer Lund and MH plc (Senior Independent Director).

Board committee memberships in other enterprises
Remuneration Committee of Lloyds Register Group Limited, Nomination Committee of Lloyds Register Group Limited, and Audit Committee, Remuneration Committee, and the Audit Committee of MH plc, and Nomination Committee of VRK Holding A/S.

## Other positions

Member of the Danish Committee on Corporate Governance, Commissioner of the Energy Transition Commission (ETC), member of the Community of Business Council for the Energy Transition of the EU, and member of Friends of Ocean Action of WEF.

## Competences

Management: General: Risk - Project - Stakeholder
Other: Safety - Energy sector ESG: Environmental
- Social - Governance



Lene Skole
*1959, Denmark
She/her

Elected by the general meeting
Independent

2015 Joined as Deputy Chair
2023 Most recently re-elected
2024 Current election period expires

## Experience

Highly experienced in managing listed companies from her previous position as CFO of Coloplast and current position as CEO of LundbeckFonden where she serves as a non-executive director of the portfolio companies of LundbeckFonden.

Executive functions in other enterprises
CEO: LundbeckFonden and LundbeckFond Invest A/S.
and others.
Deputy Chair: ALK-Albeta A/S, H. Lundbeck A/S,
Falk A/S, and Nordea Bank Abp.

Board committee memberships in other enterprises
Member of the Audit Committee and member of the
Remuneration Committee of Falk A/S, member of
the Remuneration Committee of ALK-Albeta A/S, and
Scientific Committee of ALK-Albeta A/S, member of
the Nomination & Remuneration Committee and
Scientific Committee of H. Lundbeck A/S, and mem-
ber of the Audit Committee of Nordea Bank Abp.

Other positions
Deputy Chair of the Danish Committee on Foundation Governance.

## Competences

Management: General: Financial: Risk - Stakeholder
Other: Safety - Investor and capital market relationships ESG: Environmental - Social - Governance



Annica Bresky
*1975, Sweden
She/her

Elected by the general meeting
Independent

2023 Joined
2024 Current election period expires

## Experience

Extensive industrial and leadership experience from global listed companies within the forestry, paper, and packaging industry, from positions as President and CEO of Stora Enso, and as CEO of Holmen Iglesund Paperboard. A deep knowledge of sustainability transformation and policy development in the forestry industry.

## Other positions

Member of the Executive Committee of the World Business Council for Sustainable Development (WBCSD) and member of the Royal Swedish Academy of Engineering Sciences (IVA).

## Competences

Management: General: Financial: Risk - Project
Stakeholder Other: Safety - IT and digitalisation - Investor and capital market relationships - Innovation
ESG: Environmental - Social - Governance



Andrew Brown
*1962, Great Britain
He/him

Elected by the general meeting
Not independent (interim COO of Ørsted)

2023 Joined
2024 Current election period expires

## Experience

Extensive international executive experience from leading positions in large global organisations, operations, and projects with both Shell (E&Com and Calp (CEO), and BP (CEO) and Shell (CEO) interim COO of Ørsted. Also, non-executive experience as Vice Chair of SBM Offshore.

## Other positions

Advisor of ZeroAvia Inc. and Vice President & Honorary Secretary of the council of the Energy Institute (EI).




Jørgen Kildahl
*1963, Norway
He/him

Elected by the general meeting
Independent

2018 Joined
2023 Most recently re-elected
2024 Current election period expires

## Experience

Strong international background in renewable energy and profound knowledge of how the energy ecosystems work from previous positions as Executive Vice President of Statkraft and member of the Board of Management of E.ON SE.

Executive functions in other enterprises
Member: Scatec ASA and Alpigg AG.

Board committee memberships in other enterprises
Member of the Audit Committee of Scatec ASA and the Audit Committee of Alpigg AG.

## Other positions

Senior Advisor and member of the Energy Investment Committee of Energy Infrastructure Partners, Switzerland

## Competences

• Energy Investment: General - Risk Project: Stakeholder Other: Safety - IT and digitalisation - Investor and capital market relationships EESC: Environmental-Social: Governance



Julia King
The Børgenes Brown of Cambridge
*1954, Great Britain
She/her

Elected by the general meeting
Independent

2021 Joined
2023 Most recently re-elected
2024 Current election period expires

## Experience

Strong international background within engineering in both industry and academia, including Risk-Royce plc, Cambridge University, and Imperial College. A deep knowledge of renewable energy and government policy perspectives from positions, among others, as member of the Committee on Climate Change and the executive director of the Green Investment Bank.

Executive functions in other enterprises
Chair: The Carbon Trust, STEM Learning Ltd, and
Frontier IP Group PLC
Other: Scatec Partners Core Power Holdings Plc
(Senior Independent Director).

Board committee memberships in other enterprises
Chair of ESC Committee and member of Remuneration Committee and Nomination Committee of Cerse Power Holdings Plc and member of Remuneration Committee of Frontier IP Group Plc.

## Competences

Research: Peer in the UK House of Lords, Chair of the House of Lords Science and Technology Select Committee, and Chair of the Adaptation Committee of the Committee on Climate Change.

## Competences

Management: General: Financial: Project
Stakeholder Chair: Safety - IT and digitalisation
Innovation ESC: Environmental: Social: Governance



Peter Korsholm
*1971, Denmark
He/him

Elected by the general meeting
Independent

2017 Joined
2023 Most recently re-elected
2024 Current election period expires

## Experience

Extensive M&A experience from his time as Partner and Head of EQT Partners Denmark and from private equity investments in the energy and climate transition risk management, and capital markets from CFO position at AKA AB.

Executive functions in other enterprises
CEO: DSMV Invest A/S, DSV Miljø Gruppe A/S, Toquila
CEO: DSV Invest A/S, DSV Miljø Gruppe A/S
Chair: Flugger group A/S, Nymalle Stenindustrier A/S,
Totalleveranser Sverige AB, Lion Danmark I Aps, Ivo
wholly-owned subsidiaries of Lion Danmark I Aps
CEO: Janus Group, and Toque Go to Gleds Holding A/S
Member: DSMV Invest A/S and eight wholly-owned
subsidiaries of DSMV Invest A/S, BCHG Holding A/S,
and two-wholly owned subsidiaries of BCHG Holding
A/S, and Projektsekket Betuplan A/S.

## Other positions

Chair of Investment Committee of Zoscale Partners.

## Competences

Management: General: Financial: Risk: Stakeholder Other: Investor and capital market relationships ESC: Environmental: Governance



Dieter Wemmer
*1957, Switzerland
He/him

Elected by the general meeting
Independent

2018 Joined
2023 Most recently re-elected
2024 Current election period expires

## Experience

Highly experienced in capital markets, investments, and risk management from leading financial institutions, the finance sector, including as CFO of Allianz.

Executive functions in other enterprises
Chair: Marco Hadling, plc and one wholly-owned subsidiary of Marco Hadling, plc.
Member: UBS Group AG and UBS AG.

Board committee memberships in other enterprises
Member of the Audit Committee and Compensation Committee of UBS Group AG and UBS AG.

## Competences

Management: General: Financial: Risk: Stakeholder Other: IT and digitalisation - Investor and capital market relationships ESC: Social: Governance




Benny Gabel
*1967, Denmark
He/them

Elected by the employees
Not independent

2011. Joined
2022. Most recently re-elected
2024. Current election period expires

Experience
Benny Gabel has worked in Ørsted since 2005.

Position
Senior Mechanical Specialist, EPCO & IT.

Competences
Other: Energy sector



Leticia Francisca Torres Mandiola
*1994, Chile
She/he/ther

Elected by the employees
Not independent

2022 Joined
2024 Current election period expires

Experience
Leticia Francisca Torres Mandiola has worked in Ørsted since 2018.

Position
Senior Business Developer, P2X.

Competences
Other: Energy sector; IT and digitalisation; Innovation



Alice Florence Marion Vallienne
*1994, France
She/her

Elected by the employees
Not independent

2022 Joined
2024 Current election period expires

Experience
Alice Florence Marion Vallienne has worked in Ørsted since 2018.

Position
Head of Ventures Portfolio.

Competences
Management: Financial- Risk- Project Other: Safety
- Energy sector; IT and digitalisation; Innovation
ESC: Social



Anne Cathrine Collet Yde
*1983, Denmark
She/her

Elected by the employees
Not independent

2022 Joined
2024 Current election period expires

Experience
Anne Cathrine Collet Yde has worked in Ørsted since 2017.

Position
Global HR Business Partner, People & Development.

Competences
Management: Project: Stakeholder
Other: Safety ESC: Social



## Board committees

The Board of Directors has established two committees, consisting of members appointed by and among the members of the Board of Directors: The Audit & Risk Committee and the Nomination & Remuneration Committee.

## Audit & Risk Committee

Dieter Wemmer (Chair), Jørgen Kholdal, and Peter Korsholm are the members of the committee.

The committee reports to the Board of Directors. The tasks of the committee include overseeing the integrity of the financial and sustainability reporting (including key accounting estimates and judgements), funding, liquidity and capital structure development, financial and business-related risks, compliance with statutory and other requirements from public authorities, internal controls, nomination of external auditors, and IT security in operational and administrative areas as well as cybersecurity. Moreover, the committee approves the framework governing the work of the company's external and internal auditors (including limits for non-audit services), evaluates the external auditors' independence and qualifications, and monitors the company's whistleblower scheme.

In 2023, the committee reviewed impairments on our property, plant, and equipment with a high attention to our US offshore wind projects, the development and partial implementation of a new, holistic risk management framework addressing lessons learnt in current and previous years, and prepared for the EU Corporate Sustainability Reporting Directive (CSRD). Furthermore, the committee conducted an audit tender with effect from 2025, continued to assess the claim made by the Danish Tax Agency requiring double Danish taxation of certain of our British offshore wind farms, and lastly, reviewed the progress in IT security.

Our Internal Audit function reports to the committee and is independent of our administrative management structures. Internal Audit enhances and protects the organisational value by providing risk-based and objective assurance, advice, and insight. The focus for Internal Audit is to audit and advise on our core processes, governance, risk management, control processes, and IT security.

The Chair of the Audit & Risk Committee is responsible for managing our whistleblower scheme. Internal Audit receives and handles any reports submitted. Our employees and other associates may report serious offences, such as cases of bribery, fraud, and other inappropriate or illegal conduct, to our whistleblower scheme or through our management system. In 2023, 18 substantiated cases of inappropriate or unlawful behaviour were reported through our whistleblower scheme. Nine cases related to good business conduct policy violations, while six cases concerned the workplace environment, one case concerned IT security, and two cases were classified as "other". None of the reported cases were critical to our business, nor caused adjustments to our financial results. One case required a police report.
Whistleblower cases are taken very seriously, and we continuously enhance the awareness of good business conduct through education and awareness campaigns to minimise future similar cases.

You can read more about the Audit & Risk Committee and the terms of reference for the committee on orsted.com/audit-risk-committee.

Nomination & Remuneration Committee
Thomas Thune Andersen (Chair), Lene Skole, and Julia King are the members of the committee.

The committee assists the Board of Directors in matters regarding the composition, remuneration, and performance of the Board of Directors and the Group Executive Team.

In 2023, the committee discussed the need for replacing the CFO and COO, including the appointment of an interim CFO and interim COO, and the appointment of Varun Sivaram as a new member of the Group Executive Team, replacing Neil O'Donovan.

The committee also reviewed an amendment of the short-term incentive scheme (STI) for the wider management team by implementing similar changes as the amendment introduced in 2022 for the Executive Board where the weight of shared KPIs was increased, including an explicit link to our sustainability ambitions. You can read more about the Nomination & Remuneration Committee and the terms of reference for the committee on orsted.com/nomination-remuneration-committee.



## Group Executive Team

The ten members of the Group Executive Team undertake the day-to-day management.

The Board of Directors appoints the Executive Board, consisting of the Group President and CEO, the CFO, and the Chief HR Officer (CHRO), who undertake the day-to-day management of Ørsted through the Group Executive Team.

In November 2023, Daniel Lerup (CFO) and Richard Hunter (COO) stepped down and left Ørsted with immediate effect, and Rasmus Erbøe was appointed interim CFO. Andrew Brown was appointed interim COO, expectedly until end of March 2024. While he has taken on the dual role as board member and interim COO, measures have been put in place to avoid conflicts of interests.

Mads Niper (Group President and CEO), Rasmus Erbøe (interim CFO), and Henriette Fenger Ellekrug (CHRO) constitute the members of the Executive Board of Ørsted A/S.

The Executive Board has established a Group Executive Team consisting of ten members, including the members of the Executive Board, which undertake the day-to-day management.
The Group Executive Team comprises David Hardy (CEO of Region Americas), Per Mejnert Kristensen (President of Region APAC), Olivia Bresse (interim CEO of Region Europe and Head of P2X), Andrew Brown (interim COO), Varan Sivaram (Head of Strategy, Innovation, Portfolio & Partnerships), Ingrid Reumert (Head of Global Stakeholder Relations), and Anders Zøiga Hansen (Head of Legal).

In our Executive Board, we have a female representation of 33.3%. We have no people managers reporting to the Executive Board who are employed by the same legal entity as the Executive Board, and the average number of full-time employees in Ørsted A/S did not in 2023 exceed 50. Therefore, we have not set a target to increase gender diversity among "other managerial levels" as defined under Danish law.

We describe the remuneration of the Executive Board in the separate remuneration report. You can also find information about the members of the Executive Board on page 60.



Mads Niper
Group President and
CEO, Executive Board



Per Mejnert Kristensen
President of Region
APAC



Ingrid Reumert
Head of Global
Stakeholder Relations



Rasmus Erbøe
Interim CFO,
Executive Board



Olivia Bresse
Interim CEO of
Region Europe
and Head of P2X



Anders Zøiga Hansen
Head of Legal



Henriette Fenger
Elekrog
CHRO, Executive Board



Varan Sivaram
Head of Strategy,
Innovation, Portfolio
& Partnerships



## Management committees

The Group Executive Team is supported by specialist committees with members appointed by the Group Executive Team. The specialist committees are the Investment Committee, the Executive Risk Committee, the Sustainability Committee, the QHSE Committee, the Compliance Committee, and the Cyber Security Committee. More information about the management committees can be found to the right.

Group Executive Team’s sustainability commitment
The Group Executive Team sets the strategic direction on sustainability. They are involved in all major decisions and are updated regularly on progress. The Group Executive Team is accountable for approving and implementing our portfolio of sustainability priorities and targets and assigns accountability for them at executive level. Moreover, they present proposals for sustainability targets to the Board of Directors for approval.

## Internal controls environment

We have established internal control systems throughout the organisation to ensure identification and mitigation of risks to financial and sustainability reporting by setting up targets, policies, manuals, procedures, and internal controls. We continuously monitor our financial and sustainability reporting processes and controls and optimise them as needed.

We carry out an annual risk assessment for identifying the risks of material misstatements in the financial and sustainability reporting based on materiality, the complexity of processes, and the probability of errors and omissions.
To ensure that our internal control framework is effective, we have established a plan running until the end of 2024 where we will evaluate the processes for all material areas within financial and sustainability reporting, including reassessment of existing controls and identification of additional controls within the processes. We continuously monitor and test the internal controls on financial and sustainability reporting to ensure their operating effectiveness.

We have established the same governance for financial and sustainability reporting. The Audit & Risk Committee monitors our financial and sustainability reporting process, including a review of the risk assessment, the internal controls, and their operating effectiveness.

We are committed to ensuring the accuracy of our financial and sustainability reporting. Our financial reporting are audited by an independent audit firm elected at the annual general meeting. Our sustainability data is subject to limited assurance by the same independent auditor. All observations in the external auditor's long-form report and management letter are addressed by action plans with allocation of responsibility and deadlines, and we regularly follow up on and review them.

## Management committees appointed by the Group Executive Team

## Investment Committee

The committee oversees investments, M&A projects, and certain other transactions. Investment decisions and other transactions of an unusual nature or above certain thresholds must be approved by the Board of Directors.

The committee consists of the Group Executive Team, the Chief Risk Officer, the head of Treasury & Capital Planning, and the head of Portfolio. The Investment Committee is chaired by the CEO and meets continuously during the year.

## Executive Risk Committee

The committee serves as an advisory body for the CFO on risk management-related topics. A key purpose of the committee is to ensure alignment of market, liquidity, and credit risk policies with our strategy and risk appetite.

Furthermore, the committee serves as a forum for discussing, deciding, and setting the direction of the Group's risk management strategy. In addition to the CFO, the committee consists of the Chief Risk Officer and the heads of Internal Audit, Merchant Risk, and the US and European Trading & Revenue Functions. The Executive Risk Committee is chaired by the CFO and meets continuously during the year.

## Sustainability Committee

The committee oversees the direction we take up to our stakeholders. It comprises all Directors who are public materiality assessment and ESG data set, provides recommendations, and monitors performance of our work with sustainability priorities, including progress on targets.

The committee is cross-functional with representatives from Sustainability, Finance, QHSE, ECPO (engineering, procurement, construction, and operations), and HR. The Sustainability Committee is chaired by the CFO and meets six times a year.

## QHSE Committee

The committee oversees that we live up to our QHSE (quality, health, safety, and environment) priorities, and it reviews our QHSE strategy and policy. In addition, the committee reviews our integrated management system, "way we work", conducts the management review as required by the Board of Directors, and reviews the performance of our QHSE programmes to ensure compliance with legal and regulatory requirements as well as agreed international standards.

The committee's members are the COO, the Chief Procurement Officer, and the heads of Global Stakeholder Relations, Bioenergy, P2X, and Region Europe. The QHSE committee is chaired by the head of QHSE and meets six times a year.

## Compliance Committee

The committee oversees compliance with laws, rules, standards, and internal codes of conduct within our group-wide legal compliance areas.

The committee is cross-functional and consists of the CEO, CFO, CHRO, and compliance officers appointed for all business areas and shared functions. The Compliance Committee is chaired by the CEO and meets at least twice times a year.

## Cyber Security Committee

The committee is responsible for overseeing and guiding our cybersecurity with strategy, global risk tolerance, investment choices, and support for significant global initiatives and overseas compliance and implementation of cyber regulation, NIS2 in particular.

The committee is cross-functional and consists of the CFO, COO, Chief Information Security Officer, Chief Information Officer, and the Head of Global Operations. The Cyber Security Committee is chaired by the CFO and meets four times a year.




Mads Nipper
*1966, Denmark
He/him

Group President, Chief Executive Officer (CEO), and member of the Executive Board (registered as manager of Ørsted A/S with the Danish Business Authority)

Education
MSc in International Business, University of Aarhus (1991)

Professional experience

2021:
Ørsted, Group President and Chief Executive Officer (CEO)

2014 – 2020:
Grundfos A/S, CEO and Group President

1991 - 2014
LEGO System A/S, most recently as Chief Marketing Officer and Executive Vice President as well as a member of the Management Board

Executive functions in other enterprises
Deputy Chair, FLSmidth & Co. A/S and one wholly-owned subsidiary
hereof.



Rasmus Erbøe
*1979, Denmark
He/him

Interim Chief Financial Officer (CFO) and member of the Executive Board (registered as manager of Ørsted A/S with the Danish Business Authority)

Education
MA (Law), University of Copenhagen (2006), MBA, University of San Diego (2011)

Professional experience

2023
Ørsted, interim Chief Financial Officer (CFO) and member of the Executive Board

2022
Ørsted, Executive Vice President and CEO of Region Europe (member of Ørsted's Group Executive Team)

2012 – 2022
Ørsted, most recently Senior Vice President, Head of Continental Europe, Offshore

2006-2012:
Kromann Reunert, law firm, most recently as Attorney-at-Law



Henriette Fenger Ellekrog
*1966, Denmark
She/her

Executive Vice President, Chief HR Officer (CHRO) and member of the Executive Board (registered as manager of Ørsted A/S with the Danish Business Authority)

Education
MA, (and ing.)mer., Copenhagen Business School (1992)

Professional experience

2022:
Ørsted, member of the Executive Board

2019
Ørsted, Chief HR Officer (CHRO)

2014 - 2019
Danske Bank A/S, most recently as Chief HR Officer

2007 – 2014
SAS AB, most recently as Deputy CEO, EVP, HR & Communication

1998 – 2007
TDC A/S, most recently as Senior Executive Vice President, Chief of Staff, Member of the Executive Management Team

1992 – 1996:
Pepotec (Europe) A/S and Mercuri Urval A/S, Various positions

Executive positions in other enterprises
Board member: NV Belkaert SA (member of the Nomination & Remuneration Committee).

Board committee memberships in other enterprises
Special Committee for Diversity in the Confederation of Danish Industries (DII).



## Summary of our remuneration report

The overall objective of the remuneration policy is to attract and retain qualified members of the Board of Directors and the Executive Board. The policy includes remuneration elements that support our strategy, long-term interests, and sustainability.

## Remuneration policy (extract)

The overall objective of our remuneration policy is to support the Ørsted Group's strategy, long-term interests, and sustainability.

To attain this objective, the policy is designed to attract and retain qualified members of the Board of Directors and the Executive Board and to guide the priorities of the Executive Board.

The remuneration should be competitive but not market-leading compared to the remuneration in other major listed Danish companies with international activities. The full remuneration policy is available at orsted.com/remuneration2023.

## Remuneration of the Board of Directors

The members of the Board of Directors receive a fixed fee each year. The Chair and the members of the committees also receive a multiple of the fixed fee for the extra work performed in these roles. The members' travel costs are covered by the company. The members are not entitled to severance payments. The fees did not increase in 2023.
Remuneration of the Executive Board
Besides a fixed salary, the Executive Board participates in a variable short-term incentive scheme (STI), which consists of 70% shared financial, ESG, and strategic KPIs aligned with our strategic targets:

## Financial: EBITDA

ESG: CDP climate score, relative scope 1 and 2 emissions, employee satisfaction, gender diversity, and safety Strategic ambitions: progress on strategic journey towards 2030 ambition

The remaining 30% of the STI consists of individual business and leadership targets. Furthermore, the Executive Board is eligible to participate in a long-term share-based incentive scheme (LTI), which consists of 100% TSR performance benchmarked against ten industry peers.

## Remuneration in 2023

The remuneration awarded to our Executive Board in 2023 was in line with our remuneration policy. The Executive Board's shared STI score ended at 39%. In the LTI, which vested in April 2023, Ørsted was ranked as the last when benchmarked on total shareholder return (TSR) against ten comparable energy companies. As a result, no shares were settled at the end of the performance and vesting period.

For more information, please see the full remuneration report.

<table><tr><td>Remuneration awarded (DKK '000)</td><td>2023</td><td>2022</td></tr><tr><td>Board of Directors</td><td></td><td></td></tr><tr><td>Fixed annual fee \( ^{1} \)</td><td>6,907</td><td>6,807</td></tr><tr><td>Executive Board \( ^{2} \)</td><td></td><td></td></tr><tr><td>Fixed remuneration</td><td></td><td></td></tr><tr><td>Fixed base salary</td><td>27,849</td><td>30,632</td></tr><tr><td>Benefits, incl. social security</td><td>858</td><td>859</td></tr><tr><td>Variable remuneration</td><td></td><td></td></tr><tr><td>Cash-based inventive scheme (STI)</td><td>3,712</td><td>6,455</td></tr><tr><td>Share-based inventive scheme (LTI) \( ^{3} \)</td><td>2,719</td><td>6,463</td></tr><tr><td>Ordinary remuneration</td><td>35,138</td><td>44,409</td></tr><tr><td>Carden leave period</td><td>7,071</td><td>11,405</td></tr><tr><td>Severance pay</td><td>6,210</td><td>9,270</td></tr><tr><td>Total remuneration</td><td>55,325</td><td>71,891</td></tr></table>

## Remuneration awarded

The table shows the total remuneration awarded to members of the Executive Board and the Board of Directors in aggregate from 2022 to 2023. For remuneration expressed, see note 2.7 'Employee costs' of the consolidated financial statements.

 \( ^{1} \)  Based on an ordinary board fee of DKK 0.4 million, equal to last year's fee.

 \( ^{2} $  1 in 2023, Executive Board members included former CFO Daniel Lerup. In 2022, Executive Board members included former CFOs Daniel Lerup and Marianne Wihnholt and former CCO Martin Mørkøv.

 \( ^{3} \)  The remuneration from the share-based incentive programme (LTI) reflects the market value of the scheme in the year when it was granted.

STI
Short-term incentive scheme,
components



LTI
Long-term incentive scheme,
components






## Shareholder information

2023 was a turbulent year for the Ørsted share. The lowest traded share price was DKK 253 on 1 November. The share partially rebounded towards the end of the year and ended at DKK 374 on 29 December.

Price development for the Ørsted share in 2023 The Ørsted share yielded a total loss of 3% in 2023, a decrease in the share price of 41%, and dividends of DKK 13.5 per share. The share price of comparable European utility companies increased by 10% (1.5% total return), and the OMV CX 25 cap increased by 7% (11% total return) in 2023.

The highest traded share price of the year was DKK 705 on 17 January, while the year's lowest traded price of DKK 253 was on 1 November. The Ørsted share closed 2023 at DKK 374, corresponding to a market value of DKK 157 billion at the end of the year.

The average daily turnover on Nasdaq Copenhagen was 671,952 shares in 2023. The trading volume increased by 35% compared to 2022.

## Share capital

Ørsted's share capital is divided into 420 million shares, enjoying the same voting and dividend rights.

The company's share capital remained unchanged in 2023. At the end of 2023, the company held a total of 151 thousand treasury shares, which will be used to cover incentive schemes.

## Composition of shareholders

At the end of the year, the number of shareholders had increased by 13 % to 133,213, and the majority (65 %) is held by Danish owners. The figure on the next page shows the composition of our shareholders by country. Approx. 3 % of the share capital is owned by Danish retail investors.

## Annual general meeting and dividends

The annual general meeting will be held on 5 March 2024. The Board of Directors has decided to pause dividend payments for the years 2023-2025. Hereafter, the intention is to reinstate dividend payments. In 2023, dividends of DKK 13.5 per share were paid for the 2022 financial year.

Share price development 2023
Ørsted share price compared to peers (indexed)



<table><tr><td>Share data</td><td>2023</td><td>2022</td><td>2021</td><td>2020</td><td>2019</td></tr><tr><td>Earnings per share, DKK</td><td>(50.1)</td><td>34.6</td><td>24.3</td><td>38.8</td><td>12.8</td></tr><tr><td>Proposed dividend per share, DKK</td><td>-</td><td>13.5</td><td>12.5</td><td>11.5</td><td>10.5</td></tr><tr><td>Dividend yield, %</td><td>-</td><td>1.1</td><td>1.5</td><td>1.9</td><td>1.5</td></tr><tr><td>Share price, year-end, DKK</td><td>374</td><td>631</td><td>835</td><td>1,244</td><td>689</td></tr><tr><td>Share price, high, DKK</td><td>704</td><td>898</td><td>1,400</td><td>1,273</td><td>691</td></tr><tr><td>Share price, low, DKK</td><td>253</td><td>575</td><td>790</td><td>574</td><td>428</td></tr><tr><td>Market capitalisation, year-end, DKKbn</td><td>157</td><td>265</td><td>351</td><td>522</td><td>290</td></tr><tr><td>Average trading per day, thousands of shares</td><td>671,952</td><td>496,899</td><td>549,778</td><td>516,919</td><td>447,567</td></tr></table>

## Share information

<table><tr><td>ISIN</td><td>DK0060094928220</td></tr><tr><td>Share classes</td><td></td></tr><tr><td>Nominal value</td><td>DKK 10 per share</td></tr><tr><td>Exchange</td><td>Nasdaq OMX Copenhagen</td></tr><tr><td>Ticker</td><td>ORSTED</td></tr><tr><td>Registered share</td><td>98.9%</td></tr><tr><td>Number of shares</td><td>420,381,080 shares</td></tr><tr><td>Number of treasury shares</td><td>150,784 shares</td></tr></table>



Shareholders as of 31 December 2023
Share capital and/or voting share%

Denmark 65%
Danish State (majority shareholder) 50.1%

Andel A.M.B.A. 5%

Retail investors 3%

Danish Institutional Investors 7%

North America 9%

United Kingdom 10%

Others 16%

## Investor relations

To achieve a fair pricing of our shares and corporate bonds, we seek to ensure a high level of transparency and stability in our financial communication. In addition, our management and our Investor Relations function engage in regular dialogues with investors and analysts. The dialogues take the form of quarterly conference calls, roadshows, conferences, capital markets days, and regular meetings with individual or groups of investors and analysts. The dialogues are subject to certain restrictions prior to the publication of our financial reporting.
In 2023, we had over 650 meetings with the financial market, participated in 35 investor events, and had 40 travel days.

Ørsted is covered by 33 equity analysts and 10 bond analysts. Their recommendations and consensus estimates for Ørsted's future financial performance are available at orsted.com/en/investors. On this site, you can also download our annual and interim reports, our remuneration report, our investor presentations, and a wide range of other data.

## Selected company announcements in 2023

## 31. Norway

Ørsted takes final investment decision and is ready to build Greater Changua Bzh 2 and 4 offshore wind farms.

## 15 May

Ørsted awarded contract for capturing and storing 430,000 tonnes of biogenic  \( CO_{2} \) .

## 6 June

Ørsted commits to reuse or recycle all solar panels.

## 7 June

Ørsted confirms ambition of ~50 GW renewable capacity by 2030 and strong financial outlook.

## 8 June

Ørsted becomes world's first energy company to issue blue bonds.

## 17 August

Ørsted completes divestment of 25% of London Army Offshore Wind Farm.

## 20 July

Ørsted announces anticipated impairments on its US portfolio, continues to progress projects.

## 20 September

Ørsted completes 201 MW onshore wind farm Sunflower Wind in Kansas, the US.

## 17 October

Ørsted divests 50% stake of Code Wind 3 in Germany.

## 1 November

Ørsted ceases development of Ocean Wind 1 and Ocean Wind 2, takes final investment decision and divests Windflow, and recongnises impairment losses of DKK 28.4 billion.

## 14 November

Ørsted implements changes to executive management where, by mutual agreement, Daniel Lerrup (CFO) and Richard Hunter (COO) are stepping down and leaving Ørsted with immediate effect.

## 30 November

Ørsted commits to 1.6 GW electricity business license for offshore wind project off the coast of Incheon, Korea.

## 1 December

Ørsted partners with Breakthrough Energy Catalyst, the European Commission, and the European Investment Bank for FlagshipONE.

## 4 December

Ørsted begins construction of Denmark's first carbon capture project.

## 5 December

Ørsted divests final investment decision on its first Irish solar farm.

## 20 December

Ørsted takes final investment decision on Hornsea 3 Offshore Wind Farm.

## Financial calendar 2024

7 February Annual report 2023
5 March Annual general meeting

## Interim reports

2 May The first quarter of 2024
15 August The first half-year of 2024
5 November The first nine months of 2024



## Sustainability
statements

→ The Atlantic puffin: one of the North Sea’s most distinctive and vulnerable bird species.






## Contents
Sustainability statements

Preparing for the Corporate Sustainability Reporting Directive ..... 66

## General

ERS2 Creating value through sustainability ..... 68
ERS2 General basis for preparation ..... 69
ERS2 Double materiality assessment ..... 70
Double materiality assessment outcome ..... 71
Double materiality assessment methodology ..... 77
Interests and views of our stakeholders ..... 79

## Environment

Taxonomy-aligned KPIs (incl. voluntary disclosures) ..... 81
ERS2 E1 Climate change ..... 87
ERS2 E4 Biodiversity and ecosystems ..... 102
ERS2 E5 Resource use and circular economy ..... 107

## Social

ERS2 S1 Own workforce ..... 112
ERS2 S2 Workers in the value chain ..... 120
ERS2 S3 Affected communities ..... 123

## Governance

ERS G1 Business conduct ..... 127

## Appendix

ERS2 2 Disclosure requirements and incorporation by reference ..... 132
ERS2 2 Statement on sustainability due diligence ..... 135
ERS2 2 Data points that derive from other EU legislation ..... 136
Calculation factors ..... 138
Alignment with TCFD recommendations ..... 139
Alignment with TNFD recommendations ..... 140
Additional data points below materiality thresholds ..... 141



↑ This is Leah. Leah works out of our West coast hub in Barrow, UK, as a wind turbine technician.

## Danish Financial Statement Act

The reporting requirements related to our general sustainability performance and specific efforts related to increased diversity in management as defined by sections 99a, 99b, and 107d of the Danish Financial Statements Act are fulfilled in our sustainability statements.



## Preparing for the Corporate Sustainability Reporting Directive

We welcome the new EU Corporate Sustainability Reporting Directive (CSRD) and the underlying European Sustainability Reporting Standards (ESRS). We believe that this EU directive and the standards will not only ensure a more balanced, transparent, and consistent disclosure of sustainability information, but also catalyse strengthened sustainability governance and management.

## Reporting on sustainable finance

In 2015, the responsibility of ESG accounting and reporting was moved to our financial organisation to ensure that our ESG accounting, controlling, and reporting teams work in alignment with our financial teams when it comes to processes, deadlines, tools, documentation templates, and reporting products. Furthermore, the teams work in close collaboration with our Global Sustainability team. This reporting set-up has brought us to a position where we are well suited to implement the new EU CSRD and underlying reporting standards.

In spring 2022, our Sustainability Committee initiated an ESG development project with the aim of preparing us for the new sustainable finance reporting requirements, including the CSRD, PAI indicators for our investors, and reasonable assurance for our ESG reporting.

## New sustainability statements

Reporting on the CSRD in 2024 is a huge task. Therefore, we have decided to front-load the work by developing new sustainability statements for the annual report 2023. The sustainability statements are prepared with reference to the ESRS. Our aim has been to implement as much of the fundamental structure in the standards as possible in 2023, and to integrate it in the best way possible with the other parts of our annual report. We have done this by using the ‘incorporation by reference’ option. You can find a full overview of the ESRS structure and where to find the different disclosures in the section ‘Disclosure requirements and incorporation by reference’ in the appendix.

Our double materiality assessment (DMA) has been performed with reference to the draft ESRS from November 2022, with some choices to limit the complete DMA scope (see DMA outcome on page 71). We will continue the development of the DMA towards full CSRD compliance in 2024.

In our previous ESG performance reports, we have reported on a set of energy-related Ørsted-specific data points, which are not included in the ESRS. We have included these data points in section E1 on climate change in the sustainability statements and regard this data as material entity-specific information this year. We expect some of the data points to be included in future sector-specific additions to the ESRS.

A few data points from our previous ESG performance reports have been assessed to be below the DMA materiality thresholds. We have made these data points available in the appendix, as they are asked for by certain ESG ratings and stakeholders.

## We wish you a pleasant reading!

We are very happy and proud to present our new sustainability statements. We believe they are a value-adding addition to our annual report, and we hope that you find them easy to navigate and interesting to read – and that you will find the sustainability information you are looking for.



Rasmus Erbroe
Interim CFO
Head of the Sustainability Committee

## Our ESG reporting timeline

Ørsted's first stand-alone sustainability report

Responsibility of ESG accounting and reporting in the financial reporting process, tools, and reports.

We implemented our ESG reporting in the financial reporting processes, tools, and reports.

First annual ESG performance report
We published our first annual ESG performance report built on the financial reporting platform.

First interim ESG performance report
In Q1 2019, we published our first interim ESG performance report. Since 2019, we have published our first annual ESG performance reports every quarter together with the financial interim reports.

Pre-implementation of the taxonomy reporting
In our interim report for H1 2021, we published our first taxonomy reporting and included a voluntary EBITDA taxonomy indicator in addition to the mandatory taxonomy reporting indicators.

New sustainability statements in the annual report 2023

We merged content from three stand-alone reports from 2022 into the sustainability statements.

New sustainability statements in the annual report 2023

We merged content from three stand-alone reports from 2022 into the sustainability statements.

Full implementation of the CSRD in the sustainability statements



## General

68 Creating value through sustainability

69 ESRS 2 General basis for preparation

70 ESRS 2 Double materiality assessment
Double materiality assessment outcome
Double materiality assessment methodology
Interests and views of our stakeholders

→ We partnered with WWF on a marine restoration project in the Danish North Sea as part of our efforts to help create new marine habitats, enhance ocean biodiversity, and improve water quality.

The BioRef project aims to promote the recovery of once-common biogenic reefs of European flat oysters and horse mussels in the wild waters of the North Sea to support healthy marine ecosystems.






## Creating value through sustainability

Sustainability is integral to how we operate as a business. Throughout everything we do, we are guided by how and where we can create the most value for both society and our business.

We have four strategic sustainability focus areas – climate, nature, people, and governance – each with underlying priorities. Together, the four areas respond to our material sustainability impacts, risks, and opportunities. And they support our efforts to deliver a fast build-out at scale that works for both the planet and people while laying the foundation for a resilient business.

On the following pages, we unfold how we identify impacts and risks through a double materiality assessment. For detailed information on each topic, including policies, actions, targets, and performance data, please see the topical sections under ‘Environment’, ‘Social’ and ‘Governance’.

For more information on how sustainability can help accelerate a fast build-out at scale, please refer to the 'Management's review' on page 29.



## ENVIRONMENT

Science-aligned
climate action

## APPROACH

We scale our green energy business while delivering science-aligned carbon emissions reductions, thereby enabling our customers to also take climate action

## PRIORITIES

• Scale renewable energy deployment
• Carbon dioxide own operations by 2025
• Decarbonise our supply chains by 2040
• Mobilise sustainable financing

## READ MORE

EU taxonomy, page 81
ESRS E1 Climate change, page 87

Green energy
that reviews nature

We work to ensure that each of our energy projects contributes positively to a thriving nature

## PRIORITIES

• Deliver net-positive biodiversity impact from new renewable energy projects commissioned from 2030 onwards
• Transition to circular resource use
• Continue to use 100% certified sustainable wooden biomass

ESRS E4 Biodiversity and ecosystems, page 102
ESRS E5 Resource use and circular economy, page 107

Sustainable finance: Note 5.1 'Interest-bearing net debt and FFO' in the financial statements, and our green bond impact report



## SOCIAL

A green transformation that works for people

## APPROACH

We focus our efforts on making the green energy transition just and inclusive

## PRIORITIES

• Respect human rights and the rights of Indigenous Peoples
• Support equity, diversity, and inclusion in the workplace
• Ensure health, safety, and satisfaction of employees
• Ensure safety of contractors
• Develop skills and talent for the renewable energy sector
• Support local communities

## READ MORE

ESRS S1. Own workforce, page 112
ESRS S2 Workers in the value chain, page 113
ESRS S3 Affected communities, page 123



## GOVERNANCE

Governance that enables the right decisions

## APPROACH

To deliver on our sustainability goals, we continuously work to integrate sustainability and integrity into processes and decision-making across our organisation

## PRIORITIES

• Promote and enable responsible business conduct
• Conduct product diligence of suppliers and partners
• Embed sustainability throughout our business
• Advocate and engage for a sustainable industry

## READ MORE

ESRS G1 Business conduct, page 127

Responsible tax practices: Note 4.1 'Approach to taxes' in the financial statements



## ERS 2

## General basis for preparation

## Frameworks and data selection

The sustainability statements are prepared with reference to the ESRS issued by the European Financial Reporting Advisory Group (EFRAG). All the data points included in the E, S, and G sections have been assessed as material according to our double materiality assessment (DMA). Please see the pages below for information on our DMA's limitations to scope and our methodology. All greenhouse gas data points (GHG scope 1-3) are reported based on the Greenhouse Gas Protocol.

## Measurement basis

The accounting policies have been applied consistently in the financial year and for comparative figures. Calculation factors used are listed in the appendix together with references.

## Consolidation

The data is consolidated according to the same principles as the financial statements. Thus, the consolidated quantitative ESG data comprises the parent company Ørsted A/S and subsidiaries controlled by Ørsted A/S. Joint operations are also included with Ørsted's proportionate share. Associates and joint ventures are not included in the consolidated ESG data points.

Consolidation of all quantitative ESG data follows the principles above, unless otherwise specified in the accounting policy placed next to each reported data point in the tables in sections E, S, and G.

## Key accounting estimates and judgements

We use assessments and estimates for the reporting of some data points, e.g. our taxonomy KPIs and scope 3 emissions. We regularly reassess our use of estimates and judgements based on experience, the development of ESG reporting, and a number of other factors. Changes in estimates are recognised in the period in which the estimate in question is revised. In addition, we make judgements when we apply the accounting policies. For further information on the key estimates, judgements, and assumptions applied, please refer to the pages with quantitative ESG data tables.

## Threshold for restatements

For adjustments to financial numbers, we follow the financial statements. For adjustments to ESG data, we make a judgement as to whether we should restate numbers. We clearly indicate where we have restated data.

## External review

All quantitative data points in the tables in sections E, S, G, and in the appendix marked with a blue eye icon (☑), are covered by the ESG review (limited assurance) performed by our auditor PwC. Please see the auditor's limited assurance report on page 249.

## How to read the
sustainability statements

Our management report consists of two parts: the management's review and the sustainability statements. The latter reports on some disclosure requirements from the ESRS. However, our actual reporting on data and information is not yet aligned with the CSRD and the underlying ESRS requirements. Our sustainability statements are structured into four overall sections: 'General', 'Environment', 'Social', and 'Governance'.

We have chosen to incorporate some of the strategy and corporate governance disclosures from the cross-cutting standard ESRS 2 in the management's review as we believe this information is best read in close connection with the financial review and overview of our activities.

Information on where in the annual report we have reported on ESRS disclosure requirements can be found on page 132.

Management's review

Strategy and business Corporate governance






## ERS 2

# Double materiality assessment
Introduction

As a key element of our work to prepare for the CSRD reporting, we have conducted a double materiality assessment (DMA) with reference to the draft ERS from November 2022.

To do this, we have built on the approach we have previously taken to assess the materiality of sustainability-related matters. This approach has previously used two dimensions to assess materiality: (1) stakeholder importance, which represented impacts to our surroundings, and (2) 'strategic importance', which represented impacts on our business from the outside.

We have conducted our first DMA this year to capture learnings that will help us to improve our methodology next year. We applied the limited guidance available from EFRAG, combined with our own interpretation of the standards, and developed a step-by-step process, scoring matrices, and a model for aggregation and prioritisation.

Our starting point was the impact assessment (inside-out) of Ørsted's impacts on the environment and society, which builds on how we have previously identified and assessed the sustainability-related impacts of our own operations and value chain. We have also conducted a financial assessment (outside-in) of the sustainability-related risks we are exposed to as a business.
Where possible, we quantified the effects of those matters and supplemented with qualitative assessments.

Due to our previous work with assessing sustainability-related impacts and the complexity in quantifying sustainability-related risks to our business, our efforts this year were concentrated mostly on the impact assessment.

As the ERS principles on double materiality and assessment requirements are extensive, we decided to limit the number and groups of stakeholders involved in assessing our sustainability-related impacts and risks to internal subject-matter experts only.

To verify and calibrate the results of our new DMA, we also performed a light update of our former materiality assessment using the approach we have taken annually since 2013. This assessment served as a proxy for direct involvement of external stakeholders in the DMA as it informs us about the interests and views of stakeholders relevant to our business.

In 2024, we will further refine our DMA process and methodology based on the final ERS and guidance. We are convinced that the outcome presented below is a true and fair picture of our impacts and risks, but we also acknowledge that our methodology has limitations. Consequently, we will be further developing our DMA based on the final implementation guidance published by EFRAG in 2024.

The following pages provide detailed information on the results of our double materiality assessment and the process we have applied.



## Read more

Matrix showing our material and immaterial ESRS topics.
→ Page 71

Our value chain and interaction with our most material impacts and risks.
→ Page 72

Tables specifying all our material impacts and risks.
→ Pages 73-76

Description of methodologies, assumptions, and process steps.
→ Pages 77-78

Interests and views of stakeholders.
→ Pages 79

Topical sections specifying our response to our material impacts and risks, including policies, actions, targets and metrics.
→ Pages 87-130



## Double materiality assessment outcome

## Outcome

We have identified our impacts on the environment and society (impact materiality assessment) as well as the sustainability-related risks that we are exposed to (financial materiality assessment). The outcome is aggregated per ESRS topic, showing that  \( E_{1} \) ,  \( E_{5} \) ,  \( S_{3} \) , and  \( S_{2} \)  are our most material sustainability matters.

The environmental impacts and risks we have within  \( E_{1} \)  and  \( E_{5} \)  are closely linked to our strategic efforts to deliver a fast build-out of renewable energy.

The deployment of new renewable capacity mitigates climate impacts but also requires significant amounts of natural resources such as steel with indirect negative impacts on the climate and the environment.

The build-out also affects people and societies, which is reflected in the impacts and risks we have within  \( S_{2} \)  and  \( S_{3} \) . We focus our efforts on making the energy transition just and inclusive, including for people working across the renewable energy supply chains, and in a way that brings benefits to local communities.

## Read more

The next page illustrates where our material impacts (crucial) and our material risks occur across our full value chain. Brief descriptions of our material impacts and risks are included on the pages that follow.

More information on how we respond to the effects of our impacts and risks can be found within the 'Environment', 'Social', and 'Governance' sections.



## Our DMA approach in brief

All assessed impacts and risks have been mapped to their relevant topical ESRS standard. The highest scored impact or risk within a topic determines the placement in the DMA matrix. In case of multiple topics placed within the same square, the topics are listed in chronological order.

The following main considerations have been applied:

<table><tr><td>Positive/negative impacts</td><td>Both positive and negative impacts have been assessed.</td></tr><tr><td>Actual/potential impacts</td><td>Impacts have been identified as actual or potential. Most impacts assessed were actual.</td></tr><tr><td>Risks/opportunities</td><td>Sustainability-related risks were assessed as potential. Most were not assessed in 2023.</td></tr><tr><td>Own operations/ value chain</td><td>Impacts and risks were assessed for our own operations, and for the value chain where relevant to the topic.</td></tr><tr><td>Residual impact/ risk</td><td>Assessments have included mitigation actions that are already part of our daily operations to reduce or mitigate any negative impacts or risks. This means the ESRS topics are plotted based on residual impact and risk.</td></tr></table>

EFRAG published a draft 'Implementation Guidance' in December 2023, which we will take into account to refine our DMA methodology in 2024, including a review of our residual impact/risk approach.

Note: Our full DMA methodology can be found on pages 77-78.



Value chain overview — showing where our material sustainability-related impacts (crucial) and our material sustainability-related risks occur across our full value chain



Supply chain/upstream

Own operations

Downstream

## Positive impacts

1 Renewable energy deployment

2 Local jobs and educational opportunities

## Negative impacts

3 Use of virgin materials

2 Natural resources exploitation and land-use change

5 Habitat loss from land degradation

## Sustainability-related risks

1 Transition climate-related risk

2 Physical climate-related risks

3 Availability of materials and components

4 Supplier misconduct related to human rights

5 Local community interests and concerns

6 Indigenous Peoples' consent



## Material sustainability-related impacts and risks

The following tables list the sustainability-related impacts and risks we have identified and assessed as material as a result of our double materiality assessment process.

As shown in the matrix on page 71, seven out of the ten ESRI's topics are material to Ørsted. Each material ESRI's topic is presented in the following tables, where we specify the sub-topics that our material impacts and risks relate to, e.g. climate change mitigation, climate change adaptation, and energy.

In addition, we indicate in the tables whether the impacts and risks are in our own operations (OO) or value chain (VC). We also show whether our impacts are positive or negative. Impacts are actual impacts unless stated that they are potential impacts.
Brief descriptions of the material impacts and risks are included in the tables. More information on how we respond to the effects of our impacts and risks is included in the topical sections under 'Environment', 'Social', and 'Governance'.

This year, our scoring of impacts and risks has included mitigation actions that are already part of our daily operations to reduce or mitigate any negative impacts or risks. Therefore, the impacts and risks listed in the tables show a residual impact or risk.

In 2024, we will further refine our DMA process and methodology based on the new EFRAG guidance.

## ENVIRONMENT



## E1
Climate change

<table><tr><td></td><td>Material impact or risk</td><td>Description</td></tr><tr><td colspan="3">Climate change mitigation</td></tr><tr><td>● Positive impact (OO)</td><td>Renewable energy deployment.</td><td>Renewable energy is one of the key technologies needed to decarbonise society and succeed in limiting global heating to 1.5  \( {}^{\circ} \) C.</td></tr><tr><td>● Negative impact (VC)</td><td>GHG emissions from the renewable energy supply chain, energy supplier power sales, and downstream GHG emissions from natural gas.</td><td>Supply chain emissions from manufacturing and installing our renewable energy supply chain are significant contributors to GHG emissions. Our energy and energy-related activities (fossil fuels at CHP plants and regular power sales). We respond to this impact through our strategic targets and our reduction to carbon dioxide (CO \( _{2} \) ) emissions.</td></tr><tr><td>● Risk (OO)</td><td>A 1.5  \( {}^{\circ} \) C-climated global-scale target of fossil fuels at or a ton of GHG emissions is not a risk to our business model. On the contrary, the transition risk to us relates to potential insufficient political and regulatory support to mitigate climate change and to the continued renewable energy build-out, which may lead to uncertainty in investment conditions for future projects. We are actively engaged in climate-related advocacy, calling our stakeholders to action for activities that will accelerate the renewable energy build-out.</td><td>A 1.5  \( {}^{\circ} \) C-climated global-scale target of fossil fuels at or a ton of GHG emissions is not a risk to our business model. On the contrary, the transition risk to us relates to potential insufficient political and regulatory support to mitigate climate change and to the continued renewable energy build-out, which may lead to uncertainty in investment conditions for future projects. We are actively engaged in climate-related advocacy, calling our stakeholders to action for activities that will accelerate the renewable energy build-out.</td></tr><tr><td colspan="3">Climate change adaptation</td></tr><tr><td>● Risk (OO)</td><td>Physical chronic and acute climate-related risks.</td><td>Chronic: Dependency of renewable energy generation on natural resources, such as wind patterns, may lead to uncertainty in production and consumption. Acute: Increase in the severity and frequency of extreme weather events may result in extended temporary shutdowns and an increase in repair needs. We assess the resilience of all new assets towards the occurrence of climate-related hazards.</td></tr><tr><td colspan="3">Energy</td></tr><tr><td>● Negative impact (OO)</td><td>Energy consumption, mainly at CHP plants.</td><td>Energy used in our daily operations, including energy derived from fossil-based fuels leading to GHG emissions. We respond to this impact through our strategic targets and our actions to decarbonise our operations.</td></tr></table>



## ENVIRONMENT



## E4
Biodiversity and ecosystems

<table><tr><td></td><td>Material impact or risk</td><td>Description</td></tr><tr><td colspan="3">Direct impact drivers on biodiversity loss</td></tr><tr><td>● Negative impact (VC)</td><td>Natural resources exploitation and land-use change from mining of minerals and metals</td><td>Almost all resources used in our supply chain, and subsequently in our renewable energy assets, are virgin materials that are mined and processed in a manner that has a minimal impact on the environment. These impacts on biodiversity. We are actively working towards managing our value chain impacts.</td></tr><tr><td colspan="3">Impacts on the extent and condition of ecosystems and the state of species</td></tr><tr><td>● Negative impact (VC)</td><td>Habitat loss from land degradation caused by mining of minerals and metals.</td><td>Habitat loss and ecotoxicity from run-off of mining leading to land degradation, which may result in an environmental impact. We are actively working towards managing our extent and condition of species.</td></tr><tr><td>● Negative impact (OO)</td><td>Disturbances to habitats and displacement or loss of species.</td><td>Disturbances to habitats due to construction and operation of renewable energy assets. Construction and operation of renewable energy projects can impact habitats due to ground preparation and the presence of construction and operation impacts. Construction and operation of these impacts and take appropriate avoidance, reduction, and mitigation action to manage them.</td></tr><tr><td>● Positive impact (OO)</td><td>Biodiversity restoration, research, and innovation initiatives.</td><td>We conduct habitat and ecosystem restoration efforts, including maximising positive impacts on wider supportive ecosystems (e.g. salt marsh). We conduct species restoration efforts, research on habitats and species, and innovation (e.g. biodiversity monitoring and tracking).</td></tr></table>

## ENVIRONMENT



## E5
Resource use and circular economy

<table><tr><td></td><td>Material impact or risk</td><td>Description</td></tr><tr><td colspan="3">Resource inflows, including resource use</td></tr><tr><td>● Negative impact (VC)</td><td>Use of virgin materials in our supply chain.</td><td>Almost all resources used in our supply chain, and subsequently in our renewable energy assets, and energy products for our GWP plants are virgin materials that are mined, processed, and transported. Extraction of these materials can have adverse social and environmental impacts. We work with partners and take action to maximise reuse and recycling through circularity.</td></tr><tr><td>● Risk (VC)</td><td>Availability of materials and components.</td><td>An accelerated increase in the demand for renewables coupled with inelastic supply chains would require rapid maturation of sustainable solutions (e.g. reuse and recycling of materials for main components and use of low-emission materials). We take measures to, for example, reduce and optimise resource usage, and prolong the lifetime of our assets.</td></tr><tr><td colspan="3">Resource outflows related to products and services</td></tr><tr><td>● Negative impact (OO)</td><td>Vast generation during operation and decommissioning.</td><td>Our assets have an expected life time of approx. 20-35 years, and up to approx. 90% of the total material volumes used in these assets can be recycled at their end of life. There is still potential to increase the overall recyclability of renewable energy assets, so that the volume of all materials can be kept at end of life. We actively investigate opportunities for repairing, refurbishing, and reusing key components.</td></tr></table>



## SOCIAL



## S1
Own workforce

<table><tr><td></td><td>Material impact or risk</td><td>Description</td></tr><tr><td colspan="3">Working conditions</td></tr><tr><td>● Positive impact</td><td>Secure employment and flexible workplace for our employees.</td><td>We ensure employees are part of a safe and fair working environment with transparent and compliant employment terms and benefits. Employees are able to work in a safe and healthy environment empowered to balance work and private life in alignment with their proper leaders.</td></tr><tr><td colspan="3">Equal treatment and opportunities for all</td></tr><tr><td>● Positive impact</td><td>Diversity resulting in innovative thinking and approaches.</td><td>We commit to providing equal opportunities irrespective of ethnic background, race, religion, age, gender, disability, sexual orientation, outlook, or social status. We have a global inclusion network with dedicated channels to support equality and inclusion.</td></tr><tr><td>● Positive impact</td><td>Career progression through training and development.</td><td>We offer plenty of development opportunities through access to challenging assignments and experts within a wide range of professional fields. All employees have regular development conversations to support continuous improvement.</td></tr><tr><td>● Positive impact</td><td>Recruiting and advancing women and under-represented groups, and working to ensure that they stay in Ørsted.</td><td>We aim to recruit and keep female employees in Ørsted to promote gender equality and mitigate the gender pay and management gap. We are creating targeted initiatives to support representation of under-represented or marginalised groups in leadership and management.</td></tr><tr><td>● Positive impact</td><td>Inclusive culture where people with disabilities can thrive.</td><td>We ensure that employees with disabilities feel like they belong and can thrive, with an aim of creating an inclusive culture and destigmatising disability.</td></tr></table>

## SOCIAL



## S2
Workers in the value chain

<table><tr><td></td><td>Material impact or risk</td><td>Description</td></tr><tr><td colspan="3">Working conditions</td></tr><tr><td>● Negative impact</td><td>Excessive working hours for supply chain workers.</td><td>To the extent supply chain workers are subject to excessive working hours, it can potentially lead to health issues. We therefore evaluate working hours performance when conducting supplier assessments.</td></tr><tr><td colspan="3">Other work-related rights</td></tr><tr><td>● Negative impact</td><td>Forced labour, e.g. debt bondage and withholding of passports.</td><td>Supply chain workers can end up in debt bondage if they have to pay recruitment fees, and they can end up in forced labour if their identification documents are withheld. Additionally, specific state-imposed forced labour risks have been reported in the solar PV supply chain. We therefore have particular focus on forced labour and supply chain traceability in our due diligence approach.</td></tr><tr><td>● Risk</td><td>Suppliers&#x27; breach of contractual agreements on human rights commitments.</td><td>Expansion of operations into high-risk geographies may increase the likelihood of suppliers breaching contractual human rights commitments, which may lead to reputational damage and affect the ability to proceed with project plans. We therefore use country risk as a screening and assessment parameter in our due diligence approach.</td></tr></table>

Please see our topical sections for more information on our response to our impacts and risks.



## SOCIAL



## S3
Affected communities

<table><tr><td></td><td>Material impact or risk</td><td>Description</td></tr><tr><td colspan="3">Particular rights of Indigenous communities</td></tr><tr><td>● Negative impact (OC)</td><td>Indigenous rights may be disrupted in the development stage of our renewable energy assets.</td><td>Related to some of our offshore wind developments, some Native American tribes with traditional communities located in the affected areas have expressed dissatisfaction with the consultation process utilised by the federal government. We are engaging with affected Indigenous Peoples on the matter.</td></tr><tr><td>● Negative potential impact (VC)</td><td>Indigenous rights may be disrespected by suppliers in our value chain.</td><td>Suppliers and other actors further down in the value chain (e.g. mining) may fail to obtain free, prior, and informed consent from affected Indigenous Peoples, which could potentially be linked to the development of our assets. To take care of affected communities, we have implemented a variety of actions and initiatives, including human rights impact assessments and efforts for responsible sourcing of minerals and metals.</td></tr><tr><td>● Risk (OC)</td><td>Consent of Indigenous communities.</td><td>Authorities not fully complying with the process for engaging with Indigenous communities in order to obtain free, prior, and informed consent from future projects may lead to public opposition or lawsuits, which may cause additional costs and affect the ability to proceed with project plans.</td></tr><tr><td colspan="3">Communities&#x27; economic, social, and cultural rights</td></tr><tr><td>● Positive impact (OC)</td><td>Local jobs and educational opportunities.</td><td>Communities can benefit from socio-economic impacts in terms of creation of local jobs and educational opportunities when renewable energy development is underway. However, we aim for positive impacts for affected communities to materialise these economic opportunities.</td></tr><tr><td>● Positive impact (OC)</td><td>Biodiversity restoration work replenishing local fisheries&#x27; stock and land-based biodiversity.</td><td>Our biodiversity restoration work holds the potential to positively impact local fisheries&#x27; stock and land-based biodiversity.</td></tr><tr><td>● Negative potential impact (VC)</td><td>Air, water, and soil pollution may pose a danger to local communities&#x27; health.</td><td>Air, soil, and water contamination from mining may have adverse health effects on local communities, e.g. from toxic minerals from mining leaking into local groundwater, resulting in unsafe drinking water and bioaccumulation of such minerals in the plants or animals communities consume.</td></tr><tr><td>● Risk (OC)</td><td>Balancing the global peace for dolphins&#x27; protection and the energy with local community interests and concerns.</td><td>Local opposition – if not managed early in our projects – may result in dolphins in project work and costs associated with community lawsuits. Our commitment to engage with communities and uphold human rights is outlined in our global human rights policy, stakeholder engagement policy, and just transition policy.</td></tr></table>

## GOVERNANCE



## G1
Business conduct

<table><tr><td></td><td>Material impact or risk</td><td>Description</td></tr><tr><td colspan="3">Corporate culture</td></tr><tr><td>● Positive impact (OC)</td><td>Healthy corporate culture driving the company towards its goals.</td><td>Our five guiding principles of integrity, passion, team, results, and safety help drive #nstored towards shared goals. Working with these principles is part of our way of operating, promoting a healthy corporate culture</td></tr><tr><td colspan="3">Protection of whistleblowers</td></tr><tr><td>● Positive impact (OC)</td><td>Protection of whistleblowers through anti-retaliation policies and procedures.</td><td>Our protection of whistleblowers encourages and enables all stakeholders to speak up. At #nstored, we do more than required by law regarding the protection of whistleblowers and take a proactive approach to mitigating risks and negative impacts.</td></tr><tr><td colspan="3">Political engagement</td></tr><tr><td>● Positive impact (OC)</td><td>Constructive political engagement through lobbying.</td><td>Our lobbying activities and other means of political influence have positive societal and environmental effects resulting from changes in legislation.</td></tr><tr><td colspan="3">Management of relationships with suppliers</td></tr><tr><td>● Positive impact (OC)</td><td>Good management of suppliers, ensuring compliance with our code of conduct.</td><td>We are committed to continuous improvements in our relationships with suppliers and business partners. Our work is underscored by regular updates to our internal risk scoring and the incorporation of evolving standards into our screening tools. As we navigate the dynamic landscape of due diligence, our goal is to not only meet but exceed the highest standards of integrity, transparency, and ethical conduct.</td></tr></table>



## Double materiality assessment methodology

We developed our methodology with reference to the principles in the draft ESRS from November 2022 and available guidelines. Learnings from the 2023 process, dialogue with peers, and network and industry association meetings together with the final ESRS and newest guidance will help refine the process to ensure full alignment with the DMA-related requirements in 2024.

## Methodologies and assumptions

## Scope

For our own operations, we identified and assessed impacts on people and the environment as well as potential risks to our business, focusing on specific activities where impacts are not relevant across technologies. Furthermore, we assessed our value chain impacts and risks for most topics, primarily focusing on our upstream activities. Value chain assessments were based on internal knowledge and mainly focused on our first-tier suppliers. This was especially true when identifying and assessing impacts related to 'Workers in the value chain' (ESRS S2).

In our impact assessment, we considered both positive and negative impacts as well as actual and potential impacts related to sustainability matters. In our financial assessment, we assessed potential sustainability-related risks that could trigger a negative financial impact on our business.
We excluded assessing opportunities as part of our DMA this year. However, our business opportunities are directly connected to climate change mitigation and described in the strategy section. Moreover, ESRS S4 was excluded deliberately due to our business model.

## Stakeholder engagement

For our DMA, we engaged internal subject-matter experts from both the business lines and Group functions. This year, we have not included direct consultation with affected stakeholders to understand how they may be impacted by our business activities, nor have we directly consulted external stakeholders to review the outcome of our DMA. However, as a valid proxy, we have included insights from our external affairs colleagues who, through continuous dialogue with our key stakeholders, have a good overview of the interests and views of stakeholders.

In addition, our continuous engagement activities in the communities in which we are present are a solid basis for assessing the impacts and risks most material to us.

## Scoring

## Impacts

As per the ESRS guidance, three parameters of 'scale', 'scope', and 'irremediable character' have been used in the scoring of the 'severity' of our actual impacts:

1. When scoring 'scale', we assessed how great the impact is on the environment or people, after consideration of mitigation actions already in place.
2. When scoring 'scope', we assessed how widespread the impact is based on parameters such as percentage of sites, employees, or financial spend that the impact relates to.

3. When scoring ‘irremediable character’, we assessed how difficult it is to reverse the damage in terms of cost and time horizon.

For potential impacts, an additional parameter of 'likelihood' was scored.

For negative actual impacts, each of the three dimensions above were scored and weighted equally for severity. For negative potential impacts, 'severity' and 'likelihood' were weighted 50/50. For positive actual impacts, 'scale' and 'scope' were scored and weighted equally for severity. For positive potential impacts, 'likelihood' was also considered as for negative potential impacts.

## Risks

When scoring risks, we assessed the potential magnitude of financial effects based on different triggers, including EBITDA, CAPEX, and OPEX, which constituted half of the score, and likelihood of occurrence, which constituted the other half. Assessments have included risk mitigation actions already in place.

We assessed the nature of these effects in different scenarios with assumptions based on input parameters from subject-matter experts. The potential magnitude of financial effects was scored as 'low', 'medium', or 'high'.
Likelihood of occurrence was scored as 'low', 'medium', or 'high' using relevant time horizons of short-, mid-, or long-term. We partially modelled the risks using the risk assessment tool that we use for business risks. However, quantification in monetary terms was supplemented with qualitative assessments to a high degree, due to the complexity of defining exact values for potential sustainability risk scenarios.

## Thresholds

Our Sustainability Committee has set the materiality thresholds at 'significant'. This means that impacts and risks scored as 'significant' or above, and their associated ESRS topic, are deemed material.

## Process

We defined process steps for conducting the DMA for impact materiality and financial materiality, respectively. The impact assessment was our starting point, and once we had the preliminary results, we initiated the financial assessment. We followed the five key steps below as further elaborated on the next page.



1 Engagement of stakeholders



2 Scoping of impacts/risks



3 Assessment of individual impacts/risks



4 Calibration of material impacts/risks



5 Stakeholder and management review



## Process steps
Impact materiality

Our work with mapping our sustainability-related impacts builds on the approach we have used for over a decade to assess the materiality of sustainability-related matters, as well as recent studies, benchmark reports, and internal projects.

## The following steps were conducted:

## 1. Engagement of stakeholders

We unfolded the ten topics in the ESRS and identified subject-matter experts in the business and Group functions with insights into the topics and deep knowledge of our day-to-day work with each area. Several onboarding sessions helped to get a common understanding of the new regulation and objectives of the double materiality assessment.

## 2. Scoping of impacts

As preparation for the materiality assessment workshops, we consulted relevant internal information (e.g. internal impact reports, previous materiality assessments, and stakeholder findings) to scope and pre-define impacts per ESRS sub-topic and sub-sub-topics.

## 3. Assessment of individual impacts

We conducted interactive impact materiality assessment workshops for each ESRS topic. Participants adjusted the pre-defined impacts where relevant and added additional impacts, then scored all impacts (negative and positive) within our own operations and for the value chain according to the developed scoring methodology. Scoring rationales were documented, and relevant reference documents were captured. In total, 120 impacts were identified and scored.

## 4. Calibration of material impacts

All workshop input was transferred to a tool to aggregate scores and calculate the 'degree of materiality' split into five levels. Workshop participants were consulted again for validation of the preliminary results, and if needed, the provided rationales for adjustments were documented. Further calibration across topics took place before finalising the impact assessment.

## 5. Stakeholder and management review

Consolidated overviews of the sustainability-related impacts were presented to and discussed with internal stakeholders and management. Finally, the determined materiality threshold yielded a final list of 25 material impacts that were assessed as 'significant' or above.

## Process steps
Financial materiality

As part of our efforts to prepare for the CSRD, we delimited our financial materiality assessment and focused on potential financial risks. In contrast to the business risks covered in the 'Risks and risk management' section, we only consider risks that relate to sustainability matters in the financial materiality assessment.

## The following steps were conducted:

## 1. Engagement of stakeholders

We engaged relevant stakeholders to ensure appropriate consideration of sustainability risks. These included internal subject-matter experts in the business and Group functions, as well as teams responsible for corporate risk assessment.

## 2. Scoping of risks

Results from the impact materiality assessment, supplemented with additional internal resources, formed the basis for scoping sustainability risks within the context of financial materiality.

## 3. Assessment of individual risks

The initially identified risks were verified and supplemented with additional possible sustainability risks through a series of meetings between topical subject-matter experts, ESG experts, and teams responsible for corporate risk assessment. Throughout this process, the initial magnitude and likelihood properties of each potential risk were evaluated and documented. Based on these meetings, we formulated scenarios to capture the financial effects of the identified sustainability risks.

## 4. Calibration of material risks

## The aggregated 20 sustainability-

related financial risk scenarios were subsequently categorised following our scoring methodology approach. Additional resources were used to verify and calibrate the results. These included internal stakeholders and information from the business risk assessment, as well as external studies and benchmark reports.

## 5. Stakeholder and management review

Consolidated overviews of the sustainability-related risks were presented to and discussed with internal stakeholders and management. The scoring and respective materiality threshold yielded a final list of six financially material risks related to sustainability matters that were assessed as 'significant' or above.



## Interests and views of stakeholders

## Stakeholder engagement

Our stakeholder engagement policy underscores our commitment to actively listen to and engage with our stakeholders. Through ongoing dialogue, we strive to understand their positions, concerns, and expectations. This continuous interaction informs our sustainability efforts, projects, and processes, allowing us to align with the interests and views expressed by stakeholders. The insights gained from these continuous dialogues serve to inform our due diligence processes and double materiality assessment.

Guided by principles of openness, transparency, and integrity, our stakeholder engagement policy adheres to international norms and codes, including the United Nations Guiding Principles on Business and Human Rights, the United Nations Declaration on the Rights of Indigenous Peoples, and the International Finance Corporation's Performance Standards on Social and Environmental Sustainability.

We ensure that the views and interests of affected stakeholders regarding our sustainability-related impacts are regularly communicated to our Sustainability Committee through periodic committee meetings.

## How engagement is organised

• Employment relations and occupational health and safety representation
• Inclusion networks
• Employee and board members
• Personal development dialogues
• Survey and workplace assessments

## Corporate customers

• Customer support and guidance
• Periodic reviews
• Business partner due diligence

## Suppliers

• Supplier due diligence
• Workshops and industry collaborations
• Human rights and on-site assessments

## Investors

• ESG ratings
• Investor calls, questionnaires, and emails
• Financial statements
• Capital markets days

## Governments, policymakers, and regulators

• Direct dialogue with policymakers
• Public policy consultations
• White papers, programmes, and studies

## Civic and non-profit organisations

• Collaboration on community projects
• Partnerships with NGOs
• Contributions to research projects

## Industry and sustainability associations

• Joint initiatives and programmes
• Inputs to strategic directions
• Workshops and knowledge sharing

## Local communities

• Public meetings and consultations
• Community liaison officers and project staff
• Partnerships for community benefits

## Purpose of engagements

• Including employees' perceptions and experiences
• Contributing to a sustainable workplace and working life

• Building trust
• Providing sustainable solutions
• Enabling customers to achieve their targets

• Compliance with our code of conduct
• Promoting responsible sourcing, incl. of minerals and raw materials
• Protecting human and labour rights of workers
• Ensuring a respectful working environment
• Decarbonising our supply chain

• Understanding expectations to sustainability
• Attracting responsible investors
• Enhancing transparency

• Ensuring regulatory compliance
• Promoting a sustainable build-out
• Addressing climate-related transition risks and opportunities

• Contributing to local initiatives
• Addressing concerns of communities
• Pooling efforts to decarbonise our supply chain

• Enabling the build-out of renewable energy
• Enabling the industry to engage policymakers
• Developing industry standards on sustainability
• Developing industry standards on sustainable materials
• Understanding views of value chain workers' representatives

• Addressing community concerns, questions, and feedback
• Building trust and community support
• Ensuring community benefits

## Examples of outcomes from the engagements

• Internal policy updates
• Improvement and action plans
• Communications from management
• Global initiatives and campaigns

• Product/service improvements
• Adaptation of marketing strategies

• Streamlined supplier expectations
• Supplier improvement plans
• Informed selections of suppliers
• Test pilots and early office agreements on low-carbon solutions

• ESG rating improvement plans
• Responses to investor queries
• Adapted internal communication on sustainability practices

• Aligning business model and strategy
• Value creation and risk mitigation from compliance

• Site-specific initiatives on e.g. biodiversity or community development
• Alignment of projects with best practice

• Alignment on sustainability practices and measurement standards
• Design of value chain workers initiatives

• Design of community benefits
• Support of local projects



## Environment

81 Taxonomy-aligned KPIs (incl. voluntary disclosures)

87 ESRS E1 Climate change

102 ESRS E4 Biodiversity and ecosystems

107 ESRS E5 Resource use and circular economy

→ In an industry-first initiative, we commissioned three nearshore artificial nesting structures specially designed to house black-legged kittiwake, a vulnerable species of seabird, off the East Suffolk coastline.

The structures have been installed as part of innovative plans to compensate for the impacts that Hornsea 3 Offshore Wind Farm could potentially have on the species.






## Taxonomy-aligned KPIs
Incl. voluntary disclosures

<table><tr><td>Data point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Revenue (turnover) \( ^{1} \)</td><td>DKMk</td><td>79,255</td><td>114,417</td><td>(31)%</td></tr><tr><td>Taxonomy-aligned revenue</td><td>%</td><td>86</td><td>69%</td><td>17%</td></tr><tr><td>Taxonomy-aligned revenue adjusted for green bond financing</td><td>%</td><td>14</td><td>31%</td><td>(17)%</td></tr><tr><td>Taxonomy-non-eligible revenue</td><td>%</td><td>14</td><td>31%</td><td>(17)%</td></tr><tr><td>Fossil-based generation \( ^{2} \)</td><td>%</td><td>5</td><td>18%</td><td>(10)%</td></tr><tr><td>Other activities \( ^{3} \)</td><td>%</td><td>3</td><td>6%</td><td>(5)%</td></tr><tr><td>CAPEX \( ^{1} \)</td><td>DKMk</td><td>37,973</td><td>35,595</td><td>7%</td></tr><tr><td>Taxonomy-aligned CAPEX</td><td>%</td><td>99 \( ^{1} \)</td><td>99</td><td>0%</td></tr><tr><td>Taxonomy-aligned CAPEX adjusted for green bond financing</td><td>%</td><td>98</td><td>99</td><td>(1)%</td></tr><tr><td>Taxonomy-non-eligible CAPEX</td><td>%</td><td>1</td><td>0%</td><td>(9)%</td></tr><tr><td>OPEX \( ^{1} \)</td><td>DKMk</td><td>2,368</td><td>1,720 \( ^{1} \)</td><td>36%</td></tr><tr><td>Taxonomy-aligned OPEX</td><td>%</td><td>79</td><td>80</td><td>(1)%</td></tr><tr><td>Taxonomy-non-eligible OPEX</td><td>%</td><td>21</td><td>20</td><td>1%</td></tr><tr><td>EBITDA \( ^{1} \)</td><td>DKMk</td><td>18,717</td><td>32,057</td><td>(42)%</td></tr><tr><td>Taxonomy-aligned EBITDA (voluntary)</td><td>%</td><td>95</td><td>85</td><td>10%</td></tr><tr><td>Electricity generation using solar PV technology (4.1) and storage of electricity (4.10)</td><td>%</td><td>4</td><td>2</td><td>2%</td></tr><tr><td>Taxonomy-aligned electricity generation</td><td>%</td><td>5</td><td>12</td><td>(77)%</td></tr><tr><td>Cogeneration of heat and power from bienergy (4.20)</td><td>%</td><td>5</td><td>12</td><td>(77)%</td></tr><tr><td>Taxonomy-non-eligible EBITDA (voluntary)</td><td>%</td><td>5</td><td>15</td><td>(10)%</td></tr><tr><td>Fossil-based generation \( ^{2} \)</td><td>%</td><td>3</td><td>6</td><td>(5)%</td></tr><tr><td>Other activities \( ^{3} \)</td><td>%</td><td>1</td><td>0</td><td>(5)%</td></tr></table>

 \( ^{1} \)  Revenue, CAPEX (addition), OPEX (other external expenses), and EBITDA are included in the audited consolidated financial statements 2023.

 \( ^{2} \)  Includes revenue/EBITDA from natural gas-based heat and power generation at our CHP plants, which amounts to less than 1%.

 \( ^{3} \)  Other activities \( ^{1} \)  primarily consist of non-eligible power sales (incl. end customer sales), oil distribution, and gas trading.

 \( ^{4} $  2022 revenue has been adjusted according to the change in accounting policy for presentation of revenue line items (note 1.2. Basis of preparation), resulting in an adjustment of 2022 taxonomy revenue KPIs (%). \( ^{5} \) 

 \( ^{5} \)  This ratio is applied to gross investments (DKK 38,509 million – see financial note 3.0) to calculate taxonomy-aligned gross investments.

 \( ^{6} $  2022 OPEX is restated with a maintenance and repair estimation.

## Taxonomy-aligned revenue (turnover)

Our taxonomy-aligned share of revenue in 2023 was 86%, an increase of 17 percentage points compared to 2022. This was primarily due to lower non-eligible revenue from our gas sales, driven by lower gas volumes sold and lower prices.

## Taxonomy-aligned CAPEX

Our taxonomy-aligned share of CAPEX in 2023 remained at 99% and is primarily related to our wind and solar farms and storage facilities.

## Taxonomy-aligned OPEX

Our taxonomy-aligned OPEX was 79%, a decrease of 1 percentage point compared to 2022.

## Taxonomy-aligned EBITDA (volatility)

Our taxonomy-aligned share of EBITDA in 2023 was 95%, an increase of 10 percentage points compared to 2022. This was due to significantly decreased non-eligible earnings from our gas sales and fossil-based generation at our CHP plants.

## § Accounting policies

## Taxonomy-aligned revenue (turnover)

This is the revenue associated with taxonomy-aligned economic activities as a proportion of our total revenue. It is adjusted for green bonds by excluding the revenue from our taxonomy-aligned assets financed with green bonds from the taxonomy-aligned revenue (municator) and the total revenue (denominator).

## Taxonomy-aligned CAPEX

Our taxonomy-aligned assets or processes associated with taxonomy-aligned economic activities as a proportion of our CAPEX that is accounted for based on IAS 16.7.3 (elli) and III.1.3.3 (elli) III.1.3.3 (elli) and III.3.3.3 (elli) III.3.3.3 (elli) III.3.3.3 (elli)
The taxonomy-aligned assets or processes associated with taxonomy-aligned economic activities as a proportion of our CAPEX that is accounted for from the taxonomy-aligned CAPEX (numerator) and the total CAPEX (denominator).

## Taxonomy-aligned OPEX

This is the maintenance and repair OPEX associated with taxonomy-aligned economic activities with taxonomy-aligned economic activities as a proportion of the maintenance and repair OPEX of our Other external expenses \( ^{1} \) . We have not included the maintenance and repair costs of other external expenses \( ^{1} \)  using a Group-level factor based on maintenance and repair costs for each business segment.

## Taxonomy-aligned EBITDA (volatility)

This is the EBITDA associated with taxonomy-aligned economic activities as a proportion of our total EBITDA. We have included taxonomy-aligned EBITDA as a voluntary disclosure as it better reflects our business as our gas and solar sales business has a large revenue but a small earnings margin, while other areas have a higher margin.

## Taxonomy non-eligible KPIs

Revenue, CAPEX, OPEX, and EBITDA associated with taxonomy-aligned economic activities (not included in the delegated acts) have been determined. Taxonomy-non-eligible revenue and EBITDA are classified into gas sales, fossil-based generation, and other activities.



## Taxonomy-aligned turnover

<table><tr><td rowspan="2">Economic activities (1)</td><td rowspan="2">Code (2)</td><td rowspan="2">Turnover 2023 (DKKm) (3)</td><td colspan="5">Substantial contribution</td><td colspan="10">Does not significantly harm (DNSH)</td></tr><tr><td>Proportion of GDP (4)</td><td>Climate change mitigation (5)</td><td>Climate change adaptation (6)</td><td>Water (7)</td><td>Politico (8)</td><td>Circular Economy (9)</td><td>Bio-divertory (10)</td><td>Climate change mitigation (11)</td><td>Climate change adaptation (12)</td><td>Climate change adaptation (13)</td><td>Circular Economy (14)</td><td>Bio-divertory (15)</td><td>Climate change adaptation (16)</td><td>Toxicity of the environment (17)</td><td>Category (including activity) (18)</td><td>Category (transition activity) (19)</td></tr><tr><td colspan="19">A. TAXONOMY-ELIGIBLE ACTIVITIES</td></tr><tr><td colspan="19">A.1 Environmentally sustainable activities (taxonomy-aligned)</td></tr><tr><td>Electricity generation using solar PV technology</td><td>CCH 4.1</td><td>619</td><td>1%</td><td>Y</td><td>N¹</td><td>NEL</td><td>NEL</td><td>NEL</td><td>NEL</td><td>n.a.</td><td>Y</td><td>n.a.</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>0%³</td><td>-</td></tr><tr><td>Electricity generation from wind power</td><td>CCH 4.3</td><td>59,127</td><td>75%</td><td>Y</td><td>N¹</td><td>NEL</td><td>NEL</td><td>NEL</td><td>NEL</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>59%³</td><td>-</td></tr><tr><td>Storage of electricity</td><td>CCH 4.10</td><td>25</td><td>0%</td><td>Y</td><td>N¹</td><td>NEL</td><td>NEL</td><td>NEL</td><td>NEL</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>0%³</td><td>E</td></tr><tr><td>Co-generation of heat and power from bioenergy</td><td>CCH 4.20</td><td>8,308</td><td>10%</td><td>Y</td><td>N¹</td><td>NEL</td><td>NEL</td><td>NEL</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>9%³</td><td>-</td></tr><tr><td>Turnover of environmentally sustainable activities (taxonomy-aligned) (A.1)</td><td></td><td>68,079</td><td>86%</td><td>86%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>69%³</td><td>-</td></tr><tr><td>Of which, resulting</td><td></td><td>25</td><td>0%</td><td>0%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>0%³</td><td>E</td></tr><tr><td>Of which, transformational</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="19">A.2 Taxonomy-aleligible but not environmentally sustainable activities</td></tr><tr><td>Turnover of taxonomy-aleligible but not environmentally sustainable activities (not taxonomy-aligned) (A.2)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Turnover of taxonomy-aleligible activities (A.1 + A.2)</td><td>68,079</td><td>86%</td><td>86%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>69%³</td><td>-</td></tr><tr><td colspan="19">B. TAXONOMY-HON-ELIGIBLE ACTIVITIES</td></tr><tr><td>Turnover of taxonomy-non-aleligible activities (B)</td><td>11,176</td><td>14%</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>TOTAL (A + B)</td><td>79,255</td><td>100%</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

1 We have not assessed our taxonomy-aleligible activities against the substantial contribution criteria for climate change adaptation, as the primary objective of our activities is to contribute to climate change mitigation.

 \( ^{2} $  2022 revenue has been adjusted according to the change in accounting policy for presentation of revenue (see note 1.2 'Basis of preparation' in the financial statements), resulting in an adjustment of 2022 taxonomy revenue (R¥1.1%).

CCH Climate change mitigation

Y: taxonom/entry-aleligible and taxonomy-aligned activity with the relevant environmental objective \( ^{1} \) 

N: No (taxonomy-aleligible but not taxonomy-aligned activity with the relevant environmental objective)

N/EL Not eligible (taxonomy-non-aleligible activity for the relevant environmental objective)

Quantitative breakdown of taxonomy-aligned turnover

The primary sources of turnover contributing to the numerator of the turnover KPI in 2023 are taxonomy-aligned turnover from the generation and sale of power (DKK 42,098 million), government grants (DKK 10,178 million), and the construction of offshore wind farms (DKK 6,737 million).



## Taxonomy-aligned CAPEX

<table><tr><td rowspan="2">Economic activities (1)</td><td rowspan="2">Code (2)</td><td rowspan="2">CAPEX 2023 (DK/km) (3)</td><td colspan="5">Substantial contribution</td><td colspan="5">Does not significantly harm (DNSH)</td><td rowspan="2">Taxonomy-aligned proportion of (17)</td><td rowspan="2">Category (enabling action) (19)</td><td rowspan="2">Category (transitional action) (20)</td></tr><tr><td>Proportion of (DK/km) (4)</td><td>Climate change mitigation (5)</td><td>Climate change (action) (6)</td><td>Climate change water (7)</td><td>Politico (6)</td><td>Circular Economy (9)</td><td>Bio-divertion (10)</td><td>Climate change mitigation (11)</td><td>Climate change adaptation (12)</td><td>Circular Economy (13)</td><td>Bio-divertion (14)</td><td>Climate change water (15)</td></tr><tr><td colspan="17">A. TAXONOMY-ELIGIBLE ACTIVITIES</td></tr><tr><td colspan="17">A.1 Environmentally sustainable activities (taxonomy-aligned)</td></tr><tr><td>Manufacture of hydrogen</td><td>CCH 3.10</td><td>552</td><td>1%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>0%</td></tr><tr><td>Electricity generation using solar PV technology</td><td>CCH 4.1</td><td>4,401</td><td>12%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>5%</td></tr><tr><td>Electricity generation from wind power</td><td>CCH 4.3</td><td>29,004</td><td>76%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>93%</td></tr><tr><td>Storage of electricity</td><td>CCH 4.10</td><td>2,880</td><td>8%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>-</td></tr><tr><td>Cooperation of heat and power from bioenergy</td><td>CCH 4.20</td><td>676</td><td>2%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>1%</td></tr><tr><td colspan="17">CAPEX of environmentally sustainable activities (taxonomy-aligned) (1)</td></tr><tr><td>Of which, enabling</td><td></td><td>37,513</td><td>99%</td><td>99%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>99%</td></tr><tr><td>Of which, restraining</td><td></td><td>2,880</td><td>8%</td><td>8%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>-</td></tr><tr><td colspan="17">A.2 Taxonomy-eligible but not environmentally sustainable activities</td></tr><tr><td colspan="17">CAPEX of taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned) (A.2)</td></tr><tr><td>CAPEX of taxonomy-eligible activities (A.1 + A.2)</td><td></td><td>37,513</td><td>99%</td><td>99%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>-</td><td>-</td><td>-</td></tr><tr><td colspan="17">B. TAXONOMY-HON-ELIGIBLE ACTIVITIES</td></tr><tr><td colspan="17">CAPEX of taxonomy-non-eligible activities (B)</td></tr><tr><td>TOTAL (A + B)</td><td></td><td>37,973</td><td>100%</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

We have not assessed our taxonomy-eligible activities against the substantial contribution criteria for climate change adaptation, as the primary objective of our activities is to contribute to climate change mitigation.

CCH Climate change mitigation

Y: Yes (taxonomy-eligible and taxonomy-aligned activity with the relevant environmental objective)

N: No (taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective)

N/EI Not eligible (taxonomy-non-eligible activity for the relevant environmental objective)

Quantitative breakdown of taxonomy-aligned CAPEX The primary sources of CAPEX contributing to the numerator of the CAPEX KPI in 2023 are additions from property, plant, and equipment (PPE) in Offshore, Onshore, and partly in Bioenergy (DKK 37,503 million).

CAPEX plan for manufacture of hydrogen (3.10)
We have a CAPEX plan for P2X (activity 3.10, manufacture of hydrogen), which includes ensuring taxonomy-alignment of the activity upon operation of our P2X facilities. The CAPEX incurred for manufacture of hydrogen in 2023 (DKK 552 million) is part of this CAPEX plan. For more information on the taxonomy-alignment assessment of the activity, see our accounting policies regarding substantial contribution on p.88.



## Taxonomy-aligned OPEX

<table><tr><td rowspan="2">Economic activities (1)</td><td rowspan="2">Code (2)</td><td rowspan="2">OPEX 2023 (DKKm) (3)</td><td colspan="5">Substantial contribution</td><td colspan="10">Does not significantly harm (DNSH)</td></tr><tr><td>Proportion of climate change mitigation (4)</td><td>Climate change mitigation (5)</td><td>Climate change (6)</td><td>Climate change water (7)</td><td>Pollution (8)</td><td>Circular economy (9)</td><td>Bio-divertory (10)</td><td>Climate change mitigation (11)</td><td>Climate change adaptation (12)</td><td>Pollution (13)</td><td>Circular economy (14)</td><td>Bio-divertory (15)</td><td>Minimum proportion of climate change (16)</td><td>Taxonomy-aligned composition of (2022) (18)</td><td>Category (enabling action) (19)</td><td>Category (transition) action) (20)</td></tr><tr><td colspan="19">A. TAXONOMY-ELIGIBLE ACTIVITIES</td></tr><tr><td colspan="19">A.1 Environmentally sustainable activities (taxonomy-aligned)</td></tr><tr><td>Electricity generation using solar PV technology</td><td>CCH 4.1</td><td>66</td><td>3%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>n.a.</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>2%</td><td>-</td></tr><tr><td>Electricity generation from wind power</td><td>CCH 4.3</td><td>1,498</td><td>63%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>70%</td><td>-</td></tr><tr><td>Storage of electricity</td><td>CCH 4.10</td><td>1</td><td>0%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>0%</td><td>E</td></tr><tr><td>Co-generation of heat and power from bioenergy</td><td>CCH 4.20</td><td>297</td><td>13%</td><td>Y</td><td>N¹</td><td>N/E</td><td>N/E</td><td>N/E</td><td>N/E</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>8%</td><td>-</td></tr><tr><td colspan="19">OPEX of environmentally sustainable activities (taxonomy-aligned) (A.1)</td></tr><tr><td>Bio-energy (A.1)</td><td>1,862</td><td>79%</td><td>79%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>80%</td><td>-</td></tr><tr><td>Of which, manufacturing</td><td>1</td><td>0%</td><td>0%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>Y</td><td>Y</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>Y</td><td>0%</td><td>E</td></tr><tr><td colspan="19">A.2 Taxonomy-eligible but not environmentally sustainable activities</td></tr><tr><td colspan="19">OPEX of taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned) (A.2)</td></tr><tr><td>OPEX of taxonomy-eligible activities (A.1 + A.2)</td><td>1,862</td><td>79%</td><td>79%</td><td>0%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>n.a.</td><td>Y</td><td>Y</td><td>Y</td><td>-</td><td>-</td><td>-</td></tr><tr><td colspan="19">B. TAXONOMY-HON-ELIGIBLE ACTIVITIES</td></tr><tr><td>OPEX of taxonomy-non-eligible activities (B)</td><td>506</td><td>21%</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>TOTAL (A + B)</td><td>2,368</td><td>100%</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

1 We have not assessed our taxonomy-eligible activities against the substantial contribution criteria for climate change adaptation, as the primary objective of our activities is to contribute to climate change mitigation.

CCH Climate change mitigation

Y Yes (taxonomy-eligible and taxonomy-aligned activity with the relevant environmental objective)

N No (taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective)

N/EI Not eligible (taxonomy-non-eligible activity for the relevant environmental objective)

Quantitative breakdown of taxonomy-aligned OPEX The sources of OPEX contributing to the numerator of the OPEX KPI in 2023 are from the estimated maintenance and repair costs of 'other external expenses' in Offshore (DKK 1,060 million), in Onshore (DKK 504 million), and partly in Bioenergy (DKK 297 million).

Maintenance and repair OPEX estimation
We have calculated on estimation of the maintenance and repair costs of 'other external expenses' using a Group-level factor based on maintenance and repair costs for each business segment.



## § Accounting policies

## Taxonomy-eligible activities

We have identified our taxonomy-eligible activities in the Climate Deleted Act (Commissions Declaration Legated (EU) 2021/2139), the Taxonomy-eligible Activities (TAC) Act (Commission Delegated Regulation (EU) 2022/1214), the Environmental Delegated Act (Commission Delegated Regulation (EU) 2023/1248), and the amendments to the Climate Delegated Act (Commission Delegated Regulation (EU) 2023/2458).

Five activities in the Climate Delegated Act have been identified as eligible for eBusted:

• Manufacture of hydrogen (3.10)

• Electricity generation using solar PV technology (4.1)

• Electricity generation from wind power (4.3)

• Storage of electricity (4.10)

• Co-generation of heat/cool and power from biomass (4.20)

## Taxonomy-eligible activities

Taxonomy-eligible activities, 3.5 sets out criteria which an economic activity must meet to qualify as environmentally sustainable taxonomy-eligible.

• Substantially contribute to one or more of the six environmental objectives.

• Do not significantly harm (DNHS) the other objectives.

• Comply with minimum safeguards covering the definition of the objectives.

• Comply with the technical screening criteria (TSC) for the environmental objectives.

Taxonomy-eligible of our eligible activities has subsequently been assessed against Annex I of the Climate Delegated Act. The TSC for the environmental objectives have been assessed per activity. Minimum safeguards have been assessed on Group level.

## Substantial contribution

Climate change mitigation
We have identified our taxonomy-eligible activities in the Climate Delegated Act (Commission Declaration Legated (EU) 2021/2139), the Taxonomy-eligible Activities (TAC) Act (Commission Delegated Regulation (EU) 2022/1214), the Environmental Delegated Act (Commission Delegated Regulation (EU) 2023/1248), and the amendments to the Climate Delegated Act (Commission Delegated Regulation (EU) 2023/2458).

Five activities in the Climate Delegated Act have been identified as eligible for eBusted:
• Manufacture of hydrogen (3.10)
• Electricity generation using solar PV technology (4.1)
• Electricity generation from wind power (4.3)
• Storage of electricity (4.10)
• Co-generation of heat/cool and power from biomass (4.20)

## Taxonomy-eligible activities, 3.5 sets out criteria which an economic activity must meet

to qualify as environmentally sustainable taxonomy-eligible.

• Substantially contribute to one or more of the six environmental objectives.
• Do not significantly harm (DNHS) the other objectives.

## Climate change adaptation

We have identified our taxonomy-eligible activities against the substantial contribution criteria for climate change adaptation, as the primary objective of our activities is to contribute to climate change mitigation.

## Do no significant harm (DNHS)
Climate change adaptation

We have assessed and documented how asset resilience towards different chronic and extreme climate hazards and their future development, as projected by IPCC, is an integrated part of our project development and how that contributes our assets are resilient and able to withstand climate change challenges during the assets' lifetime.

It is assessed that all relevant eligible activities comply with the criteria set out in appendix A to Annex I of the Climate Delegated Act.

## Sustainable use and protection of water and marine resources

We are legally required to conduct environmental impact assessments (EIA) as part of all our projects to ensure that potential impacts on water and marine resources are avoided, mitigated, and addressed appropriately. These projects, we consider environmental degradation risks related to preserving water quality and avoiding water pollution, and we assess the potential for compliance and water use on all assets live up to the requirements. In addition, we have a water policy, establishing our approach to responsible water management.

For activity 4.3, we work to ensure that compliance with the TAC is achieved through the achievement of good environmental status as set out in Directive 2008/56/EC, taking measures to prevent or mitigate impacts in the event that the directives' receptor 1.0 inference is exceeded.

It is assessed that all relevant eligible activities comply with the criteria set out in appendix B to Annex I of the Climate Delegated Act.

## Transition to a circular economy

Renewable assets are built of highly durable materials. To ensure reuse and recycling of materials whenever feasible, we have a resource management policy and internal waste management processes in place. To ensure we further transition to a circular economy, we have implemented a strict, eco-appropriate process of: (i) using fewer virgin resources, (ii) using resources better and longer, and (iii) recirculating resources upon end of life.
For each taxonomy activity, we also have circular economy initiatives in place.

## Pollution prevention and control

We are legally required to conduct EIA as part of all our projects to ensure that potential, avoided, mitigated, and addressed appropriate, and that pollution requirements are integrated into our environmental permit documents. We have internal processes in place to fulfill these legal requirements.

For activity 3.13 and 4.20, it has been assessed that emissions are within or lower than the emission levels associated with the project. For activity 4.20, we have assessed that we exist in relevant best available techniques (BAT) conclusions. No significant cross-media effects have been identified.

It is assessed that all relevant eligible activities comply with the criteria set out in appendix C to annex I of the Climate Delegated Act.

Protection and restoration of biodiversity and ecosystem services

We are legally required to conduct EIA as part of all our projects to ensure potential impacts on biodiversity and ecosystems are avoided, mitigated, and addressed appropriately. Our Offshore wind biodiversity policy and internal processes ensure all our assets live up to the requirements. We have also committed to ensure that all new renewable energy projects we commission from 2030 onwards deliver a net-positive biodiversity impact, which we aim to achieve through our biodiversity efforts.

For activity 4.3, we work to ensure that the construction of offshore wind does not harm the achievement of good environmental status as set out in Directive 2008/56/EC, taking appropriate measures to prevent or mitigate impacts in relation to the directives' receptors 1.1 (biodiversity) and 6 (seabed integrity).
It is assessed that all relevant eligible activities comply with the criteria set out in appendix D to Annex I of the Climate Delegated Act.

## Minimum safeguards

Our “Harm mitig” rights set out our commitment to respect human rights and lives up to the UN Guiding Principles on Business and Human Rights and OECD’s guidelines for mutual international transparency, including the principles of Donation of Fundamental Principles and Donor’s and Investor and the Information Bill of Rights at Work and the International Bill of Rights and supply chain.

Together with our good governance practices and policies, our systematic due diligence approach ensures we have robust minimum requirements in place to prevent, detect, transition, and factor competition.

## Taxonomy KPIs

Our accounting policies for the taxonomy KPIs are based on our interpretation of the Disclosures Delegated Act (annex I (Commission Declaration Regulation (EU) 2021/4978) and available guidelines from the European Commission.

## Linkage principle

The revenue, CAEPX, OPEX, and EBITDA associated with our taxonomy-aligned activities have been determined. In calculating the financial numbers to the numerator, a 'linkage principle' has been applied, stipulating that any revenue, CAEPX, OPEX, or EBITDA that can be justifiably linked to an identified taxonomy-aligned activity can be classified as taxonomy-aligned and thereby included in the numerator of the respective KPI.

## Double counting

We have not double counting across economic activities in the allocation of the numerator for revenue, CAEPX, OPEX, and EBITDA by using activity-specific factors to allocate the financials across our taxonomy activities. The factors are either 100%, 0%, or a value in between where we have used the most relevant factors. For activity 4.20, taxonomy-aligned or non-alleged activities have, the factors cannot sum to more than 100%, which eliminates the possibility of double counting the resulting financial numbers.

## Proofs

Where the financial numbers are not appropriately split into the correct activity in the financial account set-up, proxies have been used to split the numbers. Two proxies have been used.

1) The ratio of purchased power volumes from renewable versus non-renewable assets applied to revenue and EBITDA from balancing activities.

2) Bioenergy’s share of renewable energy generation – applied to revenue, EBITDA, CAEPX, and OPEX related to the CHP plants.

For more details on our taxonomy-aligned KPIs, see our accounting policies on p. 81.



## Climate scenario analysis

As our vision is to create a world that runs entirely on green energy, climate-related risks and opportunities are directly linked to our business model and strategy. It is therefore embedded in our operations to assess the climate resilience of our business by looking at climate-related transition and physical risks and opportunities, in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Climate-related transition risks and opportunities are an integrated aspect of the business cases for our investments in new assets and activities, and we continuously monitor political, technological, market, and reputational developments. Similarly, in the design and construction phases of our assets, we carry out climate risk assessments to assess acute and chronic weather developments, taking into account extreme weather conditions and events that could physically affect our assets. In addition, our greenhouse gas (GHG) reduction targets follow scenarios from the Science Based Targets initiative's (SBTi) 1.5 °C sector-specific pathway for the power industry.

In 2023, our assessment of physical climate risks included two dimensions: design safeguards and business case risks. The assessment of design safeguards entails a climate risk assessment to affirm the physical resilience of our assets in the face of climate change, particularly during extreme weather events. In addition, the business case risk assessment evaluates how revenue streams, and the overall value of assets, might be impacted, e.g. if the wind speed is projected to change at an asset location.
Our analysis focused on all operational assets, both offshore and onshore, with capacities exceeding 10MW across all markets, representing the vast majority of our climate risk exposure. The analysis utilised the latest climate projection data, downscaled to regional and asset-level granularity, based on the IPCC SSP5-8.5 scenario, which is typically considered a 'worst-case scenario'.

Our findings reconfirm that all our assets are structurally secured against climate change through a set of design safeguards and mitigation actions. From a business case perspective, the most significant climate risk for our portfolio is changing wind patterns and, to a lesser extent, changes in air temperature, as these factors have the highest potential impact on the overall energy production of our assets. The 2023 analysis indicates only a minor change in asset value compared to projections based on historical climate data.

We have several mitigation actions in place to reduce this risk, and the current impact is considered insignificant to our business cases. However, we acknowledge the need for further investigation going forward as we strive to reduce uncertainties associated with our assessments. We will continue to develop our methodology to ensure we are capturing our exposure to climate risk as accurately as possible, while further exploring ways to integrate climate change considerations into our existing processes.

Classification of climate-related hazards, cf. the TCFD classification and the EU taxonomy's Climate Delegated Act

CHRONIC

ACUTE

## Temperature-related

✓ Changing temperature (air, freshwater,

marine water)

✓ Heat stress

✓ Temperature variability

✗ Permafrost thawing

✓ Heat wave

✓ Cold wave/frost

✓ Wildfire

## Water-related

✓ Changing precipitation patterns and types

(rain, hail, snow/ice)

✓ Precipitation or hydrological variability

✓ Ocean acidification

✓ Saline intrusion

✓ Salinity intrusion

✓ Water stress

✓ Drought

✓ Heavy precipitation (rain, hail, snow/ice)

✓ Flood (coastal, fluvial, pluvial, groundwater)

✗ Glacial lake outburst

## Wind-related

✓ Changing wind patterns

✓ Cyclone, hurricane, typhoon

✓ Storm (including blizzards, dust, and sandstorms)
✓ Tornado

## Solid mass-related

✓ Coastal erosion

✓ Soil degradation

✓ Soil erosion

✓ Solifluction

✓ Avalanche

✓ Landslide

✓ Subsidence

✓ Hazard included in assessment  \( ^{*} \)  Hazard not relevant to include due to geographical location of assets



## ERS E1

## Climate change

## Decarbonisation of our operations and value chain

Our aspiration is to run a business that creates a lasting positive impact on the environment. This aspiration drives our determination to deliver renewable energy solutions that not only generate green energy but also reduce emissions throughout the manufacturing, transportation, installation, and operation of our renewable energy assets. In doing so, we actively contribute to the transition to an urgently needed net-zero economy.

Addressing climate change is in the core of our business model and strategy, with our sustainability commitment and industry-leading science-based 2040 net-zero target as the catalysts behind our efforts to address climate change mitigation and adaptation, energy efficiency, and renewable energy deployment.

Our sustainability commitment and science-based net-zero target are anchored in our Sustainability Committee, chaired by the Chief Financial Officer. Accountability lies with our Head of Global Stakeholder Relations and Chief Operating Officer.

We are also actively calling our stakeholders to action for activities that will accelerate the renewable energy build-out in line with the goals of the Paris Agreement. We believe there is a need for more transparency around climate-related advocacy to help clear the path towards faster deployment of renewable energy.

Our first climate advocacy report therefore features an assessment of our most important industry associations in terms of their alignment with the 1.5 °C Paris Agreement goal, their promotion of renewable energy, and their stance on the phase-out of fossil fuels. With the report, we aim to emphasise our efforts to accelerate a renewable energy build-out that pursues emissions reductions, protects nature, and creates a transition that is equitable for all.

## Our approach and policies

As a long-standing industry leader in sustainability, we recognise that, alongside our positive impact from scaling renewable energy deployment, we have a key role in reducing possible negative impacts, such as emissions from the extraction and manufacturing of materials and main components needed for the successful transition towards renewable energy sources.

We are committed to not only measuring and tracking greenhouse gas emissions, but also actively working towards their reduction. Our approach for our own operations includes phasing out coal in 2024. To address possible negative impacts in our value chain, we actively engage and partner with suppliers



## Our material impacts and risks



## Positive impacts
CRUCIAL

1 Renewable energy deployment (OO)

Negative impacts
SIGNIFICANT

2 GHG emissions from the renewable energy supply chain, regular power sales, and downstream GHG emissions from natural gas sales (VC)

3 Energy consumption, mainly at CHP plants (OO)

(OO) Own operations (VC) Value chain

## Risks

Transition climate risk related to potential lack of political support for the continued renewable energy build-out (OO)

Physical chronic and acute climate-related risks (OO)



to mature low-emission solutions for our continued renewables build-out.

## Renewable energy deployment

We invest in the development, construction, and operation of renewable energy assets, which include offshore and onshore wind farms, solar farms, battery storage, carbon capture and storage (CCS), biomass-fuelled CHP plants, and Power-to-X (P2X) for renewable hydrogen and e-fuels. While investments in wind and solar directly contribute to the increase in renewable energy generation capacity, biosegurity serves as an alternative to fossil fuels, P2X enables non-electric applications (e.g. transport and chemicals) and helps to reduce emissions from hard-to-abate sectors, and CCS enables permanent storage of carbon underground. Together, these technologies play a key role in building sustainable global energy systems.

## Science-aligned climate action

To align our core business activities with our sustainability ambition, we have adopted a science-based target to reach net-zero emissions by 2040, which has been formally validated by the Science Based Targets initiative (SBTi). This overarching target is supported by a suite of near-term and long-term decarbonisation targets across our full value chain. In addition to tracking and monitoring our company-wide emissions reduction progress, we utilise the climate targets internally to anchor our strategic initiatives. These include, for example, decarbonisation of our supply chains for materials and components.
To contribute to the global net-zero goal in the most impactful way, we are committed to go beyond reducing our own emissions and to contribute to climate action outside our value chain. We finance and develop our own high-quality nature-based projects in addition to reducing our emissions – not instead of doing so.

We are on track to phase out coal in 2024 and to reduce our scope 1-2 emissions intensity by 98% by 2025 – two near-term milestones towards our science based 2040 net-zero target. We also continue our financial commitment to nature-based projects and the implementation of our own quality considerations, which include proven additionality and positive impacts for local communities and biodiversity. By 2025, we will have taken final investment decision on a portfolio of projects which over their lifetime will deliver a volume of certified carbon credits exceeding the residual 2% of our future scope 1-2 emissions. However, the actual delivery of carbon credits from these projects will be delayed a few years compared to our initial expectations.

We have decided to phase out our use of the wording ‘carbon-neutral company by 2025’ when describing the impact of carbon credits. Since 2020, when we made the commitment to become a carbon-neutral company, the consensus on carbon-neutral claims has changed. While back then, such claims proved useful for incentivising and increasing the ambitions of corporate climate action, we now have the SBTi NetZero Standard to guide how companies can take the actions urgently needed to meet the 1.5 °C goal of the Paris Agreement.

Our approach to carbon credits reflects what the SBTi refers to as “beyond value chain mitigation” in its Net-Zero Standard. In line with this direction set by the SBTi, we will therefore no longer use the wording “carbon-neutral” to describe our progress in decarbonising our operations and energy generation (scope 1-2).

## Supply chain decarbonisation

The majority of our upstream value chain emissions come from hard-to-abate sectors like steel, shipping, and heavy manufacturing. We have therefore identified and deployed several strategic levers to reduce emissions from our supply chains:

Tracking and measuring carbon progress through the development of an in-house model for life cycle assessments (LCAAs). The model is currently used to calculate the total carbon footprint of our new offshore wind farms and will be further developed to cover onshore wind, solar PV technologies, and the more recent technologies in our portfolio. Additionally, to enhance the transparency and comparability of data for our stakeholders, we are contributing to the development of a standardized LCA methodology together with other energy developers.

Engaging with suppliers on the integration of decarbonisation strategies in their operations. Decarbonisation is at the core of our supplier relationship management. We actively engage key suppliers, who account for more than half of our total procurement spend and encompass some of the most carbon-intensive segments of our supply chains. This includes the adoption of science-based targets, transparent climate reporting to CDP, and covering electricity consumption with renewable electricity.
• Entering into offtake agreements for low-emission products essential to the energy transition. We contribute towards the scaling of new technologies by reducing uncertainties for suppliers and further incentivising their investments in low-emission technologies.

• Engaging in cross-sector collaborations to drive demand for ground-breaking technologies. Together with other sustainability leaders we pool our purchasing powers to drive demand for technologies needed to decarbonise materials in our operation. We have co-founded cross-industry initiatives such as the Climate Group’s SteelZero and the World Economic Forum’s First Movers Coalition, where we commit to offtake volumes of near-zero emissions materials from 2030.

## Actions

## Own operations

During 2023, we have taken the following steps:

• We have deployed 0.6 GW of new renewable capacity from onshore wind power and solar power, reaching a total of 15.7 GW installed renewable capacity.

• We have begun the construction of two CCS facilities designed to capture and store carbon emissions from the biomass-fired Ansas and Aveedere power stations. This project represents Denmark’s first full-scale carbon capture project. For more information, see our strategy section.



• We have allocated 99% of our capital expenditures (CAPEX) towards environmentally sustainable investments aligned with the EU taxonomy. For more information, see the EU taxonomy section.

• We have signed a second contract with ESVACT for a methanol-powered service operation vessel, marking a significant milestone in our efforts to decarbonise offshore wind operations.

• We no longer acquire, or lease, vehicles powered by fossil fuels, and 65% of our vehicle fleet is currently electric, an increase from 51% in 2022.

• We continued to advance our portfolio of nature-based carbon removal projects by planting approximately 40 million propagules in Gambia, equivalent to around 4,000 ha, thereby contributing further to the restoration of vital ecosystems and mitigating climate change.

• To address physical risks resulting from climate change and their potential impact on our assets, we assess the resilience of all new assets towards the occurrence of climate-related hazards. For more information, see the EU taxonomy and climate scenario analysis sections.

## Future actions:

• We will continue to deploy renewable energy and drive down emissions across scope 1-2.

• In 2025, more than 99% of our energy generation will come from renewable sources, and in 2030, our ambition is to reach 35-38 GW installed renewable capacity.
• We are making the preparations and are on track to phase out coal-based energy generation before 2025.

• In 2024, the world’s first green fuel vessel for offshore wind operations will launch off the UK East Coast, as a result of the agreement between Ørsted and ESVACT.

• We will continue to phase out our fossil-fueled vehicles, and by the end of 2025, our entire light vehicle fleet will be electric.

• During 2025, the Asnes and Avedere power stations will begin to capture and store biogenic carbon.

• We are committed to further enhancing our portfolio of nature-based carbon removal projects and are actively involved in the development of new initiatives in Africa and Southeast Asia, in collaboration with Danish NGOs and local community organisations.

## Value chain

During 2023, we have taken the following steps:

• Together with the Carbon Trust and eleven energy developers, we have launched a joint industry programme to develop the first industry-backed method for calculating the life cycle carbon footprint of offshore wind farms. This common methodology will help increase transparency for governments, investors, and suppliers and enable comparability across developers and assets.
• We have begun integrating our climate expectations into key supplier contracts, including CDP reporting, science-based target setting, and covering electricity consumption with renewable electricity. These requirements apply to suppliers in a number of high-impact categories, which collectively contribute significantly to our supply chain emissions and procurement spend.

• We have procured low-carbon copper for the export cable scope for the world’s single largest wind farm, Hornsea 3 in the UK. By choosing low-carbon copper, we have reduced the emissions from the export cable scope by approximately 50%.

• We have formed an industry-leading partnership with wind turbine supplier Vestas, including an early offtake agreement. We pledge to procure 25% low-emission steel turbine towers for oil joint projects, and, when available, blades made with recycled materials.

• We have signed a long-term large-scale supply agreement with Dillinger, our key steel manufacturer for foundations, which in part has enabled Dillinger to invest in a low-emission steel production route (DRI-EAF). This investment will reduce Dillinger's company emissions by 55% in 2030.

• To increase the collective demand signal for near-zero steel, we have joined the First Mover Coalition's Near-Zero Steel 2030 Challenge. The initiative builds on our near-zero steel commitments and aims to accelerate investments in near-zero steel by mapping suppliers' and companies' existing plans and connecting buyers with future suppliers of near-zero steel.

## Future actions:

• We will strive for a common standard to measure the life cycle carbon footprint of offshore wind farms, fostering comparability and amplifying transparency of embodied emissions.

• We will continue to develop tools to support our suppliers in their green transformations as we enhance the incorporation of sustainability in our sourcing processes. From 2024, we will also start engaging with suppliers on biodiversity, circularity, the carbon footprint of their products, and on their climate engagement of their own supply chains.

• We will continue to seek out partnerships with key strategic suppliers to further incentivise investments in low-emission technologies.



## Decarbonising our full value chain

2023 data \( ^{1} $  (1 kt = 1,000 tonnes of  \( CO_{2} \)  equivalents)



 \( ^{1} \)  Our carbon emissions accounting follows the Greenhouse Gas Protocol. This illustration shows the main sources of emissions per category. For our detailed emissions accounting, please see our greenhouse gas (GHG) emissions and intensity tables on pages 100-101.

 \( ^{2} \)  Supply chain emissions from energy sales activities are accounted for under the 'Energy sales' category.



## Targets

In 2021, Ørsted set a 2040 reduction target for scope 1-3 emissions and became the first energy company with a science-based net-zero target. As of today, we are on track to meet our near-term scope 1-2 intensity target, and we have already met our 2032 absolute scope 3 emissions target. To continue providing clarity on the near-term direction of our decarbonisation efforts, we have developed a portfolio of new near-term targets that outline our 2030 ambitions on the same KPIs that we already use for our 2040 targets. These new targets outline the pathway for our near-term efforts to decarbonise our value chain, while also putting a cap on emissions from natural gas sales based on the substantive reductions we have already achieved.

Our new 2030 targets have been submitted to the SBTi and are currently undergoing their formal target validation process. The SBTi expressed that they welcome our more ambitious 2030 decarbonisation targets, which provide a greater visibility on the pathway towards our science-based 2040 net-zero target.



Scope 1-2 greenhouse gas emissions intensity g CO₂e/kWh



Scope 1-3 greenhouse gas emissions intensity (excl. natural gas sales) g CO₂e/kWh



Scope 3 greenhouse gas emissions from natural gas sales
HM CO₂e

We are committed to continue driving the global transition to renewable energy sources. We are on track to reach our target of 99% renewable energy generation by 2025. Our commitment is reinforced by our strategic ambition to enhance our renewable energy capacity, aiming to reach a gross installed capacity of 35-36 GW by 2030. For more information on our ambition for installed renewable capacity, please refer to the 'Strategy and business' section.



Installed renewable capacity GW

Share of renewable energy generation %
%



## Overview by business unit

<table><tr><td>Data point</td><td>Unit</td><td>Offshore</td><td>Onshore</td><td>Bioenergy &amp; Other</td><td>activities/ eliminations</td><td>2023</td><td>2022</td><td>A</td></tr><tr><td>Installed renewable capacity</td><td>MW</td><td>8,871</td><td>4,785</td><td>2,075</td><td>-</td><td>15,731</td><td>15,121</td><td>4%</td></tr><tr><td>Offshore wind power</td><td>MW</td><td>8,871</td><td>-</td><td>-</td><td>-</td><td>8,871</td><td>8,871</td><td>0%</td></tr><tr><td>Onshore wind power</td><td>MW</td><td>-</td><td>3,717</td><td>-</td><td>-</td><td>3,717</td><td>3,464</td><td>7%</td></tr><tr><td>Solar PV power</td><td>MW</td><td>-</td><td>1,028</td><td>-</td><td>-</td><td>1,028</td><td>671</td><td>53%</td></tr><tr><td>Battery storage</td><td>MW</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>0%</td></tr><tr><td>Biomass-based thermal heat</td><td>MW</td><td>-</td><td>-</td><td>2,054</td><td>-</td><td>2,054</td><td>2,054</td><td>0%</td></tr><tr><td>Decided (FID&#x27;ed) renewable capacity</td><td>MW</td><td>6,672</td><td>1,579</td><td>-</td><td>72</td><td>8,323</td><td>4,340</td><td>92%</td></tr><tr><td>Awarded and contracted renewable capacity</td><td>MW</td><td>3,677</td><td>43</td><td>-</td><td>-</td><td>3,720</td><td>11,157</td><td>(67%)</td></tr><tr><td>Sum of installed, FID&#x27;d, and awarded/contracted capacity</td><td>MW</td><td>19,220</td><td>6,407</td><td>2,075</td><td>72</td><td>27,774</td><td>30,618</td><td>(9%)</td></tr><tr><td>Power generation capacity</td><td>MW</td><td>4,986</td><td>4,725</td><td>2,800</td><td>-</td><td>12,511</td><td>11,327</td><td>10%</td></tr><tr><td>Heat generation capacity, thermal</td><td>MW</td><td>-</td><td>-</td><td>3,353</td><td>-</td><td>3,353</td><td>3,353</td><td>0%</td></tr><tr><td>Power generation</td><td>GWh</td><td>17,761</td><td>13,374</td><td>4,437</td><td>-</td><td>35,572</td><td>35,641</td><td>(0%)</td></tr><tr><td>Heat generation</td><td>GWh</td><td>-</td><td>-</td><td>6,567</td><td>-</td><td>6,567</td><td>6,366</td><td>3%</td></tr><tr><td>Share of renewable energy generation</td><td></td><td>100</td><td>100</td><td>73</td><td>-</td><td>93</td><td>91</td><td>2%</td></tr><tr><td>Share of installed, FID&#x27;d, and awarded/contracted capacity</td><td></td><td>Thousand tonnes CO2e</td><td>32</td><td>-</td><td>-</td><td>-</td><td>-</td><td>0%</td></tr><tr><td>Greenhouse gas emissions (scope 1 and 2)</td><td></td><td>Thousand tonnes CO2e</td><td>213</td><td>121</td><td>5,256</td><td>41</td><td>5,631</td><td>10,983</td></tr><tr><td>Greenhouse gas emissions (scope 3)</td><td></td><td>Thousand tonnes CO2e</td><td>-</td><td>-</td><td>3,862</td><td>-</td><td>3,862</td><td>(47%)</td></tr><tr><td>Greenhouse gas emissions (scope 3. use of sold products) 1</td><td></td><td>Thousand tonnes CO2e</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(47%)</td></tr><tr><td>Greenhouse gas intensity (scope 1 and 2)</td><td></td><td>g CO2e/kWh</td><td>2</td><td>0</td><td>141</td><td>-</td><td>38</td><td>60</td></tr><tr><td>Greenhouse gas intensity (scope 1, 2, and 3) 2</td><td></td><td>g CO2e/kWh</td><td>14</td><td>9</td><td>267</td><td>-</td><td>80</td><td>147</td></tr></table>

 \( ^{1} \)  Scope 3 emissions from wholesale buying and selling of natural gas.

 \( ^{2} \)  Excludes scope 3 emissions from use of sold products (natural gas sales).



## Overview by country

<table><tr><td>Data point</td><td>Unit</td><td>Denmark</td><td>The UK</td><td>Germany</td><td>The Netherlands</td><td>The US</td><td>Taiwan</td><td>Poland</td><td>Other countries</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Installed renewable capacity</td><td>MW</td><td>3,061</td><td>5,795</td><td>1,383</td><td>752</td><td>4,299</td><td>45</td><td>-</td><td>396</td><td>15,731</td><td>15,121</td><td>4%</td></tr><tr><td>Offshore wind power</td><td>MW</td><td>1,006</td><td>5,692</td><td>1,348</td><td>752</td><td>30</td><td>45</td><td>-</td><td>-</td><td>8,871</td><td>8,871</td><td>0%</td></tr><tr><td>Onshore wind power</td><td>MW</td><td>-</td><td>83</td><td>27</td><td>-</td><td>3,215</td><td>-</td><td>-</td><td>392</td><td>3,717</td><td>3,464</td><td>7%</td></tr><tr><td>Solar PV power</td><td>MW</td><td>-</td><td>-</td><td>10</td><td>-</td><td>1,014</td><td>-</td><td>-</td><td>4</td><td>1,028</td><td>671</td><td>53%</td></tr><tr><td>Offshore solar</td><td>MW</td><td>1</td><td>20</td><td>-</td><td>-</td><td>40</td><td>-</td><td>-</td><td>-</td><td>61</td><td>0</td><td>0%</td></tr><tr><td>Biomass-based thermal heat</td><td>MW</td><td>2,054</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,054</td><td>2,054</td><td>0%</td></tr><tr><td>Decided (FIDe)d renewable capacity</td><td>MW</td><td>2</td><td>2,852</td><td>1,237</td><td>-</td><td>2,228</td><td>1,820</td><td>-</td><td>184</td><td>8,323</td><td>4,340</td><td>92%</td></tr><tr><td>Offshore wind power</td><td>MW</td><td>-</td><td>2,852</td><td>1,166</td><td>-</td><td>834</td><td>1,820</td><td>-</td><td>-</td><td>6,672</td><td>2,196</td><td>204%</td></tr><tr><td>Onshore wind power</td><td>MW</td><td>-</td><td>-</td><td>67</td><td>-</td><td>-</td><td>-</td><td>-</td><td>33</td><td>100</td><td>321</td><td>(69%)</td></tr><tr><td>Solar PV power</td><td>MW</td><td>-</td><td>-</td><td>4</td><td>-</td><td>1,094</td><td>-</td><td>-</td><td>81</td><td>1,179</td><td>1,451</td><td>(19%)</td></tr><tr><td>Battery storage</td><td>MW</td><td>-</td><td>-</td><td>-</td><td>-</td><td>300</td><td>-</td><td>-</td><td>-</td><td>300</td><td>300</td><td>0%</td></tr><tr><td>Other</td><td>MW</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>70</td><td>-</td><td>-</td><td>0%</td></tr><tr><td>Awarded and contracted renewable capacity</td><td>MW</td><td>-</td><td>-</td><td>-</td><td>-</td><td>924</td><td>-</td><td>2,753</td><td>43</td><td>3,720</td><td>11,157</td><td>(67%)</td></tr><tr><td>Sum of installed, FIDe,d, and awarded/contracted capacity</td><td>MW</td><td>3,063</td><td>8,647</td><td>2,620</td><td>752</td><td>7,451</td><td>1,865</td><td>2,753</td><td>623</td><td>27,774</td><td>30,618</td><td>(9%)</td></tr><tr><td>Power generation capacity</td><td>MW</td><td>3,361</td><td>2,908</td><td>705</td><td>376</td><td>4,249</td><td>516</td><td>-</td><td>396</td><td>12,511</td><td>11,327</td><td>10%</td></tr><tr><td>Offshore wind power</td><td>MW</td><td>561</td><td>2,630</td><td>673</td><td>376</td><td>30</td><td>516</td><td>-</td><td>-</td><td>4,986</td><td>4,672</td><td>7%</td></tr><tr><td>Onshore wind power</td><td>MW</td><td>-</td><td>78</td><td>22</td><td>-</td><td>3,215</td><td>-</td><td>-</td><td>392</td><td>3,707</td><td>3,454</td><td>7%</td></tr><tr><td>Solar PV power</td><td>MW</td><td>-</td><td>-</td><td>10</td><td>-</td><td>1,004</td><td>-</td><td>-</td><td>-</td><td>4</td><td>1,018</td><td>661</td></tr><tr><td>Offshore solar</td><td>MW</td><td>2,800</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,800</td><td>2,540</td><td>10%</td></tr><tr><td>Heat generation capacity, thermal</td><td>MW</td><td>3,353</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>3,353</td><td>3,353</td><td>0%</td></tr><tr><td>Power generation</td><td>GWh</td><td>6,405</td><td>11,037</td><td>2,145</td><td>1,449</td><td>12,343</td><td>1,291</td><td>-</td><td>902</td><td>35,572</td><td>35,641</td><td>(0%)</td></tr><tr><td>Heat generation</td><td>GWh</td><td>6,587</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>6,587</td><td>6,368</td><td>3%</td></tr><tr><td>Share of renewable energy generation</td><td>%</td><td>77</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td><td>93</td><td>91</td><td>2%</td></tr><tr><td>Greenhouse gas emissions (scope 1 and 2)</td><td>Thousand tonnes CO2e</td><td>1,555</td><td>17</td><td>6</td><td>2</td><td>2</td><td>4</td><td>-</td><td>0</td><td>1,586</td><td>2,511</td><td>(37%)</td></tr><tr><td>Greenhouse gas intensity (scope 1 and 2)</td><td>g CO2e/kWh</td><td>120</td><td>2</td><td>3</td><td>1</td><td>0</td><td>3</td><td>-</td><td>0</td><td>38</td><td>60</td><td>(37%)</td></tr></table>



## Renewable capacity

Business drivers

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Installed renewable capacity</td><td>MW</td><td>-35.36 GW(2030)</td><td>15,731</td><td>15,121</td><td>610</td></tr><tr><td>Offshore, wind power</td><td>MW</td><td>-20.22 GW(2030)</td><td>6,871</td><td>8,871</td><td></td></tr><tr><td>Onshore</td><td>MW</td><td>-11.13 GW(2030)</td><td>4,785</td><td>4,175</td><td>610</td></tr><tr><td>Wind power</td><td>MW</td><td></td><td>3,717</td><td>3,464</td><td>253</td></tr><tr><td>Solar PV power \( ^{1} \)</td><td>MW</td><td></td><td>1,028</td><td>671</td><td>357</td></tr><tr><td>Battery storage \( ^{1} \)</td><td>MW</td><td></td><td>40</td><td>40</td><td>-</td></tr><tr><td>Bioenergy \( ^{1} \)</td><td>MW</td><td>-2 GW(2030)</td><td>2,075</td><td>2,075</td><td>-</td></tr><tr><td>Other</td><td>MW</td><td>-1 GW(2030)</td><td></td><td></td><td></td></tr><tr><td>Decided (FID \( ^{2} \)  renewable capacity)</td><td>MW</td><td></td><td>8,323</td><td>4,340</td><td>3,983</td></tr><tr><td>Offshore, wind power</td><td>MW</td><td></td><td>6,672</td><td>2,196</td><td>4,476</td></tr><tr><td>Onshore</td><td>MW</td><td></td><td>1,579</td><td>2,072</td><td>(493)</td></tr><tr><td>Wind power</td><td>MW</td><td></td><td>100</td><td>321</td><td>(221)</td></tr><tr><td>Solar PV power \( ^{1} \)</td><td>MW</td><td></td><td>1,179</td><td>1,451</td><td>(272)</td></tr><tr><td>Battery storage \( ^{1} \)</td><td>MW</td><td></td><td>300</td><td>300</td><td>-</td></tr><tr><td>PWR</td><td>MW</td><td></td><td>72</td><td>72</td><td>-</td></tr><tr><td>Awarded and contracted renewable capacity \( ^{3} \)</td><td>MW</td><td></td><td>3,720</td><td>11,157</td><td>(7,437)</td></tr><tr><td>Offshore, wind power</td><td>MW</td><td></td><td>3,677</td><td>11,157</td><td>(7,480)</td></tr><tr><td>Onshore, wind power</td><td>MW</td><td></td><td>43</td><td>-</td><td>43</td></tr><tr><td>Sum of installed and FID \( ^{2} \)  renewable capacity</td><td>MW</td><td></td><td>24,054</td><td>19,461</td><td>4,593</td></tr><tr><td>Sum of installed, FID \( ^{2} \) , and awarded/contracted</td><td>MW</td><td></td><td>27,774</td><td>30,618</td><td>(2,844)</td></tr></table>

 \( ^{1} \)  Both the solar PV and battery storage capacities are measured in megawatts of alternating current (MW·e).

 \( ^{2} \)  Including thermal heat capacity from biomass and battery capacity not in Onshore (21 MW).

 \( ^{3} \)  We have removed Baltimore (65 MW) from our contracted renewable capacity.

Additions for the last 12 months

● Installed capacity ● Decided (FID \( ^{2} \)  capacity) ● Awarded offshore and contracted (onshore) capacity

<table><tr><td>Q1 2023</td><td>Q2 2023</td><td>Q3 2023</td><td>Q4 2023</td></tr><tr><td>Q1 Q3, solar PV (357 MW - 80% of total capacity)</td><td>Battica 2, offshore wind (210 MW)</td><td>Sunflower Wind, onshore wind (20 MW)</td><td>Hornsea 3, offshore wind (2,852 MW)</td></tr><tr><td>Greater Changha 2b and 4, offshore wind (920 MW)</td><td>Lishen 3, onshore wind (29 MW)</td><td>Farranory, onshore wind (43 MW)</td><td>Ballykelen, onshore wind (16 MW)</td></tr><tr><td></td><td>Les Dix Huit, onshore wind (7 MW)</td><td>Carreelenen (Phase 1, solar PV (81 MW)</td><td>Revolution Wind, offshore wind (704 MW)</td></tr></table>

In 2023, we took final investment decisions (FIDs) on three offshore wind farms in each of our three regions: the offshore wind farm Hornsea 3 (2.9 GW) in the UK, the offshore wind farms Greater Changha 2b and 4 (0.9 GW) in Taiwan, and the offshore wind farm Revolution Wind (0.7 GW) in the US.

We have ceased development of our offshore wind projects Ocean Wind 1 and Ocean Wind 2 in the US. We have also decided to withdraw the Offshore Wind Renewable Energy Certificate (OREC) for our offshore wind project Skipjack in the US. In total, the three US projects amounted to a capacity of 3.2 GW, which we have removed from our awarded capacity.

## § Accounting policies

## Installed renewable capacity

The installed renewable capacity is calculated as renewable gross capacity installed by Ørsted accumulated over time. We include all capacities after commercial operation date (COD) has been reached, and where we had an ownership share and an EPC (engineering, construction and equipment) agreement. The O&M project. Capacities from acquisitions are added to the installed capacity. For installed renewable thermal capacity, we use the heat capacity, as well as the heat produced by the heat generation, and as biocondensers of the combined heat and power plants are driven by heat contracts.

Decided (FID \( ^{2} \)  renewable capacity)
Decided (FID \( ^{2} \)  capacity is renewable
(2023) and Wind investment decision
(FID) has been made.

Awarded and contracted renewable capacity
The awarded renewable capacity is based on the capacities which have been awarded to the companies which have been awarded to renewable capacity is the capacity for which Ørsted has signed a contract or power purchase agreement (PPA) concerning a new renewable energy asset. We include the full capacity of more than 50% of PPAs or offtake is secured. We only include awarded/contracted capacity for projects that we expect to develop.



## Generation capacity

Business drivers

<table><tr><td>Data point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Power generation capacity</td><td>MW</td><td>12,511</td><td>11,327</td><td>1,184</td></tr><tr><td>Offshore wind</td><td>MW</td><td>4,986</td><td>4,672</td><td>314</td></tr><tr><td>Denmark</td><td>MW</td><td>561</td><td>561</td><td>-</td></tr><tr><td>The UK</td><td>MW</td><td>2,830</td><td>2,988</td><td>(158)</td></tr><tr><td>Germany</td><td>MW</td><td>673</td><td>673</td><td>-</td></tr><tr><td>The Netherlands</td><td>MW</td><td>376</td><td>376</td><td>-</td></tr><tr><td>Italy</td><td>MW</td><td>516</td><td>44</td><td>472</td></tr><tr><td>The US</td><td>MW</td><td>30</td><td>30</td><td>-</td></tr><tr><td>Onshore wind</td><td>MW</td><td>3,707</td><td>3,454</td><td>253</td></tr><tr><td>The US</td><td>MW</td><td>3,215</td><td>3,014</td><td>201</td></tr><tr><td>Ireland</td><td>MW</td><td>351</td><td>332</td><td>29</td></tr><tr><td>The UK</td><td>MW</td><td>78</td><td>62</td><td>16</td></tr><tr><td>France</td><td>MW</td><td>41</td><td>34</td><td>7</td></tr><tr><td>Germany</td><td>MW</td><td>22</td><td>22</td><td>-</td></tr><tr><td>Solar PV</td><td>MW</td><td>1,018</td><td>661</td><td>357</td></tr><tr><td>The US</td><td>MW</td><td>1,004</td><td>647</td><td>357</td></tr><tr><td>France</td><td>MW</td><td>4</td><td>4</td><td>-</td></tr><tr><td>Germany</td><td>MW</td><td>10</td><td>10</td><td>-</td></tr><tr><td>Thermal, Denmark (CHP plants)</td><td>MW</td><td>2,800</td><td>2,540</td><td>260</td></tr><tr><td>Heat generation capacity, thermal</td><td>MW</td><td>3,353</td><td>3,353</td><td>-</td></tr><tr><td>Based on biomass</td><td>MW</td><td>2,032</td><td>2,032</td><td>-</td></tr><tr><td>Based on coal</td><td>MW</td><td>1,300</td><td>1,300</td><td>-</td></tr><tr><td>Based on natural gas</td><td>MW</td><td>1,600</td><td>1,624</td><td>-</td></tr><tr><td>Heat generation capacity, electric</td><td>MW</td><td>225</td><td>25</td><td>200</td></tr><tr><td>Power generation capacity, thermal</td><td>MW</td><td>2,800</td><td>2,540</td><td>260</td></tr><tr><td>Based on biomass</td><td>MW</td><td>1,228</td><td>1,228</td><td>-</td></tr><tr><td>Based on coal</td><td>MW</td><td>1,200</td><td>1,200</td><td>-</td></tr><tr><td>Based on natural gas</td><td>MW</td><td>951</td><td>951</td><td>-</td></tr><tr><td>Based on oil</td><td>MW</td><td>734</td><td>474</td><td>260</td></tr></table>

Our power generation capacity increased by 10% to 12,511 MW in 2023. Offshore wind power generation capacity increased by 314 MW, primarily due to the ramp-up of our offshore wind farms Greater Changhua 1 and 2a in Taiwan. Onshore wind power generation capacity increased by 253 MW, primarily due to the commissioning of the onshore wind farm Sunflower Wind (201 MW) in the US. Solar PV power generation capacity increased by 357 MW, due to the partial commissioning of the solar farm Oil 300 in the US.

Thermal power generation capacity (based on oil) increased by 260 MW in 2023 due to an extra unit at Kyndby Peak Load Plant being temporarily back in operation. Heat generation capacity (electric) increased by 200 MW, as four new electric boilers were commissioned at Studstrup Power Station in February 2023.

## § Accounting policies

## Power generation capacity

Power generation capacity for an offshore wind farm is calculated and included from the time when the individual wind turbine has passed a 250-kW test. Power generation capacity for onshore wind and solar farms are included after commercial operation date (COD) has been reached. The COD is the date when the fleet sends 1.8 & 2 and Walney 1 & 2 have been consolidated according to ownership interest. Other wind farms, solar farms, and combined heat and power (CHP) plants have been financed using COD.

Heat and power generation capacity, thermal
Thermal heat and power generation capacity is a measure of the maximum capability to generate heat and power. The capacity may change over time due to the installation of new CHP plant, the capacity is given for generation with the primary fuel mix. Overload is not included. CHP plants which have been taken off the grid for operation and put on standby are not included.

Fuel-specific thermal heat and power generation capacities measure the maximum capacity using the specified fuel as primary fuel at the time of the measurement. This could be used to total thermal capacity, as they are defined individually for each fuel type for our multi-fuel plants. All fuels cannot be used at the same time. Therefore, the total sum amounts to more than 100%.



## Energy business drivers
Business drivers

<table><tr><td>Data point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Offshore wind</td><td></td><td></td><td></td><td></td></tr><tr><td>Wind speed</td><td>m/s</td><td>9.8</td><td>9.5</td><td>3%</td></tr><tr><td>Wind speed, normal wind year</td><td>m/s</td><td>9.9</td><td>9.7</td><td>2%</td></tr><tr><td>Availability</td><td>%</td><td>93</td><td>94</td><td>(1%)</td></tr><tr><td>Load factor</td><td>%</td><td>43</td><td>42</td><td>1%</td></tr><tr><td>Onshore wind</td><td></td><td></td><td></td><td></td></tr><tr><td>Wind speed</td><td>m/s</td><td>7.2</td><td>7.4</td><td>(3%)</td></tr><tr><td>Wind speed, normal wind year</td><td>m/s</td><td>7.4</td><td>7.3</td><td>1%</td></tr><tr><td>Availability</td><td>%</td><td>86</td><td>93</td><td>(5%)</td></tr><tr><td>Load factor</td><td>%</td><td>36</td><td>40</td><td>(4%)</td></tr><tr><td>Solar PV</td><td></td><td></td><td></td><td></td></tr><tr><td>Availability</td><td>%</td><td>98</td><td>98</td><td>0%</td></tr><tr><td>Load factor</td><td>%</td><td>24</td><td>25</td><td>(1%)</td></tr><tr><td>Other</td><td></td><td></td><td></td><td></td></tr><tr><td>Degree days, Denmark</td><td>Number</td><td>2,585</td><td>2,548</td><td>1%</td></tr></table>

## Offshore wind

Offshore wind speeds in 2023 were 3% higher than in 2022, but 1% below a normal wind year. Availability in 2023 was 1 percentage point lower than in 2022. The higher wind speeds resulted in a 1 percentage point increase of the load factor in 2023.

## Onshore wind

Onshore wind speeds in 2023 were 3% lower than in 2022 and 3% lower than in a normal wind year. Availability was 5 percentage points lower in 2023 than in 2022. The lower wind speeds and availability resulted in a 4 percentage point lower load factor in 2023.

## Solar PV

Availability in 2023 was at the same level as in 2022, but the load factor decreased by 1 percentage point.

## Other

The number of degree days in 2023 was 1% higher than in 2022, indicating that the weather in 2023 was slightly colder than in 2022.

In G4 2023, the number of degree days was 12% higher than in G4 2022, which means that the weather at the end of 2023 was much colder than in 2022.

## § Accounting policies

## Wind speeds

Wind speeds for the areas where Ørsted's offshore and onshore wind farms are located are provided to Ørsted by an external supplier. Wind speeds are weighted on the basis of the capacity of the individual wind farms and consolidated to an Ørsted total for offshore and onshore, respectively. Normal wind speed is a historical wind speed average (over a minimum 20-year period).

## Availability

Availability is calculated as the ratio of actual production to the possible production, which is calculated as the ratio of the actual production in a given period. The production-based availability (PBA) is impacted by grid and wind turbine outages, which are technical production interruptions. The PBA is calculated by requested shutdowns and wind farm curtailments as these are due to external factors.

## Load factor

The load factor is calculated as the ratio of the actual load to the possible load. This is a relative to potential generation, which is possible by continuously exploiting the maximum capacity over the same period. The load factor is commercially calculated. This means that the offshore wind farm has been financially compensated by the transmission system operators when it is available for generation, but the output cannot be supplied to the grid due to maintenance or grid interruptions. New offshore wind turbines are included in the calculations for the year 2023. The onshore wind turbines passed a 240-hour test. Onshore wind turbines are included once they have passed commercial operation date (COD).

## Degree days

The number of degree days expresses the difference between on-ramp indoor temperature of  $ 17^{\circ} \) C and the outside mean temperature for a given period. It helps compare the heat demand for a given year with a normal year.



## Energy generation and sales
Business drivers

<table><tr><td>Data point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Power generation</td><td>GWh</td><td>35,572</td><td>35,641</td><td>(9%)</td></tr><tr><td>Offshore wind</td><td>GWh</td><td>17,761</td><td>16,463</td><td>8%</td></tr><tr><td>Denmark</td><td>GWh</td><td>1,970</td><td>2,084</td><td>(5%)</td></tr><tr><td>The UK</td><td>GWh</td><td>10,887</td><td>10,989</td><td>(1%)</td></tr><tr><td>Germany</td><td>GWh</td><td>2,076</td><td>1,949</td><td>7%</td></tr><tr><td>The Netherlands</td><td>GWh</td><td>1,449</td><td>1,259</td><td>15%</td></tr><tr><td>The US</td><td>GWh</td><td>88</td><td>110</td><td>(20%)</td></tr><tr><td>Canada</td><td>GWh</td><td>1,291</td><td>1,192</td><td>13%</td></tr><tr><td>Onshore wind</td><td>GWh</td><td>11,228</td><td>11,225</td><td>0%</td></tr><tr><td>The US</td><td>GWh</td><td>10,124</td><td>10,389</td><td>(3%)</td></tr><tr><td>Ireland</td><td>GWh</td><td>809</td><td>761</td><td>6%</td></tr><tr><td>France</td><td>GWh</td><td>89</td><td>18</td><td>394%</td></tr><tr><td>Germany</td><td>GWh</td><td>1,201</td><td>1,202</td><td>0%</td></tr><tr><td>The UK</td><td>GWh</td><td>148</td><td>44</td><td>256%</td></tr><tr><td>Solar PV</td><td>GWh</td><td>2,146</td><td>1,921</td><td>12%</td></tr><tr><td>The US</td><td>GWh</td><td>2,131</td><td>1,920</td><td>11%</td></tr><tr><td>Germany</td><td>GWh</td><td>11</td><td>-</td><td>-</td></tr><tr><td>France</td><td>GWh</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Denmark</td><td>GWh</td><td>4,437</td><td>6,012</td><td>(26%)</td></tr><tr><td>The Netherlands</td><td>GWh</td><td>6,587</td><td>6,368</td><td>3%</td></tr><tr><td>Total heat and power generation</td><td>GWh</td><td>42,159</td><td>42,009</td><td>0%</td></tr><tr><td>Of which, wind and solar PV power generation</td><td>GWh</td><td>31,135</td><td>29,629</td><td>9%</td></tr><tr><td>Of which, thermal heat and power generation</td><td>GWh</td><td>11,024</td><td>12,380</td><td>(11%)</td></tr><tr><td>Of which, thermal heat and power generation</td><td>%</td><td>26</td><td>29</td><td>(3%)</td></tr><tr><td>Gas sales</td><td>GWh</td><td>16,880</td><td>31,637</td><td>(47%)</td></tr><tr><td>Power sales</td><td>GWh</td><td>21,448</td><td>23,914</td><td>(8%)</td></tr><tr><td>Green power to end customers?</td><td>GWh</td><td>881</td><td>2,294</td><td>(62%)</td></tr><tr><td>Regular power to end customers?</td><td>GWh</td><td>1,567</td><td>2,500</td><td>(37%)</td></tr><tr><td>Power wholesale</td><td>GWh</td><td>19,000</td><td>18,400</td><td>3%</td></tr></table>

1 2022 wholesale power volumes have been adjusted according to the change in capacity following per generation of revenue see note 1.2 'Basis of preparation' in the financial statements.

 \( ^{2} \)  Power sold with renewable certificates.

 \( ^{3} \)  Power sold without renewable certificates.

Offshore wind power generation increased by 8% to 17.6 TWh in 2023 due to higher generation capacity and higher wind speeds in 2023 compared to 2022.

Onshore wind power generation was 11.2 TWh in 2023, as in 2022. The increase in generation at our European onshore wind farms was offset by decreased generation at several of our US onshore wind farms. Solar PV generation increased by 1.2% to 2.1 TWh due to increased generation at our solar farm Old 300.

Thermal power generation decreased by 26% in 2023, primarily driven by lower condensing generation due to lower power prices and market spreads compared to 2022.

Heat generation was 3% higher in 2023 compared to 2022 due to colder weather in 2023, especially in Q4 2023.

Gas sales decreased significantly by 47% to 16.9 TWh in 2023. This was primarily due to lower UK sourcing volumes, mainly due to the phasing out of our UK B2B activities as well as expired contracts. It was also due to Gazprom Export's suspension of its gas supplies to Ørsted on 1 June 2022 and Ørsted's subsequent termination of the supply contract during Q1 2023.

Power sales decreased by 8% to 21.4 TWh in 2023 due to a 62% and 37% decrease in green and regular power to end customers, respectively. This was primarily driven by the phasing out of our UK B2B business. The decrease was partly offset by a 3% increase in wholesale power to 19.0 TWh, primarily driven by the 50% farm-down of the fully operational offshore wind farm Hornsea 2 in Q3 2022, resulting in increased power volumes sold on behalf of our partners.

## § Accounting policies

## Power generation

Power generation from wind and solar farms is determined as generation sold. The offshore wind farms Countest Sands 1 & 2 and Walney 1 & 2 have been consolidated according to average ship interest. Other wind farms, solar farms, and combined heat and power (CHP) plants have been financially consolidated.

Thermal power generation is determined as net generation sold, based on settlements from the official Danish production database. Data for generation from offshore facilities is provided by the operators.

## Heat generation

Heat (including steam) generation is measured as net output sold to heat customers.

## Gas and power sales

Sales of gas and power are calculated as physical sales to retail and wholesale customers and exchanges. Sales are based on readings from Ørsted's trading systems. Internal sales to our combined heat and power (CHP) plants are not included in the statement.



## Share of renewable energy generation
Business drivers

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Total heat and power generation</td><td>%</td><td></td><td>100</td><td>100</td><td>0%</td></tr><tr><td>From offshore wind</td><td>%</td><td></td><td>42</td><td>39</td><td>3%</td></tr><tr><td>From onshore wind</td><td>%</td><td></td><td>27</td><td>27</td><td>0%</td></tr><tr><td>From solar PV</td><td>%</td><td></td><td>5</td><td>5</td><td>0%</td></tr><tr><td>From sustainable biomass</td><td>%</td><td></td><td>18</td><td>20</td><td>(2%)</td></tr><tr><td>From other renewable energy sources</td><td>%</td><td></td><td>1</td><td>0</td><td>1%</td></tr><tr><td>From coal</td><td>%</td><td></td><td>0</td><td>8</td><td>(2%)</td></tr><tr><td>From natural gas</td><td>%</td><td></td><td>1</td><td>1</td><td>0%</td></tr><tr><td>From other fossil energy sources</td><td>%</td><td></td><td>0</td><td>0</td><td>0%</td></tr><tr><td>Share of renewable energy generation</td><td>%</td><td>99 (2025)</td><td>93</td><td>91</td><td>2%</td></tr><tr><td>Offshore</td><td>%</td><td></td><td>100</td><td>100</td><td>0%</td></tr><tr><td>Onshore</td><td>%</td><td></td><td>100</td><td>100</td><td>0%</td></tr><tr><td>Bioenergy &amp; Other</td><td>%</td><td></td><td>73</td><td>68</td><td>5%</td></tr></table>

## Total heat and power generation by energy source 2023

<table><tr><td>42</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>27</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>18</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>6</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>5</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>1</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>1</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

Share of renewable energy generation %
%

<table><tr><td>2023</td><td>93</td></tr><tr><td>2022</td><td>91</td></tr></table>

* Other renewable and fossil energy sources

The share of our renewable heat and power generation increased by 2 percentage points to 93% in 2023.

The 2 percentage point increase in the renewable energy share was due to the 3 percentage point increase in offshore wind power generation and the 1 percentage point increase in other renewable energy sources (certified renewable power for heat boilers), partly offset by a 2 percentage point decrease in the share of sustainable biomass-based generation.

The increase in offshore wind power generation was primarily due to the ramp-up of our offshore wind farms Greater Changhua 1 and 2n in Taiwan and higher wind speeds in 2023 compared to 2022.

The share of sustainable biomass-based generation decreased by 2 percentage points.
This was due to a temporary switch from biomass to coal usage at Studstrup Power Station from the autumn of 2022 until Q2 2023 following a fire in the wood pellet silo, and lower biomass-based condensing generation driven by lower market spreads. This was partly offset by higher heat demand and thereby higher biomass-based generation in Q4 2023.

The 1 percentage point increase in other renewable energy sources was driven by heat generation from the new electric boilers at the Studstrup Power Station using sourced green power.

The share of coal-based generation decreased by 2 percentage points, mainly driven by lower coal-based condensing driven by significantly lower power spot prices, hence reduced spreads.

## § Accounting policies

Share of renewable energy generation
The renewable energy share of our heat and power generation is calculated on the basis of the energy sources used and the energy generated at the different assets.

For combined heat and power (CHP) plants, the share of renewable energy generation in biomass) is calculated relative to the total fuel consumption for a given plant or unit within a given time period.

The specific fuel share is then multiplied by the total heat and power generation for the year, and then divided by the total fuel used. The result is the fuel-based generation for the individual plant or unit, for example the sustainable biomass-based generation of heat and power from the CHP plant until within a given time period.

The percentage shares of the individual energy sources are calculated by dividing the generation from the individual energy source by the total generation.

The following energy sources and fuels are considered to be renewable energy: wind, solar PV, sustainable biomass, biogas, and power sourced with renewable energy certificates. The following energy sources are considered to be fossil energy sources: coal, natural gas, and oil.



## Energy consumption

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Direct energy consumption (GHG, scope 1)</td><td>GWh</td><td>14,036</td><td>18,850</td><td>(21)%</td><td></td></tr><tr><td>Fuels used in thermal heat and power generation</td><td>GWh</td><td>14,764</td><td>18,649</td><td>(21)%</td><td></td></tr><tr><td>Sustainable biomass</td><td>GWh</td><td>10,074</td><td>11,258</td><td>(11)%</td><td></td></tr><tr><td>Cool</td><td>GWh</td><td>(0 2025)1</td><td>3,782</td><td>6,677</td><td>(43)%</td></tr><tr><td>Natural gas</td><td>GWh</td><td></td><td>746</td><td>289</td><td>1,58%</td></tr><tr><td>Heat</td><td>GWh</td><td></td><td>162</td><td>425</td><td>(62)%</td></tr><tr><td>Other energy usage (oil, gas, and diesel for vessels and vehicles)</td><td>GWh</td><td></td><td>172</td><td>210</td><td>(18)%</td></tr><tr><td>Cool used in thermal heat and power generation</td><td>Thousand tonnes</td><td>(0 2025)1</td><td>546</td><td>996</td><td>(45)%</td></tr><tr><td>Certified sustainable wood biomass sourced \( ^{2} \)</td><td></td><td></td><td>100</td><td>100</td><td>0%</td></tr><tr><td>Indirect energy consumption (GHG, scope 2)</td><td>GWh</td><td></td><td>632</td><td>308</td><td>105%</td></tr><tr><td>Power sourced for own consumption</td><td>GWh</td><td></td><td>618</td><td>293</td><td>111%</td></tr><tr><td>Own power consumption covered by renewable energy certificates</td><td>%</td><td>100 (engagement) 1</td><td>100</td><td>100</td><td>0%</td></tr><tr><td>Heat sourced for own consumption</td><td>GWh</td><td></td><td>14</td><td>15</td><td>(7)%</td></tr><tr><td>Total direct and indirect energy consumption</td><td>GWh</td><td></td><td>15,568</td><td>19,167</td><td>(19)%</td></tr><tr><td>Green share of total direct and indirect energy consumption</td><td>%</td><td></td><td>69</td><td>60</td><td>9%</td></tr><tr><td>Internal energy savings, accumulated from 2018</td><td>GWh</td><td></td><td>52</td><td>46</td><td>13%</td></tr><tr><td>Electric vehicles in the company vehicle fleet</td><td>%</td><td>100 (2025)</td><td>65</td><td>51</td><td>14%</td></tr></table>

1 Our target is to phase out cool before 2025. The Danish authorities have ordered us to continue and resume the operation of three of our power station units which use cool and oil until 31 August 2024.

2 We are committed to use 100% certified sustainable wood biomass.

3 Our target is to have our own power consumption 100% covered by renewable energy certificates.
The total fuel consumption used for heat and power generation decreased by 21% in 2023 compared to 2022, driven by the 11% decrease in thermal heat and power generation. Fuel consumption decreased more than thermal generation because of lower condensing generation in 2023 compared to 2022. Condensing generation (power generation only) has lower fuel efficiency than combined heat and power generation.

The consumption of sustainable biomass decreased by 11%, primarily due to the switch from sustainable biomass to coal-based generation at Studstrup Power Station following a fire in the wood pellet silo in the autumn of 2022. In Q2 2023, we switched back to sustainable biomass at Studstrup Power Station. In addition, there has been lower biomass condensing in 2023 due to lower power prices.

The consumption of coal decreased by 43%, mainly due to lower coal-based condensing driven by significantly lower power spot prices in 2023, hence reduced spreads.

Natural gas consumption increased by 158% in 2023, mainly driven by lower gas prices and improved spreads compared to 2022.

## § Accounting policies

Direct energy consumption (GHG, scope 1)
Direct energy consumption includes all energy consumption, including energy consumption that tends to scope 1 GHG emissions. Energy consumption includes fuel used to conduct indirect heat and power (CHP) plants (lower caloric values) and other energy usage (oil, natural gas, etc.) in scope 1.

Certified sustainable wood biomass sourced Certified sustainable wood biomass sourced is calculated as the amount of certified sustainable wood biomass sourced divided by the amount of certified sustainable wood biomass used, wood pellets and wood chips, delivered to individual CHP plants within the reporting period. Certified sustainable wood biomass must be certified within at least one of the claim categories accepted by the Danish industry agreement on certified biomass. Accepted claim categories are FSC, MSC, FSC, FSC Map, FSC MP, FSC 100%, and SBP-compliant.

Indirect energy consumption (GHG, scope 2)
Heat and power purchased and consumed by Ørsted are reported for CHP plants, other facilities, or manufacture distributed by Danish and power consumption excludes consumption of own generated heat and power at our CHP plants. For communications related to disinformation and other processes, we calculate direct consumption on the basis of invoices.

## Green share of total direct and indirect energy consumption

The green share is calculated as renewable energy sourced (biomass and certified green power) for own consumption divided by total energy sourced for own consumption.

## Internal energy savings

The scope of the energy savings covers both heat and power consumption and process optimisation savings at our CHP plants (i.e. fuel savings). GHG (Scope 1) projects are included when they are fully implemented and operational.

Electric vehicles in the company vehicle fleet Ørsted is a member of the Climate Group's EV100 initiative. The statement is prepared on the basis of the EV100 guidelines.



## Greenhouse gas (GHG) emissions
Scope 1, 2, and 3

<table><tr><td>Date point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>A</td></tr><tr><td>Direct GHG emissions (scope 1)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total scope 1 GHG emissions</td><td>Thousand tonnes CO2e</td><td></td><td>1,585</td><td>2,510</td><td>(37)%</td></tr><tr><td>Covered by the EU Emissions Trading System</td><td>%</td><td></td><td>96</td><td>97</td><td>(1)%</td></tr><tr><td>Indirect GHG emissions (scope 2)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Location-based</td><td>Thousand tonnes CO2e</td><td></td><td>93</td><td>45</td><td>107%</td></tr><tr><td>Market-based</td><td>Thousand tonnes CO2e</td><td></td><td>1</td><td>1</td><td>0%</td></tr><tr><td>Indirect GHG emissions (scope 3)</td><td>Thousand tonnes CO2e</td><td></td><td>5,631</td><td>10,983</td><td>(49)%</td></tr><tr><td>CI: purchased goods and services</td><td>Thousand tonnes CO2e</td><td></td><td>328</td><td>350</td><td>(6)%</td></tr><tr><td>C2: capital goods</td><td>Thousand tonnes CO2e</td><td></td><td>91</td><td>1,456</td><td>(94)%</td></tr><tr><td>C3: fuel- and energy-related activities</td><td>Thousand tonnes CO2e</td><td></td><td>1,314</td><td>1,836</td><td>(28)%</td></tr><tr><td>C4: upstream transportation and distribution</td><td>Thousand tonnes CO2e</td><td></td><td>0</td><td>1</td><td>(100)%</td></tr><tr><td>C5: value generated in operations</td><td>Thousand tonnes CO2e</td><td></td><td>3</td><td>2</td><td>50%</td></tr><tr><td>C6: business travel</td><td>Thousand tonnes CO2e</td><td></td><td>18</td><td>15</td><td>20%</td></tr><tr><td>C7: employee commuting</td><td>Thousand tonnes CO2e</td><td></td><td>13</td><td>11</td><td>18%</td></tr><tr><td>C9: downstream transport and distribution</td><td>Thousand tonnes CO2e</td><td></td><td>2</td><td>3</td><td>(33)%</td></tr><tr><td>C11: use of sold products</td><td>Thousand tonnes CO2e</td><td>67% (2030), 60% (2040)</td><td>3,862</td><td>7,309</td><td>(47)%</td></tr><tr><td>Total GHG emissions (location-based) \( ^{1} $</td><td>Thousand tonnes CO2e</td><td></td><td>7,309</td><td>13,538</td><td>(46)%</td></tr><tr><td>Total GHG emissions (market-based) \( ^{1} $</td><td>Thousand tonnes CO2e</td><td></td><td>7,217</td><td>13,494</td><td>(47)%</td></tr><tr><td>Scope 1, 2, and 3 (excl. natural gas sales)</td><td>Thousand tonnes CO2e</td><td></td><td>3,355</td><td>6,185</td><td>(46)%</td></tr><tr><td>Scope 3 (excl. natural gas sales)</td><td>Thousand tonnes CO2e</td><td></td><td>1,769</td><td>3,674</td><td>(52)%</td></tr><tr><td>GHG emissions outside of scope 1-3</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Direct biogenic carbon emissions \( ^{1} $</td><td>Thousand tonnes CO2e</td><td></td><td>3,544</td><td>3,961</td><td>(11)%</td></tr></table>

 \( ^{1} \)  Our targets to reduce scope 3 emissions from sold products by 67% in 2030 and 90% in 2040 relate to wholesale buying and selling of natural gas from the base year 2018.

 \( ^{2} \)  Total GHG emissions including scope 2 GHG emissions measured under the EU ETS scheme.

 \( ^{3} \)  Total GHG emissions including scope 2 GHG emissions measured using the market-based method.
 \( ^{*} \)  According to the GHG Protocol, the carbon emissions from burning biomass are net-zero for scope 1 direct emissions, since the amount of carbon absorbed by the biomass during the growth phase is equivalent to the amount of carbon released through combustion.

## Scope 1

Scope 1 greenhouse gas (GHG) emissions decreased by 37% from 2022 to 2023. The main driver was the 43% decrease in the use of coal, partly offset by the 158% increase in the use of natural gas.

In 2023, fossil fuel-based heat and power generation was accountable for 97% of the total scope 1 emissions. Fuel for vessels are the main contributor to the remaining 3%.

## Scope 2

Location-based scope 2 emissions increased by 107% from 2022 to 2023. The main source of location-based scope 2 emissions was power purchased for the generation of heat in electric boilers at our CHP plants.

All power purchased and consumed by  \( Ø \) rsted is certified green power. Therefore, our market-based scope 2 GHG emissions from power consumption amounted to zero tonnes carbon dioxide equivalents, and the remaining one thousand tonnes carbon dioxide equivalents came from our heat consumption.

## Scope 3

Scope 3 greenhouse gas emissions decreased by 49% from 2022 to 2023, primarily driven by the 47% reduction in scope 3 emissions from natural gas sales (category 11).
Scope 3 emissions from capital goods (category 2) decreased by 94% as we only commissioned four onshore wind farms (totalling 253 MWh) in 2023, whereas we commissioned more wind farms in 2022, including the offshore wind farm Hornsea 2 (L, 320 MWh). The scope 3 impact from the partly-commissioned solar farm Old 300 will be reported when the solar farm is fully commissioned, expected in 2024.

Scope 3 emissions from fuel- and energy-related activities (category 3) decreased by 28% due to the 37% reduction in regular power sales to end customers and the 21% reduction in fuel consumption at the CHP plants in 2023.

## GHG emissions outside of scope 1-3

Direct biogenic carbon emissions were 11% lower in 2023 than in 2022 as a result of the 11% reduction in the use of sustainable biomass as fuel.



## Greenhouse gas (GHG) emissions
GHG intensity

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>GHG intensity (scope 1 and 2)</td><td>g CO2e/kWh</td><td></td><td></td><td></td><td></td></tr><tr><td>GHG intensity, energy generation</td><td>g CO2e/kWh</td><td>6 (2030), 1 (2040)</td><td>38</td><td>60</td><td>(37)%</td></tr><tr><td>Offshore</td><td>g CO2e/kWh</td><td>2</td><td>2</td><td>0%</td><td></td></tr><tr><td>Onshore</td><td>g CO2e/kWh</td><td>0</td><td>0</td><td></td><td></td></tr><tr><td>Bioenergy &amp; Other</td><td>g CO2e/kWh</td><td>141</td><td>200</td><td>(30)%</td><td></td></tr><tr><td>GHG intensity, revenue</td><td>g CO2e/kWh</td><td>0</td><td>0</td><td>0%</td><td></td></tr><tr><td>GHG intensity, EBITDA</td><td>g CO2e/kWh</td><td>85</td><td>78</td><td>9%</td><td></td></tr><tr><td></td><td>75 (2030),</td><td></td><td></td><td></td><td></td></tr><tr><td>GHG intensity (scope 1, 2, and 3)</td><td>g CO2e/kWh</td><td>2.9 (2040)1</td><td>80</td><td>147</td><td>(46)%</td></tr></table>

 \( ^{1} \)  Our GHG intensity (scope 1, 2, and 3) targets exclude scope 3 emissions from use of sold products (natural gas sales).

## GHG Intensity (scope 1 and 2)

Our GHG Intensity (scope 1 and 2) of energy generation decreased by 37% in 2023 compared to 2022. The decrease was the result of a 37% decrease in scope 1 emissions due to lower coal consumption (numerator) and unchanged total heat and power generation (denominator).

The GHG emissions intensity of revenue was reduced by 9%, and the GHG emissions intensity of EBITDA increased by 9% following the 37% reduction in GHG emissions (denominator), the 31% reduction in revenue, and the 42% reduction in EBITDA (denominators).

## GHG Intensity (scope 1, 2, and 3)

Scope 1, 2, and 3 GHG intensity (excluding emissions from natural gas sales) decreased by 46% from 2022 to 2023. The decrease was mainly driven by the 37% reduction in scope 1 and the 52% reduction in scope 3 emissions, excluding natural gas sales (numerator), in addition to an unchanged total heat and power generation (denominator).

## 5 Accounting policies

## Direct GHG emissions (scope 1)

Scope 1 emissions are reported based on the Greenhouse Gas (GHG) Protocol and cover all direct emissions of greenhouse gases from Orsted's carbon dioxide, methane, nitrous oxide, and sulphur hexafluoride. The direct carbon emissions from the combined heat and power plants are determined based on the fuel quantity and the heat rate of the plant. The direct trading System (ETS). Carbon dioxide and other greenhouse gas emissions outside the EU ETS scheme are primarily calculated as energy consumption multiplied by emission factors.

## Indirect GHG emissions (scope 2)

Scope 2 emissions are reported based on the GHG Protocol and include indirect GHG emissions from the generation of power, heat, and steam purchased and consumed by Orsted. The indirect emissions are calculated as the power volumes purchased multiplied by country-specific emission factors. Location-based emissions are calculated based on average country-specific emission factors. Market-based emissions take into account renewable power purchased and assume that regular power is delivered as residual power.

## Indirect GHG emissions (scope 3)

Scope 3 emissions are reported based on the GHG Protocol, where the scope 3 inventory is split into 15 subcategories (C1-C15).

C1 is categorised spend data multiplied by relevant spend-category-specific emission factors.

C2 includes upstream GHG emissions (indicated for operations) from acquired and installed wind and solar farms in the month when the wind or solar farm has reached commercial operation date (CCOD).

C3 is calculated based on actual fuel consumption and power sales to end customers multiplied by relevant emission factors. We use separate emission factors for green and regular power sales.

C4 only includes fuel for helicopter transport. Emissions from other transport types are included in the emission factors we use for purchased goods and services.
C5 is calculated based on actual waste data multiplied by relevant emission factors.

C6 is calculated based on mileage allowances for employee travel in own cars and GHG emissions from plane travel provided by our travel agent.

C7 is calculated based on estimates of the distribution of travel by age, car or train.

C9 is calculated based on volumes of residual products, estimated distances transported, and relevant emission factors for transport.

C11 is calculated based on actual sales of purchased goods and services. We use data as reported in our ESG consolidation system. The different types of gas sold have specific upstream and downstream emission factors.

The subcategories C8, C10, and C12–C15 are not relevant for Orsted.

## GHG emissions outside of scope 1-3

Carbon emissions from burning biomass are net-zero for scope 1 emissions, according to the GHG Protocol, as the amount of carbon dioxide that is removed from the atmosphere is equivalent to the amount of carbon released through combustion. To ensure full transparency of all our activities, we document these emissions separately from the scope 1, as recommended by the GHG Protocol. The direct biogenic carbon emissions are calculated by multiplying the volume of used biomass with the corresponding carbon emission factors.

## GHG intensity (scope 1 and 2)

Scope 1 GHG intensity is calculated based on scope 2 (market-based) emissions divided by total heat and power generation, revenue, and EBITDA, respectively.

## GHG Intensity (scope 1, 2, and 3)

This is calculated as total scope 1, scope 2 (market-based) and scope 3 (excluding natural gas sales) emissions divided by total heat and power generation.



## ERS E4

# Biodiversity and ecosystems

## Energy projects with net-positive biodiversity impact

## Our approach and policies

Our nature is under increasing pressure, and biodiversity loss presents a potentially devastating threat to society. We depend on diverse, healthy ecosystems for the air we breathe, the food we eat, our economic prosperity, limiting climate change, and protecting those communities most at risk.

At Ørsted, we believe that the renewable energy transition can be part of a solution to the biodiversity crisis, provided we do it right. Achieving this requires that we first and foremost identify and proactively address the potential adverse effects that the build-out itself has on wildlife, habitats, and ecosystems.

As we continue our renewable energy build-out, we are determined to leave nature as a whole in a better state than we found it. Therefore, our ambition is to take direct action to be able to achieve a net-positive biodiversity impact in projects commissioned from 2030 onwards. We strive to optimise how we work with and integrate biodiversity protection and restoration into the way we develop, construct, and operate renewable energy projects.

We have established an offshore wind biodiversity policy addressing direct impacts from our operations on biodiversity, ecosystem protection, and sustainable ocean practices. With accountability lying with the Head of Global Stakeholder Relations, the policy sets out the principles that underpin our efforts to protect the natural environment in the areas where we construct and operate offshore wind farms. We will develop our biodiversity policy further to encompass all renewable energy technologies, both onshore and offshore. The revised policy is expected to be finalised in 2024.

As we develop, construct, and operate more renewable energy assets, we follow four core principles to effectively manage our impacts on biodiversity and work towards achieving a net-positive biodiversity impact for future projects:

## 1 Science-based decarbonisation

Our biodiversity policy recognises the significant threat that climate change poses to biodiversity. To address the interconnected challenges of biodiversity loss and climate change, we must shift away from fossil fuels and set science-based decarbonisation targets across the value chain (see section E1 on climate change).



Our material impacts and risks

Positive impacts
SIGNIFICANT

1 Biodiversity restoration, research, and innovation initiatives (OO)

SIGNIFICANT

(OO) Own operations (VC) Value chain

3 Habitat loss from land degradation caused by mining of minerals and metals (VC)

SIGNIFICANT

Negative impacts
CRUCIAL

2 Natural resources exploitation and land-use change from mining of minerals and metals (VC)

3 Habitat loss from land degradation caused by mining of minerals and metals (VC)

SIGNIFICANT

4 Disturbances to habitats and displacement or loss of species (OO)




 \( ^{\uparrow} \)  Sunflower Wind, located in Marion County, Kansas.

2 Avoid and mitigate negative impacts based on the best available science

We follow the mitigation hierarchy, emphasising avoidance, minimisation, and mitigation of impacts on biodiversity. Additionally, we prioritise reduction of any residual negative impacts. We ensure this through environmental and social impact assessments and studies, and through implementation of technologies for impact management, mitigation, and reduction. We actively expand our knowledge in these areas by addressing knowledge gaps and uncertainties to ensure we can deploy solutions that are based on the best available science, local expert knowledge, and the latest effective technological advancements.
3 Set targets and deliver positive impacts
To deliver on our 2030 ambition of achieving net-positive biodiversity impact, we depend on appropriate measurement and reporting frameworks. Our goal is to establish clear targets with specific, transparent, and recognised metrics. We are involved in the Science Based Targets Network’s (SBTN) Corporate Engagement Program and have become Early Adopters of the Taskforce on Nature-related Financial Disclosures (TNFD), contributing to the development of a standardised methodology for assessing corporate-level impacts on nature.

4 Holistic sustainability action
We adopt a holistic approach, addressing ecological, climate, and social sustainability. This includes implementing the mitigation hierarchy, including delivering ecosystem-wide restoration projects where feasible, resource circularity (see section E5 on resource use and circular economy), and supporting local communities (see section S3 on affected communities).

## 2023 actions

During the year, we have taken significant steps towards our 2030 ambition by following our four principles for a biodiversity-positive energy transition:

1 Science-based decarbonisation

• See section E1 on climate change.

2 Avoid and mitigate negative impacts based on the best available science

• As part of the ecological compensation measures for our offshore wind farm Hornsea 3, we have started the work of providing artificial nesting structures for the kitthwaite bird species along the east coast of England. The offshore artificial nesting structures are the first of their kind, and we are working on new and innovative designs for future structures. These nesting structures are needed to support this important and vulnerable species and will enable Hornsea 3 to be built and generate renewable electricity.

• We have progressed research studies on critical environmental topics. For instance, we have developed a bot and bird monitoring guidance document to support protection of vulnerable bat and bird species in the acceleration of the offshore wind industry.

## 3 Set targets and deliver positive impacts

• We have continued the development of a measurement framework to assess biodiversity net gains and losses at our assets, utilising data from five operational assets for practical testing. In 2023, we successfully piloted this framework across renewable projects to evaluate its effectiveness in being able to report overall biodiversity impacts for future projects. The aim of the framework is to ensure consistency, transparency, and informed decision-making by having a standardised methodology with reliable data.

• We have become Early Adopters of the TNFD Recommendations, and in 2023, we made our first TNFD-aligned disclosures. For more information, see our TNFD reference table in the appendix.



In addition, we have continued a strong collaboration with TNFD, SBTN, and other key stakeholders, aimed at facilitating the development of an industry standard. As part of these efforts, we have aligned our data collection approach to ensure our readiness for active participation once global frameworks are established. This will hopefully contribute to a higher level of comparability and credibility of biodiversity measurements in the renewable energy sector.

## 4 Holistic sustainability action

- On World Ocean Day, we became the first energy company in the world to issue blue bonds, with the aim of raising blue financing to increase investments that specifically target offshore biodiversity and sustainable shipping. This allows us to further incentivise biodiversity action as part of offshore wind development.

- We have released a white paper titled 'Uniting action on climate and biodiversity'. This paper highlights the crucial role renewable energy plays in addressing both the climate and biodiversity crises. It emphasises the necessity of incorporating biodiversity considerations into renewable energy expansion and outlines the essential steps for achieving this goal. The paper is a call to action to policymakers and civil society to drive further progress in this field and build this into the development of future renewable targets.

- We have taken steps to contribute to saving the cod stock in the Baltic Sea through a collaboration with BalticWaters and the ReCood project. The project involves releasing cod larvae in places where the cod previously spawned. The aim is to improve the survival rate of cod and at the same time collect valuable data on how the cod stock can be strengthened in the Baltic Sea.

- In collaboration with The Nature Conservancy, we have set out to protect almost 1,000 acres of threatened native prairie at our Mockingbird Solar Center in northeast Texas, U.S. Prairies are valuable, productive ecosystems that provide numerous benefits, from flood prevention and water filtration to carbon storage. Native prairies provide habitat for populations of birds, monarch butterflies, bees, and other pollinators.

- We have launched the BioReef marine restoration project in collaboration with WWF and DTU Aqua to contribute to ocean biodiversity in the Danish North Sea. The project aims to develop methods to establish biogenic reefs of European flat oysters and horse mussels. We hope that learnings from BioReef will inform best practices for global bivalve reef restoration.

- We have initiated a biodiversity initiative near our onshore wind farm Sunflower Wind in Kansas, US, together with The Conservation Fund and The Nature Conservancy. This initiative will support habitat protection and restoration of up to 3,000 acres of tailgrass prairie near the wind farm.

- We have launched a new research project at Anholt Offshore Wind Farm in Denmark together with the Technical University of Denmark (DTU), with the purpose of growing less carbon-intensive foods while contributing to a healthier marine environment.
- We continued our previously launched biodiversity pilot projects, including our large-scale restoration project in the Humber Estuary in the UK, our ReCoroll project in Taiwan, our 3D-printed reef project in Denmark, and rewilding of ocean biodiversity through our partnership with ARK Nature.

## Future actions

In the short term, we aim to integrate our biodiversity ambition and measurement framework into all upcoming renewable energy projects that will be commissioned from 2030 onwards, covering offshore wind, onshore wind, solar power, and P2X, alongside ongoing monitoring of our current and upcoming biodiversity initiatives.

In the future, we intend to ensure that every renewable energy project we commission delivers a net-positive impact through effective avoidance, minimisation, mitigation, and where required, offsetting of biodiversity impacts. We also aim to establish precise science-based and measurable biodiversity targets for our direct impacts. We will strive to fully integrate our biodiversity ambition into all facets of our business.

We have also begun the work of identifying our key impacts on biodiversity in our upstream value chain, e.g. by identifying which materials have the greatest impact on biodiversity. Going forward, we will work towards mapping out these impacts to a country level and cooperating with our suppliers on mitigating impacts on biodiversity.

## Targets

Through our 2030 ambition, we work on being able to establish specific biodiversity targets. Substantial progress has been achieved through our biodiversity pilot projects and our development of a measurement framework, which has enhanced our understanding of how to improve biodiversity at the asset level.

Our biodiversity efforts, ambition, and approach are influenced by various factors, including the EU’s biodiversity strategy for 2030, the Global Bio-Diversity Framework, SBTN, TNFD, the EU Align project, and national legislation in the countries where we operate. We ensure alignment with these frameworks, and new regulations guide our continued development and engagement with biodiversity.



## Biodiversity

Protected areas

<table><tr><td>Data point</td><td>Type of protection</td><td>Unit</td><td>2023</td></tr><tr><td>Offshore</td><td></td><td></td><td></td></tr><tr><td>The UK</td><td></td><td></td><td></td></tr><tr><td>Overlaps with protected areas</td><td>Area of Outstanding Natural Beauty, Heritage Coast, Marine Conservation Zone, Marine Protected Area (OSPAR), National Nature Reserve, Ramsar Site, Site of Special Scientific Interest</td><td>Number</td><td>44</td></tr><tr><td>Overlaps with key biodiversity areas</td><td></td><td></td><td></td></tr><tr><td>Denmark</td><td></td><td></td><td></td></tr><tr><td>Overlaps with protected areas</td><td>Baltic Sea Protected Area (HELCOP), Marine Protected Area (OSPAR), Ramsar Site, Special Areas of Conservation (Habitats Directive), Special Protection Area (Birds Directive)</td><td>Number</td><td>7</td></tr><tr><td>Overlaps with key biodiversity areas</td><td></td><td></td><td></td></tr><tr><td>Germany</td><td></td><td></td><td></td></tr><tr><td>Overlaps with protected areas</td><td>Landscape Protection Area, Marine Protected Area (OSPAR), National Park, Nature Reserve, Sites of Community Importance, Special Areas of Conservation (Habitats Directive), Special Protection Area (Birds Directive), Special Protection Area (OSPAR)</td><td>Number</td><td>6</td></tr><tr><td>Overlaps with key biodiversity areas</td><td></td><td></td><td></td></tr><tr><td>The Netherlands</td><td></td><td></td><td></td></tr><tr><td>Overlaps with protected areas</td><td>Areas of Conservation, Marine Protected Area (OSPAR), Nature Conservation Act, Ramsar Site, Special Areas of Conservation (Habitats Directive), Special Protection Area (Birds Directive)</td><td>Number</td><td>2</td></tr><tr><td>The US</td><td></td><td></td><td></td></tr><tr><td>Overlaps with protected areas</td><td>Easement, Private Conservation</td><td>Number</td><td>3</td></tr><tr><td>Overlaps with key biodiversity areas</td><td></td><td></td><td></td></tr><tr><td>Ireland</td><td></td><td></td><td></td></tr><tr><td>Overlaps with protected areas</td><td>Area of Outstanding Natural Beauty, Area of Special Scientific Interest, Ramsar Site</td><td>Number</td><td>54</td></tr><tr><td>Overlaps with key biodiversity areas</td><td></td><td></td><td></td></tr><tr><td>The US</td><td></td><td></td><td></td></tr><tr><td>Overlaps with protected areas</td><td>Habitat Area, National Wildlife Refuge, Private Conservation, Reserve Program, Wildlife Management Area</td><td>Number</td><td>11</td></tr><tr><td>Overlaps with key biodiversity areas</td><td></td><td></td><td></td></tr></table>

In 2022, we changed our data source for our reporting on biodiversity-protected areas to the Integrated Biodiversity Assessment Tool (IBAT). In 2023, we have combined the information from IBAT with additional biodiversity data collected during a biodiversity risk assessment.

The change in the buffer zones applied in 2023 significantly increased the figures reported compared to previous years' reporting.

In 2023, we have included our onshore assets in our reporting as well, meaning that we have now added onshore assets in Ireland and the US.

Our wind farms in the APAC region do not currently overlap with any protected areas for nature conservation or key biodiversity areas.

## § Accounting policies

The biodiversity data covers offshore and onshore wind farms and solar farms.

For offshore wind farms, a buffer zone of 25 km is applied, whereas for onshore wind and solar farms, the buffer zone is 10 km. These buffers have been determined based on best practice and are based on the best available information and interactions with protected areas for nature conservation or key biodiversity areas.

The figures are reported gross, i.e. we include 100% of the number of areas irrespective of our ownership share. Data is initially recognised from commercial operation date (COD).

In some markets, we install transmission assets for offshore wind farms, which include onshore infrastructure. For onshore wind farms in the UK, however, these usually have to be divested near to or at commissioning of the wind farm, as required by national legislation. Therefore, the data for export cables represents transmission assets not yet divested on some wind farms and does not include onshore parts of offshore wind farms.

## Protected areas

Protected areas and areas of high biodiversity value (key biodiversity areas) follow the Global Reporting Initiative (GRI) Standards, disclosure requirements and reporting requirements as described, such as IUCN protected area management categories, the Ramsar Convention, and national legislation. The data points are the cumulative number of protected areas for nature conservation or key biodiversity areas, respectively, with which our operational sites interact.



## Biodiversity \( ^{®} \) 
Endangered species

<table><tr><td>Data point</td><td>Unit</td><td>Critically endangered</td><td>Endangered</td><td>Vulnerable</td><td>Near-threatened</td></tr><tr><td>Offshore, 2023</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>The UK</td><td>Number</td><td>11</td><td>12</td><td>61</td><td>50</td></tr><tr><td>Denmark</td><td>Number</td><td>7</td><td>9</td><td>53</td><td>41</td></tr><tr><td>Germany</td><td>Number</td><td>6</td><td>5</td><td>18</td><td>10</td></tr><tr><td>The Netherlands</td><td>Number</td><td>7</td><td>8</td><td>38</td><td>21</td></tr><tr><td>The US</td><td>Number</td><td>8</td><td>28</td><td>56</td><td>32</td></tr><tr><td>Onshore, 2023</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ireland</td><td>Number</td><td>10</td><td>17</td><td>44</td><td>36</td></tr><tr><td>The US</td><td>Number</td><td>18</td><td>28</td><td>45</td><td>46</td></tr></table>

As outlined in our offshore wind biodiversity policy, we carry out detailed environmental consenting processes and ongoing environmental monitoring in compliance with local regulations on protection of nature conservation to ensure species are considered carefully. We have similar processes for all our onshore operations as well, which will be defined more clearly in our updated biodiversity policy in 2024.

Our assets in the APAC region do not currently overlap with any protected or known areas of critical importance for vulnerable species.

In 2023, we have included our onshore assets and have split our reporting into country levels to gain a clearer picture of specific overlaps. We have moved away from reporting across groups of vertebrates and instead report the collective number of IUCN Red List species at a country level.
The change in the buffer zones applied in 2023 significantly increased the figures reported compared to previous years' reporting.

In 2023, our onshore wind farm Sunflower Wind (201 MW) went into operation, as well as the three smaller onshore wind farms Lishen 3, Les Dix Huit, and Ballykeel.

Sunflower Wind is in proximity to the Flint Hills in central Kansas, a native grassland prairie, which is an important habitat to many key species, including the greater prairie chicken, upland sandpiper, Henlows's sparrow, and many other species of grassland birds. To mitigate any possible impacts that Sunflower Wind may have on these species, we have launched a partnership with The Nature Conservancy and The Conservation Fund to protect and restore native tall-grass prairie within the Flint Hills, protecting a key habitat for many species found here.

## § Accounting policies

Biodiversity data covers all of our operational assets, both offshore and onshore, and includes the protected areas described in the table about protected areas.

The overlap with species ranges has been assessed using a buffer of 25 km for offshore buffers and 50 km for onshore buffers. These buffers have been determined based on best practice rooted in science, and to recognise relevant interactions with any species in proximity to the protected areas. The buffer length for these total asset footprints for completeness.

The figures are reported gross, i.e. we include 100% of the number of areas irrespective of our ownership share. Data is initially recognised from commercial operation date (COD).

## Endangered Red List species

This data point follows the Global Reporting Initiative (GRI) Standards, which 2024, and lists the number of threatened species. We report by level of extinction risk according to the International Union for Conservation of Nature's (IUCN) Red List of Threatened Species \( ^{1} \)  – an inventory of the global conservation status of plant and animal species.



ESRS E5

# Resource use and circular economy

## Circular resource use

## Our approach and policies

We are reliant on significant amounts of critical raw materials to meet the scale and pace needed for the renewable energy build-out. However, renewable energy supply chains are under pressure, and bottlenecks and material scarcities are already defining the pace of the energy transition in many markets. We can reduce some of these pressures through circularity efforts. By considering the provenance and mix of materials and increasing recycling and reusing, we can reduce the demand for virgin materials and reduce volatilities in our supply chain while minimising negative impacts throughout the value chain, including carbon emissions.

The dominant share of our upstream carbon emissions comes from the extraction and processing of materials for our assets (approximately 75%) – steel alone accounts for approximately 50%. By incorporating circular principles across our business we can reduce carbon emissions to help reach our science-based net-zero target while ensuring responsible waste management. We mainly work across three circularity levers:

## 1 Circular design and materials

We take measures to reduce and optimise resource usage by rethinking the design of our new renewable energy assets. We want to engage with key suppliers to promote the use of recycled and recyclable materials, particularly in high-impact categories like steel.

## 2 Operations and late-life strategies

We strive to maximise the value of our components and assets. We investigate opportunities for repairing, refurbishing, and reusing key components to prolong their lifetime, and we aim to extend the operational lifetime of our wind farms by up to 10 years, beyond the expected lifetime.

## 3 Resource recovery and recycling

Our ambition is to ensure that all materials, when they reach their end-of-life stage, can be effectively recovered and recycled into new supply chains.



Negative impacts
CRUCIAL

1 Use of virgin materials in our supply chain (VC)

SIGNIFICANT

2 Waste generation during operation and decommissioning (OO)

(OO) Own operations (VC) Value chain

## Risks

③ Availability of materials and components (VC)



To support the promotion of circularity and waste management in our business, we have a resource management policy covering all Ørsted activities and locations. The objective of the policy is to address our aim of minimising the use of virgin resources and to provide the direction for sustainable sourcing of resources. Accountability for our circularity efforts lies with our Chief Operating Officer.

## 2023 actions

During the year, we have taken significant steps by launching partnerships and initiatives for circularity and sustainable resource management, of which the most prominent are:

## 1 Design and supply chain

• We have partnered with Vestas and pledged to procure a minimum of 25% wind turbine towers produced using scrap steel for all joint future offshore projects. These new towers will reduce the carbon footprint from offshore turbine towers with approximately 25%. We have also pledged to procure blades made from recycled materials at all future joint offshore wind farms, when commercially available. This new blade technology addresses the industry’s biggest circularity challenge, namely the many blades in operation today that need to be recycled at their end of life. With this pledge, we help scale the technology further.

• Our co-founded industry-wide recycling project DecomBlades has achieved a significant development by extracting and processing glass fibres from old wind turbine blades. The extracted fibres maintain a quality that enables their reuse in the manufacturing of new blades. This breakthrough represents a crucial step in mitigating our industry's largest waste problem and advancing towards a more sustainable and resource-efficient future.

## 2 Operations and late-life strategies

• We have joined the Coalition for Wind Industry Circularity (CWIC) to contribute to the establishment of a circular supply chain focused on reusing and refurbishing old wind turbine components. The initiative aims to collaborate with industry peers and supply chain partners to develop capabilities for refurbishing and reusing wind turbine parts in the UK. Emphasising reuse and refurbishment can alleviate pressure on supply chains, decrease the carbon footprint of wind farms, and offer socio-economic benefits through the generation of new jobs.

• We have formed a partnership with Renewable Parts, a specialist in supply chains and refurbishment within the wind energy industry. Through the optimisation of maintenance and parts supply, specifically by refurbishing our offshore wind turbines, our goal is to decrease costs, enhance availability levels of materials, and reduce the overall carbon footprint of wind farms.

## 3 Resource recovery and recycling

• We have entered a partnership with SOLARCYCLE, a technology-based solar recycling company, to handle the processing and recycling of end-of-life solar modules sourced from our projects throughout the US. This collaboration not only helps us divert materials from landfills but also ensures the recovery of high-value materials crucial to the green energy transition. By reintroducing these materials into our supply chain, we are actively contributing to a more sustainable and circular approach to managing solar technology waste.

• Our commitment to achieving 100% reuse and recycling of solar panels within our US portfolio has now been expanded to encompass our entire global portfolio. By proactively making this commitment, we are laying the groundwork for the early development of capabilities and the maturation of recycling markets.

• We have entered into a partnership with Plassvire in Northern Ireland with the aim of maturing recycling solutions for onshore wind farms. In a pilot project initiated at our onshore wind farms Owenreagh 1 and 2, three blades were recycled by shredding and remoulding their materials for the production of construction materials. Beyond material reutilisation, this partnership is supposed to generate employment opportunities within the local communities.

• In 2023, we were part of DNV’s pilot programme ReVind, a digital tool designed to evaluate material breakdown and circularity rates in decommissioned wind farms. We are confident that this industry-leading platform will assist us in accurately calculating the residual value of our assets and optimising the circularity of our projects.

## Future actions

• Moving forward, we will start engaging our key suppliers in circularity as part of our procurement processes with the goal of incentivising more circular methods in our supply chain. Acknowledging the complexity of circularity in the renewable energy industry, we will continue to seek out industry-wide and cross-sector collaborations to achieve increased circularity.

• As described in the ‘Strategy and business’ section, we have ceased development of our offshore wind projects Ocean Wind 1 and 2 in the US. We are closely assessing whether and how components that have been fabricated for those projects can be reused or repurposed to preserve their material and financial value. This includes evaluating opportunities such as reusing components in other Ørsted projects, or selling them for reuse or refurbishment to our suppliers or other developers in the industry.

## Sustainable use of biomass

## Our approach and policies

We are committed to sourcing sustainable wooden biomass verified by independent third-party bodies. Biomass plays an important role in the Danish energy system, delivering efficient energy with a remarkable yield of up to 90% when integrated into district heating. Furthermore, it serves as an alternative energy source during periods of suboptimal solar and wind conditions. While biomass is a renewable source, we recognise the need for responsible utilisation of biomass to ensure the preservation of its climate benefits.

Our wooden biomass only originates from well-managed production forests with an ongoing reforestation effort. We only procure wood pellets and chips from residues and low-grade wood, typically sourced from sawdust, regular forest thinning, harvesting residues, or diseased trees.




↑ At work at our hydrogen test facility in Avedere, Denmark.

With our biomass efforts, we adhere to the UNEP Convention on Biological Diversity, FOREST EUROPE, and relevant certification schemes (FSC \( ^{®} \) , PEFC, and SBP).

We also intend to capture the biogenic carbon emissions from biomass incineration. Read more in the 'Strategy and business' section.
2023 actions

• We operate five combined heat and power (CHP) plants fuelled by biomass, providing district heating and electricity to approximately 400,000 households.

• In 2023, 94% of our total biomass consumption came from wooden biomass, of which 100% was certified sustainable wooden biomass, independently verified by FSC \( ^{®} \) , PEFC, or SBP, ensuring the origin of the biomass on an annual basis. In addition to the certification requirements, we maintain ongoing engagement with our biomass suppliers to ensure they align with our sustainability standards.

The remaining 6% of our biomass came from residual straw sourced from Danish agriculture. While straw biomass lacks a specific certification scheme, our supplied straw is sourced as a waste product from local farms, preventing the disposal of the resource.

## Future actions

In the future, we anticipate a reduction in our biomass usage as other renewable energy sources are expected to increase. Nevertheless, biomass will most likely continue to play a role in the Danish energy system, serving as a storable energy solution to complement solar and wind, as well as being employed in P2X to produce renewable hydrogen.

## Responsible sourcing of minerals and metals

Our renewable energy assets rely on various metals, including rare earth elements for wind turbine magnets, copper for transmission cables, and lithium for batteries. We have implemented activities to promote responsible supply chains for the key metals that fuel the renewable energy transition. For more information about our sourcing of minerals and metals, see section S2 on workers in the value chain.

## Targets

We have a commitment to continue to use 100% certified sustainable wooden biomass.

We commit to either reuse, recycle, or recover all of the wind turbine blades in our global portfolio of onshore and offshore wind farms. Similarly, we commit to reuse or recycle all solar panels from our global portfolio of solar farms.



Ban on landfilling
→ Zero wind turbine blades to landfill
→ Zero solar panels to landfill



## Waste

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Hazardous waste</td><td>Thousand tonnes</td><td></td><td>3</td><td>2</td><td>50%</td></tr><tr><td>Diverted from disposal \( ^{1} $</td><td>Thousand tonnes</td><td></td><td>1</td><td>1</td><td>0%</td></tr><tr><td>Diverted to disposal \( ^{2} $</td><td>Thousand tonnes</td><td></td><td>2</td><td>1</td><td>100%</td></tr><tr><td>Non-hazardous waste</td><td>Thousand tonnes</td><td></td><td>118</td><td>87</td><td>36%</td></tr><tr><td>Diverted from disposal \( ^{1} $</td><td>Thousand tonnes</td><td></td><td>101</td><td>64</td><td>58%</td></tr><tr><td>Diverted to disposal \( ^{2} $</td><td>Thousand tonnes</td><td></td><td>17</td><td>23</td><td>(26)%</td></tr><tr><td>Total waste</td><td>Thousand tonnes</td><td></td><td>121</td><td>89</td><td>36%</td></tr><tr><td>Diverted from disposal \( ^{1} \)</td><td></td><td></td><td>84</td><td>72</td><td>12%p</td></tr><tr><td>Diverted to disposal \( ^{2} \)</td><td>%</td><td></td><td>16</td><td>28</td><td>(12)%p</td></tr><tr><td>Wind turbine blades taken down</td><td>Number</td><td></td><td>2</td><td>12</td><td>(83)%</td></tr><tr><td>Of which, put in temporary storage</td><td>Number</td><td></td><td>2</td><td>11</td><td>(82)%</td></tr><tr><td>Of which, directed to landfill</td><td>Number</td><td>0 (ongoing) \( ^{3} \)</td><td>0</td><td>1</td><td>(100)%</td></tr></table>

 \( ^{1} \)  Reuse, recycling, composting, and recovery.

 \( ^{2} \)  Energy recovery, incineration, and landfill.

 \( ^{3} \)  Effective from 2021, our target is to not landfill any wind turbine blades from our wind farms in operation and upon decommissioning.

The increase in hazardous waste from 2022 to 2023 was mainly due to increased amounts of sludge from the treatment of wastewater at the oil terminal in Fredericia in Denmark and oil waste from a change of oil products used during start-up at one of our CHP plants.

The 36% increase in non-hazardous waste was primarily due to increased ashes from the CHP plants.

In 2023, two wind turbine blades were taken down and put in temporary storage for future recovery. We started to send some of the wind turbine blades from the temporary storage to recovery.

Total amount of waste diverted from disposal %
%



In 2023, two wind turbine blades were taken down and put in temporary storage for future recovery. We started to send some of the wind turbine blades from the temporary storage to recovery.

## § Accounting policies

Waste by type and disposal method
The Global Reporting Initiative (GRI) Standards, disclosures 306-3, 306-4, and 306-5, have been used as guidance in developing the reported data points.

Waste is generally reported on the basis of the amount of waste that waste recipients, supplemented with plant-specific measurement methods for commercial facilities, including construction activities.

Part of the oil-contaminated wastewater from the North Sea oil pipeline has been treated as waste and therefore reported as waste and not diverted.

Waste treated at the Presenceance plant, which converts household waste into biogas, recyclables, and waste fuel, is included as well as ashes from the combined heat and power (CHP) plants.

Residual products, e.g. gypsum from the CHPs, which are not handled as waste but sold as products, are not included.

Soil from excavation projects is not included.

Wind turbine blades taken down include all blades taken down due to decommissioning, repowering, or malfunctioning during their operational lifetime.



## Social

112 ESRS S1 Own workforce
120 ESRS S2 Workers in the value chain
123 ESRS S3 Affected communities

→ We are dedicated to being an active partner in the communities where we develop, build, operate, and own renewable energy assets. For it to be a just transition, these communities need to play a part in shaping it and to share in the benefits it can generate – from jobs to economic opportunities and incentives.






## ERS S1

## Own workforce

## Human and labour rights

## Our approach and policies

We see human rights as fundamental principles for protecting people’s dignity and ensuring freedom and respect both in our own operations, in the companies we work with, and in the communities we are part of.

Our commitment to upholding human rights, including labour rights and local communities' rights, is outlined in our sustainability commitment, global human rights policy, stakeholder engagement policy, just transition policy, and code of conduct for business partners.

All our policies have been approved by the Board of Directors and are governed by our Sustainability Committee, chaired by the Chief Financial Officer. All employees, contractors, suppliers, and business partners, as well as the communities affected by our operations, are covered by the policies.

We respect key international human and labour rights standards included in the International Bill of Human Rights and the International Labour Organization's (ILO) Declaration on Fundamental Principles and Rights at Work. Our policy on human rights explicitly highlights our dedication to ensuring freedom of association, the right to collective bargaining, elimination of forced or compulsory labour, effective abolition of child labour, and elimination of discrimination in employment and occupation, among other critical issues. In our work with human rights, we are guided by the authoritative global frameworks, UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

We firmly believe that these principles are integral to fostering a just transition to green energy. Therefore, it is our priority to ensure that adequate management systems are in place to identify, prevent, mitigate, and remedy any potential adverse human rights impacts, whether they are related to our own workforce, value chain workers, or affected communities.

In cases where we identify potential adverse human rights impacts, we are committed to promptly and effectively providing and enabling remedies. Our grievance and remediation approach includes addressing any adverse human rights impacts on individuals, workers, and communities that we have caused or contributed to.

Furthermore, we are dedicated to safeguarding the labour conditions of our employees through social protection. This encompasses support for circumstances such as sickness, unemployment, employment injury, parental leave, and retirement.



## Our material impacts and risks



## Positive impacts
SIGNIFICANT

1 Secure employment and flexible workplace for our employees

2 Diversity resulting in innovative thinking and approaches

3 Career progression through training and development
4 Recruiting and advancing women and under-represented groups, and working to ensure that they stay in Ørsted

5 Inclusive culture where people with disabilities can thrive



We have established a global minimum standard of benefits for caregivers, irrespective of gender or marital status. In addition, we offer various other paid or unpaid family-related leaves, according to country provision and collective bargaining agreements, such as marriage leave, compassionate leave, childcare leave, and nursing care leave. We have a commitment to offer immediate assistance and financial security to employees facing severe illness, with a focus on facilitating a timely return to work.

Aligned with local practices, our basic insurance for unemployment and disability ensures equitable compensation. Retirement benefits are incorporated in our overall remuneration package, and, unless local laws dictate otherwise, all employees are enrolled in a pension scheme through their employment at Ørsted.

## Actions

• We actively monitor compliance with internationally recognised human rights standards by continuously collecting information and engaging with our business partners to ensure timely identification and remedy of potential violations.

• We conduct regular human rights impact assessments of our own operations, supply chain, and projects. The assessments involve interviews with employees, document and policy reviews, and discussions with rightsholders, stakeholders, and experts. These assessments guide the development and implementation of mitigating action plans, and we continually monitor their progress.

• To foster a sustainable, safe, and inclusive working environment where all employees can thrive, we are in the final stages of developing a new global labour and employment rights policy. This policy aims to enhance transparency for our employees by articulating our commitment to actively safeguarding labour, employment, and human rights standards within our own workforce.

• We have launched a new internal global policy on parental leave with the purpose of supporting and including all types of family structures, irrespective of gender or marital status.

## Health and safety

## Our approach and policies

At Ørsted, we prioritise and protect the physical, social, and psychological safety of everyone in the workplace. We believe that personal health and well-being are fundamental drivers for living a balanced life where people can realise their potential. Therefore, it is fundamental to our operations that we have a robust health and safety management system in place and that we foster a culture that promotes our employees' health and safety.

We have established a policy for quality, health, safety, and environment (QHSE), setting the standards for how we protect and ensure the well-being of our employees and the sustainability of our operations. The policy covers all our employees and facilities, with accountability lying with our Head of QHSE. We aim to incorporate quality, health, safety, and environment in all our decisions and actions, and we have implemented workplace accident prevention procedures to ensure the safety and well-being of our employees.
We comply with various ISO standards, including ISO 9001 (quality management system), 14001 (environmental management system), and 45001 (occupational health and safety management system), to maintain a robust management system that aligns with international best practices.

Additionally, we have an internal policy on mental well-being for all employees, with a focus on enhancing the mental well-being of our workforce, mitigating mental strain, such as work-related stress and anxiety, and providing guidance to employees and leaders on addressing these concerns. We have a range of support systems and offer our employees a health insurance, including access to psychologists and other mental health professionals and crisis counsellors as well as support on topics such as stress, relationships, family issues, and lifestyle management. Accountability for our well-being lies with the Chief Human Resources Officer.

## Actions

• We are continuously working to preserve our robust health and safety record while expanding our business activities. This entails continuing preventive and mitigating efforts such as safety days, internal audits, inspections, personal risk dialogues, emergency drills, and safety trainings.

• To foster a workplace where everyone feels empowered to voice their thoughts, share innovative ideas, and express themselves freely, we have launched a series of dynamic psychological safety workshops. The objective of these workshops is to cultivate a shared understanding and provide practical techniques for nurturing psychological safety, with the ultimate goal of fostering an open, creative, and inclusive culture.

• We continue to explore approaches to support our employees in leading fulfilling lives, both within and outside the workplace. This includes promoting greater flexibility in working conditions, employee benefits, revaluating expectations regarding the definition of a typical workweek, and upgrading office facilities.

• We have rolled out a Fitness & Health for Frontiers project, which is an initiative designed to enhance the physical well-being of our workforce, boost their work ability, and proactively manage issues such as musculoskeletal concerns. The project includes a fitness testing protocol, upgrades to our on-site training facilities, the introduction of tailored physical exercise programmes, and optimisation of physical demands and ergonomics.

## Diversity and inclusion

## Our approach and policies

At Ørsted, we recognise that diversity drives innovation and is essential for a thriving workplace. To support this, we have established a global diversity and inclusion policy covering all Ørsted employees, including executive and managerial positions, and with accountability lying with our Chief Human Resources Officer. The policy is centred on three key pillars:

1. Providing equal opportunities for all employees, emphasising recognition and respect for all individuals.



2 Acknowledging that diversity and inclusion are essential for our success in the global market.

3 Aspiring to make Ørsted a positive force for social sustainability across all our locations.

We aim to create an inclusive environment at all managerial levels to attract and retain talented people from all backgrounds and cultures. We are dedicated to offering equal opportunities regardless of ethnic background, race, religion, age, gender, disability, sexual orientation, outlook, or social status. For all employees across Ørsted, we have set an ambition of having an equal gender distribution by 2030, i.e. at least 40% women and 60% men. We are committed to diversity in top management, and we are working towards increasing the share of women in executive and managerial positions through talent programmes and leadership training.

We have also established an internal policy on bullying, discrimination, and harassment outlining our commitment to providing an inclusive working environment with equal opportunities. Accountability for this policy lies with our Chief Human Resources Officer. Together, our policies describe commitments related to initiatives for people from vulnerable groups, such as inclusive recruitment and promotion, coaching, mentoring, and sponsorships. We adopted the UN's LGBTI Standards of Conduct for Business in 2018, and we aim to support equal rights for the LGBTO+ community.

## Actions

• We have introduced an internal ‘global accessibility toolkit’ to assist employees and people leaders in enhancing the accessibility of our workplace for everyone. This toolkit offers guidance on physical accessibility, technology accessibility, and everyday behaviours that foster an inclusive environment for employees with disabilities.

• We have continued working towards increasing the share of women in executive and managerial positions through targeted development programmes for female talents and our ‘Female Spotlight Initiative’, which prepares talented women for senior leadership positions.

• We have implemented a new training programme that educates participants on creating an equitable and inclusive workplace. This programme includes quarterly trainings and a self-learning platform for continuous development.

• We have continued our work with Ørsted IN, a global hub for our inclusion networks with dedicated channels for anyone identifying with a specific group or serving as an ally supporting equality and inclusion. These networks provide psychologically safe communities for members to share ideas, seek advice, and learn about inclusion of diversity. Current active networks include Race and Ethnicity IN, Gender IN, Disability IN, LGBTQ+ IN, and 50+ IN, each working towards fostering inclusivity within Ørsted.

• We are committed to equal pay and have a constant focus on ensuring equal pay for equal positions and competences when hiring or promoting employees. To raise awareness, we conduct an annual gender pay gap report for all the countries where we operate with more than 250 employees. For more information, please see table ‘Gender pay gap’ on page 118.

## Training and skills

## Our approach and policies

At Ørsted, we are committed to cultivating and expanding a skilled workforce that can drive the global green energy transition. We firmly believe that for employees to thrive, perform effectively, and experience growth, it is essential for them to comprehend their role within the organisation and be aware of future opportunities that may arise.

We believe that we learn most effectively from experience and through interactions with other people. In Ørsted, we have implemented the 70:20:10 learning model, meaning that approximately 70% of our learning and development comes from experience, 20% comes from working with others, and 10% comes from training.

## Actions

• We are working on enhancing Ørsted’s career pathways to empower employees to take ownership of their career progression, supported by their leaders. Our goal is to facilitate competence growth and ensure fair access to career development opportunities.

• We have implemented a global career map designed to assist employees in driving their own development by outlining pathways for career fulfilment. This map also serves as a shared framework for discussing aspirations with people leaders.

• We have hosted career pathway webinars for employees and people leaders. These sessions aim to encourage better ownership of career development by utilising various tools, such as career cards. These cards contain descriptions of the generic key competences required in each job, aiding employees in comparing roles across Ørsted.

• To live out our 70:20:10 learning model, we offer and encourage our employees to use a variety of solutions, including catalogues and tools for on-the-job learning, mentoring programmes, knowledge sharing, courses, workshops, e-learnings, and much more.

## Engaging with our own workforce

We are committed to creating a culture where everyone feels psychologically safe to voice important matters. This includes encouragement to freely express views, also to colleagues in higher hierarchical positions.

To support this, we conduct an annual People Matter (satisfaction and motivation) survey globally, providing insights into employees' perceptions of Ørsted as a workplace, daily work experiences, relationships with people leaders and senior management, and other factors impacting their working life. Survey results serve as a valuable foundation for initiating dialogue and identifying actions to further improve our workplace.

Additionally, we have established an easily accessible site on our company intranet that outlines various options for employee representation on both global and local levels. These include alternative channels for employees to voice their opinions, such as HR business partners, reporting systems, a whistleblower hotline, works councils, employment relations representatives, and personal development dialogues.



## Remediation and channels to raise concerns

Access to remedy helps ensure fairness, justice, and protection for individuals and communities. It allows people to seek recourse and find a solution when they believe that their rights have been violated, promoting a more equitable and fairer workplace. If any employee feels they have experienced an instance of bullying, discrimination, or harassment, they are encouraged to seek support. Employees can also make an official report to their HR contact or utilise Ørsted's global whistleblower hotline. For more information on our whistleblower hotline and how we protect whistleblowers against retaliation, see section G1 on business conduct.

We take proactive steps to ensure that our employees are aware of and reminded about the grievance mechanisms available. This awareness is built into various aspects of our employee experience, including:

• Code of conduct training:
As part of our training programme, we include specific modules on our grievance and complaints handling policy.

• Internal information campaigns:
We regularly communicate with our employees through various internal channels, including emails, newsletters, and our intranet, to remind them about the availability of grievance channels and encourage their use.
We are dedicated to ensuring that our employees not only have access to these channels but also have the knowledge, confidence, and psychological safety to utilise them when necessary. Ørsted as an organisation has the responsibility to take all reported cases seriously and provide fair outcomes for investigated cases that take all parties' needs into consideration. We also maintain secure and confidential records of reports and outcomes.

## Targets

Gender balance total workforce
%, women/men



Gender balance people leaders
%, women/men

Senior directors and above
%, women/men



Employee satisfaction in top 25 % compared to external benchmark group (Index 0-100)

Ørsted
Ennova benchmark top 25%
Ennova benchmark

Total recordable injury rate (TRIR)
Injuries per million hours worked






## People

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Number of employees</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total number of employees (as of 31. December)</td><td>FTEs</td><td></td><td>8,905</td><td>8,027</td><td>11%</td></tr><tr><td>Denmark</td><td>FTEs</td><td></td><td>4,354</td><td>4,220</td><td>3%</td></tr><tr><td>The UK</td><td>FTEs</td><td></td><td>1,311</td><td>1,253</td><td>5%</td></tr><tr><td>The US</td><td>FTEs</td><td></td><td>766</td><td>643</td><td>16%</td></tr><tr><td>Malaysia</td><td>FTEs</td><td></td><td>769</td><td>574</td><td>34%</td></tr><tr><td>Poland</td><td>FTEs</td><td></td><td>776</td><td>519</td><td>50%</td></tr><tr><td>Germany</td><td>FTEs</td><td></td><td>385</td><td>331</td><td>16%</td></tr><tr><td>Taiwan</td><td>FTEs</td><td></td><td>193</td><td>185</td><td>4%</td></tr><tr><td>Netherlands</td><td>FTEs</td><td></td><td>751</td><td>302</td><td>23%</td></tr><tr><td>Average number of employees during the year</td><td>FTEs</td><td></td><td>8,666</td><td>7,428</td><td>17%</td></tr><tr><td>Sickness absence</td><td></td><td>%</td><td>2.1</td><td>2.2</td><td>(0.1)p</td></tr><tr><td>Turnover</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total employee turnover rate</td><td>%</td><td></td><td>9.6</td><td>11.7</td><td>(2.1)p</td></tr><tr><td>Voluntary employee turnover rate</td><td>%</td><td></td><td>7.2</td><td>8.8</td><td>(1.6)p</td></tr><tr><td>Employee satisfaction survey results</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee satisfaction</td><td>Index 0-100</td><td>Top 25%</td><td>76</td><td>76</td><td>0</td></tr><tr><td>Employee loyalty</td><td>Index 0-100</td><td></td><td>84</td><td>85</td><td>(1)</td></tr><tr><td>Employees experiencing stress</td><td>%</td><td></td><td>13.7</td><td>13.5</td><td>0.2%</td></tr><tr><td>Employees experiencing bullying, harassment, threats, or violence</td><td>%</td><td></td><td>2.7</td><td>2.5</td><td>0.2%</td></tr></table>

FTE distribution in other countries in 2023, the Netherlands (11.4%, Ireland (10.5%), France (70.1%, Singapore (21%), Korea (21%), Japan (19.9%), Sweden (11.1%), and Spain (9)).

Our target is to have an employee satisfaction survey result in the top 25 percentile compared to an external benchmark group.

The number of employees was 11% higher at the end of 2023 compared to 2022. The main contributors to the absolute increase in number of full-time equivalents (FTEs) were Poland, Malaysia, Denmark, and the US.
Ørsted's total turnover rate decreased by 2.1 percentage points to 9.6% in 2023. The voluntary turnover rate decreased by 1.6 percentage points to 7.2% in 2023.

The score for employee satisfaction in the yearly employee survey was 76, which is at the same level as last year. The score is above the Ennova benchmark of 73, and in line with our Ennova benchmark top 25% target.

## Accounting policies

## Number of employees

Employee data is recognised based on records from the Group's ordinary registration systems. The number of employees is determined as the number of employees that the end-of-month converted to full-time equivalents (FTEs). Employees who have been made redundant are recognised until the expiry of their notice period, regardless of whether they have been released from all or some of their duties during their notice period.

## Sickness absence

Sickness absence is calculated as the ratio between the number of sick days and the planned number of annual working days.

## Turnover

The employee turnover rate is calculated as the number of permanent employees who have left the company relative to the average number of permanent employees in the financial year.

Employee satisfaction survey results
Ørsted conducts a comprehensive employee satisfaction survey once a year. With few exceptions, all Ørsted employees are invited to participate in the survey. The following employees are omitted from the survey results: employees who joined the company shortly before the employee satisfaction survey, employees who resigned shortly after the employee satisfaction survey, interns, consultants, advisors, and external temporary workers who do not have an employment contract with Ørsted.



## Group Executive Team and Board of Directors

<table><tr><td>Date point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Group Executive Team</td><td></td><td></td><td></td><td></td></tr><tr><td>Members</td><td>Number</td><td>10</td><td>11</td><td>(1)</td></tr><tr><td>Danish</td><td>Number</td><td>6</td><td>7</td><td>(1)</td></tr><tr><td>Jens Hansen</td><td>Number</td><td>4</td><td>4</td><td>0</td></tr><tr><td>Average age</td><td>Years</td><td>50</td><td>48</td><td>2</td></tr><tr><td>Average seniority</td><td>Years</td><td>1</td><td>1</td><td>0</td></tr><tr><td>CEO pay ratio \( ^{1} \)</td><td>Ratio</td><td>21</td><td>27</td><td>(22%)</td></tr><tr><td>Remuneration of the Group Executive Team \( ^{2} $</td><td>DKK million</td><td>134</td><td>103</td><td>30%</td></tr><tr><td>Incentivised pay directly ascribed to ESG targets \( ^{3} \)</td><td>%</td><td>30</td><td>30</td><td>0%p</td></tr><tr><td>Board of Directors</td><td></td><td></td><td></td><td></td></tr><tr><td>Members</td><td>Number</td><td>8</td><td>8</td><td>0</td></tr><tr><td>Danish</td><td>Number</td><td>3</td><td>4</td><td>(1)</td></tr><tr><td>Non-Danish</td><td>Number</td><td>5</td><td>4</td><td>1</td></tr><tr><td>Average age</td><td>Years</td><td>61</td><td>63</td><td>(2)</td></tr><tr><td>Average seniority</td><td>Years</td><td>4</td><td>5</td><td>(1)</td></tr><tr><td>Independent board members</td><td>%</td><td>88</td><td>88</td><td>0%p</td></tr><tr><td>Board meetings</td><td>Number</td><td>16</td><td>13</td><td>3</td></tr><tr><td>%</td><td>%</td><td>94</td><td>86</td><td>(2)p</td></tr><tr><td>Remuneration of the Board of Directors \( ^{1} $</td><td>DKK thousand</td><td>6,907</td><td>6,807</td><td>1%</td></tr><tr><td>Nomination &amp; Remuneration Committee</td><td></td><td></td><td></td><td></td></tr><tr><td>Members</td><td>Number</td><td>3</td><td>3</td><td>0</td></tr><tr><td>Meetings</td><td>Number</td><td>3</td><td>6</td><td>(3)</td></tr><tr><td>Attendance</td><td>%</td><td>100</td><td>89</td><td>11%p</td></tr><tr><td>Audit &amp; Risk Committee</td><td></td><td></td><td></td><td></td></tr><tr><td>Members</td><td>Number</td><td>3</td><td>3</td><td>0</td></tr><tr><td>Meetings</td><td>Number</td><td>10</td><td>8</td><td>2</td></tr><tr><td>Attendance</td><td>%</td><td>100</td><td>86</td><td>4%p</td></tr></table>

1. CEO pay ratio based on awarded remuneration. More details on CEO pay ratio based on awarded (and expired) remuneration can be found in the remuneration report 2023.

 \( ^{2} \)  For more information on the remuneration of the Group Executive Team and Board of Directors, see note 2.7 'Employee costs' in the financial statements.

 \( ^{3} \)  Our Executive Board has ESG targets related to our CDP climate score, GHG emissions intensity (scope 1 and 2), employee satisfaction, gender diversity targets, and safety (TRIR). You can find more details in our remuneration report 2023 and in the 'Corporate Governance' section.

Overview regarding gender diversity pursuant to Section 99% of the Danish Financial Statements Act 2023

<table><tr><td colspan="2">The Board of Directors</td></tr><tr><td>Total number of members elected by the general meeting</td><td>8</td></tr><tr><td>Underrepresented gender (percentage)</td><td>37.5%</td></tr><tr><td>Target (percentage) and year to meet target – no target as Ørsted A/S has equal representation on the Board of Directors</td><td>-</td></tr><tr><td colspan="2">Other managerial levels – the Executive Board and people managers employed by Ørsted A/S reporting to the Executive Board</td></tr><tr><td>Total number of members</td><td>3</td></tr><tr><td>Underrepresented gender</td><td>33.3%</td></tr><tr><td colspan="2">Target (percentage) and year to meet target – no target. In the recent financial year, Ørsted A/S had an average number of full-time employees below 50 full-time employees. Ørsted A/S has equal representation on &quot;other managerial levels&quot;</td></tr></table>

Pursuant to Section 99% of the Danish Financial Statements Act, the table above reports the number of individuals and gender composition in the three highest management levels. The parent company Ørsted A/S falls below the employee threshold of 50 employees. For information on policies and actions taken on diversity in the Ørsted Group please see page 113.

## Accounting policies

## Average seniority

Average seniority is calculated as the average number of years the Group Executive Team (CET) members have been part of the CET.

## Remuneration

The CEO pay ratio is calculated as the ratio of the CEO's annual remuneration to the remuneration (fixed salary, including personal benefits, such as a company car, free telephone, etc., a variable salary, and share-based payment (STAR) payments). The remuneration of the CEO is the total remuneration of the Executive Board and the other members of the CET.

## Board of Directors

In this section, the Board of Directors only refers to the Board of Directors. The general meeting (ACM), with the exception of remuneration for the Board of Directors, which also includes members elected by the employees.

For independents, we follow the Recommendations on Corporate Governance.

Gender (with lowest representation is reported under 'Gender diversity'.



## Gender diversity and pay gap \( ^{®} \) 

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Board of Directors, Ørsted A/S, members</td><td>Number</td><td></td><td>8</td><td>8</td><td>0%</td></tr><tr><td>Gender with lowest representation (female)</td><td>%</td><td></td><td>38</td><td>38</td><td>0% p</td></tr><tr><td>Group Executive Team, members</td><td>Number</td><td></td><td>10</td><td>11</td><td>(9%)</td></tr><tr><td>Gender with lowest representation (female)</td><td>%</td><td></td><td>30</td><td>27</td><td>3% p</td></tr><tr><td>Senior directors and above</td><td>Number</td><td></td><td>175</td><td>170</td><td>3%</td></tr><tr><td>Gender with lowest representation (female)</td><td>%</td><td>40 (2030)</td><td>1,022</td><td>922</td><td>2%</td></tr><tr><td>Gender with lowest representation (female)</td><td>%</td><td></td><td>1,033</td><td>938</td><td>12%</td></tr><tr><td>Gender with lowest representation (female)</td><td>%</td><td>40 (2030)</td><td>33</td><td>31</td><td>2% p</td></tr><tr><td>All employees</td><td>Number</td><td></td><td>8,905</td><td>8,027</td><td>11%</td></tr><tr><td>Gender with lowest representation (female)</td><td>%</td><td>40 (2030)</td><td>34</td><td>33</td><td>1% p</td></tr><tr><td>Gender pay gap</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Gender pay gap, median</td><td>%</td><td></td><td>10</td><td>10</td><td>0% p</td></tr><tr><td>Gender bonus pay gap, median</td><td>%</td><td></td><td>34</td><td>31</td><td>3% p</td></tr><tr><td>Gender bonus distribution</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Proportion of women receiving bonus</td><td>%</td><td></td><td>30</td><td>25</td><td>5% p</td></tr><tr><td>Proportion of men receiving bonus</td><td>%</td><td></td><td>33</td><td>28</td><td>5% p</td></tr></table>

We have equal representation for our Board of Directors.

We have a gender diversity target of at least 40% women across Ørsted by 2030. The target is tracked at three levels: senior directors and above, people leaders, and all employees.

We are committed to equal pay and have a constant focus on ensuring equal pay for equal positions and competences in relation to all aspects of the salary-relevant processes from hiring to promotion.

The presented 2023 gender pay data is based on data from Denmark (54 %), Germany (5 %), Malaysia (9 %), Poland (8 %), the UK (16 %), and the US (8 %).
The median gender pay gap remains unchanged in 2023 compared to 2022, while the bonus pay gap has increased by 3 percentage points compared to 2022. Both the proportion of women and men receiving bonus increased by 5 percentage points to 30% and 33%, respectively, in 2023.

The differences in pay and bonus between men and women are highly impacted by differences in gender mix across levels in the organisation, where there is a trend towards the share of women not increasing at the same pace in the higher-level leadership positions as we see in the remaining part of the organisation.

## § Accounting policies

## Board of Directors

Consists of members elected at the annual general meeting. Board members elected by the employees are not included in the data.

## Group Executive Team (GET)

Consists of the CEO, CFO, Chief HR Officer, Head of Group Finance, Head of Group Risk and Region APAC, Head of Strategy, Innovation, Portfolio, Partnerships & M&A, Head of P2X, Head of EPCO & IT, Head of Legal, and Head of Global Stakeholder Relations.

## Senior directors and above

Consist of the GET, our senior vice presidents, our vice presidents, and our senior directors.

## People leaders

People leaders are defined as all people with direct reports (responsibilities for staff).

## All employees

All employees by gender represent the gender distribution of the total workforce in Ørsted. The reporting covers contractually employed employees in all Ørsted companies. The number of employees is determined as the number of employees at the end of the financial year converted to full-time equivalents.

## Gender pay

Our gender pay reporting is inspired by the mandatory gender pay reporting requirements in the UK.

Countries with more than 250 FTEs per country are included in the statement.

The salaries are reviewed annually and come into effect on 1 June. Countries with more than 250 FTEs on that day are included in the year's reporting.

The gender pay gap shows the pay gap between men and women without adjusting for other factors impacting pay levels (e.g. career level and work experience).

## Definitions

Gender pay gap: The difference between the average earnings of women and men expressed as a percentage.

Gender bonus pay gap: The difference between the average bonus payments of women and men expressed as a percentage.

Gender bonus distribution: The percentage of men and women in the workforce who receive bonuses.



## Safety

<table><tr><td>Data point</td><td>Unit</td><td>Target</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Total recordable injuries (TRIs)</td><td>Number</td><td>73</td><td>78</td><td>(6)%</td><td></td></tr><tr><td>Own employees</td><td>Number</td><td>23</td><td>26</td><td>(12)%</td><td></td></tr><tr><td>Contractor employees</td><td>Number</td><td>50</td><td>52</td><td>(12)%</td><td></td></tr><tr><td>Lost-time injuries (LTIs)</td><td>Number</td><td>36</td><td>40</td><td>(10)%</td><td></td></tr><tr><td>Own employees</td><td>Number</td><td>12</td><td>16</td><td>(25)%</td><td></td></tr><tr><td>Contractor employees</td><td>Number</td><td>24</td><td>24</td><td>0%</td><td></td></tr><tr><td>Hours worked</td><td>Million hours worked</td><td>25.8</td><td>24.8</td><td>4%</td><td></td></tr><tr><td>Own employees</td><td>Million hours worked</td><td>14.5</td><td>12.3</td><td>16%</td><td></td></tr><tr><td>Contractor employees</td><td>Million hours worked</td><td>11.3</td><td>12.5</td><td>(10)%</td><td></td></tr><tr><td>Total recordable injury rate (TRIR)</td><td>Injuries per million hours worked</td><td>2.5 (2025)</td><td>2.8</td><td>3.1</td><td>(10)%</td></tr><tr><td>Own employees</td><td>Injuries per million hours worked</td><td>1.6</td><td>2.1</td><td>(24)%</td><td></td></tr><tr><td>Contractor employees</td><td>Injuries per million hours worked</td><td>4.4</td><td>4.2</td><td>5%</td><td></td></tr><tr><td>Lost-time injury frequency (LTIF)</td><td>Injuries per million hours worked</td><td>1.4</td><td>1.6</td><td>(13)%</td><td></td></tr><tr><td>Own employees</td><td>Injuries per million hours worked</td><td>0.8</td><td>1.3</td><td>(38)%</td><td></td></tr><tr><td>Contractor employees</td><td>Injuries per million hours worked</td><td>2.1</td><td>1.9</td><td>11%</td><td></td></tr><tr><td>Fatalities</td><td>Number</td><td>0</td><td>0</td><td>0%</td><td></td></tr><tr><td>Permanent disability cases</td><td>Number</td><td>0</td><td>0</td><td>0%</td><td></td></tr></table>

Both safety injury rates (TRIR and LTIF) were reduced in 2023 compared to 2022.

In 2023, our total number of recordable injuries was reduced by five injuries: three injuries among own employees and two injuries among contractor employees.

The total number of lost-time injuries (LTIs) decreased by four injuries, all among own employees.

The total amount of hours worked in 2023 was 4% higher than in 2022.
Consequently, the total recordable injury rate (TRIR) was 2.8, which was 10% lower than in 2022.

The lost-time injury frequency (LTIF) was 1.4 in 2023, which was 13% lower than in 2022.

To ensure the health and safety of our employees and contractors, we continue to constantly monitor our safety performance and implement relevant and effective actions where and when needed.

## § Accounting policies

The scoping and consolidation of safety data deviates from our general basis for preparation. This means that irrespective of our ownership share, we include 100% of injuries, hours worked, etc. from all operations where TRIs are is responsible for HSE safety, including the is responsible for HSE safety, including the is responsible for HSE safety, including the is

The lost-time injury frequency (LTIF) is calculated as the number of lost-time injuries per one million hours worked. The number of lost-time injuries is calculated as the number of annually per full-time equivalent and monthly records of the number of employees converted into lost-time injuries. The number of actual number of hours worked is recognised on the basis of data provided by the suppliers, access control systems at locations, or existing safety systems. The number of lost-time injuries is an injury that result in an incapacity to work for one or more calendar days in addition to the day of the incident.

Total recordable injury rate (TRIR) is calculated in the same way as LTIF, but in addition to lost-time injuries, TRIR also includes injuries where the injured person is able to perform restricted work the day after the accident as well as injuries where the injured person has received medical treatment.

Permanent disability cases are injuries resulting in irreversible damage with permanent impairment which is not expected to improve.

Fatalities are the number of employees who lost their lives as a result of a work-related incident. Fatalities are included in both LTIs and TRIs.



## ERS S2

## Workers in the value chain

## Human and labour rights

## Our approach and policies

The green energy build-out impacts the lives of many, including people working across renewable energy supply chains. To support a just energy transition, we expect the companies we work with to run their business and supply chains in compliance with national laws and with respect for international labour and human rights standards. We need to make sure that we respect labour and human rights in everything we do and that we reduce the risk of people in our value chain being adversely impacted.

At Ørsted, we want to support a just transition through the creation of decent jobs in the renewable energy industry. This means jobs providing employees with decent wages, secure employment, safe working conditions, and a working environment where they are free to express their concerns and their right to organise in trade unions is protected.

Our commitment to upholding human rights, including labour rights, is outlined in our sustainability commitment, global human rights policy, stakeholder engagement policy, just transition policy, and code of conduct for business partners. For more information on our policies and how they address human and labour rights impacts, see section S1 on our own workforce. For more information on our code of conduct, see section G1 on business conduct.

## Actions

We aim at contributing to the creation of decent jobs in the renewable energy sector through our workforce development programmes and active engagement with value chain workers and trade unions. To take care of our value chain workers, we carry out a variety of actions and initiatives:

- We are collaborating with industry partners, associations, and unions to define quality standards for offshore wind jobs, creating opportunities for skilled workers and building an open, accessible sector.

- We are actively involved in preparing workers for the demands of the industry. This involves training programmes for wind turbine technicians and apprenticeships targeted at young and seasoned professionals, with the goal of ensuring that they meet the highest standards for renewable energy development.



## Negative impacts
SIGNIFICANT

1 Excessive working hours for supply chain workers

2 Forced labour, e.g. debt bondage and withholding of passports

## Risks

3 Suppliers' breach of contractual agreements on human rights commitments



• To reinforce the monitoring of supplier performance, we have conducted human rights training with a focus on bullying, discrimination, and harassment for our Marine Inspection Team and expect to perform similar trainings for our QHSE site representatives going forward. These teams have frequent on-site presence during the execution of contracts with our suppliers.

• We have continued our work with industry peers to improve the rights and welfare of migrant workers in our supply chains, which is central to responsible business conduct and a just transition. As a first step, the companies drafted a set of principles and guidelines in consultation with suppliers and civil society organisations. The aim is to improve accommodation and transport for migrant workers, drive the employer pays principle, and implement effective grievance mechanisms. The next step is to pilot the principles and guidelines in fabrication yards in Singapore.

• We have initiated a Respectful Working Environment campaign aimed at strategic vessel suppliers, with the aim of mitigating the risk of bullying and harassment in our offshore logistics supply chain. A key element of the campaign is to guide our suppliers on how to prevent, mitigate, and manage cases of bullying, discrimination, and harassment on board our contracted vessels. The format of the campaign not only raises awareness but also ensures that our offshore logistics suppliers are equipped with the necessary policies and procedures to foster a safe and respectful working environment for all crew members.

## Responsible sourcing of minerals and metals

## Our approach and policies

Our renewable energy assets are dependent on metals, including rare earth elements for wind turbine magnets, copper for transportation cables, and lithium for batteries. A significant share of these metals is mined in countries where the likelihood of adverse impacts on human and labour rights is high, and we must therefore do everything we can to avoid harmful effects. Therefore, we have a specific focus on striving to respect and protect the rights of workers and communities involved in the minerals and metals supply chain.

Our efforts within sourcing of minerals and metals focus on the responsible supply chain of metals, acknowledging the challenges inherent in the mining industry's long and complex supply chains. We focus on ten key metals with the highest risk of adverse social and environmental impacts, operating through three strategic pillars:

## 1. Supplier engagement

We work closely with key suppliers, aligning with the OECD due diligence guidance on responsible mining. This involves assessing suppliers' management systems and supply chain risks and implementing response strategies.

## 2. Supply chain transparency

Addressing the challenge of transparency, we collaborate with first-tier suppliers and industry partners, exploring technological solutions to enhance traceability of supply chains for metals.

## 3. Industry partnerships

Engaging with multi-stakeholder initiatives such as the Initiative for Responsible Mining Assurance (IRMA) and the International Responsible Business Conduct (IRBC) Agreement for the Renewable Energy Sector, we leverage partnerships to work on shared solutions to industry-wide impacts and risks.

## Actions

In 2023, we continued our engagement with suppliers and industry associations, reinforcing our efforts of mapping our supply chains and enhancing our influence to mitigate social and environmental risks within our minerals and metals supply chain. Key initiatives include:

## 1. Continued engagement with IRMA

Building on our membership since the end of 2022 as the first renewable energy company, we actively participated in the Buyers Group alongside leaders in the automotive, electronics, and gemstone industries. This collaborative effort aims to collectively promote responsible supply chains of minerals and metals and advocate for ethical mining practices.

## 2. Advancements in transparency

We have started a pilot project applying blockchain technology to enhance the transparency of copper usage at one of our UK wind farms. Also, we have agreed with a supplier to initiate reporting on the origin of steel used in foundations for upcoming projects, a significant step towards increased transparency.

3 Signing the IRBC for the Renewable Energy Sector
We joined forces with other wind developers, industry partners, civil society, and governmental stakeholders to address and mitigate risks and impacts on people and the environment in the operations and supply chains of the renewable energy sector. The aim of the agreement is to promote international responsible business conduct (IRBC), including collaborating with trade unions to address impacts on workers in our minerals and metals supply chain.

As part of our ongoing commitment to transparency and accountability, we plan to evaluate the results of our blockchain pilot in 2024, exploring potential applications to other suppliers and metals. Moving forward, we will also explore the reporting of the origin of steel for foundations and wind turbines with selected suppliers.




↑ On board our service operation vessel Wind of Change.

## Engaging with value chain workers

In our regular supplier assessments, we actively engage with supply chain workers to obtain insights into labour conditions and the implementation of specific suppliers' management systems. As the primary form of engagement, we conduct worker interviews during on-site assessments. These assessments are performed for selected high-risk suppliers with a high presence of manual labour and are conducted through our regular supplier assessments, described in section G1 on business conduct.

Through these interviews, we strive to gain insights into the perspectives of workers who may be particularly vulnerable and marginalised, e.g. migrant workers and minorities. These interviews inform our ongoing collaboration with suppliers, guiding potential improvement activities that the supplier must work to implement in close partnership with Ørsted.

We maintain a strong collaboration with trade unions and civic and non-governmental organisations in the regions where we operate, aiming to foster a diverse and inclusive workforce throughout our value chain. An example is our landmark project labour agreement with North America's Building Trades Unions (NABTU) – the National Offshore Wind Agreement (NOWA).

Through NOWA, we have implemented diversity targets, local training programmes, and performance monitoring for workforce diversity across all of Ørsted's contractors and subcontractors involved in offshore wind farm construction in the US. This agreement also establishes project-specific workforce equity committees, which prioritise the recruitment and retention of individuals from communities of colour, women, gender-nonconforming individuals, and local environmental justice communities.

## Remediation and channels to raise concerns

Our approach to addressing concerns and grievances within our value chain is built on the principles of transparency, trust, and effective remediation that is proportionate to the grievance that has occurred. We are committed and continuously work to strengthen our processes for providing or helping to provide appropriate remediation to harmed workers in situations where we have identified that we have caused or contributed to a negative impact.

Furthermore, through our code of conduct for business partners, we set clear expectations to our suppliers, emphasising the establishment of accessible grievance mechanisms for workers, rightsholders, and stakeholders. During our supplier due diligence procedure, we assess suppliers' management systems with a specific focus on their ability to meet these requirements. In cases where we identify shortcomings, we collaborate with our suppliers to develop improvement plans.

Additionally, workers in the supply chain have free access to and are encouraged to make use of the Ørsted whistleblower hotline to confidentially report any inappropriate or illegal conduct. For more information on our code of conduct, whistleblower hotline, and how we protect whistleblowers against retaliation, see section G1 on business conduct.



## ERS 53

## Affected communities

## Communities' rights

## Our approach and policies

To succeed in creating a world that runs entirely on green energy, we must ensure an energy build-out that brings benefits to people and local communities while avoiding or mitigating any potential adverse social or human rights impacts. Accordingly, we acknowledge that the success of our business also relies on meaningful engagement with affected communities to foster local support and collaboration. By engaging communities in our projects and building them while being mindful of social impacts, we gain valuable insights into community needs, priorities, and local knowledge. These insights help ensure that our projects are not only environmentally sustainable but also socially sustainable.

Our approach to managing our impacts on affected communities aims to avoid, mitigate, and remedy negative impacts and to create lasting positive impacts for affected communities. A key element of our approach is the recognition that our social impacts go beyond local context. We aim for positive impacts for affected communities to also materialise through biodiversity actions and local decarbonisation efforts, improving local air quality and public health.
We believe the industry should define a framework to measure what a people-positive project looks like, and we are currently taking the lead to achieve this.

Our social value creation for affected communities centres on providing job opportunities and fostering skills development, innovation, and local supply chain growth. Due to our ambition to deliver a just and equitable transition, we are also actively exploring how to increase the participation and inclusion of especially disadvantaged groups in our engagement and benefit-sharing actions. Additionally, we are exploring deeper ways of strengthening community engagement, for example by offering co-ownership of our assets.

Our commitment to uphold human rights of everyone and engage with communities is outlined in our sustainability commitment, global human rights policy, stakeholder engagement policy, just transition policy, and code of conduct for business partners. For more information on our policies and how they address human rights impacts, see section S1 on our own workforce. For more information on our code of conduct, see section G1 on business conduct.



## Our material impacts and risks



## Positive impacts
CRUCIAL

Local jobs and educational opportunities (OO)

SIGNIFICANT

Biodiversity restoration work replenishing local fisheries' stock and land-based biodiversity (OO)

Negative impacts
SIGNIFICANT

Indigenous rights may be disrespected in the development stage of our renewable energy assets (OO)

(OO) Own operations (VC) Value chain

Indigenous rights may be disrespected by suppliers in our value chain (VC), potential impact

Air, water, and soil pollution may pose a danger to local communities' health (VC), potential impact

## Risks

Balancing the global pace for deployment of renewable energy with local community interests and concerns (OO)

Consent of Indigenous communities (OO)



Specifically, our code of conduct and policies on human rights and stakeholder engagement highlight our dedication to:

• respecting Indigenous Peoples, minorities, and other vulnerable groups in line with international law and standards as described in the UN Declaration on the Rights of Indigenous Peoples, including the principles of free, prior, and informed consent (FPIC)

• respecting land rights of legitimate tenure rights holders as set out in the UN Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests

• ensuring the safety and protection of human rights, environmental, or Indigenous defenders

• engaging in early dialogue with local communities to understand their perspectives on our projects and the local impacts

• mandating that our business partners take measures to protect environmental and human rights defenders and other interested parties who lawfully exercise their freedom of speech.

## Actions

We strive to construct projects with minimal negative impact on communities. Our current initiatives lay the foundation for integrating this approach across our business functions, markets, and asset projects. We work to go above the minimum regulatory requirements, believing that these actions are essential for securing and sustaining the social licence necessary for advancing renewable energy development. To take care of affected communities, we have implemented a variety of actions and initiatives:

Internal integration of standardised processes for monitoring and managing potential adverse human rights and social impacts

We are working towards establishing a consistent approach across our company for assessing and addressing human rights risks concerning local communities throughout the entire lifespan of a renewable energy project. Our initial focus involves the development and implementation of a global framework, comprised of three tools:

1. Social and human rights impact assessments
We have initiated the development of global guidance for asset-level social and human rights impact assessments. The purpose of the guidance is to create a standardised approach for conducting assessments before the construction of every new project, identifying and addressing potential human rights and social risks.

2 Company-wide framework for managing community-level grievances
We have initiated the development of a global standard for community feedback and grievance management. This will facilitate systematic tracking and response to community feedback and grievances and help us prevent or mitigate material negative impacts throughout the life cycle of an asset.

3 Internal community engagement guidelines
We are developing corporate-level guidelines to serve as a universal reference for adhering to

international best practice standards on community engagement. Emphasising principles such as free, prior, and informed consent (FPIC), these guidelines will have the aim of ensuring our commitment to ethical and respectful engagement, especially with Indigenous Peoples.

## Creating positive impact

• We continued to work towards further increasing our positive social impacts on local socio-economic development, equity and inclusion, environmental sustainability, and community empowerment through initiatives such as apprenticeship programmes, community benefit funds, local supplier development, sponsorships, and partnerships.

• An example is our efforts in Korea, where we are developing co-prosperity programmes for the Incheon and Ongjin County communities after extensive consultation with affected stakeholders. The programmes will guide our relationship with the local communities going forward and include commitments to create a profit-sharing scheme with the local communities. They also include commitments to improve island community well-being by creating new business opportunities and promoting wind farm tourism as an additional source of livelihood.

## Communicating our impacts

• Pursuant to the UK Modern Slavery Act, we release a modern slavery act statement on an annual basis, addressing our modern slavery, human trafficking, and other human rights risks.
Developing impact strategy and targets

• We have initiated a new partnership with the Haas School of Business at the University of California, Berkeley, focusing on defining the foundational elements for measuring the people-positivity of renewable energy projects.

## Engaging with affected communities

We acknowledge the importance of engaging with affected communities to understand and address actual and potential impacts on them. Engagement occurs at various stages of the project development, construction, and operation through community liaison officers and project staff, employing different types and frequencies of interaction, such as public meetings and consultations, ensuring a dynamic and responsive approach to community needs.

Our engagement approach is responsive to local social contexts, tailored to specific projects and areas. Our community liaison officers often come from the communities we engage with, helping us gain a profound understanding of the local contexts.

When we develop new energy projects, we consider it our responsibility to assess the impact on local communities, and we consistently adhere to local regulations and guidelines in order to evaluate these projects' effects on the communities in which they are constructed. Therefore, we engage in early dialogue with local stakeholders to understand their perspectives on the project and its local impact.



After due consideration of the expectations and opportunities within our project’s area of operations, we will assess and implement community initiatives in compliance with applicable laws and tender rules.

We recognise the importance of gaining insight into the perspectives of vulnerable or marginalised communities. We have actively engaged with Indigenous communities in connection with projects both in the US and Australia. We try to begin conversations early in the development process, aligning with Indigenous Peoples' expectations and wishes. Our goal is to secure free, prior, and informed consent (FPIC) for projects impacting Indigenous lands or territories, respecting their cultural, intellectual, religious, and spiritual property.

## Remediation and channels to raise concerns

We work actively to improve our abilities to address and remedy negative impacts on communities affected by our operations. Through engagement via community liaison officers, we are able to actively collect feedback and grievances at the local asset level, particularly during the execution phase. We employ various methods, including hosting town halls and open forums and setting up post boxes to collect and address concerns on an ongoing basis. Also, our whistleblower hotline allows all individuals in affected communities to confidentially report inappropriate or illegal conduct. For more information on our whistleblower hotline and how we protect whistleblowers against retaliation, see section G1 on business conduct.
We have implemented tailored solutions for different markets to address concerns from local communities and provide remedy. Notably, in instances where fliers have been adversely affected during the construction and operation of our offshore wind farms, we have taken measures to provide proportional remedies. Going forward, our efforts to establish a common standard for community feedback and grievance management will strengthen and systematise our processes for receiving, addressing, resolving, and providing remedy to affected communities where necessary.



↑ Our offshore wind farm technicians preparing for a day out on the turbines in Taichung, Taiwan.



## Governance

127 ESRS G1 Business conduct

→ At Ørsted, we are not just committed to renewable energy. We are also dedicated to being a great place to work.

Our team in Taiwan continues to thrive; for the third consecutive year, Ørsted was voted Asia’s best employer. Serving as our Asia-Pacific hub, our Taipei office now comprises over 200 colleagues from diverse backgrounds, with a working environment built on inclusivity, trust, and respect.






ESRS C1

# Business conduct

## Business conduct policies and corporate culture

At Ørsted, we face financial, technical, commercial, and ethical challenges on a daily basis, both as a business and as individuals. Through our good business conduct policy, we strive to uphold a healthy corporate culture with a high level of integrity, providing guidance to all employees on the expected behaviour at Ørsted and in interactions with stakeholders. The policy addresses topics such as bribery, facilitation payments, sponsorships and donations, political contributions, entertainment, and conflicts of interest. It is overseen by our Head of Legal and our Compliance Committee, chaired by the CEO, which has the overall responsibility for monitoring compliance.

Our commitment to business integrity is carried through the whistleblower hotline, which serves both internal and external stakeholders. Our promise to protect whistleblowers against retaliation is outlined in our policy on good business conduct. If whistleblowers choose to remain anonymous, neither Ørsted nor our web service provider can track or identify the reporting individuals. In addition, we have established a standard operating procedure to ensure that allegations are rigorously and objectively investigated.
In our organisation, certain functions pose elevated risks for corruption and bribery due to their involvement in critical financial transactions, interactions with external stakeholders, and sensitivity to regulatory and ethical compliance. These high-risk functions include Procurement, Partnerships & M&A, Asset Projects, and Regulatory & Public Affairs. In particular, to promote the accelerated build-out of renewable energy and the goals of the Paris Agreement, our Regulatory & Public Affairs function actively engages policymakers through lobbying and advocacy efforts. We prioritise the implementation of robust anti-corruption and anti-bribery measures in the specific functions mentioned above to mitigate risks and ensure the highest standards of integrity and compliance.

To ensure employee awareness and effective communication of our policies and measures, we conduct periodic global awareness campaigns and have the documents readily accessible online. Also, all employees are required to participate in an e-learning course on business conduct as part of their onboarding process, and the course must be repeated every second year. The training covers a wide range of topics, providing a good understanding of our policy on good business conduct, including anti-corruption and ethical guidelines.



## Positive impacts
SIGNIFICANT

1 Healthy corporate culture driving the company towards shared goals (OO)

2 Protection of whistleblowers through anti-relationship policies and procedures (OO)

(OO) Own operations
(VC) Value chain

3 Constructive political engagement through lobbying (OO)

4 Good management of suppliers, ensuring compliance with our code of conduct (OO)



## Prevention and detection of corruption and bribery

We have released our anti-bribery and corruption position, emphasising a zero-tolerance policy on bribery and corruption and describing our processes for identifying and managing bribery and corruption risks in our own operations.

To ensure that our suppliers live up to our policy on good business conduct, we conduct know-your-counterparty (KYC) screenings. The KYC process involves screening for anti-bribery and anti-corruption compliance, sanctions, government watch lists, and adverse media coverage. For high-risk partnerships, such as M&As, joint ventures, and similar, we perform a comprehensive partner due diligence, which also encompasses sustainability, creditworthiness, and branding assessments.

Through the KYC process, we conduct thorough investigations of our business partners to prevent, detect, and address allegations or incidents of corruption and bribery within Ørsted. Our policies regarding sponsorships, donations, gifts, and entertainment are rigorous enforced and monitored through an online tool.

In addition to our policy on good business conduct, KYC process, trainings, whistleblower hotline, and supplier due diligence, our Internal Audit team conducts regular audits to assess the effectiveness of our anti-corruption and anti-bribery measures. Internal Audit acts as an autonomous function, reporting directly to the Audit & Risk Committee, and is not involved in day-to-day management affairs. This separation aims to ensure impartiality and integrity of investigations.
Additionally, we prepare an annual internal fraud risk report, which analyses potential corruption and bribery risks within Ørsted. This report aids in our ongoing efforts to prevent and address such incidents.

## Management of relationships with suppliers

We believe in collaborative partnerships, expecting business partners to actively participate in risk assessments, inspections, monitoring, and reporting. Our Responsible Business Partners Programme engages and collaborates with suppliers and business partners on improving their adherence to our social, environmental, and ethical expectations. Our work is based on a systematic and risk-based due diligence process used to assess partners' and suppliers' adherence to our code of conduct for business partners.

The code of conduct is an integral part of our corporate strategy and agreements with our business partners, covering all suppliers, joint venture partners, and counterparties. We ensure a strong commitment to our code of conduct by incorporating it into all contracts with our business partners and suppliers. In addition to the principles of our code of conduct, we have commenced the incorporation of climate requirements into contractual agreements with key suppliers, which entails reporting to the Carbon Disclosure Project (CDP), setting science-based climate targets, and covering electricity consumption with renewable electricity.

Our strategy to manage relationships with our suppliers is guided by a deep understanding of the potential sustainability risks within our supply chain. To evaluate performance and identify any gaps or adverse impacts, we employ a combination of risk screenings, extended risk screenings, and code of conduct assessments, which may occur both before and after contract signing. This process evaluates suppliers' adherence to our code of conduct and integrates with our global procurement system, encompassing four key steps for real progress and continuous improvement:

## 1. Commitment

Upon entering a contract with Ørsted, suppliers sign and thereby commit to our code of conduct.

## 2. Risk screening

Based on country risk, category risk, and spend, we prioritise business partners for further engagement.

## 3. Assessment

We evaluate whether business partners adhere to the expectations in our code of conduct, reviewing relevant management systems and practices.

## 4. Improvement

In cases where gaps are identified, we collaborate with business partners to devise an improvement plan followed by regular touch points to ensure the effective implementation of the plan. In cases where we identify that business partners intentionally fail or repeatedly neglect the improvement plans, we reserve the right to terminate business relationships with the partner in question.

In 2023, we evaluated our due diligence approach, and in 2024, we will implement an updated process focusing on assessing high-risk suppliers prior to contract signing independent of the risk of the project location. This commitment to continuous improvement is underscored by regular updates to our internal risk scoring and the incorporation of evolving standards into our screening tools. As we navigate the dynamic landscape of due diligence, our goal is to meet the highest standards of integrity, transparency, and ethical conduct.



## Whistleblower cases and good business conduct

<table><tr><td>Data point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Whistleblower cases</td><td></td><td></td><td></td><td></td></tr><tr><td>Substantiated whistleblower cases</td><td>Number</td><td>18</td><td>8</td><td>10</td></tr><tr><td>Cases transferred to the police</td><td>Number</td><td>1</td><td>1</td><td>0</td></tr><tr><td>Good business conduct</td><td></td><td></td><td></td><td></td></tr><tr><td>Employees who have completed a course in good business conduct</td><td>%</td><td>87</td><td>84</td><td>3%p</td></tr></table>

The Chair of the Audit & Risk Committee is responsible for managing our whistleblower scheme. Internal Audit receives and handles any reports submitted. Our employees and other associates may report serious offences, such as cases of bribery, fraud, and other inappropriate or illegal conduct through our whistleblower scheme or our management system.

In 2023, 18 substantiated cases of inappropriate or unlawful behaviour were reported through our whistleblower scheme. Nine cases related to good business conduct policy violations, while six cases concerned the workplace environment, one case concerned IT security, and two cases were classified as 'other'. None of the reported cases were critical to our business or caused adjustments to our financial results. One case required a police report.

## § Accounting policies

## Whistleblower cases

Örsted's whistleblower hotline is available for internal and external reporting of suspected cases of inappropriate or illegal behaviour. Whistleblower cases are received and handled by the Internal Audit function, which also receives similar reports through the management system and from compliance officers.

All reports are managed in accordance with the guidelines for the handling of whistleblower cases, which are set out in the Whistleblower Committee, which is ultimately responsible for the whistleblower scheme. Only cases which are closed during the financial year, and which have been reported to the Audit & Risk Committee as fully or partially substantiated, are reported.

## Course in good business conduct

The number of employees who have completed a course in good business conduct is calculated as the proportion of employees who, as of 31 December, have completed an e-learning course in good business conduct relative to the number of employees invited to take the course.



## Supply chain due diligence

<table><tr><td>Data point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Risk screenings</td><td></td><td></td><td></td><td></td></tr><tr><td>Risk screenings (all contracts above DKK 3 million)</td><td>Number</td><td>363</td><td>331</td><td>10%</td></tr><tr><td>Extended risk screenings</td><td>Number</td><td>62</td><td>79</td><td>(22)%</td></tr><tr><td>Procurement spend that is risk-screened</td><td>%</td><td>78</td><td>85</td><td>(7%p)</td></tr><tr><td>Know-your-counterparty (KYC) screenings</td><td>Number</td><td>1,456</td><td>1,421</td><td>2%</td></tr><tr><td>Due diligence activities conducted</td><td></td><td></td><td></td><td></td></tr><tr><td>Code of conduct (COC) desktop assessments</td><td>Number</td><td>54</td><td>47</td><td>15%</td></tr><tr><td>Code of conduct (COC) site assessments</td><td>Number</td><td>9</td><td>3</td><td>200%</td></tr><tr><td>Health, safety, and environment (HSE) desktop assessments</td><td>Number</td><td>130</td><td>166</td><td>(27)%</td></tr><tr><td>Health, safety, and environment (HSE) site assessments</td><td>Number</td><td>117</td><td>94</td><td>24%</td></tr><tr><td>Desktop vessel inspections</td><td>Number</td><td>61</td><td>91</td><td>(33)%</td></tr><tr><td>Physical vessel inspections</td><td>Number</td><td>404</td><td>353</td><td>14%</td></tr></table>

 \( ^{1} \)  The number of ‘Health, safety, and environment (HSE) site assessments’ 2022 has been restated following a systems review.

The number of risk screenings increased by 10% to 363 compared to 2022. The number of extended risk screenings decreased by 22% to 62 due to a large number of recurring suppliers having been previously assessed.

Procurement spend that is risk-screened decreased by 7 percentage points to 78% in 2023, mainly because there has been some spend in 2023 on suppliers risk-screened before 2022 who are not in scope of our 2023 reporting.

The number of know-your-counterparty (KYC) screenings, focusing on suppliers' integrity and legal compliance, increased by 2% in 2023. The increase reflects the additional focus on KYC-screening compliance during 2023 and is in line with expectations.

The number of code of conduct (COC) desktop assessments increased by 15% in 2023, primarily due to the introduction of new suppliers in countries associated with higher COC risks. The number of COC site assessments increased to 9 in 2023 from 3 in 2022 due to an increased number of supplier pre-qualifications as well as the introduction of new high-risk category suppliers in high-risk markets.

The number of health, safety, and environment (HSE) desktop assessments decreased by 22% in 2023 due to the implementation of new sourcing and supplier selection processes. The number of site assessments increased by 24% in 2023 due to a stronger focus on supplier performance on site.
The number of desktop vessel inspections decreased by 33% in 2023 due to a slowdown of project activities in APAC, where the majority of desktop assessments were performed. The number of physical vessel inspections increased by 14% in 2023 due to an increase in project activities in the US Northeast and in Germany, where we have commenced the construction of our offshore wind farms Code Wind 3 and Borkum Riffgrund 3.

The results from the assessments are managed throughout the different programmes, and improvement plans are developed and implemented in collaboration with the suppliers.

## § Accounting policies

The number of supplier risk screenings and due diligence activities conducted is determined by the time schedule of the individual construction projects and the procurement priorities from year to year.

## Risk screenings

The Responsible Business Partners Programme (RPP) team applies a risk-based due diligence framework to identify areas within our code of conduct (COC) for business partners where suppliers need to improve adherence to the code.

Risk screenings are conducted by the RPP team, which is responsible for the assessment of DKK 3 million based on country and category risk. Based on the risk screening evaluation, the RPP team conducts extended risk screenings for suppliers that have been identified as parameters, including labour characteristics related to e.g. migrant workers' and seafarers' rights. Screenings and extended screenings also take place for suppliers of coal and sustainable biomass as well as top-spent suppliers. Risk-screened procurement spend is also calculated annually.

The Business Ethics Compliance (BEC) team conducts know-your-counterparty (KYC) screenings of all new suppliers and business partners to ensure legal compliance.

## Due diligence activities conducted

Due diligence activities are carried out by our RPP, Health, Safety & Environment (HSE), and Environment, Safety & Environment (EHS) teams of individual screenings and risk assessments.

The activities are conducted either as desktop assessments or inspections or as on-site assessments or physical inspections, which often include a visit to the production facilities by Ørsted or a third party.

Assessments also include potential suppliers (i.e. no signed contracts yet) as part of the tender process.



## Appendix

132 Disclosure requirements and incorporation by reference

135 Statement on sustainability due diligence

136 ESRS data points from other EU legislation

138 Calculation factors

139 Alignment with TCFD recommendations

140 Alignment with TNFD recommendations

141 Additional data points below materiality thresholds



## ERS 2

# Disclosure requirements and incorporation by reference

The following tables list all of the ESRS disclosure requirements in ESRS 2 and the seven topical standards which are material to Ørsted and which have guided the preparation of our sustainability statements. We have omitted all the disclosure requirements in the topical standards E2, E3, and S4 as these are below our materiality thresholds.

The tables can be used to navigate to information relating to a specific disclosure requirement in the sustainability statements.

The tables also show where we have placed information relating to a specific disclosure requirement that lies outside of the sustainability statements and is ‘incorporated by reference’ to either the management’s review or the financial statements within this annual report, or to the remuneration report published as a separate report.

In cases where we do not yet have any information related to a disclosure requirement, no reference is made.

<table><tr><td>Cross-cutting standards</td><td>Section/ report</td><td>Page</td><td>Additional information</td></tr><tr><td>ESRS 2 - General disclosures</td><td></td><td></td><td></td></tr><tr><td>BP-1</td><td>General basis for preparation of the sustainability statement</td><td>SUS</td><td>69</td></tr><tr><td>BP-2</td><td>Disclosures in relation to specific circumstances</td><td>SUS</td><td>69</td></tr><tr><td></td><td>Datapoints that derive from other EU legislation</td><td>SUS</td><td>136</td></tr><tr><td>COV-1</td><td>The role of the administrative, management and supervisory bodies</td><td>MR</td><td>52-60</td></tr><tr><td>COV-2</td><td>Information provided to and sustainability matters addressed by the undertakings&#x27; administrative, management and supervisory bodies</td><td>MR</td><td>57-59</td></tr><tr><td>COV-3</td><td></td><td></td><td></td></tr><tr><td></td><td>Integration of sustainability-related performance in incentive schemes</td><td>REM</td><td>6-7</td></tr><tr><td>COV-4</td><td>Statement on sustainability due diligence</td><td>SUS</td><td>135</td></tr><tr><td>COV-5</td><td>Risk management and internal controls over sustainability reporting</td><td>MR</td><td>59</td></tr><tr><td>SBM-1</td><td>Strategy, business model and value chain (products, markets, customers)</td><td>MR</td><td>20-28</td></tr><tr><td></td><td>Strategy, business model and value chain (headcount by country)</td><td>FS</td><td>197</td></tr><tr><td></td><td>Strategy, business model and value chain (headcount of revenue)</td><td>FS</td><td>155</td></tr><tr><td>SBM-2</td><td>Interests and views of stakeholders</td><td>SUS</td><td>79</td></tr><tr><td>SBM-3</td><td>Material impacts, risks and opportunities and their interaction with the business model</td><td>SUS</td><td>66,72-76</td></tr><tr><td>IRO-1</td><td>Description of the process to identify and assess material impacts, risks and opportunities</td><td>SUS</td><td>77-78</td></tr><tr><td>IRO-2</td><td>Disclosure requirements in ESRS covered by the undertaking&#x27;s sustainability statement</td><td>SUS</td><td>132-135</td></tr></table>

SUS Sustainability statements
HR Management's review
REM Remuneration report
FS Financial statements



<table><tr><td>Environmental standards</td><td>Section/ report</td><td>Page</td><td>Additional information</td></tr><tr><td>ESRS E1 - Climate change</td><td></td><td></td><td></td></tr><tr><td>ESRS 2, GOV-3</td><td>Integration of sustainability-related performance in incentive schemes</td><td>REM</td><td>6-7</td></tr><tr><td>E1-1</td><td>Transition plan for climate change mitigation</td><td>SUS</td><td>67-89; 91</td></tr><tr><td>ESRS 2, SBMP-3</td><td>Material impacts, risks and opportunities, and their interaction with strategy and business model</td><td>SUS</td><td>73, 67-88</td></tr><tr><td>ESRS 2, IRO-1</td><td>Description of the processes to identify and assess material climate-related impacts, risks and opportunities</td><td>-</td><td>-</td></tr><tr><td>E1-2</td><td>Policies related to climate change mitigation and adaptation</td><td>SUS</td><td>87-88</td></tr><tr><td>E1-3</td><td>Actions and resources in relation to climate change policies</td><td>SUS</td><td>88-89</td></tr><tr><td>E1-4</td><td>Targets related to climate change mitigation and adaptation</td><td>SUS</td><td>91</td></tr><tr><td>E1-5</td><td>Energy consumption and mix</td><td>SUS</td><td>99</td></tr><tr><td>E1-6</td><td>Gross Scopes 1, 2, 3 and total GHG emissions</td><td>SUS</td><td>100</td></tr><tr><td>E1-7</td><td>GHG removals and GHG mitigation projects financed through carbon credits</td><td>-</td><td>-</td></tr><tr><td>E1-8</td><td>Internal carbon pricing</td><td>-</td><td>-</td></tr><tr><td>E1-9</td><td>Anticipated financial effects from material physical and transition risks and potential climate-related opportunities</td><td>-</td><td>-</td></tr></table>

<table><tr><td>Environmental standards</td><td>Section/ report</td><td>Page</td><td>Additional information</td></tr><tr><td>ESRS E4 - Biodiversity and ecosystems</td><td></td><td></td><td></td></tr><tr><td>E4-1</td><td>Transition plan and consideration of biodiversity and ecosystems in strategy and business model</td><td>SUS</td><td>102-104</td></tr><tr><td>ESRS 2, SBMP-3</td><td>Material impacts, risks and opportunities and their interaction with strategy and business model</td><td>SUS</td><td>74; 102</td></tr><tr><td>ESRS 2, IRO-1</td><td>Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks, dependencies and opportunities</td><td>-</td><td>-</td></tr><tr><td>E4-2</td><td>Policies related to biodiversity and ecosystem</td><td>SUS</td><td>102-103</td></tr><tr><td>E4-3</td><td>Actions and resources related to biodiversity and ecosystems</td><td>SUS</td><td>103-104</td></tr><tr><td>E4-4</td><td>Targets related to biodiversity and ecosystems</td><td>SUS</td><td>104</td></tr><tr><td>E4-5</td><td>Impact metrics related to biodiversity and ecosystems change</td><td>SUS</td><td>105-106</td></tr><tr><td>E4-6</td><td>Anticipated financial effects from biodiversity and ecosystems-related risks and opportunities</td><td>-</td><td>-</td></tr><tr><td>ESRS E5 - Resource use and circular economy</td><td></td><td></td><td></td></tr><tr><td>ESRS 2, IRO-1</td><td>Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities</td><td>-</td><td>-</td></tr><tr><td>E5-1</td><td>Policies related to resource use and circular economy</td><td>SUS</td><td>107-109</td></tr><tr><td>E5-2</td><td>Actions and resources related to resource use and circular economy</td><td>SUS</td><td>108-109</td></tr><tr><td>E5-3</td><td>Targets related to resource use and circular economy</td><td>SUS</td><td>109</td></tr><tr><td>E5-4</td><td>Resource inflows</td><td>-</td><td>-</td></tr><tr><td>E5-5</td><td>Resource outflows</td><td>SUS</td><td>110</td></tr><tr><td>E5-6</td><td>Anticipated financial effects from material resource use and circular economy-related risks and opportunities</td><td>-</td><td>-</td></tr></table>



<table><tr><td>Social standards
Disclosure requirement</td><td>Section/
report</td><td>Page</td><td>Additional information</td></tr><tr><td>ESRS 51 - Own workforce</td><td></td><td></td><td></td></tr><tr><td>ESRS 2</td><td></td><td></td><td></td></tr><tr><td>SBP-2 - Interests and views of stakeholders</td><td>SUS</td><td>79</td><td></td></tr><tr><td>ESRS 2 - Material impacts, risks and opportunities and their interaction with
SBP-3 - strategy and business model</td><td>SUS</td><td>112-114</td><td></td></tr><tr><td>S1-1 - Policies related to own workforce</td><td>SUS</td><td>112-114</td><td></td></tr><tr><td>S1-2 - Processes for engaging with own workers and workers&#x27; representatives
about impacts</td><td>SUS</td><td>114</td><td>Engaging with
our own workforce</td></tr><tr><td>S1-3 - Processes to remediate negative impacts and channels for own workers to
communicate with stakeholders</td><td>SUS</td><td>115</td><td>Remediation and channels
to role concerns</td></tr><tr><td>S1-4 - Taking action on material impacts on own workforce, and approaches to
mitigating material risks and pursuing material opportunities related to
own workforce, and effectiveness of those actions</td><td>SUS</td><td>113-114</td><td></td></tr><tr><td>S1-5 - Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities</td><td>SUS</td><td>115</td><td></td></tr><tr><td>S1-6 - Characteristics of the undertaking&#x27;s employees</td><td>SUS</td><td>116</td><td></td></tr><tr><td>S1-7 - Characteristics of non-employee workers in the undertaking&#x27;s own
workforce</td><td>-</td><td>-</td><td></td></tr><tr><td>S1-8 - Collective bargaining coverage and social dialogue</td><td>-</td><td>-</td><td></td></tr><tr><td>S1-9 - Diversity metrics</td><td>SUS</td><td>117-118</td><td></td></tr><tr><td>S1-10 - Adequate wages</td><td>-</td><td>-</td><td></td></tr><tr><td>S1-11 - Social protection</td><td>SUS</td><td>112</td><td></td></tr><tr><td>S1-12 - Persons with disabilities</td><td>-</td><td>-</td><td></td></tr><tr><td>S1-13 - Training and skills development metrics</td><td>-</td><td>-</td><td></td></tr><tr><td>S1-14 - Health and safety metrics</td><td>SUS</td><td>119</td><td></td></tr><tr><td>S1-15 - Work-life balance metrics</td><td>SUS</td><td>113</td><td>Only qualitative info</td></tr><tr><td>S1-16 - Compensation metrics (pay gap and total compensation)</td><td>SUS</td><td>117-118</td><td></td></tr><tr><td>S1-17 - Incidents, complaints and severe human rights impacts</td><td>-</td><td>-</td><td></td></tr></table>

<table><tr><td>Social standards
Disclosure requirement</td><td>Section/
report</td><td>Page</td><td>Additional Information</td></tr><tr><td>ESRS 52 - Workers in the value chain</td><td></td><td></td><td></td></tr><tr><td>ESRS 2, SBM-2 - Interests and views of stakeholders</td><td>SUS</td><td>79</td><td></td></tr><tr><td>ESRS 2, SBM-3 - Material impacts, risks and opportunities and their interaction with
SBM-3 - strategy and business model</td><td>SUS</td><td>120-121</td><td></td></tr><tr><td>S2-1 - Policies related to value chain workers</td><td>SUS</td><td>120-121</td><td></td></tr><tr><td>S2-2 - Processes for engaging with value chain workers about impacts</td><td>SUS</td><td>122</td><td>Engaging with value
chain workers</td></tr><tr><td>S2-3 - Processes to remediate negative impacts and channels for value chain
workers to communicate with stakeholders</td><td>SUS</td><td>122</td><td>Remediation and channels
to role concerns</td></tr><tr><td>S2-4 - Taking action on material impacts on value chain workers, and approaches
to managing material risks and pursuing material opportunities related to
value chain workers, and effectiveness of those actions</td><td>SUS</td><td>120-121</td><td></td></tr><tr><td>S2-5 - Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities</td><td>-</td><td>-</td><td></td></tr><tr><td>ESRS 53 - Affected communities</td><td></td><td></td><td></td></tr><tr><td>ESRS 2, SBM-2 - Interests and views of stakeholders</td><td>SUS</td><td>79</td><td></td></tr><tr><td>ESRS 2, SBM-3 - Material impacts, risks and opportunities and their interaction with
SBM-3 - strategy and business model</td><td>SUS</td><td>123-124</td><td></td></tr><tr><td>S3-1 - Policies related to affected communities</td><td>SUS</td><td>123-124</td><td></td></tr><tr><td>S3-2 - Processes for engaging with affected communities about impacts</td><td>SUS</td><td>124</td><td>Engaging with affected
communities</td></tr><tr><td>S3-3 - Processes to remediate negative impacts and channels for affected
communities to raise concerns</td><td>SUS</td><td>125</td><td>Remediation and channels
to raise concerns</td></tr><tr><td>S3-4 - Taking action on material impacts on affected communities, and
approaches to managing material risks and pursuing material
opportunities related to affected communities, and effectiveness of those
actions</td><td>SUS</td><td>124</td><td></td></tr><tr><td>S3-5 - Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities</td><td>-</td><td>-</td><td></td></tr></table>

SUS: Sustainability statements

MR Management's review

REM Remuneration report

FS Financial statements



<table><tr><td>Governance standards</td><td>Section/ report</td><td>Page</td><td>Additional information</td></tr><tr><td>Disclosure requirement</td><td></td><td></td><td></td></tr><tr><td>ESRS G1 - Business conduct</td><td></td><td></td><td></td></tr><tr><td>ESRS 2, GOV-1</td><td>The role of the administrative, supervisory and management bodies</td><td>MR</td><td>52-60</td></tr><tr><td>ESRS 2, DRC-1</td><td>Description of the processes to identify and assess material impacts, risks and opportunities</td><td>-</td><td>-</td></tr><tr><td>G1-1</td><td>Business conduct policies and corporate culture</td><td>SUS</td><td>127</td></tr><tr><td>G1-2</td><td>Management of relationships with suppliers</td><td>SUS</td><td>128</td></tr><tr><td>G1-3</td><td>Prevention and detection of corruption and bribery</td><td>SUS</td><td>128</td></tr><tr><td>G1-4</td><td>Incidents of corruption or bribery</td><td>SUS</td><td>-</td></tr><tr><td>G1-5</td><td>Political influence and lobbying activities</td><td>SUS</td><td>-</td></tr><tr><td>G1-6</td><td>Payment practices</td><td>SUS</td><td>-</td></tr></table>

## ESRS 2

## Statement on sustainability due diligence

<table><tr><td rowspan="2">Core elements of due diligence</td><td colspan="2">Sections in the sustainability statements</td><td rowspan="2">Page</td></tr><tr><td>governance</td><td>127-128</td></tr><tr><td rowspan="2">a) Embedding due diligence in governance, strategy and business model</td><td rowspan="2">Governance</td><td rowspan="2">79</td><td></td></tr><tr><td></td></tr><tr><td rowspan="2">b) Engaging with affected stakeholders in all key steps of the due diligence</td><td>General</td><td>79</td><td></td></tr><tr><td>Governance</td><td>112-115, 120-125</td><td></td></tr><tr><td rowspan="2">c) Identifying and assessing adverse impacts</td><td>Social</td><td>127-128</td><td></td></tr><tr><td>Governance</td><td>112-115, 120-122, 123-125</td><td></td></tr><tr><td rowspan="2">d) Taking actions to address those adverse impacts</td><td>Social</td><td>113, 121-125</td><td></td></tr><tr><td>Governance</td><td>127-128</td><td></td></tr><tr><td rowspan="2">e) Tracking the effectiveness of these efforts and communicating</td><td>Social</td><td>113, 121-122, 124</td><td></td></tr><tr><td>Governance</td><td>127-128</td><td></td></tr></table>

The above table provides a mapping to where in our sustainability statements we provide information about our due diligence process, including how we apply the main aspects and steps of our due diligence process.



## ERS 2

## Datapoints that derive from other EU legislation

The table below includes all of the datapoints that derive from other EU legislation as listed in ERS 2 appendix B, indicating where the data points can be found in our report and which data points are assessed as 'Not material'.

<table><tr><td>Disclosure requirement</td><td>Data point</td><td>Sustainability statements | Appendix</td><td>SFDR reference</td><td>Pillar 3 reference</td><td>Benchmark regulation reference</td><td>EU Climate Law reference</td><td>Section</td><td>Page</td></tr><tr><td>ERS 2 COV-1</td><td>21 (d)</td><td>Boards&#x27; gender diversity</td><td>x</td><td></td><td></td><td></td><td>Sustainability statements</td><td>118</td></tr><tr><td>ERS 2 COV-1</td><td>21 (e)</td><td>Percentage of board members who are independent</td><td></td><td></td><td></td><td></td><td>Managements review</td><td>52</td></tr><tr><td>ERS 2 COV-4</td><td>30</td><td>Statement on due diligence</td><td></td><td></td><td></td><td></td><td>Sustainability statements</td><td>117</td></tr><tr><td>ERS 2 SBP-1</td><td>40 (d)</td><td>Involvement in activities related to fossil fuel activities</td><td>x</td><td></td><td></td><td></td><td>Sustainability statements</td><td>135</td></tr><tr><td>ERS 2 SBP-1</td><td>40 (d) ii</td><td>Involvement in activities related to chemical production</td><td>x</td><td>x</td><td>x</td><td></td><td>Sustainability statements</td><td>81</td></tr><tr><td>ERS 2 SBP-1</td><td>40 (d) iii</td><td>Involvement in activities related to controversial weapons</td><td>x</td><td></td><td></td><td></td><td>Not relevant</td><td></td></tr><tr><td>ERS 2 SBP-1</td><td>40 (d) iv</td><td>Involvement in activities related to cultivation and production of tobacco</td><td>x</td><td></td><td></td><td></td><td>Not relevant</td><td></td></tr><tr><td>ERS E1-1</td><td>14</td><td>Transition plan to reach climate neutrality by 2050</td><td></td><td></td><td></td><td></td><td>Not relevant</td><td></td></tr><tr><td>ERS E1-1</td><td>16 (g)</td><td>Undertakings excluded from Paris-aligned Benchmarks</td><td></td><td></td><td></td><td>x</td><td>Sustainability statements</td><td>87-89</td></tr><tr><td>ERS E1-4</td><td>34</td><td>GHG emission reduction targets</td><td></td><td>x</td><td>x</td><td></td><td>Not relevant</td><td></td></tr><tr><td>ERS E1-5</td><td>38</td><td>Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors)</td><td></td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>91</td></tr><tr><td>ERS E1-5</td><td>37</td><td>Energy consumption and mix</td><td></td><td>x</td><td></td><td></td><td>Not relevant</td><td></td></tr><tr><td>ERS E1-5</td><td>40-43</td><td>Energy intensity associated with activities in high climate impact sectors</td><td></td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>99</td></tr><tr><td>ERS E1-6</td><td>44</td><td>Gross Scope 1, 2, 3 and Total GHG emissions</td><td></td><td>x</td><td></td><td></td><td>Not relevant</td><td></td></tr><tr><td>ERS E1-6</td><td>53-55</td><td>Gross GHG emissions intensity</td><td></td><td>x</td><td>x</td><td>x</td><td>Sustainability statements</td><td>100</td></tr><tr><td>ERS E1-7</td><td>56</td><td>GHG removals and carbon credits</td><td></td><td>x</td><td>x</td><td>x</td><td>Not stated</td><td></td></tr><tr><td>ERS E1-9</td><td>66</td><td>Exposure of the benchmark portfolio to climate-related physical risks</td><td></td><td></td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ERS E1-9</td><td>66 (a) 66 (c)</td><td>Disaggregation of monetary amounts by acute and chronic physical risk; Location of significant assets at material physical risk</td><td></td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>86</td></tr><tr><td>ERS E1-9</td><td>67 (c)</td><td>Breakdown of the carrying value of its real estate assets by energy-efficiency classes</td><td></td><td></td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ERS E1-9</td><td>69</td><td>Degree of exposure of the portfolio to climate-related opportunities</td><td></td><td></td><td></td><td></td><td>Management&#x27;s review</td><td>20-35</td></tr><tr><td>ERS E2-4</td><td>28</td><td>Amount of each pollutant listed in Annex II of the E-PRTR Regulation emitted to air, water and soil</td><td></td><td>x</td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ERS E3-1</td><td>9</td><td>Water and marine resources</td><td></td><td></td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ERS E3-1</td><td>13</td><td>Dedicated policy</td><td></td><td></td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ERS E3-1</td><td>14</td><td>Sustainable oceans and seas</td><td></td><td>x</td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ERS E3-4</td><td>28 (c)</td><td>Total water recycled and reused</td><td></td><td>x</td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ERS E3-4</td><td>29</td><td>Total water consumption in m³ per net revenue on own operations</td><td></td><td>x</td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ERS 2 SBP 3 - E4</td><td>16 (a)</td><td></td><td></td><td></td><td></td><td></td><td>Sustainability statements</td><td>105</td></tr><tr><td>ERS 2 SBP 3 - E4</td><td>16 (b)</td><td></td><td></td><td></td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ERS 2 SBP 3 - E4</td><td>16 (c)</td><td></td><td></td><td></td><td></td><td></td><td>Sustainability statements</td><td>100</td></tr></table>



<table><tr><td>Disclosure requirement</td><td>Data point</td><td>SFDR reference</td><td>Pillar 3 reference</td><td>Benchmark regulation reference</td><td>EU Climate Law reference</td><td>Section</td><td>Page</td></tr><tr><td>ESRS 4.2</td><td>24 (b)</td><td>Sustainable land / agriculture practices or policies</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>108-109</td></tr><tr><td>ESRS 4.2</td><td>24 (c)</td><td>Sustainable oceans / seas practices or policies</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>102</td></tr><tr><td>ESRS 4.2</td><td>24 (d)</td><td>Policies to address deforestation</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>108-109</td></tr><tr><td>ESRS 5.5</td><td>37 (d)</td><td>Non-engaged waste</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>110</td></tr><tr><td>ESRS 5.5</td><td>39</td><td>Hazardous waste and radioactive waste</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>110</td></tr><tr><td>ESRS 2.5/Bn3-5.1</td><td>14 (f)</td><td>Risk of incidents of forced labour</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 2.5/Bn3-5.1</td><td>14 (g)</td><td>Risk of incidents of child labour</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.1</td><td>20</td><td>Human rights policy commitments</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112-113</td></tr><tr><td>ESRS 5.1</td><td>21</td><td>Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112-113</td></tr><tr><td>ESRS 5.1</td><td>22</td><td>Processes and measures for preventing trafficking in human beings</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112-113</td></tr><tr><td>ESRS 5.1</td><td>23</td><td>Workplace accident prevention policy or management system</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>113</td></tr><tr><td>ESRS 5.1</td><td>32 (c)</td><td>Grievance/complaints handling mechanisms</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112, 115</td></tr><tr><td>ESRS 5.1.4</td><td>88 (b) and (c)</td><td>Number of fatalities and number and rate of work-related accidents</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>119</td></tr><tr><td>ESRS 5.1.4</td><td>88 (e)</td><td>Number of days lost to injuries, accidents, fatalities or illness</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.1.6</td><td>97 (a)</td><td>Unadjusted gender pay gap</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>118</td></tr><tr><td>ESRS 5.1.6</td><td>97 (b)</td><td>Excessive CEO pay ratio</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>117</td></tr><tr><td>ESRS 5.1.7</td><td>103 (a)</td><td>Incidents of discrimination</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.1.7</td><td>104 (a)</td><td>Non-respect of UNPs on Business and Human Rights and OECD</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 2.5/Bn3-5.2</td><td>11 (b)</td><td>Significant risk of child labour or forced labour in the value chain</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.2</td><td>17</td><td>Human rights policy commitments</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112-113, 120-122</td></tr><tr><td>ESRS 5.2</td><td>18</td><td>Policies related to value chain workers</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112-113, 120-122, 128</td></tr><tr><td>ESRS 5.2</td><td>19</td><td>Non-respect of UNPs on Business and Human Rights principles and OECD guidelines</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.2</td><td>19</td><td>Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112-113, 120-122, 128</td></tr><tr><td>ESRS 5.2</td><td>36</td><td>Human rights issues and incidents connected to its upstream and downstream value chain</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.3</td><td>16</td><td>Human rights policy commitments</td><td>x</td><td></td><td></td><td>Sustainability statements</td><td>112-113, 123-125</td></tr><tr><td>ESRS 5.3</td><td>17</td><td>Non-respect of UNPs on Business and Human Rights, ILO principles or and OECD guidelines</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.3</td><td>36</td><td>Human rights issues and incidents</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS 5.4</td><td>16</td><td>Policies related to consumers and end-users</td><td>x</td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ESRS 5.4</td><td>17</td><td>Non-respect of UNPs on Business and Human Rights and OECD guidelines</td><td>x</td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ESRS 5.4</td><td>35</td><td>Human rights issues and incidents</td><td>x</td><td></td><td></td><td>Not material</td><td></td></tr><tr><td>ESRS C1.1</td><td>510 (b)</td><td>United Nations Convention against Corruption</td><td>x</td><td></td><td></td><td>Not relevant</td><td></td></tr><tr><td>ESRS C1.1</td><td>510 (d)</td><td>Protection of whistle-blowers</td><td>x</td><td></td><td></td><td>Not relevant</td><td></td></tr><tr><td>ESRS C1.4</td><td>524 (a)</td><td>Fines for violation of anti-corruption and anti-bribery laws</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr><tr><td>ESRS C1.4</td><td>524 (b)</td><td>Standards of anti-corruption and anti-bribery</td><td>x</td><td></td><td></td><td>Not stated</td><td></td></tr></table>



## Calculation factors 2023

<table><tr><td>Page reference</td><td>Data point</td><td>Factor</td><td>Comment</td><td>Reference</td><td>Publication name</td></tr><tr><td>p. 100</td><td>Scope 1 emissions</td><td>Global warming potential of greenhouse gases</td><td>CH4, N2O, SF6</td><td>Intergovernmental Panel on Climate Change (IPCC)</td><td>Climate Change 2021, The Physical Science Basis</td></tr><tr><td>p. 100</td><td>Scope 1 emissions</td><td>Carbon emissions from fossil fuels at CHP plants</td><td>Cool, oil, natural gas</td><td>Danish Energy Agency</td><td>Standardfaktorer for brandelværdier og CO2-emissioner (Standard factors for brandelværdier og CO2-emissioner), 2022</td></tr><tr><td>p. 100</td><td>Scope 1 emissions</td><td>Carbon emissions from fossil fuels outside CHP plants</td><td>Diesel, petrol, fuel oil, jet fuel</td><td>American Petroleum Institute (API)</td><td>Compendium of greenhouse gas emission methodologies for the oil and natural gas industry, 2009</td></tr><tr><td>p. 100</td><td>Scope 2 emissions</td><td>Carbon emissions from power purchased</td><td>In Denmark</td><td>Energetik DK, 2022</td><td>Generell deklaration og Miljødeklaration, 2021 (Generell declaration and environmental declaration, 2021)</td></tr><tr><td>p. 100</td><td>Scope 2 emissions</td><td>Carbon emissions from power purchased</td><td>In other European countries</td><td>Association of Issuing Bodies (AIB)</td><td>European Residual Hives, 2022 (2021 data)</td></tr><tr><td>p. 100</td><td>Scope 2 emissions</td><td>Carbon emissions from power purchased</td><td>In countries outside Europe</td><td>Institute for Global Environmental Strategies (ICES) US Environmental Protection Agency (EPA)</td><td>List of grid emission factors, 2022 US EPA 2023 (eGRID2021 data)</td></tr><tr><td>p. 100</td><td>Biogenic emissions</td><td>Biogenic emissions from combustion of biomass</td><td>GHG emissions outside of scope 1-3, biomass and biogas</td><td>UK Department for Environment, Food &amp; Rural Affairs (DEFRA)</td><td>UK government GHG conversion factors for company reporting, 2022</td></tr><tr><td>p. 100</td><td>Scope 3 emissions</td><td>Use of sold products. Fuel- and energy-related activities</td><td>Emissions from end use of gas. Upstream supply chain for fuels</td><td>UK Department for Environment, Food &amp; Rural Affairs (DEFRA)</td><td>UK government GHG conversion factors for company reporting, 2022</td></tr><tr><td>p. 100</td><td>Scope 3 emissions</td><td>Capital goods</td><td>Wind farms, onshore</td><td>Siemens</td><td>Environmental Product Declaration: a clean energy solution - from cradle to grave. Onshore wind power plant employing SWT-2-3-1.08</td></tr><tr><td>p. 100</td><td>Scope 3 emissions</td><td>Purchased goods and services</td><td>Supply chain emission factors depend on product categories</td><td>US Environmental Protection Agency (EPA)</td><td>Supply Chain Greenhouse Gas Emission Factors, USD 2018</td></tr><tr><td>p. 100</td><td>Scope 3 emissions</td><td>Business travel in private car</td><td>Assumptions: &#x27;average car&#x27;, &#x27;unknown fuel type&#x27;</td><td>UK Department for Environment, Food &amp; Rural Affairs (DEFRA)</td><td>UK government GHG conversion factors for company reporting, 2022</td></tr><tr><td>p. 141</td><td>Avoided emissions from green bond proceeds</td><td>Carbon emissions from average fossil-fuel mix</td><td>Average of cool, gas, and oil [countries and US states]</td><td>International Energy Agency (IEA) US Environmental Protection Agency (EPA)</td><td>IEA Emissions Factors 2022 (2020 data) US EPA 2023 (eGRID2020 data)</td></tr><tr><td>p. 141</td><td>Water stress</td><td>Baseline water stress</td><td>Measured at site level, baseline water stress is the ratio of total water withdrawals to available renewable supply</td><td>World Resources Institute (WRI)</td><td>Aqueduct Water Risk Atlas v3.0, 2019</td></tr></table>

Note: The table shows references for calculation factors used in the 2023 data set.



## Alignment with TCFD recommendations

<table><tr><td>Theme</td><td>Recommended disclosures</td><td>Annual report section/Orsted report</td><td>Section</td><td>Page</td></tr><tr><td rowspan="2">Governance</td><td>a) Describe the board’s oversight of climate-related risks and opportunities</td><td>Management’s review</td><td>Corporate governance</td><td>52-61</td></tr><tr><td>b) Describe management’s role in assessing and managing climate-related risks and opportunities</td><td>Management’s review</td><td>Corporate governance</td><td>52-61</td></tr><tr><td rowspan="3">Strategy</td><td>a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Environment of the Executive Board</td><td>20-38</td></tr><tr><td>b) Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Strategy and businessDouble materiality assessmentEnvironment: Climate change</td><td>70-76</td></tr><tr><td>c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Strategy and businessEnvironment: Climate scenario analysisEnvironment: Climate change</td><td>20-38</td></tr><tr><td rowspan="3">Risk management</td><td>a) Describe the organisation’s processes for identifying and assessing climate-related risks</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Risks and risk managementDouble materiality assessment methodologyEnvironment: Climate scenario analysis</td><td>66</td></tr><tr><td>b) Describe the organisation’s processes for managing climate-related risks</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Risks and risk managementDouble materiality assessment methodologyEnvironment: Climate scenario analysis</td><td>34-37</td></tr><tr><td>c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Risks and risk managementDouble materiality assessment methodologyEnvironment: Climate scenario analysis</td><td>34-37</td></tr><tr><td rowspan="3">Metrics and targets</td><td>a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Overview: Strategic ambitionsEnvironment: Climate changeSustainability statements</td><td>6</td></tr><tr><td>b) Disclose scope 1, scope 2, and, if appropriate, scope 3 greenhouse gas (GHG) emissions and the related risks</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Overview: Strategic ambitionsEnvironment: Climate changeSustainability statements</td><td>6</td></tr><tr><td>c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets</td><td>Management’s reviewSustainability statementsSustainability statements</td><td>Overview: Strategic ambitionsEnvironment: Climate change</td><td>6</td></tr></table>



## Alignment with TNFD recommendations

<table><tr><td>Theme</td><td>Recommended disclosures</td><td>Annual report section/Orsted report</td><td>Section</td><td>Page</td></tr><tr><td rowspan="2">Governance</td><td>a) Describe the board&#x27;s oversight of nature-related dependencies, impacts, risks and opportunities</td><td>Management&#x27;s review</td><td>Corporate governance</td><td>52-61</td></tr><tr><td>b) Describe management&#x27;s role in assessing and managing nature-related dependencies, impacts, risks and opportunities</td><td>Management&#x27;s review</td><td>Corporate governance</td><td>52-61</td></tr><tr><td rowspan="3">Strategy</td><td>c) Describe the organisation&#x27;s human rights policies and engagement activities, and oversight by the board and management, with respect to Indigenous Peoples, Local Communities, affected and other stakeholders, in the organisation&#x27;s assessment of, and response to, nature-related dependencies, impacts, risks and opportunities</td><td>Sustainability statements Sustainability statements Sustainability statements</td><td>Interests and views of stakeholders Environment Biodiversity and ecosystems Social- Affected communities</td><td>79 102-106 123-125</td></tr><tr><td>d) Describe the nature-related dependencies, impacts, risks and opportunities the organisation has identified over the short, medium and long term.</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Strategy and business Double materiality assessment Environment</td><td>20-38 70-79 81-110</td></tr><tr><td>b) Describe the effect nature-related dependencies, impacts, risks and opportunities have had on the organisation&#x27;s business model, value chain, strategy and financial planning, as well as any transition plans or analysis in place.</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Strategy and business Environment</td><td>20-38 81-110</td></tr><tr><td rowspan="2">Risk and impact management</td><td>c) Describe the resilience of the organisation&#x27;s strategy to nature-related risks and opportunities, taking into consideration different scenarios.</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Risks and risk management Environment</td><td>34-37 81-110</td></tr><tr><td>d) Disclose the locations of assets and/or activities in the organisation&#x27;s direct operations and, where possible, upstream and downstream value chain(s) that meet the criteria for priority locations.</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Overview: Out footprint Environment Biodiversity and ecosystems</td><td>14 102-106</td></tr><tr><td rowspan="4">Risks and impact management</td><td>a) Describe the organisation&#x27;s processes for identifying, assessing and prioritising nature-related dependencies, impacts, risks and opportunities in its upstream and downstream value chain(s).</td><td>Management&#x27;s review Sustainability statements Sustainability statements Sustainability statements</td><td>Corporate governance Double materiality assessment Double materiality assessment Governance: Business conduct</td><td>52-61 74-37 70-79 127-130</td></tr><tr><td>b) Describe the organisation&#x27;s processes for identifying, assessing and prioritising nature-related dependencies, impacts, risks and opportunities in its upstream and downstream value chain(s).</td><td>Management&#x27;s review Sustainability statements Sustainability statements Sustainability statements</td><td>Risks and risk management Double materiality assessment Environment</td><td>34-37 74-37 70-79 102-106</td></tr><tr><td>c) Describe how processes for identifying, assessing, prioritising and monitoring nature-related risks are integrated into and inform the organisation&#x27;s overall risk management processes.</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Risks and risk management Double materiality assessment Environment</td><td>34-37 70-79</td></tr><tr><td>a) Disclose the metrics used by the organisation to assess and manage material nature-related risks and opportunities in line with its strategy and risk management process.</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Overview: Strategic ambitions Environment</td><td>6 81-110</td></tr><tr><td rowspan="2">Metrics and targets</td><td>b) Disclose the metrics used by the organisation to assess and manage dependencies and impacts on nature.</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Overview: Strategic ambitions Environment</td><td>6 81-110</td></tr><tr><td>c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets</td><td>Management&#x27;s review Sustainability statements Sustainability statements</td><td>Overview: Strategic ambitions Environment</td><td>6 81-110</td></tr></table>



## Additional data points below materiality thresholds  \( {}^{\textregistered} \) 

<table><tr><td>Data point</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Water withdrawal</td><td></td><td></td><td></td><td></td></tr><tr><td>Total volume of water withdrawn</td><td>Thousand m³</td><td>767,643</td><td>1,021,206</td><td>(25 %)</td></tr><tr><td>Surface water</td><td>Thousand m³</td><td>753</td><td>708</td><td>6 %</td></tr><tr><td>Groundwater</td><td>Thousand m³</td><td>285</td><td>205</td><td>39 %</td></tr><tr><td>Seawater</td><td>Thousand m³</td><td>765,220</td><td>1,018,826</td><td>(25 %)</td></tr><tr><td>Produced water</td><td>Thousand m³</td><td>467</td><td>422</td><td>11 %</td></tr><tr><td>Third-party water</td><td>Thousand m³</td><td>912</td><td>1,043</td><td>(13 %)</td></tr><tr><td>Freshwater withdrawal intensity¹</td><td>m³/GWh</td><td>46</td><td>47</td><td>(2 %)</td></tr><tr><td>Water withdrawal from water-stressed areas</td><td></td><td></td><td></td><td></td></tr><tr><td>From areas with low stress levels</td><td>%</td><td>2</td><td>0</td><td>2 %p</td></tr><tr><td>From areas with low to medium stress levels</td><td>%</td><td>45</td><td>55</td><td>(10 %)p</td></tr><tr><td>From areas with medium to high stress levels</td><td>%</td><td>49</td><td>45</td><td>4 %p</td></tr><tr><td>From areas with extremely high stress levels</td><td>%</td><td>4</td><td>0</td><td>4 %p</td></tr><tr><td>Wastewater discharge by destination</td><td></td><td></td><td></td><td></td></tr><tr><td>Total volume of water discharge</td><td>Thousand m³</td><td>766,920</td><td>1,019,827</td><td>(25 %)</td></tr><tr><td>Surface water</td><td>Thousand m³</td><td>226</td><td>91</td><td>146 %</td></tr><tr><td>Groundwater</td><td>Thousand m³</td><td>0</td><td>0</td><td>0 %</td></tr><tr><td>Seawater</td><td>Thousand m³</td><td>765,425</td><td>1,018,690</td><td>(25 %)</td></tr><tr><td>Third-party water</td><td>Thousand m³</td><td>1,269</td><td>1,046</td><td>21 %</td></tr><tr><td>Third-party water sent for use in other organisations (solid water)</td><td>Thousand m³</td><td>496</td><td>452</td><td>10 %</td></tr><tr><td>Water consumption</td><td>Thousand m³</td><td>723</td><td>1,379</td><td>(48 %)</td></tr><tr><td>Other air emissions: nitrogen oxides (NOx) and sulphur dioxide (SO₂)</td><td></td><td></td><td></td><td></td></tr><tr><td>Nitrogen oxides emissions</td><td>Tonnes</td><td>1,572</td><td>1,892</td><td>(17 %)</td></tr><tr><td>Sulphur dioxide emissions</td><td>Tonnes</td><td>576</td><td>780</td><td>(26 %)</td></tr><tr><td>Nitrogen oxides emissions intensity</td><td>g NO₂/kWh</td><td>0.14</td><td>0.15</td><td>(7 %)</td></tr><tr><td>Sulphur dioxide emissions intensity</td><td>g SO₂/kWh</td><td>0.005</td><td>0.06</td><td>(17 %)</td></tr><tr><td>Environmental incidents</td><td></td><td></td><td></td><td></td></tr><tr><td>Massive environmental incidents</td><td>Number</td><td>0</td><td>0</td><td>0 %</td></tr><tr><td>Major environmental incidents</td><td>Number</td><td>3</td><td>2</td><td>50 %</td></tr><tr><td>Green bond impact report data points</td><td>Unit</td><td>2023</td><td>2022</td><td>Δ</td></tr><tr><td>Total avoided emissions from green bond proceeds</td><td>Million tonnes CO₂-e</td><td>5.9</td><td>4.2</td><td>40 %</td></tr><tr><td>Avoided emissions from projects in operation</td><td>Million tonnes CO₂-e</td><td>2.6</td><td>1.4</td><td>100 %</td></tr><tr><td>Potential avoided emissions from projects under construction</td><td>Million tonnes CO₂-e</td><td>3.1</td><td>2.8</td><td>11 %</td></tr></table>

 \( ^{1} \)  Our freshwater withdrawal intensity target is 32 m \( ^{3} \) /GWh by 2025.

## Accounting policies

The water category definitions are based on CRI 303: Water and effluents (2018).

## Water withdrawal

This includes all water resources that  \( \textcircled{1} \) irst withdraws directly from groundwater or sources from waterways. This includes:  \( \textcircled{1} \)  withdrawal from process is outdoors, like flues cleaning, fly ash management, etc.  \( \textcircled{1} \)  withdrawal for conversion to steam or hot water and release to businesses partners  \( \textcircled{1} \)  withdrawal for offices and other buildings

The total volume of water withdrawal is measured based on meter readings or invoices from water companies. This includes water used for cooling at the combined heat and power (CHP) plants. Produced water is water extracted as part of the processing of wood pulp and paper, or as part of the water cycle.

## Freshwater withdrawal intensity

Freshwater withdrawal intensity is calculated as freshwater withdrawal (surface water, groundwater, and third-party water) per unit produced per generation

## Water stress

Water stress is measured at site level. The methodology used to assess water stress is WRI's Aqueduct Water Risk Atlas. The calculated output is  \( \textcircled{1} \) irst tested  \( \textcircled{1} \)  water withdrawal for water from water-stressed areas. Only groundwater and third-party water is included.

## Wastewater discharge

This includes all planned and unplanned discharges of water from  \( \textcircled{1} \) irst. The wastewater discharges are recorded based on the volume of water discharged, the volume of water produced, tank discharges as based on invoices. For offices and warehouses, wastewater discharge is regarded to be equivalent to water discharge.

## Water consumption

Water consumption is calculated as water withdrawal minus wastewater discharges
Other air emissions: nitrogen oxides (NO \( _{x} \) ) and sulphur dioxide (SO \( _{2} \) )
NO \( _{x} \)  and SO \( _{2} \)  emissions are only reported for CHPs. NO \( _{x} \)  and SO \( _{2} \)  emissions from other combustion are not included. NO \( _{x} \)  and SO \( _{2} \)  are primarily measured by continuous measurement, but may also be based on plant-specific measurements.

## Environmental incidents

An environmental incident is an unintended incident which has a negative impact on the environment. We report environmental incidents as a result of our operations, directly or indirectly. We register all environmental incidents at facilities where we are responsible for operations in terms of environmental impact.

The materiality of an incident is determined on the basis of an assessment of the extent of, the dispersion to, and the impact on the environment. On this basis, all environmental incidents are categorised on a scale from 1 (light impact) to 5 (massive impact). Actual incidents in categories 4 (major impact) and 5 (massive impact) are reported.

Avoided emissions from green bond proceeds are calculated on the assumption that the proceeds are used for the same purposes as equal quantity of power generated using fossil fuels. Emissions from operation of these renewable assets are assumed to be zero.

The avoided emissions from green bond proceeds are calculated on the assumption that generation multiplied by an emission factor – the average emissions of electricity produced from fossil fuels at the specific geographical location of the project. The avoided emissions into account the weighted mix of oil, coal, and natural gas.

The annual energy generation from projects in operation and projects under construction, as well as the resulting avoided emissions, are total figures for the projects (not adjusted for  \( \textcircled{1} \) irst's ownership share).



## Consolidated financial statements

1 January – 31 December 2023

→ Western Trail, located in Wilbarger and Baylor counties, Texas, the US.






## Contents
Financial statements

Consolidated financial statements

Consolidated statement of income ..... 144
Consolidated statement of comprehensive income ..... 144
Consolidated balance sheet ..... 145
Consolidated statement of shareholders' equity ..... 146
Consolidated statement of cash flows ..... 147

## Notes

1. Basis of reporting
1.1 Significant changes and events ..... 149
1.2 Basis of preparation ..... 150
2. Return on capital employed
2.1 Segment information ..... 154
2.2 Revenues ..... 157
2.3 Cost of sales ..... 159
2.4 Government grants ..... 160
2.5 Research and development expenditures ..... 160
2.6 Other operating income and expenses ..... 161
2.7 Employee costs ..... 162
2.8 Share-based payment ..... 163
3. Capital employed
3.1 Intangibles, assets, and property, plant, and equipment ..... 166
3.2 Impairment ..... 167
3.3 Acquisition of enterprises ..... 174
3.4 Inventories ..... 175
3.5 Contracts and liabilities ..... 176
3.6 Trade receivables ..... 177
3.7 Trade receivables and other payables ..... 178
3.8 Other receivables and other payables ..... 178
3.9 Tax equity liabilities ..... 179
3.10 Provisions and contingent liabilities ..... 180
3.11 Non-controlling interests ..... 183
4. Tax
4.1 Approach to taxes ..... 185
4.2 Tax on profit (loss) for the year ..... 188
4.3 Deferred tax ..... 190
4.4 Our tax footprint ..... 193

5. Capital structure
5.1 Interest-bearing net debt and FFO ..... 199
5.2 Equity ..... 202
5.3 High/paid capital ..... 204
5.4 Liquidity reserve ..... 205
5.5 Maturity analysis of financial liabilities ..... 207
5.6 Financial income and expenses ..... 208

## 6. Risk management

6.1 Risk framework ..... 210
6.2 Energy price risks ..... 211
6.3 Inflation and interest rate risks ..... 214
6.4 Currency risks ..... 217
6.5 Credit risks ..... 220
6.6 Fair value measurement ..... 221
6.7 Energy trading portfolio ..... 221
6.8 Categories of financial instruments ..... 224
6.9 Sensitivity analysis of financial instruments ..... 225

## 7. Other notes

7.1 Related-party transactions ..... 226
7.2 Auditor's fees ..... 227
7.3 Non-IFRS financial measures ..... 228
7.4 Company overview ..... 230
7.5 Events after the reporting period ..... 231



## Consolidated statement of income

1 January – 31 December

## Consolidated statement of comprehensive income

1 January – 31 December

<table><tr><td>Note</td><td>DKkm</td><td>2023</td><td>2022</td></tr><tr><td>2.2, 2.4</td><td>Revenue</td><td>79,255</td><td>11,441.7</td></tr><tr><td>2.3</td><td>Cost of sales</td><td>(46,624)</td><td>(79,303)</td></tr><tr><td></td><td>Other external expenses</td><td>(7,406)</td><td>(7,049)</td></tr><tr><td>2.7, 2.8</td><td>Employee costs</td><td>(6,374)</td><td>(5,278)</td></tr><tr><td></td><td>Share of profit (loss) in associates and joint ventures</td><td>(55)</td><td>114</td></tr><tr><td>2.6</td><td>Other income</td><td>(1,500)</td><td>(1,000)</td></tr><tr><td>2.6</td><td>Other operating expenses</td><td>(10,408)</td><td>(4,963)</td></tr><tr><td></td><td>Operating profit (loss) before depreciation, amortisation, and impairment losses (EBITDA)</td><td>18,717</td><td>32,057</td></tr><tr><td>3.1</td><td>Amortisation and depreciation on intangible assets, and property, plant, and equipment</td><td>(9,795)</td><td>(9,754)</td></tr><tr><td>3.1, 3.2</td><td>Impairment losses on intangible assets, and property, plant, and equipment</td><td>(26,775)</td><td>(2,529)</td></tr><tr><td></td><td>Operating profit (loss) (EBIT)</td><td>(17,853)</td><td>19,774</td></tr><tr><td></td><td>Gain (loss) on divestment of enterprises</td><td>234</td><td>331</td></tr><tr><td></td><td>Share of profit (loss) in associates and joint ventures</td><td>36</td><td>40</td></tr><tr><td>5.6</td><td>Financial income</td><td>12,379</td><td>15,514</td></tr><tr><td>5.6</td><td>Financial expenses</td><td>(1,000)</td><td>(1,000)</td></tr><tr><td></td><td>Profit (loss) before tax</td><td>(19,026)</td><td>17,609</td></tr><tr><td>4.2</td><td>Tax on profit (loss) for the year</td><td>(1,156)</td><td>(2,613)</td></tr><tr><td></td><td>Profit (loss) for the year</td><td>(20,182)</td><td>14,996</td></tr><tr><td></td><td>Profit (loss) for the year is attributable to:</td><td></td><td></td></tr><tr><td></td><td>Shareholders in Ørsted A/S</td><td>(21,059)</td><td>14,549</td></tr><tr><td></td><td>Interests and costs, hybrid capital owners of Ørsted A/S</td><td>553</td><td>577</td></tr><tr><td></td><td>Non-controlling interests</td><td>324</td><td>(130)</td></tr><tr><td>5.2</td><td>Earnings per share (DKK)</td><td>(50.1)</td><td>34.6</td></tr><tr><td>5.2</td><td>Diluted earnings per share (DKK)</td><td>(50.1)</td><td>34.6</td><tr><td>5.2</td><td>Proposed dividend per share (DKK)</td><td>-</td><td>13.5</td></tr></tr></table>

<table><tr><td>Note</td><td>DKkm</td><td>2023</td><td>2022</td></tr><tr><td></td><td>Profit (loss) for the year</td><td>(20,182)</td><td>14,996</td></tr><tr><td></td><td>Other comprehensive income:</td><td></td><td></td></tr><tr><td></td><td>Cash flow hedging:</td><td></td><td></td></tr><tr><td>6</td><td>Value adjustments for the year</td><td>25,017</td><td>(23,521)</td></tr><tr><td>5.2</td><td>Value adjustments transferred to income statement</td><td>(4,143)</td><td>24,395</td></tr><tr><td>5.2</td><td>Value adjustments transferred to balance sheet</td><td>-</td><td>(11.6)</td></tr><tr><td></td><td>Exchange rate adjustments</td><td></td><td></td></tr><tr><td></td><td>Exchange rate adjustments relating to net investments in foreign enterprises</td><td>548</td><td>(3,747)</td></tr><tr><td>6.4</td><td>Value adjustment of net investment hedges</td><td>(328)</td><td>738</td></tr><tr><td>5.2</td><td>Value adjustments and hedges transferred to income statement</td><td>(295)</td><td>676</td></tr><tr><td></td><td>Other:</td><td></td><td></td></tr><tr><td></td><td>Tax on hedging instruments</td><td>(4,576)</td><td>(902)</td></tr><tr><td></td><td>Tax on exchange rate adjustments</td><td>10</td><td>666</td></tr><tr><td></td><td>Other:</td><td></td><td></td></tr><tr><td></td><td>Share of other comprehensive income from associated companies, after tax</td><td>6</td><td>26</td></tr><tr><td></td><td>Other comprehensive income</td><td>16,239</td><td>(1,785)</td></tr><tr><td></td><td>Total comprehensive income</td><td>(3,943)</td><td>13,211</td></tr><tr><td></td><td>Comprehensive income for the year is attributable to:</td><td></td><td></td></tr><tr><td></td><td>Shareholders in Ørsted A/S</td><td>(4,837)</td><td>12,886</td></tr><tr><td></td><td>Interest payments and costs, hybrid capital owners of Ørsted A/S</td><td>553</td><td>577</td></tr><tr><td></td><td>Non-controlling interests</td><td>341</td><td>(252)</td></tr><tr><td></td><td>Total comprehensive income</td><td>(3,943)</td><td>13,211</td></tr></table>

All items in 'Other comprehensive income' may be recycled to the income statement.

## Cash flow hedging

Value adjustments for the year for cash flow hedging amounting to DKK 25,017 million mainly consist of gains related to the hedging of power and, to a lesser extent, gains related to the hedging of gas. The gain of DKK 4,143 million transferred to the income statement mainly consists of gains related to the hedging of power.

## Exchange rate adjustments

In 2023, foreign exchange gains relating to net investments in foreign entities were DKK 1,000 million. The Danish dollar was primarily attributable to an increase of 3% in the GBP exchange rate, partly countered by a decrease of 3% in the USD exchange rate and a decrease of 3% in the NTD exchange rate. A part of the net investment was hedged.



## Consolidated balance sheet

31 December

<table><tr><td>Assets</td><td></td><td></td><td></td></tr><tr><td>Note</td><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>3.1</td><td>Intangible assets</td><td>3,426</td><td>4,029</td></tr><tr><td>3.1</td><td>Land and buildings</td><td>7,777</td><td>7,980</td></tr><tr><td>3.1</td><td>Production assets</td><td>121,643</td><td>119,211</td></tr><tr><td>3.1</td><td>Fixtures and fittings, tools, and equipment</td><td>2,042</td><td>1,543</td></tr><tr><td>3.1</td><td>Property, plant, and equipment under construction</td><td>48,307</td><td>48,931</td></tr><tr><td>3.1</td><td>Property, plant, and equipment</td><td>179,769</td><td>177,665</td></tr><tr><td></td><td>Investments in associates and joint ventures</td><td>960</td><td>772</td></tr><tr><td></td><td>Receivables from associates and joint ventures</td><td>77</td><td>-</td></tr><tr><td></td><td>Other securities and equity investments</td><td>-</td><td>182</td></tr><tr><td>6</td><td>Other</td><td>1,356</td><td>1,804</td></tr><tr><td>4.3</td><td>Deferred tax</td><td>6,192</td><td>13,719</td></tr><tr><td>3.8</td><td>Other receivables</td><td>3,134</td><td>3,243</td></tr><tr><td></td><td>Other non-current assets</td><td>13,886</td><td>19,720</td></tr><tr><td></td><td>Non-current assets</td><td>197,081</td><td>201,414</td></tr><tr><td>3.4</td><td>Inventories</td><td>10,539</td><td>14,103</td></tr><tr><td>6</td><td>Derivatives</td><td>10,473</td><td>23,433</td></tr><tr><td>3.5</td><td>Contract assets</td><td>802</td><td>408</td></tr><tr><td>3.6</td><td>Trade receivables</td><td>11,107</td><td>12,701</td></tr><tr><td>3.8</td><td>Other receivables</td><td>10,557</td><td>20,269</td></tr><tr><td></td><td>Receivables from associates and joint ventures</td><td>74</td><td>-</td></tr><tr><td></td><td>Income tax</td><td>483</td><td>419</td></tr><tr><td>5.4</td><td>Securities</td><td>29,902</td><td>25,197</td></tr><tr><td></td><td>Cash</td><td>10,145</td><td>16,178</td></tr><tr><td></td><td>Current assets</td><td>84,055</td><td>112,728</td></tr><tr><td></td><td>Assets</td><td>281,136</td><td>314,142</td></tr></table>

<table><tr><td>Note</td><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>5.2</td><td>Share capital</td><td>4,204</td><td>4,204</td></tr><tr><td>5.2</td><td>Reserves</td><td>(10,251)</td><td>(26,467)</td></tr><tr><td></td><td>Retained earnings</td><td>62,829</td><td>68,331</td></tr><tr><td>5.2</td><td>Proposed dividends</td><td>-</td><td>5,675</td></tr><tr><td>5.2</td><td>Equity attributable to shareholders in Ørsted A/S</td><td>56,782</td><td>71,743</td></tr><tr><td>5.3</td><td>Hybrid capital</td><td>19,103</td><td>19,793</td></tr><tr><td>3.11</td><td>Non-controlling interests</td><td>-</td><td>-</td></tr><tr><td></td><td>Equity</td><td>77,791</td><td>95,532</td></tr><tr><td>4.3</td><td>Deferred tax</td><td>3,439</td><td>7,414</td></tr><tr><td>3.10</td><td>Provisions</td><td>16,908</td><td>19,121</td></tr><tr><td>5.5</td><td>Lease liabilities</td><td>7,618</td><td>7,697</td></tr><tr><td>5.1</td><td>Bond and bank debt</td><td>79,236</td><td>60,451</td></tr><tr><td>6</td><td>Derivatives</td><td>13,763</td><td>24,121</td></tr><tr><td>5.5</td><td>Contract liabilities</td><td>3,297</td><td>3,085</td></tr><tr><td>3.5</td><td>Contract assets</td><td>3,297</td><td>3,085</td></tr><tr><td>3.8</td><td>Other payables</td><td>6,273</td><td>7,363</td></tr><tr><td></td><td>Non-current liabilities</td><td>144,144</td><td>143,742</td></tr><tr><td>3.10</td><td>Provisions</td><td>15,955</td><td>585</td></tr><tr><td>5.5</td><td>Lease liabilities</td><td>808</td><td>569</td></tr><tr><td>5.1</td><td>Bond and bank debt</td><td>384</td><td>2,830</td></tr><tr><td>6</td><td>Derivatives</td><td>8,449</td><td>33,436</td></tr><tr><td>5.5</td><td>Contract liabilities</td><td>2,785</td><td>2,269</td></tr><tr><td>3.5</td><td>Trade payables</td><td>14,915</td><td>20,641</td></tr><tr><td>3.9</td><td>Tax equity liabilities</td><td>3,397</td><td>1,903</td></tr><tr><td>3.8</td><td>Other payables</td><td>6,225</td><td>7,518</td></tr><tr><td></td><td>Income tax</td><td>6,283</td><td>5,115</td></tr><tr><td></td><td>Current liabilities</td><td>59,201</td><td>74,868</td></tr><tr><td></td><td>Liabilities</td><td>203,345</td><td>216,610</td></tr><tr><td></td><td>Equity and liabilities</td><td>281,136</td><td>314,142</td></tr></table>



## Consolidated statement of cash flows

1 January – 31 December

<table><tr><td>Note</td><td>DKkm</td><td>2023</td><td>2022</td></tr><tr><td></td><td>Operating profit (loss) before depreciation, amortisation, and impairment losses (EBITDA)</td><td>18,717</td><td>32,057</td></tr><tr><td></td><td>Reserve of gain (loss) on divestment of assets</td><td>(5,745)</td><td>(10,685)</td></tr><tr><td></td><td>Change in derivatives</td><td>4,274</td><td>(8,687)</td></tr><tr><td></td><td>Change in provisions</td><td>8,454</td><td>(1,935)</td></tr><tr><td></td><td>Other items</td><td>287</td><td>(278)</td></tr><tr><td></td><td>Change in inventories</td><td>3,656</td><td>1,419</td></tr><tr><td></td><td>Change in trade receivables and liabilities</td><td>(1,303)</td><td>(1,303)</td></tr><tr><td></td><td>Change in trade receivables</td><td>1,522</td><td>(2,875)</td></tr><tr><td></td><td>Change in other receivables</td><td>3,834</td><td>2,742</td></tr><tr><td></td><td>Change in trade payables</td><td>(5,309)</td><td>3,886</td></tr><tr><td></td><td>Change in tax equity liabilities</td><td>374</td><td>(353)</td></tr><tr><td></td><td>Change in other payables</td><td>(660)</td><td>(38)</td></tr><tr><td></td><td>Interest received and similar items</td><td>8,279</td><td>7,985</td></tr><tr><td></td><td>Interest paid and similar items</td><td>(6,894)</td><td>(8,548)</td></tr><tr><td>4.4</td><td>Income tax paid</td><td>(2,717)</td><td>(1,263)</td></tr><tr><td></td><td>Cash flows from operating activities</td><td>28,532</td><td>11,924</td></tr><tr><td></td><td>Purchase of intangible assets, and property, plant, and equipment</td><td>(38,203)</td><td>(33,004)</td></tr><tr><td></td><td>Sale of intangible assets, and property, plant, and equipment</td><td>6,189</td><td>2,405</td></tr><tr><td>3.3</td><td>Acquisition of enterprises</td><td>-</td><td>(3,406)</td></tr><tr><td></td><td>Divestment of enterprises</td><td>(3)</td><td>99</td></tr><tr><td></td><td>Transfer of non-currentity investments</td><td>(124)</td><td>-</td></tr><tr><td></td><td>Purchase of securities</td><td>(18,285)</td><td>(9,414)</td></tr><tr><td></td><td>Sale/maturation of securities</td><td>13,935</td><td>3,780</td></tr><tr><td></td><td>Change in other non-current assets</td><td>(13)</td><td>(4)</td></tr><tr><td></td><td>Transactions with associates and joint ventures</td><td>(247)</td><td>(54)</td></tr><tr><td></td><td>Dividend received and capital reductions</td><td>19</td><td>23</td></tr><tr><td></td><td>Cash flows from investing activities</td><td>(34,733)</td><td>(17,912)</td></tr></table>

## Supplementary statements

Our supplementary statements of gross and net investment appear from note 3.0 'Capital employed' and free cash flows (FCF) from note 2.1 'Segment information'.

Gross investments by segment
DKkm



<table><tr><td>2023</td><td>38,509</td></tr><tr><td>2022</td><td>37,447</td></tr><tr><td>2021</td><td>39,307</td></tr><tr><td>2020</td><td>26,967</td></tr><tr><td>2019</td><td>23,305</td></tr></table>

Specification of 'Cash flows from investing activities' (DKK 34,732 million) to 'Gross investments' (DKK 38,509 million) is disclosed in note 3.0 'Capital employed'.



## Consolidated statement of cash flows – continued

1 January – 31 December

<table><tr><td>Note</td><td>DK/m</td><td>2023</td><td>2022</td></tr><tr><td></td><td>Proceeds from raising loans</td><td>17,584</td><td>37,090</td></tr><tr><td></td><td>Instalments on loans</td><td>(1,580)</td><td>(21,482)</td></tr><tr><td></td><td>Instalments on leases</td><td>(712)</td><td>(582)</td></tr><tr><td></td><td>Coupon payments on hybrid capital</td><td>(546)</td><td>(529)</td></tr><tr><td></td><td>Repurchase of hybrid capital</td><td>(699)</td><td>(1,945)</td></tr><tr><td></td><td>Proceeds from issuance of hybrid capital</td><td></td><td>3,693</td></tr><tr><td></td><td>Dividends paid to shareholders in Ørsted A/S</td><td>(5,673)</td><td>(5,252)</td></tr><tr><td>3.11</td><td>Transactions with non-controlling interests</td><td>(7,061)</td><td>1,170</td></tr><tr><td></td><td>Net proceeds from tax equity partners</td><td>(182)</td><td>(523)</td></tr><tr><td></td><td>Collateral posted in relation to trading of derivatives</td><td>(21,829)</td><td>(48,685)</td></tr><tr><td></td><td>Collateral released in relation to trading of derivatives</td><td>19,515</td><td>52,143</td></tr><tr><td></td><td>Restricted cash and other changes</td><td>1,448</td><td>(1,113)</td></tr><tr><td></td><td>Cash flows from financing activities</td><td>265</td><td>13,785</td></tr><tr><td></td><td>Total net change in cash and cash equivalents</td><td>(5,935)</td><td>7,797</td></tr><tr><td>5.4</td><td>Cash and cash equivalents at 1 January</td><td>16,175</td><td>8,614</td></tr><tr><td></td><td>Total net change in cash and cash equivalents</td><td>(5,935)</td><td>7,797</td></tr><tr><td></td><td>Exchange rate adjustments of cash and cash equivalents</td><td>(99)</td><td>(236)</td></tr><tr><td>5.4</td><td>Cash and cash equivalents at 31 December</td><td>10,144</td><td>16,175</td></tr></table>

## § Accounting policies

Cash flows from operating activities are determined using the indirect method as operating profit (loss) before depreciation, amortisation, and impairment losses adjusted for changes in operating items without cash flow effect. Trade payables relating to purchases of intangible assets, and property, plant, and equipment are not recognised in 'Change in trade payables'.

'Change in tax equity liabilities' relates to cash contributions from tax equity partners and repayment hereof through production tax credits. 'Change in interest income' relates to interest and other tax attributes to tax equity partners. See also note 3.9 'Tax equity liabilities'.

'Cash flows from investing activities' comprise payments in connection with the purchase and sale of non-current assets and enterprises as well as the purchase of intangible assets. Payments are not recognised as cash and cash equivalents.

'Cash flows from financing activities' comprise changes in the size or composition of equity and loans, including instalments on leases and net proceeds related to interest-bearing tax equity liabilities. Proceeds from the raising of short-term repo loans are presented net.

Cash flows in currencies other than the functional currency are translated at the average exchange rates for the month in question, unless these differ significantly from the rates at the transaction date.



## Basis of reporting
Note 1

## Significant changes and events
Note 1.1

The financial position and performance of Ørsted was particularly affected by the following events and transactions during 2023.

## Impairment and cancellation fees

## US offshore and onshore projects

Due to adverse impacts relating to our upstream and onshore projects, we have been blindsided with a lower anticipated probability of getting additional tax credits, a lower expected value from monetising these, and the timing and likelihood of obtaining these construction permits for Ocean Wind 1 and 2 as well as a change in OREC assumptions for the onshore wind projects. The impairment tests of DKK 26.8 billion in 2023.

The majority of the impairment loss relates to our US offshore projects Ocean Wind 1 (DKK 139 billion), Sunrise Wind (DKK 2.1 billion), and Revolution Wind (DKK 2.7 billion).

## See note 3.2 Impairments \( ^{1} \) .

## Decision to cease development of Ocean Wind 1 and Ocean Wind 2

On 31 October, we decided to cease development of Ocean Wind 1 and Ocean Wind 2, in addition to the impairment loss recognised on Ocean Wind 1, we have recognised a provision relating to the expected contract cancellation fees not already covered by the impairment loss. The provision reflects our expectation to reuse the export cables for another project. Besides this, we have not assumed reuse or sale of other contracts. The total provision was DKK 15.0 billion at the end of 2023 and was recognised as 'Onerous contracts'.

See note 3.10 Provisions and contingent liabilities \( ^{2} \) .

## Divestments

Hormea 2 offshore transmission asset
In July, we completed the divestment of our 50% interest in Lese Area 500 in northern-UK, which was on account of the divestment of the UK transmission asset in the UK. The transaction resulted in proceeds of DKK 5 billion.

See note 2.2 'Revenue' and note 3.4 'Inventories'.

## London Aero

Due to the completed divestment of our remaining 25% ownership share in the London Aero Offshore Wind Farm in the UK. The transaction resulted in proceeds of DKK 1.1 billion.

See note 2.6 'Other operating income and expenses' and note 3.1 'Intangible assets, and property, plant, and equipment'.

## Gode Wind 3

In December, we completed the divestment of our offshore wind farm Gode Wind 3 in Germany. The transaction resulted in proceeds of DKK 2 billion.

See note 2.6 'Other operating income and expenses' and note 3.1 'Intangible assets, and property, plant, and equipment'.

## Acquisitions

## Lease Area 500 \( ^{1} \) 

In September, we completed the acquisition of our 50% interest in Lese Area 500 in northern-UK, which was on account of the divestment of offshore lease area owned jointly by Ørsted and Eversource.

See note 3.11 'Non-controlling interests'.

## Ocean Wind 1

Due to completed the acquisition of the Public Service Enterprise Group's (PSEG) 25% equity stake in the offshore wind energy project Ocean Wind 1. The acquisition of Ocean Wind 1 with 100% ownership of Ocean Wind 2.

See note 3.11 'Non-controlling interests'.

## Accounting policies

## Change in accounting policy

From gross to net presentation of revenue and cost of sales from power trading activities.

We have changed our accounting policy for presentation of revenue and related costs from the settlement of failed ownership of the offshore wind farm to the settled with delivery of physical power where the purpose of entering into them are hedging or optimisation of our revenue. The change in accounting policy is a cost of sales on a gross basis when these contracts were settled.

See note 1.2 'Basis of preparation'.



## Basis of preparation

Note 1.2

This section provides an overall description of the accounting policies applied in our consolidated financial statements as well as the European Single Electronic Format (ESEF) reporting requirements. We provide a more detailed description of the accounting policies applied in the specific notes. Key accounting estimates and judgements as well as new and amended IFRS standards and interpretations are discussed in detail later in this note.

## Accounting policies

The consolidated financial statements have been prepared in accordance with the IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act (Årsregnskabsloven).

The accounting policies have been applied consistently in the financial year and for comparative figures, except for one change in accounting policy – see below.

## Change in accounting policy

From gross to net presentation of revenue and cost of sales from power trading activities.

We have changed our accounting policy regarding presentation of revenue and related costs from the settlement of failed own-use power contracts. These are contracts settled with delivery of physical power where the purpose of entering into them are hedging or optimisation of our revenue. Previously, we recognised revenue and the cost of sales on a gross basis when these contracts were settled. As the gross presentation does not reflect the magnitude of the Group's power trading activities, we have changed the presentation to a net presentation of revenue and related costs. It is management's view that such presentation better reflects the power trading activities.

The change only impacts revenue and the cost of sales in the Offshore segment, and thus our EBITDA is not impacted.

The 2022 comparisons have been adjusted accordingly.

The impact on our 2023 and 2022 numbers is illustrated in the table to the right.

## Measurement basis

The consolidated financial statements have been prepared on historical cost basis, except for derivatives, gas in non-Danish storage facilities, financial instruments in the trading portfolio, and carbon emission allowances in the trading portfolio, which are measured at market value.

## Consolidation

The consolidated financial statements comprise the financial statements of Ørsted A/S (the parent company) and subsidiaries controlled by Ørsted A/S. See more in note 7.4 'Company overview'.

<table><tr><td>2023</td><td>Previous accounting policy</td><td>Change</td><td>New accounting policy</td></tr><tr><td>Revenue \( ^{1} \)</td><td>68,462</td><td>(9,227)</td><td>79,255</td></tr><tr><td>Cost of sales \( ^{2} \)</td><td>55,851</td><td>(9,227)</td><td>46,624</td></tr><tr><td>2022</td><td>Reported</td><td>Change</td><td>Adjusted</td></tr><tr><td>Revenue \( ^{1} \)</td><td>132,277</td><td>(17,860)</td><td>114,417</td></tr><tr><td>Cost of sales \( ^{2} \)</td><td>97,163</td><td>(17,860)</td><td>79,303</td></tr></table>

The table illustrates the change in accounting policy regarding presentation of revenue and related costs from settlement of failed own-use contracts.

1. The line item 'Sale of power' is impacted in note 2.2 'Revenue'.

2. The line item 'Power including certificates' is impacted in note 2.3 'Cost of sales'.

The consolidated financial statements have been prepared as a consolidation of the parent company's and the individual subsidiaries' financial statements, which have been prepared in accordance with the Group's accounting policies.

Intra-group income, expenses, shareholdings, balances, and dividends as well as realised and unrealised gains and losses arising from intra-group transactions are eliminated in our consolidated financial statements.

Unrealised gains and losses resulting from transactions with associates and joint ventures are eliminated to the extent of our ownership interest.

Enterprises are accounted for as associates if we hold or have the ability to exercise, directly or indirectly, 20-50% of the voting rights and do not exercise control. However, we carry out a specific assessment of our ability to exercise influence, including our ability to influence financial and operational decisions and thus our return. Enterprises that satisfy the criteria for joint control are accounted for as investments in joint ventures, unless the nature of the joint arrangement is considered a joint operation.

Our shares in joint operations are recognised in the consolidated balance sheet through recognition of the Group's own assets, liabilities, income, and expenses. The proportionate share of realised and unrealised gains and losses arising from intra-group transactions between fully consolidated enterprises and joint operations is eliminated.



## Basis of preparation

Note 1.2 – continued

## Foreign currency translation

The financial statements are presented in million Danish kroner (DKKM), unless otherwise stated.

Exchange differences arising between the exchange rate on the transaction date and on the date of payment are recognised in profit (loss) for the year as financial income or expenses.

Foreign currency transactions are translated into the functional currency defined for each entity, using the exchange rates prevailing at the transaction date. Receivables, payables, and other monetary items in foreign currencies are translated at the exchange rates on the balance sheet date. The difference between the exchange rate on the balance sheet date and on the date at which the receivable or payable arose is recognised in profit (loss) for the year as financial income or expenses.

Financial statements of foreign subsidiaries, joint operations, associates, and joint ventures are translated into DKK at monthly average exchange rates insofar as these do not deviate materially from the actual exchange rates at the transaction dates. Balance sheet items are translated at the exchange rates on the balance sheet date.

All exchange differences are recognised in profit (loss) for the year, except for exchange differences arising on:
• translation of the opening equity of these entities at the exchange rates on the balance sheet date

• translation of the statements of comprehensive income of these enterprises from “the average-for-the-month exchange rates” to “the exchange rates on the balance sheet date”

• translation of balances accounted for as part of the total net investment

• translation of the portion of loans and derivatives that has been entered into to hedge the net investment in an enterprise, and that provides an effective hedge against corresponding foreign exchange gains (losses) on the net investment.

The above types of exchange differences are recognised in “Other comprehensive income”. Such exchange rate adjustments are divided between the equity of the parent company and the equity of the non-controlling interests.

On full or partial divestment of the net investment, the accumulated exchange rate adjustments are recognised as follows:

• Disposal resulting in loss of control:
The accumulated exchange rate adjustments, including any associated hedges, are recognised in the profit (loss) for the year if a foreign exchange gain (loss) is realised by the selling enterprise. Any foreign exchange gain (loss) is transferred to the item in which the gain (loss) from the disposal is recognised. The part of the foreign currency translation reserve that relates to non-controlling interests is not transferred to profit (loss) for the year.

• Disposal not resulting in loss of control:
A proportionate share of the foreign currency translation reserve is transferred from the parent company shareholders' share of equity to the minority shareholders' share of equity.

Repayment of balances that are considered part of the net investment does not constitute a partial disposal of the subsidiary.

## IXBRL reporting

We are required to file our annual report in the European Single Electronic Format (“ESF”) using the XHTML format and to tag the consolidated financial statements, including notes, using the inline eXtensible Business Reporting Language (iXBRL). The iXBRL tags comply with the ESF taxonomy. Where a financial statement line item is not defined in the ESF taxonomy, an extension to the taxonomy has been created.

The annual report submitted to the Danish Financial Supervisory Authority consists of the XHTML document together with certain technical files, all included in a ZIP file named Orsted-2023-12-31-en.zip.

## Non-IFRS financial measures

We present financial measures in the consolidated financial statements to describe the Group's financial performance, financial position, and cash flows. We use these financial measures as we believe they provide valuable information to our stakeholders and management.

The financial measures should not be considered a replacement for the performance measures as defined under IFRS, but rather as supplementary information.

The financial measures may not be comparable to similar titled measures presented by other companies, as the definitions and calculations may be different.

The financial measures most commonly presented in the Ørsted annual report are:

• EBITDA and EBITDA excluding new partnerships and cancellation fees

• funds from operations (FFO)

• adjusted interest-bearing net debt

• free cash flow (FCF)

• ROCE.

Our definitions of the financial measures are included in note 7.3 'Non-IFRS financial measures'.



## Basis of preparation

Note 1.2 – continued

<table><tr><td>Note</td><td>Key accounting estimates and judgements</td><td>Estimate/ judgement</td><td>Potential impact from accounting estimates and judgements</td></tr><tr><td rowspan="3">2.6 Other operating income and expenses</td><td>Variable selling prices related to divestments of offshore wind farms and offshore transmission assets</td><td>Estimate</td><td>* *</td></tr><tr><td>Consolidation method for partnerships</td><td>Judgement</td><td>* * *</td></tr><tr><td>Classification of divestments</td><td>Judgement</td><td>* *</td></tr><tr><td>3.2 Impairments</td><td>Key assumptions in impairment tests</td><td>Estimate</td><td>* * *</td></tr><tr><td>3.9 Tax equity liabilities</td><td>Recognition of tax equity partnerships</td><td>Estimate/ judgement</td><td>* *</td></tr><tr><td>3.10 Provisions and contingent liabilities</td><td>Assumptions for provisions</td><td>Estimate</td><td>* * *</td></tr><tr><td>4.2 Tax on profit (loss) for the year</td><td>Recognition of income taxes</td><td>Estimate</td><td>* * *</td></tr><tr><td rowspan="2">6.1 Risk framework</td><td>Valuation of long-term power purchase agreements</td><td>Estimate/ judgement</td><td>* *</td></tr><tr><td>Hedge accounting</td><td>Estimate/ judgement</td><td>* *</td></tr></table>

## Implementation of new and changed accounting standards and interpretations

The International Accounting Standards Board (IASB) has issued amended standards that are effective for the first time in 2023. None of them required a change in our accounting policies.

## New standards and interpretations

IASB has issued new or amended accounting standards and interpretations that have not yet become effective and have consequently not been implemented in the consolidated financial statements for 2023. Ørsted expects to adopt the accounting standards and interpretations as they become mandatory, except for the early implementation of the new disclosures to IAS 7 and IFRS 7 'Supplier Finance Arrangements'. See note 3.7 'Supply chain finance'.
The new or amended standards or interpretations are not expected to have a significant impact on our consolidated financial statements.

## Key accounting estimates and judgements

The use of reasonable estimates and judgements is an essential part of the preparation of the consolidated financial statements.

Given the uncertainties inherent in our business activities, we make a number of estimates and judgements. The estimates and judgements are based on assumptions concerning future developments, which affect our application of accounting policies and the reported amounts of our assets, liabilities, sales, costs, cash flows, hedge reserves, and related disclosures. Actual amounts may differ from the amounts estimated and judgements made, as more detailed information becomes available.
We regularly reassess these estimates and judgements based on, among other things, historical experience, the current situation in the financial markets, and a number of other relevant factors, e.g. the updates in annual estimated production. Changes in estimates are recognised in the period in which the estimate in question is revised.

Accounting estimates, judgements, and assumptions which may entail a risk of material adjustments in subsequent years are listed in the table above.

In addition, we make judgements when we apply the accounting policies.

Reference is made to the specific notes for further information on the key accounting estimates and judgements as well as the assumptions applied.
 \( ^{*} \)  Key accounting estimates and judgements and their level of potential impact on the consolidated financial statements.

The impact relates to objectivity and business practice.

- Very objective/market-conforming
- Objective/objectively conforming
- Partially subjective/partially distinctive
- Subjective/divisitive to Ørsted



## Return on
capital employed
Note 2

Return on capital employed (ROCE) is a key ratio showing how profitable our business activities are. Our target is on average ROCE of approx. 14% for the Group for the 2024-2030 period.

Return on capital employed was -14.2% in 2023. Adjusted for impairment losses and cancellation fees, ROCE amounted to 12.9% in 2023.

See note 2.1 "Segment information".






## Segment information

Note 2.1

<table><tr><td>Offshore</td><td></td></tr><tr><td>DKkm</td><td></td></tr><tr><td>Revenue</td><td>58,427</td></tr><tr><td>EBITDA</td><td>13,817</td></tr><tr><td>Gross investments</td><td>28,613</td></tr></table>

## Primary activities

Development, construction, ownership, and operation of offshore wind and solar farms in the UK, Europe, the US and Taiwan as well as the development of renewable hydrogen and green fuels in Europe and on the US Gulf Coast.

<table><tr><td>Onshore</td><td></td></tr><tr><td>DKkm</td><td></td></tr><tr><td>Revenue</td><td>2,620</td></tr><tr><td>EBITDA</td><td>2,970</td></tr><tr><td>Gross investments</td><td>9,069</td></tr></table>

## Primary activities

Development, construction, ownership, and operation of onshore wind and solar farms in the US and in Europe, including integrated storage.

<table><tr><td>Bioenergy &amp; Other DKkm</td><td></td></tr><tr><td>Revenue</td><td>19,230</td></tr><tr><td>EBITDA</td><td>1,523</td></tr><tr><td>Gross investments</td><td>727</td></tr></table>

## Generation of heat

Generation of heat and power and delivery of ancillary services from CHP plants in Denmark, optimisation of our gas portfolio, and of our Danish and Swedish B2B customers.

## Geographical distribution

Geographical revenue is broken down, as far as possible, by the customer's geographical location based on supply point.

A significant part of our sales takes place via power exchanges and gas hubs in Europe, whose physical locations do not reflect the geographical locations of our customers. When breaking down these sales by geographical location, we use the physical locations of the exchange or hub since we do not know the physical location of our customers in all cases.

No single customer accounted for more than 10% of our consolidated revenue in 2023 or 2022.

Non-current assets are broken down geographically, based on the physical locations of the assets.

<table><tr><td>Revenue</td><td></td></tr><tr><td>DKkm 2023 (2022)</td><td></td></tr><tr><td>Total 79,255 (11,414,417)</td><td></td></tr><tr><td>UK</td><td>45,694 (45,017)</td></tr><tr><td>DK</td><td>17,149 (36,471)</td></tr><tr><td>DE</td><td>7,516 (13,237)</td></tr><tr><td>NL</td><td>4,093 (7,614)</td></tr><tr><td>US</td><td>2,192 (2,619)</td></tr><tr><td>TW</td><td>1,042 (5,439)</td></tr><tr><td>Other</td><td>910 (1,083)</td></tr><tr><td>IR</td><td>659 (937)</td></tr></table>

## Intangible assets and property, plant, and equipment

DKkm 2023 (2022)

Total 183,195 (181,694)

<table><tr><td>US</td><td></td><td></td><td>69,144 (68,352)</td></tr><tr><td>UK</td><td></td><td></td><td>43,747 (48,963)</td></tr><tr><td>TW</td><td></td><td></td><td>28,755 (24,476)</td></tr><tr><td>DE</td><td></td><td></td><td>16,996 (15,141)</td></tr><tr><td>DK</td><td></td><td></td><td>11,137 (12,182)</td></tr><tr><td>IR</td><td></td><td></td><td>4,451 (5,017)</td></tr><tr><td>NL</td><td></td><td></td><td>4,335 (4,722)</td></tr><tr><td>PL</td><td></td><td></td><td>2,297 (1,479)</td></tr><tr><td>FR</td><td></td><td></td><td>1,594 (1,357)</td></tr><tr><td>Other</td><td></td><td></td><td>739 (5)</td></tr></table>

Revenue, intangible assets, and property, plant, and equipment are presented based on the locations of our customers and assets as well as the exchanges on which we trade.

## Accounting policies

Our operating segments are consistent with our internal reporting to our chief operating decision-maker, the Group Executive Team.

The operating segments are managed primarily on the basis of EBIT and interest payments. Financial income, financial expenses, and tax are allocated to the operating segments, while we manage them at Group level.

Segment income and segment expenses are those items that, in our internal management reporting, are directly attributable to individual segments or can be indirectly allocated to individual segments on a reliable basis.



## Segment information

Note 2.1 – continued

<table><tr><td>2023 income statement</td><td></td><td></td><td></td><td></td><td>Other activities/ eliminations</td><td>Total</td></tr><tr><td>DK/m</td><td>Offshore</td><td>Onshore</td><td>Bioenergy &amp; Other</td><td>Reportable segments</td><td></td><td></td></tr><tr><td>External revenue</td><td>57,062</td><td>2,643</td><td>19,525</td><td>79,230</td><td>25</td><td>79,255</td></tr><tr><td>Intra-group revenue</td><td>1,365</td><td>(23)</td><td>(295)</td><td>1,047</td><td>(1,047)</td><td>-</td></tr><tr><td>Revenue</td><td>58,427</td><td>2,620</td><td>19,230</td><td>80,277</td><td>(1,022)</td><td>79,255</td></tr><tr><td>Cost of sales</td><td>(31,773)</td><td>(129)</td><td>(15,024)</td><td>(46,926)</td><td>302</td><td>(46,624)</td></tr><tr><td>Cost of sales and other external expenses</td><td>(9,712)</td><td>(2,460)</td><td>(2,730)</td><td>(14,902)</td><td>1,122</td><td>(13,780)</td></tr><tr><td>Cash (loss) on disposal of non-current assets</td><td>5,751</td><td>-</td><td>2,460</td><td>5,743</td><td>-</td><td>5,743</td></tr><tr><td>Additional other operating income and expenses</td><td>(8,629)</td><td>2,948</td><td>52</td><td>(5,829)</td><td>5</td><td>(5,824)</td></tr><tr><td>Share of profit (loss) in associates and joint ventures</td><td>(47)</td><td>(9)</td><td>1</td><td>(55)</td><td>-</td><td>(55)</td></tr><tr><td>EBITDA</td><td>13,817</td><td>2,970</td><td>1,523</td><td>18,310</td><td>407</td><td>18,717</td></tr><tr><td>Depreciation and amortisation</td><td>(6,615)</td><td>(1,957)</td><td>(759)</td><td>(9,531)</td><td>(264)</td><td>(9,795)</td></tr><tr><td>Impairment losses</td><td>(25,526)</td><td>(927)</td><td>(322)</td><td>(26,775)</td><td>-</td><td>(26,775)</td></tr><tr><td>Operating profit (loss) (EBIT)</td><td>(18,524)</td><td>86</td><td>442</td><td>(17,996)</td><td>143</td><td>(17,853)</td></tr><tr><td>Key ratios</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Return on assets, and property, plant and equipment</td><td>111,188</td><td>6,262</td><td>6,132</td><td>181,046</td><td>1,249</td><td>183,195</td></tr><tr><td>Equity investments and non-current receivables</td><td>770</td><td>143</td><td>92</td><td>1,005</td><td>167</td><td>1,172</td></tr><tr><td>Net working capital, capital expenditures</td><td>(3,285)</td><td>(1,001)</td><td>(256)</td><td>(4,542)</td><td>-</td><td>(4,542)</td></tr><tr><td>Net working capital, work in progress</td><td>1,705</td><td>-</td><td>-</td><td>1,705</td><td>-</td><td>1,705</td></tr><tr><td>Net working capital, tax equity</td><td>(1,365)</td><td>(14,446)</td><td>-</td><td>(15,811)</td><td>-</td><td>(15,811)</td></tr><tr><td>Net working capital, other items</td><td>4,513</td><td>461</td><td>870</td><td>5,844</td><td>1,950</td><td>7,794</td></tr><tr><td>Derivatives, net</td><td>(5,454)</td><td>(6,311)</td><td>(738)</td><td>(10,694)</td><td>311</td><td>(10,383)</td></tr><tr><td>Decommissioning obligations</td><td>(8,460)</td><td>(2,061)</td><td>(2,075)</td><td>(12,977)</td><td>-</td><td>(12,977)</td></tr><tr><td>Other provisions</td><td>(16,655)</td><td>(2)</td><td>(1,022)</td><td>(17,889)</td><td>(1,997)</td><td>(19,886)</td></tr><tr><td>Tax, net</td><td>2,187</td><td>(3,787)</td><td>(348)</td><td>(1,948)</td><td>901</td><td>(1,047)</td></tr><tr><td>Other receivables and other payables, net</td><td>(2,789)</td><td>13</td><td>-</td><td>(2,776)</td><td>(1,274)</td><td>(4,050)</td></tr><tr><td>Capital employed at 31 December</td><td>83,574</td><td>35,634</td><td>4,655</td><td>123,863</td><td>1,307</td><td>125,170</td></tr><tr><td>Return on capital employed (ROCE), %</td><td></td><td></td><td></td><td></td><td></td><td>(14.2)</td></tr><tr><td>Cash flows from operating activities</td><td>21,209</td><td>609</td><td>2,550</td><td>24,368</td><td>4,164</td><td>28,532</td></tr><tr><td>Gross investments</td><td>(28,613)</td><td>(9,069)</td><td>(727)</td><td>(36,409)</td><td>(100)</td><td>(36,509)</td></tr><tr><td>Divestments</td><td>1,500</td><td>-</td><td>61</td><td>1,566</td><td>(24)</td><td>1,542</td></tr><tr><td>Free cash flow (FCF)</td><td>(5,904)</td><td>(8,455)</td><td>1,884</td><td>(12,475)</td><td>4,040</td><td>(8,455)</td></tr></table>

The column 'Other activities/eliminations' primarily covers the elimination of inter-segment transactions. It also includes income and costs, assets and liabilities, investment activity, taxes, etc., handled at Group level.

 \( ^{1} \)  Including the elimination of other activities, the total elimination of intra-group revenue amounts to DK/m 4,859 million, which primarily relates to our Shared Functions services as well as our B2B business activities.



## Segment information

Note 2.1 – continued

<table><tr><td>2022 income statement
DK/m</td><td>Offshore</td><td>Onshore</td><td>Bioenergy &amp; Other</td><td>Reportable segments</td><td>Other activities/ eliminations</td><td>Total</td></tr><tr><td>External revenue</td><td>61,110</td><td>3,014</td><td>50,279</td><td>114,403</td><td>14</td><td>114,417</td></tr><tr><td>Intra-group revenue</td><td>8,151</td><td>-</td><td>(4,036)</td><td>4,115</td><td>(4,115)</td><td>-</td></tr><tr><td>Revenue</td><td>69,261</td><td>3,014</td><td>46,243</td><td>116,518</td><td>(4,101)</td><td>114,417</td></tr><tr><td>Cost of sales</td><td>(48,558)</td><td>(57)</td><td>(34,748)</td><td>(83,343)</td><td>4,040</td><td>(79,303)</td></tr><tr><td>Cost of sales and other external expenses</td><td>(8,419)</td><td>(1,831)</td><td>(2,370)</td><td>(12,611)</td><td>264</td><td>(12,327)</td></tr><tr><td>Gain (loss) on disposal of non-current assets</td><td>10,064</td><td>43</td><td>(22)</td><td>10,685</td><td>-</td><td>10,685</td></tr><tr><td>Additional other operating income and expenses</td><td>(3,716)</td><td>2,472</td><td>(487)</td><td>(1,731)</td><td>2</td><td>(1,729)</td></tr><tr><td>Share of profit (loss) in associates and joint ventures</td><td>108</td><td>3</td><td>-</td><td>114</td><td>-</td><td>114</td></tr><tr><td>EBITDA</td><td>19,569</td><td>3,644</td><td>8,619</td><td>31,832</td><td>225</td><td>32,057</td></tr><tr><td>Depreciation and amortisation</td><td>(7,006)</td><td>(1,644)</td><td>(859)</td><td>(9,509)</td><td>(245)</td><td>(9,754)</td></tr><tr><td>Impairment losses</td><td>(2,529)</td><td>-</td><td>-</td><td>(2,529)</td><td>-</td><td>(2,529)</td></tr><tr><td>Operating profit (loss) (EBIT)</td><td>10,034</td><td>2,000</td><td>7,760</td><td>19,794</td><td>(20)</td><td>19,774</td></tr><tr><td>Key ratios</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest, cash, and property, plant, and equipment</td><td>111,140</td><td>53,720</td><td>8,868</td><td>180,318</td><td>1,376</td><td>181,604</td></tr><tr><td>Equity investments and non-current receivables</td><td>605</td><td>100</td><td>124</td><td>829</td><td>167</td><td>996</td></tr><tr><td>Net working capital, capital expenditures</td><td>(5,050)</td><td>(572)</td><td>(43)</td><td>(5,665)</td><td>-</td><td>(5,665)</td></tr><tr><td>Net working capital, work in progress</td><td>1,430</td><td>41</td><td>-</td><td>1,471</td><td>-</td><td>1,471</td></tr><tr><td>Net working capital, tax equity</td><td>-</td><td>(15,157)</td><td>-</td><td>(15,157)</td><td>-</td><td>(15,157</td></tr><tr><td>Net working capital, other items</td><td>9,093</td><td>85</td><td>873</td><td>10,051</td><td>1,877</td><td>11,928</td></tr><tr><td>Derivatives, net</td><td>(25,354)</td><td>(7,604)</td><td>99</td><td>(33,419)</td><td>1,097</td><td>(32,322)</td></tr><tr><td>Decommissioning obligations</td><td>(10,233)</td><td>(1,769)</td><td>(2,074)</td><td>(14,076)</td><td>-</td><td>(14,076</td></tr><tr><td>Other provisions</td><td>(1,910)</td><td>(39)</td><td>(1,520)</td><td>(3,469)</td><td>(2,161)</td><td>(5,630</td></tr><tr><td>Tax, net</td><td>5,598</td><td>(3,938)</td><td>(1,119)</td><td>541</td><td>1,068</td><td>1,609</td></tr><tr><td>Other receivables and other payables, net</td><td>2,192</td><td>(4)</td><td>3</td><td>2,191</td><td>(936)</td><td>1,255</td></tr><tr><td>Capital employed at 31 December</td><td>89,941</td><td>28,463</td><td>5,211</td><td>123,615</td><td>2,488</td><td>126,103</td></tr><tr><td>Return on capital employed (ROCE), %</td><td></td><td></td><td></td><td></td><td></td><td>16.8</td></tr><tr><td>Cash flows from operating activities</td><td>5,272</td><td>2,509</td><td>2,622</td><td>10,403</td><td>1,521</td><td>11,924</td></tr><tr><td>Gross investments</td><td>(26,710)</td><td>(10,396)</td><td>(267)</td><td>(37,373)</td><td>(74)</td><td>(37,447</td></tr><tr><td>Divestments</td><td>25,451</td><td>56</td><td>141</td><td>25,503</td><td>133</td><td>25,636</td></tr><tr><td>Free cash flow (FCF)</td><td>4,013</td><td>(7,831)</td><td>2,351</td><td>(1,467)</td><td>1,580</td><td>113</td></tr></table>

The column 'Other activities/eliminations' primarily covers the elimination of inter-segment transactions. It also includes income and costs, assets and liabilities, investment activity, taxes, etc., handled at Group level.

 \( ^{1} \)  Including the elimination of other activities, the total elimination of intra-group revenue amounts to DK/m 7,760 million, which primarily relates to our Shared Functions services as well as our B2B business activities.



## Revenue

Note 2.2

<table><tr><td>Revenue
DK/m</td><td>Offshore</td><td>Onshore</td><td>Bioenergy &amp; Other</td><td>activities/ eliminations</td><td>2023 total</td><td>Offshore</td><td>Onshore</td><td>Bioenergy &amp; Other</td><td>activities/
eliminations</td><td>2022 total</td></tr><tr><td>Generation of power</td><td>10,585</td><td>2,171</td><td>6,306</td><td>-</td><td>19,062</td><td>15,149</td><td>2,121</td><td>12,701</td><td>-</td><td>29,971</td></tr><tr><td>Sale of power</td><td>25,329</td><td>3</td><td>395</td><td>(286)</td><td>25,439</td><td>34,392</td><td>-</td><td>5,936</td><td>(4,094)</td><td>36,229</td></tr><tr><td>Revenue from construction of wind farms and offshore wind farms</td><td>6,589</td><td>148</td><td>-</td><td>-</td><td>6,737</td><td>11,640</td><td>-</td><td>-</td><td>-</td><td>11,640</td></tr><tr><td>Generation and sale of heat and steam</td><td>-</td><td>-</td><td>3,776</td><td>-</td><td>3,776</td><td>-</td><td>-</td><td>3,002</td><td>-</td><td>3,002</td></tr><tr><td>Sale of gas</td><td>-</td><td>-</td><td>6,296</td><td>-</td><td>6,296</td><td>-</td><td>-</td><td>20,954</td><td>-</td><td>20,954</td></tr><tr><td>Distribution and transmission</td><td>-</td><td>-</td><td>309</td><td>(1)</td><td>308</td><td>-</td><td>-</td><td>277</td><td>(5)</td><td>272</td></tr><tr><td>G&amp;M and other services</td><td>4,045</td><td>163</td><td>942</td><td>(733)</td><td>4,417</td><td>2,403</td><td>31</td><td>733</td><td>(45)</td><td>3,122</td></tr><tr><td>Total revenue from customers</td><td>46,548</td><td>2,485</td><td>16,024</td><td>(1,022)</td><td>66,035</td><td>63,584</td><td>2,152</td><td>43,603</td><td>(4,149)</td><td>105,190</td></tr><tr><td>Government grants</td><td>9,518</td><td>296</td><td>364</td><td>-</td><td>10,178</td><td>4,631</td><td>862</td><td>493</td><td>-</td><td>6,186</td></tr><tr><td>Miscellaneous revenue</td><td>2,361</td><td>(1,611)</td><td>842</td><td>-</td><td>3,042</td><td>-</td><td>-</td><td>-</td><td>-</td><td>3,042</td></tr><tr><td>Total revenue</td><td>58,427</td><td>2,620</td><td>19,230</td><td>(1,022)</td><td>79,255</td><td>69,261</td><td>3,014</td><td>46,243</td><td>(4,101)</td><td>114,417</td></tr><tr><td>Timing of revenue recognition from customers</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>At a point in time</td><td>34,657</td><td>2,485</td><td>10,722</td><td>(1,022)</td><td>46,842</td><td>48,833</td><td>2,152</td><td>26,564</td><td>(4,149)</td><td>73,400</td></tr><tr><td>Over time</td><td>11,891</td><td>-</td><td>7,302</td><td>-</td><td>19,193</td><td>14,751</td><td>-</td><td>17,039</td><td>-</td><td>31,790</td></tr><tr><td>Total revenue from customers</td><td>46,548</td><td>2,485</td><td>18,024</td><td>(1,022)</td><td>66,035</td><td>63,584</td><td>2,152</td><td>43,603</td><td>(4,149)</td><td>105,190</td></tr><tr><td>Revenue from sale of goods and services</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue from sale of goods</td><td>54,602</td><td>2,585</td><td>18,736</td><td>(303)</td><td>75,620</td><td>66,984</td><td>3,001</td><td>45,837</td><td>(4,044)</td><td>111,778</td></tr><tr><td>Revenue from sale of services</td><td>3,825</td><td>35</td><td>494</td><td>(719)</td><td>3,635</td><td>2,277</td><td>13</td><td>406</td><td>(57)</td><td>2,639</td></tr><tr><td>Total revenue</td><td>58,427</td><td>2,620</td><td>19,230</td><td>(1,023)</td><td>79,255</td><td>69,261</td><td>3,014</td><td>46,243</td><td>(4,101)</td><td>114,417</td></tr></table>

Revenue for the year decreased by 31.3% to DKK 79,255 million in 2023. The decrease was primarily driven by significantly lower power and gas prices across all markets as well as lower volumes of gas and power sold.

Revenue from construction agreements was DKK 6,737 million, mainly relating to the construction of Borkum Riffgrund 3 for partners and the divestment of the Hornsea 2 transmission asset.
In 2022, revenue from construction agreements mainly related to the farm-down of 50% of the Hornsea 2 offshore transmission asset and the construction of Greater Changhua 1 for partners.

Income from government grants increased in 2023 due to power prices being below subsidy prices, leading to a higher subsidy per MWh produced.
On 1 January 2023, we changed our accounting policy with respect to presentation of revenue and related costs from the settlement of failed own-use power contracts. See more in note 1.2 'Basis of preparation'.

## Revenue

The timing of transfer of goods or services to customers is categorised as follows:

A) at point in time/many countries:

- sale of power or gas in the market, e.g. Nord Pool, TTF, NBP, 36,229

- sale of transmission assets from offshore wind farms.

Over time/many countries:

- construction agreements for wind farms and transmission assets
- long-term contracts with customers to deliver power, heat, or gas.

## Backlog

Order backlog for the construction of wind farms and offshore transmission assets is remaining revenue on construction agreements to customers, as well as on the backlog.

The overview does not include revenue from contracts with customers to deliver gas, heat, and power, or our operations and maintenance agreements. For these types of goods and services, we recognise the revenue that corresponds directly to the value transferred to the customer.

<table><tr><td>Order backlog</td><td>DK/m</td><td>2023</td><td>2022</td></tr><tr><td>31 December</td><td>6,538</td><td>5,909</td><td></td></tr><tr><td>Within one year</td><td>99%</td><td>43%</td><td></td></tr><tr><td>In more than one year</td><td>1%</td><td>57%</td><td></td></tr></table>



## Revenue

Note 2.2 – continued

## $ Accounting policies

Revenue is measured based on the consideration specified in a contract with a customer and is measured at the point in time when collected on behalf of third parties, i.e. VAT. We recognise revenue when we transfer control over a product or service to a customer or a partner.

If a part of the transaction price is variable, i.e. bonus payments, incentive payments for unused dedications, etc., the variable consideration is recognised in revenue when it is probable that the revenue will not be received in subsequent periods.

We adjust the transaction price for the time value of money if the payments exceed twelve months.

## Generation of power

Generation of power is the sale of power produced at our own wind farms, solar farms, and power stations as well as the sale of electricity to the grid. The price of electricity as the power is produced, since this is when delivery to the customers occurs.

Fees for having CHP plants on standby or ready to increase or decrease the generation of power to balance the demand and supply in the system is considered one and predominantly fulfilled over time.

The consideration for the power is due when the actual power is delivered to the customer.

## Sale of power

Sale of power includes revenue from the sale of power sourced from other producers. This includes the sale of power sourced from investor power purchase agreements, third-party balancing contracts, exchanges, and other sales contracts. The sale is recognised when the power is delivered to the grid.

Sales contracts for a fixed amount of power at a variable price, or where we are exclusive suppliers to the customer at a variable price, are considered one performance obligation with multiple deliveries to be satisfied over time. For such contracts and for long-term agreements on selling power at a fixed price, we recognise revenue in the amount up to which we have a right to invoice.

The consideration for the power is due when the actual power is delivered to the customer.

Revenue from construction of wind farms
Revenue from construction of wind farms
is recognised when the actual work is done.
The construction agreements cover the
construction phase from design to delivery
of an operational asset. The agreement con-
sists of two performance obligations:

• Wind farms.
• Offshore transmission assets, if applicable.

The construction agreements cover our partners' shares of the construction of the wind farm and of offshore transmission assets, if applicable. If our contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. Where there are not directly observable, they are estimated based on the expected total gross margin.

We reclass our revenue items, using an input method to measure progress towards complete satisfaction of the performance obligation because the customer gains control of the wind farm during the construction process. The input method reflects the ongoing transfer of control.

The consideration for the construction of an offshore wind farm consists of fixed amounts of a relatively minor variable fee, depending on when the wind farm can be put into operation. The consideration for an offshore transmission asset is a fixed fee.

After signing the construction agreement, we carry out on-assignment determining when the wind farm is expected to be completed. We calculate the size of the variable fee based on the expected on-assignment variable fee when it is highly probable that a subsequent reversal will not take place.

Our partner pays the fixed consideration based on a payment schedule. The payment schedule is determined and based on the expected progress of the construction and transfer of control to the customer.

Generation and sale of heat and steam
Heat and steam sold under long-term heat contracts and recognised when the heat is delivered to our customer.

The individual heat customer has made a prepayment to finance the majority of our CAPEX associated with the biomass conversion. The prepayment is recognised as a receivable as a contract liability, and it is also recognised as revenue in step with the transfer of heat to the customer.

Payment for the sale of heat consists of fixed costs associated with operations and maintenance costs. The amount of the payment is a function of heat, and a financial return. The consideration is due when delivered.

## Sale of gas

Sale of gas is our gas sourced from other producers, and it is recognised when the gas is transferred to our buyer. The transfer of control occurs either when the gas is injected into the distribution system or delivered to the customer.

Sales contracts for a fixed amount of gas at a variable price, or where we are exclusive suppliers to the customer at a variable price, are considered one performance obligation with multiple deliveries to be satisfied over time. For such contracts, we recognise revenue in the amount up to which we have a right to invoice. The transaction price includes clause which give the right to renegotiate the fixed sales prices. Expectations for the outcomes of renegotiations are not taken into account in the calculation of the outcome of the individual renegotiations.

The consideration for the gas is due when the gas is injected into the distribution system or delivered to the customer.

## Distribution and transmission

Fees for distribution and transmission of oil is recognised when the oil is delivered to the buyer, or when the capacity is made available.

Revenue is calculated as the amount to which we are entitled when the service is delivered to the customer, and consideration is payable when invoiced.

## 06k and other services

Revenue from providing services is recognised over time as our customers simultaneously receive and consume the benefits provided.
For fixed-priced contracts, revenue is recognised based on the exclusive user rendered at the end of the reporting period as a proportion of the total services to be rendered. This is determined based on the actual labour hours spent relative to the total labour hours worked.

Fixed-price contracts are invoiced on a monthly basis, and consideration is payable when invoiced. Variable fee services are due after the services are rendered.



## Cost of sales

Note 2.3

<table><tr><td>Cost of sales DK/m</td><td>Offshore</td><td>Onshore</td><td>Bioenergy &amp; Other</td><td>Other activities/ eliminations</td><td>2023 total</td><td>Offshore</td><td>Onshore</td><td>Bioenergy &amp; Other</td><td>Other activations/ eliminations</td><td>2022 total</td></tr><tr><td>Power including certificates</td><td>23,500</td><td>-</td><td>666</td><td>(13.4)</td><td>24,052</td><td>36,902</td><td>-</td><td>6,172</td><td>(4,014)</td><td>39,060</td></tr><tr><td>Costs of construction of wind farms and transmission assets</td><td>6,527</td><td>53</td><td>-</td><td>-</td><td>6,580</td><td>9,570</td><td>-</td><td>-</td><td>-</td><td>9,570</td></tr><tr><td>Bonuses</td><td>-</td><td>-</td><td>3,753</td><td>-</td><td>3,753</td><td>-</td><td>-</td><td>3,323</td><td>-</td><td>3,323</td></tr><tr><td>Costs</td><td>-</td><td>-</td><td>2,017</td><td>(7)</td><td>2,010</td><td>-</td><td>-</td><td>2,955</td><td>-</td><td>2,955</td></tr><tr><td>Gas</td><td>-</td><td>-</td><td>5,640</td><td>(1)</td><td>5,639</td><td>-</td><td>-</td><td>19,676</td><td>-</td><td>19,676</td></tr><tr><td>Distribution and transmission costs</td><td>1,527</td><td>37</td><td>1,408</td><td>(59)</td><td>2,913</td><td>2,064</td><td>-</td><td>1,507</td><td>(50)</td><td>3,550</td></tr><tr><td>Other cost of sales</td><td>219</td><td>39</td><td>1,520</td><td>(101)</td><td>1,677</td><td>-</td><td>30</td><td>1,115</td><td>24</td><td>1,169</td></tr><tr><td>Total</td><td>31,773</td><td>129</td><td>15,024</td><td>(302)</td><td>46,624</td><td>48,536</td><td>57</td><td>34,748</td><td>(4,040)</td><td>79,303</td></tr></table>

Cost of sales decreased by 41.6% to DKK 46,624 million in 2023. The decrease was primarily due to the lower power and gas prices as well as the lower power and gas volumes sold across all markets.

'Costs of construction of wind farms and transmission assets' was DKK 6,580 million, mainly relating to the construction of Borkum Rifgrund 3 for partners and the divestment of the remaining 50% of the Hornsea 2 offshore transmission asset to an Ofgem-appointed buyer. In 2022, 'Costs of construction of wind farms and transmission assets' was DKK 9,570 million, mainly relating to the construction of Greater Changhua 1 for partners and the farm-down of the first 50% of the offshore transmission asset at Hornsea 2 to partners.

On 1 January 2023, we changed our accounting policy with respect to presentation of revenue and related costs from the settlement of failed own-use power contracts. See more in note 1.2 'Basis of preparation'.

## § Accounting policies

Orsted constructs offshore transmission assets in the UK which are required to be divested to third parties due to EU unbundling regulations. The construction costs are presented as inventories and transferred to cost of sales when the asset is divested to either a form-down partner or to the buyer appointed by Ofgem.



## Government grants

Note 2.4

<table><tr><td>Government grants DKfm</td><td>2023</td><td>2022</td></tr><tr><td>Government grants recognised in profit (loss) for the year under revenue</td><td>10,178</td><td>6,186</td></tr><tr><td>Government grants recognised in profit (loss) for the year under other operating income</td><td>26</td><td>28</td></tr><tr><td>Government grants recognised in the balance sheet</td><td>(26)</td><td>(28)</td></tr><tr><td>Government grants recognised for the year</td><td>10,178</td><td>6,186</td></tr></table>

Energinet, the transmission system operator in Denmark, administers subsidies for environmentally sustainable power generation, including biomass and offshore wind farms. We treat the subsidies as a government grant, as it is paid by the Danish state.

In the UK, we receive subsidies under two schemes: contracts for difference (CfD) and the Renewable Obligation scheme (renewable obligation certificate (ROC) regime). The Burbo Bank Extension, Walney Extension, and Hornsea 1 offshore wind farms are under the CfD regime, while our other UK wind farms are entitled to ROCs. We treat the payments from the schemes as government grants.

Feed-in tariffs from our Irish, French, Dutch, and German wind farms are also recognised as government grants.

## Research and development expenditures

Note 2.5

<table><tr><td>Expensed research and development expenditures 2023 DKfm</td><td>Offshore \( ^{1} \)</td><td>Onshore</td><td>Biennery &amp; Other</td><td>Total</td></tr><tr><td>Research</td><td>239</td><td>-</td><td>-</td><td>239</td></tr><tr><td>Development</td><td>1,606</td><td>460</td><td>1</td><td>2,067</td></tr><tr><td>Total</td><td>1,845</td><td>460</td><td>1</td><td>2,306</td></tr></table>

<table><tr><td colspan="4">Expensed research and development expenditures 2022</td></tr><tr><td></td><td></td><td></td><td></td></tr><tr><td>Research</td><td>122</td><td>-</td><td>122</td></tr><tr><td>Development</td><td>1,736</td><td>266</td><td>10</td></tr><tr><td>Total</td><td>1,858</td><td>266</td><td>10</td></tr></table>

 \( ^{1} \)  In 2023, development expenditures in Offshore include P2X development costs of DKK 338 million (2022: DKK 159 million).

## For subsidies in the US, see note 3.9 'Tax equity liabilities'.

Income from government grants increased in 2023 due to power prices being below subsidy prices, leading to a higher subsidy per MWh produced.

## § Accounting policies

Government grants comprise grants for environmentally sustainable power generation, grants for the funding of development projects, investment grants, etc.

Government grants are recognised when there is reasonable assurance that the grants will be received.

As grants for power generation are intended as a compensation for the price of power, we systematically recognise the grants under revenue in step with the power generation and thus the related revenue.

## § Accounting policies

Research costs are costs incurred to find new or improve existing technologies (e.g. improving offshore foundations, existing technologies like subsea pipelines and of wind farms, and developing new ways of converting renewable or renewable technologies to renewable molecules and synthetic fuels).

Research costs are recognised in the income statement as incurred.
Development costs primarily comprise salaries (presented in Note 2.7 'Employee costs') as well as internal and external costs, which can be directly or indirectly attributed to design and development of offshore and onshore wind farms, solar farms, P2X production facilities, and energy storage facilities.

Development costs are expensed until the capitalisation criteria are met. Development costs incurred after that are capitalised as 'Property, plant, and equipment under construction' (see note 3.1 'Intangible assets, and property, plant and equipment').



## Other operating income and expenses
Note 2.6

<table><tr><td>Other operating income</td><td></td><td></td><td></td></tr><tr><td>DK/km</td><td>2023</td><td>2022</td><td></td></tr><tr><td>Gain on divestment of assets</td><td>5,895</td><td>11,018</td><td></td></tr><tr><td>Insurance compensation</td><td>116</td><td>-</td><td></td></tr><tr><td>US tax credits and tax attributions</td><td>2,577</td><td>2,556</td><td></td></tr><tr><td>Other compensation</td><td>800</td><td>175</td><td></td></tr><tr><td>Miscellaneous operating income</td><td>-</td><td>-</td><td></td></tr><tr><td>Total</td><td>10,329</td><td>14,119</td><td></td></tr></table>

<table><tr><td>Other operating expenses</td><td></td><td></td><td></td></tr><tr><td>DK/km</td><td>2023</td><td>2022</td><td></td></tr><tr><td>Cancellation fees</td><td>9,621</td><td>-</td><td></td></tr><tr><td>Ineffective hedges, etc.</td><td>512</td><td>4,591</td><td></td></tr><tr><td>Loss on divestment of assets</td><td>150</td><td>133</td><td></td></tr><tr><td>Miscellaneous operating expenses</td><td>-</td><td>-</td><td></td></tr><tr><td>Total</td><td>125</td><td>239</td><td></td></tr><tr><td>Total</td><td>10,408</td><td>4,963</td><td></td></tr></table>

## Other operating income

In 2023, 'Other operating income' was DKK 10,329 million, which was DKK 3,790 million lower than in 2022.

In 2023, 'Gain on divestment of assets' primarily related to the divestment of London Array, the 50% farm-down of Good Wind 3, and other minor adjustments to finalised projects. In 2022, 'Gain on divestments of assets' related to the 50% farm-down of Hornsea 2 and Borkum Riffgrund 3.

'Other compensation' was primarily compensations regarding outages and curtailments from Tennet, the German grid operator, and compensations from US operating asset performance guarantees.

'Miscellaneous operating income' primarily related to adjustment of provisions toward partners.

## Other operating expenses

'Cancellation fees' amounted to DKK 9,621 million and related to the decision to cease the development of Ocean Wind 1.

Costs related to fulfilling and cancelling contracts on Ocean Wind 1 were recognised as 'Cancellation fees' when the obligation arose, and to the extent these exceeded the provision for onerous contracts made as part of the impairment losses recognised in our interim report for the first nine months of 2023. Adjustments to this provision will be recognised in 'Other operating expenses' as 'Cancellation fees'.

See note 3.10 'Provisions and contingent liabilities' for more information about the cancellation fees and provisions made in relation to this.

'Ineffective hedges' in 2023 mainly related to hedges, which we cannot document as being 'effective from a hedge accounting perspective. In 2022, we also had volume-ineffective hedges.

## Accounting policies

Gains from farm-downs of ownership interests in wind farms are recognised on the divestment date and on the operating income.

Gains from future construction of the partner's share of wind farm and an offshore transmission asset the income statement in step with construction. See notes 2.2 'Revenue' and 3.5 'Contract assets and liabilities'.

The accounting policies for the income from 'US tax credits and tax attributions' are described in note 3.9 'Tax equity liabilities'.

Losses from our market trading activities are presented as other operating expenses under 'Ineffective hedges', etc.

## Divestment of ownership interests in our offshore wind farm

When we divest an ownership interest in an offshore wind farm to a partner, we typically also enter into agreements on the construction and future construction of the offshore wind farm.

Contracts in connection with a divestment are typically agreements on:

- the sole of shares (divestment of assets) (SPA)
- the sole of the contract (the contract of the offshore wind (construction agreements or construction management agreements), if not in operation)
- the future operation of the offshore wind farm (OKM agreements)

## P Key accounting estimate

Variable selling price related to divestments of offshore wind farms and offshore transmission assets

When we divest an ownership interest in an offshore wind farm and an offshore transmission asset to a partner, we consider all terms and conditions in the contracts in order to determine the transaction price.
If the consideration includes a variable amount, we estimate the consideration to which we are entitled in exchange for transferring the asset, the wind farm, and the transmission asset to our partner.

The variable considerations are estimated at contract inception based on future outcome of events, e.g.

- the divestment price of the offshore transmission asset, the contract price under the project
- the impact on production from future wind farms
- the winning bid of the tender revenue stream through a competitive tender process.

We consider 'the most likely amount' to provide the most appropriate estimate of the expected variable consideration.

## D Key accounting judgement

## Classification of divestment

When we divest ownership interests in an offshore wind farm, we carry out an individual assessment, determining whether the divestment qualifies as a divestment of an enterprise or a divestment of assets. The assessment is based on the facts and events that would form no deal to constitute an enterprise, as no employees are transferred, and processes are transferred to a limited extent only.

## Consolidation method for partnerships

On establishment of partnerships and in connection with any restructuring of existing partnerships, we assess whether the structure is a joint operation under shared control. For joint arrangements, we subsequently assess whether they are joint ventures or joint operations.

In assessing joint operations, we look at:
- the corporate form of the operation
- whether we are only entitled to the net profit (loss) or to income and expenses resulting from the operation.

In addition, the fact that the parties buy or are assigned all output, for example the power generated, will lead to the structure being considered a joint operation if we have joint control.



## Employee costs

Note 2.7

<table><tr><td>Employee costs</td><td></td><td></td><td></td></tr><tr><td>DK/km</td><td></td><td>2023</td><td>2022</td></tr><tr><td>Wages, salaries, and remuneration</td><td></td><td>6,550</td><td>5,510</td></tr><tr><td>Share-based payment</td><td></td><td>32</td><td>32</td></tr><tr><td>Pensions</td><td></td><td>536</td><td>430</td></tr><tr><td>Other social security costs</td><td></td><td>268</td><td>233</td></tr><tr><td>Other employee costs</td><td></td><td>1,000</td><td>1,000</td></tr><tr><td>Employee costs before transfer to assets</td><td></td><td>7,571</td><td>6,297</td></tr><tr><td>Transfer to assets</td><td></td><td>(1,197)</td><td>(1,019)</td></tr><tr><td>Total employee costs</td><td></td><td>6,374</td><td>5,278</td></tr></table>

Salaries and remuneration for the Group Executive Team and the Board of Directors

<table><tr><td rowspan="2">DK/000</td><td colspan="3">Executive Board \( ^{1} \)</td><td colspan="3">Other members of the Group Executive Team \( ^{1} \)</td><td colspan="3">Board of Directors</td><td colspan="3">Total</td></tr><tr><td>2023</td><td>2022</td><td>2023</td><td>2022</td><td>2023</td><td>2022</td><td>2023</td><td></td><td>2022</td><td></td><td></td><td></td></tr><tr><td>Fixed salary</td><td>27,849</td><td>30,632</td><td>36,278</td><td>20,337</td><td>6,907</td><td>6,807</td><td>71,034</td><td>57,776</td><td></td><td></td><td></td><td></td></tr><tr><td>Short-term cash-based incentive scheme</td><td>3,711</td><td>6,454</td><td>5,046</td><td>4,402</td><td>-</td><td>-</td><td>8,757</td><td>10,856</td><td></td><td></td><td></td><td></td></tr><tr><td>Share-based payment</td><td>6,270</td><td>3,989</td><td>4,622</td><td>2,336</td><td>-</td><td>-</td><td>10,892</td><td>6,327</td><td></td><td></td><td></td><td></td></tr><tr><td>Pension, incl. social security and benefits</td><td>858</td><td>860</td><td>7,600</td><td>4,521</td><td>-</td><td>-</td><td>8,508</td><td>5,361</td><td></td><td></td><td></td><td></td></tr><tr><td>Salary in notice period</td><td>8,443 \( ^{1} \)</td><td>14,553 \( ^{1} \)</td><td>12,850</td><td>6,693</td><td>-</td><td>-</td><td>21,393</td><td>15,246</td><td></td><td></td><td></td><td></td></tr><tr><td>Share-based payment</td><td>6,210</td><td>9,270</td><td>14,309</td><td>4,793</td><td>-</td><td>-</td><td>20,519</td><td>14,063</td><td></td><td></td><td></td><td></td></tr><tr><td>Total</td><td>53,341</td><td>65,758</td><td>80,755</td><td>37,084</td><td>6,907</td><td>6,807</td><td>141,003</td><td>109,649</td><td></td><td></td><td></td><td></td></tr></table>

1 The Executive Board in 2023 consisted of: Mads Pihler, Rasmus Einbue (joined on 14 November 2023), Daniel Leup, Leif Lof (14 November 2023), and Henriette Fenger, Leif Chevreux. The decrease is due to the change in composition of the executive board.

2 Other members of the Group Executive Team in 2023 were: Olivia Breesse, Andrew Brown (joined on 14 November 2023), Rasmus Einbue, Leif Lof (14 November 2023), Daniel Leup, Leif Chevreux, Rasmus Einbue, Rasmus Løkke, Rasmus Løkke, Rasmus Løkke, Rasmus Løkk
3 Other members of the Group Executive Team in 2023 were: Olivia Breesse, Andrew Brown (joined on 14 November 2023), Rasmus Einbue, Rasmus Løkke, Rasmus Løkke, Rasmus Løkke, Rasmus Løkk, Rasmus Løkke, Rasmus Løkke, Rasmus Lølkk, Rasmus Løkke, Rasmus Løkke, Rasmus Lökke, Rasmus Lökke, Rasmus Lökke, Rasmus Lökke
4 Including DK 1,373 thousand related to share-based payments related to the cancellation of two LTI grants due to not meeting the shareholding requirement. Despite his increase in shareholding, the total value of his shares was not sufficient to satisfy the build-up of the shareholding requirement for continued participation in the share program. In accordance with PEFR 2, the 2023 and future expense related to the two grants from 2021 and 2022 have been accelerated, and DK 4.5 million have been expensed and reported as share-based remuneration to Hokas in 2023 despite him not receiving any remuneration from the two grants.
5 Including DK 1,373 thousand related to share-based payments as, in accordance with the programme terms, Martin Neubert kept his rights to the 2020, 2021, and 2022 grants. As Martin has entered into a new position in 2023 during the notice period, we have the right to offset his new salary.

Pension plans and number of employees
Pension plans are defined-contribution plans that do not commit Ørsted beyond the amounts contributed.

In 2023, our average number of employees was 8,666 (2022: 7,428).

Remuneration of the Group Executive Team
The remuneration of the Group Executive Team is based on a fixed salary, including personal benefits, such as a company car, free telephone, etc., a variable salary, and share-based payment. The non-executive members of the Group Executive Team also receive a pension.

The members of the Board of Directors are paid a fixed remuneration only for their work in Ørsted. In addition, Ørsted reimburses any travel expenses.

For more details on the remuneration of the Executive Board, please refer to the remuneration report orsted.com/remuneration2023.



## Share-based payment

Note 2.6

<table><tr><td>Market value of PSUs and key assumptions for valuation in executive share programme</td><td>Time of granting 2023</td><td>Time of granting 2022</td><td>Time of granting 2021</td></tr><tr><td>Market value of 1 PSU</td><td>729</td><td>909</td><td>1,246</td></tr><tr><td>Key assumptions</td><td></td><td></td><td></td></tr><tr><td>Share price</td><td>583</td><td>635</td><td>1,025</td></tr><tr><td>Average volatility rate</td><td>30.6%</td><td>30.2%</td><td>28.6%</td></tr><tr><td>Volatility, Ørsted</td><td>36.2%</td><td>34.8%</td><td>29.6%</td></tr><tr><td>Risk-free interest rate</td><td>2.5%</td><td>0.9%</td><td>0.1%</td></tr><tr><td>Expected term at time of granting</td><td>3 years</td><td>3 years</td><td>3 years</td></tr></table>

## Required number of locked-up shares relative to fixed salary

<table><tr><td>CEO</td><td>75% of fixed salary</td></tr><tr><td>CFO, Chief HR Officer</td><td>50% of fixed salary</td></tr><tr><td>Other members of the Group Executive Team</td><td>25% - 50% of fixed salary</td></tr><tr><td>Other participants</td><td>15% - 25% of fixed salary</td></tr></table>

The figure shows the shareholding requirement in percentage of the participants' fixed salary. A build-up period of up to five years is allowed.

## Executive share programme

The Group Executive Team and a number of other senior executives participate in the share programme (approx. 150). As a condition for the granting of performance share units (PSUs), the participant must own a number of shares in Ørsted corresponding to a portion of the individual participant's annual fixed salary. The portion depends on the employee category, and it makes up 75% of our CEO's fixed salary. See the table above for more information. The participants in the programme must invest in Ørsted shares prior to the first granting. A build-up period for the shareholding requirements of up to five years is allowed. If the participants fulfil the shareholding requirement at the time of granting, they will be granted a number of PSUs each year, representing a value of 15-20% (15-40% in the US) of the annual fixed salary on the date of granting.

The granted PSUs have a vesting period of approximately three years. Then, each PSU entitles the holder, without payment, to receive a number of shares corresponding to 0-200% of the number of PSUs granted. The vesting is conditional upon continued employment. Assuming no share price development since the grant, the value would correspond to 0-30% or 0-40% (0-80% in the US) of the fixed salary on the date of grant. The final number of shares for each participant will be determined on the basis of the total shareholder return delivered by Ørsted, benchmarked against ten comparable European energy companies. The highest rate (200%) will be triggered if Ørsted's results, measured as the total return to shareholders, outperform those of the comparable companies. For each lower ranking, the number of shares granted will fall by 20 percentage points. If, for example, Ørsted ranks third, the participants will be entitled to 160% of the target.

If Ørsted ranks 11 in the comparison, no shares will be granted to the participants. The right to shares is conditional upon continued employment.

## Retention share programme

The target group for the share-based retention agreements will typically be employees responsible for vital, long-term projects. The use of these share-based retention agreements will be limited to 25 concurrent agreements with an individual time frame of up to five years. Members of the Executive Board (CEO, CFO, and Chief HR Officer) cannot be granted such retention agreements.

The number of retention share units (RSUs) to be granted will be determined on the basis of the price of Ørsted's shares at the time of the grant and will be limited to an amount corresponding to a maximum of six months' base pay for the employee in question. At vesting, each RSU will entitle the employee to one Ørsted share free of charge. However, the total value of the shares to be received at vesting will be capped at a maximum of twelve months' base pay for the employee in question.

## Accounting policies

The share programme is classified as an equity-based programme as the programme is settled in shares. The market value of the PSUs and the estimated number of PSUs granted are measured at the time of granting and recognised:

- in the income statement under employee costs over the vesting period
- as on offset in the balance sheet under equity over the vesting period

The valuation of the PSUs and the estimate of the number of PSUs expected to be granted are carried out as a probability simulation based on Ørsted's expected total shareholder return. The PSUs are valued at the grant date in energy companies. The expectations are factored into the market value and are not adjusted subsequently. The participants are compensated for any dividend payment by receiving additional PSUs.



## Share-based payment

Note 2.8 – continued

<table><tr><td>Maximum number of outstanding shares at 31 December &#x27;000</td><td>Executive Board*</td><td>Other members of the Group Executive Team*</td><td>Senior executives</td><td>Other employees</td><td>2023</td><td>2023 in % of share capital</td><td>Market value of shares at granting DKIM</td><td>until expiry as DKIM</td><td>Years of 2023</td></tr><tr><td>1 April 2020</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>63</td><td>-</td><td>-</td><td>-</td></tr><tr><td>1 April 2021</td><td>3</td><td>4</td><td>40</td><td>-</td><td>47</td><td>53</td><td>0.01%</td><td>29</td><td>0.3</td></tr><tr><td>1 April 2022</td><td>4</td><td>7</td><td>78</td><td>-</td><td>89</td><td>102</td><td>0.02%</td><td>41</td><td>1.3</td></tr><tr><td>1 April 2023</td><td>7</td><td>13</td><td>116</td><td>-</td><td>136</td><td>-</td><td>0.03%</td><td>50</td><td>2.3</td></tr><tr><td>Share retention programme</td><td>-</td><td>1</td><td>-</td><td>7</td><td>8</td><td>15</td><td>0.00%</td><td>5</td><td>-</td></tr><tr><td>Maximum number of outstanding shares at 31 December</td><td>14</td><td>25</td><td>234</td><td>7</td><td>280</td><td>233</td><td>0.06%</td><td>125</td><td>-</td></tr><tr><td colspan="10">Development in maximum number of outstanding shares</td></tr><tr><td>Maximum number of outstanding shares at 1 January</td><td>36</td><td>24</td><td>160</td><td>13</td><td>233</td><td>234</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Compensation for dividends paid (2020, 2021, and 2022 programmes)</td><td>-</td><td>1</td><td>4</td><td>-</td><td>-</td><td>5</td><td>4</td><td>-</td><td>-</td></tr><tr><td>Transfer between categories</td><td>(9)</td><td>(14)</td><td>23</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Exercised (2020 programme)1</td><td>(7)</td><td>(5)</td><td>(53)</td><td>-</td><td>(65)</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Exercised (2031 programme)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(84)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Granted (2023 programme)</td><td>8</td><td>24</td><td>135</td><td>-</td><td>167</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Granted (2022 programme)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>101</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Cancelled (2023 programme)</td><td>-</td><td>(4)</td><td>(28)</td><td>-</td><td>(32)</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Cancelled (2022 programme)</td><td>(9)1</td><td>-</td><td>(5)</td><td>-</td><td>(14)</td><td>(1)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Cancelled (2021 programme)</td><td>(5)1</td><td>-</td><td>(2)</td><td>-</td><td>(7)</td><td>(6)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Cancelled (2020 programme)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(11)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Share retention programme</td><td>-</td><td>(1)</td><td>-</td><td>(6)</td><td>(7)</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Maximum number of outstanding shares at 31 December</td><td>14</td><td>25</td><td>234</td><td>7</td><td>280</td><td>233</td><td>-</td><td>-</td><td>-</td></tr><tr><td colspan="10">DKIM</td></tr><tr><td>Market value of share programme at the time of granting</td><td>6</td><td>11</td><td>103</td><td>5</td><td>125</td><td>114</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Maximum market value of share programme at 31 December</td><td>5</td><td>9</td><td>88</td><td>3</td><td>105</td><td>147</td><td>-</td><td>-</td><td>-</td></tr></table>

 \( ^{1} \)  At vesting, Ørsted did not outperform any of the 10 competitors, and, as a result, no shares were granted to the participants.

 \( ^{2} \)  Remains as of 31 Dec. 2023 in undiscounted in the category.

 \( ^{3} \)  Cancellation of Mots DNipers' LTI grants for 2021 and 2022. Despite his increase in shareholding, the total value of his shares was not sufficient to satisfy the build-up of the shareholding requirement for continued participation in the share programme, and consequently, the awarded PSUs were cancelled.

The maximum market value of the share programme at 31 December is based on the assumption that the participants receive the maximum number of shares (i.e. 200% of the granted PSUs/RSUs). This requires Ørsted to deliver the highest shareholder return, benchmarked against ten comparable companies.

The share price at the time of exercising in 2023 was DKK 583.



## Capital employed
Note 3

Our capital employed primarily relates to production assets, including assets under construction.

We monitor investment projects closely, as a large part of our value is created in the development and construction phases.

Capital employed by segment is based on capital employed for reportable segments of DKK 123,863 million.

Gross investments by segment is based on gross investments for reportable segments of DKK 38,410 million.

 \( ^{3} \)  Net working capital, work in progress \( ^{4} \)  consists of inventories related to transmission assets, construction agreements, and construction work. The net working capital is a connection with the construction of transmission assets and offshore wind farms for partners as well as related trade payables.

## Capital employed by segment \( ^{1} \) 
% 2023



Gross investments by segment \( ^{1} \) 
% 2023

Offshore 74%

Onshore 24%

Bioenergy & Other 2%

<table><tr><td>Capital employed</td><td>2023</td><td>2022</td></tr><tr><td>DKKbn</td><td></td><td></td></tr><tr><td>Intangible assets, and property, plant, and equipment</td><td>183,195</td><td>181,694</td></tr><tr><td>Equity investments and non-current receivables</td><td>1,172</td><td>996</td></tr><tr><td>Net working capital, capital expenditures</td><td>(4,542)</td><td>(5,665)</td></tr><tr><td>Net working capital, work in progress \( ^{3} \)</td><td>1,705</td><td>1,471</td></tr><tr><td>Net working capital, tax equity</td><td>(15,811)</td><td>(15,157)</td></tr><tr><td>Net working capital, other items</td><td>7,794</td><td>11,928</td></tr><tr><td>Decommissioning</td><td>(10,383)</td><td>(12,322)</td></tr><tr><td>Other provisions</td><td>(12,977)</td><td>(14,076)</td></tr><tr><td>Tax, net</td><td>(19,886)</td><td>(5,630)</td></tr><tr><td>Other receivables and other payables, net</td><td>(1,047)</td><td>1,609</td></tr><tr><td>Total capital employed</td><td>125,170</td><td>126,103</td></tr></table>

<table><tr><td colspan="3">Gross and net investments</td></tr><tr><td>DKKbn</td><td>2023</td><td>2022</td></tr><tr><td>Cash flows from investing activities</td><td>(34,732)</td><td>(17,912)</td></tr><tr><td>Dividends received and capital reductions reversed</td><td>(19)</td><td>(23)</td></tr><tr><td>Purchase and sale of securities, reversed</td><td>4,350</td><td>5,634</td></tr><tr><td>Loans to associates and joint ventures, reversed</td><td>78</td><td>-</td></tr><tr><td>Sale of non-current assets, reversed</td><td>(8,186)</td><td>(24,175)</td></tr><tr><td>Interest-bearing debt in acquired enterprises</td><td>-</td><td>(972)</td></tr><tr><td>Restricted cash in acquired enterprises</td><td>1</td><td>1</td></tr><tr><td>Gross investments</td><td>(38,509)</td><td>(37,447)</td></tr><tr><td>Transactions with non-controlling interests in connection with divestments and acquisitions</td><td>(6,644)</td><td>1,461</td></tr><tr><td>Sale of non-current assets</td><td>0,186</td><td>24,175</td></tr><tr><td>Divestments</td><td>1,542</td><td>26,636</td></tr><tr><td>Net investments</td><td>(36,967)</td><td>(11,811)</td></tr></table>



## Intangible assets, and property, plant, and equipment
Note 3.1

<table><tr><td>Intangible assets, and property, plant, and equipment
DK/m</td><td>Intangible assets</td><td>Land and buildings</td><td>Production assets</td><td>Fixtures and fittings, tools, and equipment</td><td>Property, plant, and equipment under construction</td><td>Property, plant, and equipment under construction</td></tr><tr><td>Cost at 1 January 2023</td><td>5,707</td><td>10,747</td><td>179,094</td><td>3,076</td><td>52,088</td><td>245,005</td></tr><tr><td>Exchange rate adjustments</td><td>9</td><td>(47)</td><td>159</td><td>(23)</td><td>(1,551)</td><td>(1,462)</td></tr><tr><td>Additions</td><td>19</td><td>551</td><td>349</td><td>889</td><td>36,164</td><td>37,953</td></tr><tr><td>Disposals</td><td>(580)</td><td>(114)</td><td>(1,183)</td><td>-</td><td>(1,477)</td><td>(1,476)</td></tr><tr><td>Adjustment of decommissioning obligations</td><td>-</td><td>-</td><td>-</td><td>-</td><td>579</td><td>(1,264)</td></tr><tr><td>Reclassified assets</td><td>22</td><td>16</td><td>16,430</td><td>98</td><td>(16,566)</td><td>(22)</td></tr><tr><td>Cost at 31 December 2023</td><td>5,177</td><td>11,153</td><td>189,104</td><td>4,040</td><td>69,197</td><td>273,494</td></tr><tr><td>Depreciation and amortisation at 1 January 2023</td><td>(973)</td><td>(2,767)</td><td>(59,102)</td><td>(1,533)</td><td>-</td><td>(63,402)</td></tr><tr><td>Exchange rate adjustments</td><td>-</td><td>(6)</td><td>(586)</td><td>(2)</td><td>-</td><td>(594)</td></tr><tr><td>Depreciation and amortisation</td><td>(59)</td><td>(614)</td><td>(8,661)</td><td>(459)</td><td>-</td><td>(9,734)</td></tr><tr><td>Disposals</td><td>(16)</td><td>41</td><td>-</td><td>-</td><td>-</td><td>(16)</td></tr><tr><td>Depreciation and amortisation at 31 December 2023</td><td>(1,048)</td><td>(3,346)</td><td>(65,639)</td><td>(1,994)</td><td>-</td><td>(70,979)</td></tr><tr><td>Impairment losses at 1 January 2023</td><td>(705)</td><td>-</td><td>(781)</td><td>-</td><td>(3,157)</td><td>(3,936)</td></tr><tr><td>Exchange rate adjustments</td><td>-</td><td>-</td><td>17</td><td>-</td><td>438</td><td>455</td></tr><tr><td>Impairment losses and reversals</td><td>-</td><td>(30)</td><td>(1,058)</td><td>(4)</td><td>(18,190)</td><td>(19,282)</td></tr><tr><td>Disposals</td><td>-</td><td>-</td><td>-</td><td>-</td><td>19</td><td>19</td></tr><tr><td>Impairment losses at 31 December 2023</td><td>(703)</td><td>(30)</td><td>(1,822)</td><td>(4)</td><td>(20,890)</td><td>(22,746)</td></tr><tr><td>Carrying amount at 31 December 2023</td><td>3,426</td><td>7,777</td><td>121,643</td><td>2,042</td><td>48,307</td><td>179,769</td></tr></table>

 \( ^{1} \)  We recognised total impairment losses of DKK 26,775 million for the year. Of that amount, DKK 19,282 million are recognised under 'Property, plant, and equipment' and DKK 7,493 million under 'Provisions' as 'Onerous contracts'. See note 3.2 'Impairments' and note 3.10 'Provisions and contingent liabilities' for more information.

## Intangible assets

Intangible assets consist of goodwill of DKK 1,847 million (2022: DKK 1,843 million), carbon emission allowances of DKK 871 million (2022: DKK 1,464 million), other rights of DKK 626 million (2022: DKK 614 million), completed development projects of DKK 61 million (2022: DKK 28 million), and development projects in progress of DKK 21 million (2022: DKK 80 million). Recognised goodwill primarily relates to Onshore Europe.

Production assets by segment % 2023

DKK 121,643 million



Property, plant, and equipment under construction by segment % 2023

DKK 48,307 million






## Intangible assets, and property, plant, and equipment

Note 3.1 – continued

<table><tr><td>Intangible assets, and property, plant, and equipment DK(km)</td><td>Intangible assets</td><td>Land and buildings</td><td>Production assets</td><td>Fixtures and fittings, tools, and equipment</td><td>Property, plant, and equipment under construction</td><td>Property, plant, and equipment under construction</td></tr><tr><td>Cost at 1 January 2022</td><td>3,243</td><td>10,311</td><td>148,309</td><td>1,856</td><td>57,852</td><td>218,330</td></tr><tr><td>Exchange rate adjustments</td><td>(10)</td><td>(18)</td><td>(2,019)</td><td>(62)</td><td>(555)</td><td>(2,654)</td></tr><tr><td>Additions</td><td>1,314</td><td>720</td><td>1,728</td><td>1,240</td><td>29,394</td><td>33,082</td></tr><tr><td>Additions on acquisition of enterprises</td><td>1,866</td><td>53</td><td>1,179</td><td>7</td><td>1,103</td><td>2,342</td></tr><tr><td>Disposals</td><td>(726)</td><td>(464)</td><td>(9,634)</td><td>(12)</td><td>(1,136)</td><td>(1,156)</td></tr><tr><td>Adjustment of decommissioning obligations</td><td>-</td><td>-</td><td>4,398</td><td>-</td><td>503</td><td>4,901</td></tr><tr><td>Reclassified assets</td><td>-</td><td>165</td><td>34,993</td><td>45</td><td>(35,203)</td><td>-</td></tr><tr><td>Reclassified from assets classified as held for sale</td><td>-</td><td>-</td><td>140</td><td>-</td><td>130</td><td>270</td></tr><tr><td>Cost at 31 December 2022</td><td>5,707</td><td>10,747</td><td>19,094</td><td>3,076</td><td>52,088</td><td>245,005</td></tr><tr><td>Depreciation and amortisation at 1 January 2022</td><td>(999)</td><td>(2,245)</td><td>(51,906)</td><td>(1,254)</td><td>-</td><td>(55,405)</td></tr><tr><td>Exchange rate adjustments</td><td>-</td><td>-</td><td>1,278</td><td>13</td><td>-</td><td>1,323</td></tr><tr><td>Depreciation and amortisation</td><td>(36)</td><td>(67)</td><td>18,614</td><td>(297)</td><td>-</td><td>(97,818)</td></tr><tr><td>Disposals</td><td>61</td><td>53</td><td>-</td><td>-</td><td>-</td><td>308</td></tr><tr><td>Depreciation and amortisation at 31 December 2022</td><td>(973)</td><td>(2,767)</td><td>(59,102)</td><td>(1,533)</td><td>-</td><td>(63,402)</td></tr><tr><td>Impairment losses at 1 January 2022</td><td>(701)</td><td>-</td><td>(785)</td><td>-</td><td>(744)</td><td>(1,529)</td></tr><tr><td>Exchange rate adjustments</td><td>(2)</td><td>-</td><td>4</td><td>-</td><td>53</td><td>57</td></tr><tr><td>Impairment losses and reversals</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(2,529)</td><td>(2,529)</td></tr><tr><td>Disposals</td><td>(2)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>63</td></tr><tr><td>Impairment losses at 31 December 2022</td><td>(705)</td><td>-</td><td>(781)</td><td>-</td><td>(3,157)</td><td>(3,926)</td></tr><tr><td>Carrying amount at 31 December 2022</td><td>4,029</td><td>7,980</td><td>119,211</td><td>1,543</td><td>48,931</td><td>177,665</td></tr></table>

Production assets by segment

% 2022

DKK 119,211 million

60%

35%

5%

Offshore Onshore Bioenergy & Other

Property, plant, and equipment under construction by segment

DKK 48,931 million

79%

20%
1%
Offshore Onshore Bioenergy & Other



## Intangible assets, and property, plant, and equipment

Note 3.1 – continued

<table><tr><td>Lease assets
DK/km</td><td>Land and buildings</td><td>Production assets</td><td>Fixtures and fittings, tools, and equipment</td><td>Property, plant, and equipment</td></tr><tr><td>Carrying amount at 1 January 2023</td><td>6,409</td><td>43</td><td>1,157</td><td>7,609</td></tr><tr><td>Exchange rate adjustments</td><td>(45)</td><td>1</td><td>(32)</td><td>(76)</td></tr><tr><td>Additions</td><td>137</td><td>4</td><td>814</td><td>955</td></tr><tr><td>Disposals</td><td>(67)</td><td>-</td><td>-</td><td>(1)</td></tr><tr><td>Depreciation</td><td>(30)</td><td>-</td><td>-</td><td>(30)</td></tr><tr><td>Depreciation</td><td>(523)</td><td>(21)</td><td>(372)</td><td>(916)</td></tr><tr><td>Carrying amount at 31 December 2023</td><td>5,881</td><td>27</td><td>1,567</td><td>7,475</td></tr></table>

<table><tr><td>Lease assets
DK/km</td><td></td><td></td><td></td><td></td></tr><tr><td>Carrying amount at 1 January 2022</td><td>6,628</td><td>104</td><td>255</td><td>6,987</td></tr><tr><td>Exchange rate adjustments</td><td>40</td><td>-</td><td>(42)</td><td>(2)</td></tr><tr><td>Additions</td><td>655</td><td>8</td><td>1,171</td><td>1,814</td></tr><tr><td>Disposals</td><td>(33)</td><td>-</td><td>-</td><td>(1)</td></tr><tr><td>Depreciation</td><td>(431)</td><td>-</td><td>(7)</td><td>(438)</td></tr><tr><td>Depreciation</td><td>(516)</td><td>(69)</td><td>(220)</td><td>(805)</td></tr><tr><td>Carrying amount at 31 December 2022</td><td>6,409</td><td>43</td><td>1,157</td><td>7,609</td></tr></table>

<table><tr><td>Contractual obligations by segment</td><td></td><td></td><td></td><td></td></tr><tr><td>DK/km</td><td>0-1 year</td><td>1-5 years</td><td>5-10 years</td><td>2023</td></tr><tr><td>Offshore</td><td>38,714</td><td>47,298</td><td>3</td><td>86,015</td></tr><tr><td>Onshore</td><td>8,262</td><td>2,655</td><td>-</td><td>10,937</td></tr><tr><td>Bienerg &amp; Other</td><td>1,000</td><td>1,000</td><td>-</td><td>1,000</td></tr><tr><td>Total</td><td>48,524</td><td>50,699</td><td>3</td><td>99,226</td></tr></table>

Overview of contracts entered into where delivery had not taken place at 31 December 2023. The obligations are measured at nominal value.

## Leases

We mainly lease office buildings, service and installation vessels, seabeds related to offshore wind farms, and plots of land related to onshore wind farms, solar farms, and battery storage facilities.

Seabed leases include variable lease payments, which depend on the number of megawatt hours generated. However, we have typically agreed on minimum lease payments for the seabeds, and these minimum payments are included in the lease liabilities.

Expenses for the year relating to variable lease payments not included in lease liabilities were DKK 717 million in 2023 (2022: DKK 609 million). Interests on lease debt expensed in profit (loss) were DKK 308 million in 2023 (2022: DKK 256 million).

Total cash outflow for leases were DKK 1,737 million in 2023 (2022: DKK 1,447 million).

We have not entered into lease liabilities which have not been commenced per 31 December 2023 and consequently not included in the balance sheet.

For a maturity analysis of lease liabilities, we refer to note 5.5 'Maturity analysis of financial liabilities'.

## Contractual obligations

Our contractual obligations for property, plant, and equipment at 31 December 2023 mainly related to wind turbines, foundations, and cables, etc., for the construction of offshore wind farms (primarily Borkum Riffgrund 3, Code Wind 3, Greater Changhua 2b and 4, Hornsea 3, Revolution Wind, South Fork, and Sunrise Wind).

The obligations in Onshore mainly related to purchases of wind turbines and solar PV modules.

<table><tr><td>Unused Lives</td><td></td><td></td></tr><tr><td>Battery storage</td><td>15 years</td><td></td></tr><tr><td>Battery storage</td><td>20-50 years</td><td></td></tr><tr><td>Fixtures and fittings, tools, and equipment</td><td>3-10 years</td><td></td></tr><tr><td>Gas transportation systems (marine pipelines)</td><td>20-40 years</td><td></td></tr><tr><td>Offshore wind farms</td><td>20-30 years</td><td></td></tr><tr><td>Onshore wind farms</td><td>24-30 years</td><td></td></tr><tr><td>Production assets, power (thermal), and district heating</td><td>20-25 years</td><td></td></tr><tr><td>Solar farms</td><td>35 years</td><td></td></tr><tr><td>Goodwill</td><td>Indefinite</td><td></td></tr></table>



## Intangible assets, and property, plant, and equipment

Note 3.1 — continued

## § Accounting policies

## Intangible assets

Rights are measured at cost less accumulated amortisation and impairment losses. Rights are amortised on a straight-line basis over their estimated future useful lives, which are 5-20 years.

Goodwill represents the excess of the cost of acquiring a business over the fair value of the fair value of the net assets of the acquired company. The carrying amount of goodwill is allocated to the Group's cash-generating units, which are the operating segments at the acquisition date. Goodwill is not tax deductible.

Annual impairment tests are carried out for goodwill and other intangible assets with indefinite useful lives.

## Property, plant, and equipment

Property, plant, and equipment which is not a lease is measured at cost less accumulated depreciation and impairment losses. Cost of property, plant, and equipment is stated at the cost of the asset being the straight-line method, the diminishing-balance method, or the reducing-value method. The diminishing-balance method and the reducing-function method result in decreasing depreciation over the useful life. These methods are used for some of the Group's assets.

The residual values, useful lives, and methods of depreciation of property, plant, and equipment are reviewed at the end of each financial year and adjusted prospectively, if appropriate.
Costs comprise purchase price and any costs directly attributable to the acquisition until the date the asset is available for use. The costs of self-constructed assets comprise direct and indirect costs of materials, direct labour, sub-suppliers, and labour. Borrowing costs relating to both specific and general borrowing directly attributable to assets under construction with a lengthy construction period are recognised in costs during the construction period. The costs of the acquisition of the present value of the estimated obligations for demolition and decommissioning of assets to the extent that the obligations are recognised as provisions.

Subsequent costs, for example in connection with the acquisition of a business or property, plant, and equipment, are recognised in the carrying amount of the asset in question when it is probable that future economic benefits will flow to the Group from the asset. An irregular use of the replaced parts is recognised in the income statement as loss on disposal of non-current assets. Other costs are recognised in the income statement in profit (loss) for the year as incurred.

## Leases

Our lease assets are classified on a charge under owned assets of similar type under property, plant, and equipment. Initially, we measure a lease asset at cost, being the initial amount of the lease liability. We depreciate our lease assets over the lease term. The depreciation method used is the straight-line method for all our lease assets, except for seabed leases where the depreciation method is aligned with the depreciation method for the related offshore wind farm. Therefore, seabed lease assets are depreciated using either the straight-line method or the reducing-function method.

Our lease liabilities are initially measured at the net present value of the in-substance lease payments. The present value of the lease asset, if, at inception of the lease, we are reasonably certain about exercising an option to exercise the lease, is determined by discounting payments in the option period when calculated using the lease liability. We measure the lease asset to the value of the lease liability at initial recognition.

Contracts may contain both lease and non-lease elements. The Group's accounting criterion is a contract to the lease and non-lease components based on their relative stand-alone prices. We account for non-lease components in the income statement as a cost of the policy applicable for such items. Non-lease components comprise building services and operating costs of leased vessels, etc.

Variable lease expenses are recognised in other external expenses in the period when the condition triggering those payments occurs. Interests of lease liabilities are recognised in financial expenses.

Each lease payment is separated into repayment of the lease liability and payment of interest of the lease liability. Debt repayments are classified as cash flows from financing activities, and payment of interests are classified as cash flows from operating activities.

Each lease payment is separated into repayment of the lease liability and payment of interest of the lease liability. Debt repayments are classified as cash flows from financing activities, and payment of interests are classified as cash flows from operating activities.



## Impairments

Note 3.2

<table><tr><td colspan="3">Impairment losses on segment level</td></tr><tr><td></td><td>2023</td><td>2022</td></tr><tr><td>Offshore</td><td>25,526</td><td>2,529</td></tr><tr><td>Onshore</td><td>927</td><td>-</td></tr><tr><td>Bloenergy &amp; Other</td><td>322</td><td>-</td></tr><tr><td>Total impairment losses</td><td>26,775</td><td>2,529</td></tr></table>

On 29 August 2023, we announced anticipated impairments on our US portfolio due to adverse impacts related to the supply chain, lack of favourable progress in investment tax credit (ITC) guidance, and increased interest rates. Following this, we recognised impairment losses of DKK 28.4 billion in our interim financial report for the first nine months of 2023.

We have updated our impairment calculations as of 31 December 2023. Management has taken the above-mentioned impacts and other related risks and inherent uncertainties into consideration when estimating the future cash flows for the value-in-use calculations of our cash-generating units (CCUs).

Based on this, our impairment tests prepared in Q4 2023 have resulted in a reversal of impairment losses of DKK 1.6 billion, mainly driven by a decrease in the US long-dated interest rate from 30 September to 31 December 2023, which lowered our WACCs. Thus, we have recognised total impairment losses of DKK 26.8 billion in 2023.
In 2022, we recognised impairment losses of DKK 2.5 billion related to Sunrise Wind.

## Ceasing development of Ocean Wind 1

On 31 October, we decided to cease the development of Ocean Wind 1 in the form it was awarded by the New Jersey Board of Public Utilities. In the wake of the COVID-19 pandemic and Russia’s invasion of Ukraine, Ocean Wind 1 had been faced with a variety of challenges, such as higher costs of capital (US risk-free rate increasing by approx. 300 bps from the award in 2019), cost inflation, supply chain challenges, and slow permitting.

As explained in our interim financial report for the first nine months of 2023, the decision to cease the development was taken after additional supplier delays further impacted the project schedule, which led to an additional significant delay to the project. In addition, we had updated our view on certain assumptions, including tax credit monetisation and the timing and likelihood of final construction permits. Finally,

## WACC levels

Base discount rate applied for

the US

The base discount rate after tax applied for the value-in-use calculation is determined per CCU.

continued increases to long-dated US interest rates had further deteriorated the business case.

We also ceased the development of Ocean Wind 2, which did not lead to an impairment as the carrying amount was insignificant.

Costs related to fulfilling and cancelling contracts were recognised as 'Other operating expenses' when the obligation arose and to the extent these exceeded the provision for onerous contracts made as part of the impairment losses recognised in our interim report for the first nine months of 2023. See note 3.10 'Provisions and contingent liabilities' for more information about the cancellation fees and the provisions made in relation to this.

## Impairment test

The circumstances and assumptions with the most significant impairment impact and high involvement of estimates and uncertainties are described in the following sections.

## CCUs in Offshore

The cash-generating units (CCUs) are made up of individual offshore wind farms or seabeds, each of which generates cash flows for the segment independently of each other.

## Significant CCUs

Europe: Baltic 2, Baltic 3, Korbum Riffgrund 1, Korbum Riffgrund 2, Korbum Riffgrund 3, Børresøe 1 & 2, Gode Wind 1, Gode Wind 2, Gode Wind 3, Hørnsø 1, Hørnsø 2, Hørnsø 3, Røc Bank, Væthø, Valeney and Væthøen Extension. The US: Block Island, Revolution Wind, Skipjack Wind (seabed), South Fork, Sunrise Wind, and Ocean Wind 1 seabed.

APAC: Greater Changhua 1 and 2 and Greater Changhua 2b and 4.

## CCUs in Onshore

The CCUs are made up of individual onshore wind and solar farms, each of which generates cash flows for the segment independently of each other.

## Significant CCUs

The US: Amazon, Eleven Hills, Ford Ridge, Hay-stock, Hester Enfield, Century Island, Lincol Wind, Lockett, Mushee Shoots, Old 300, Permian Energy Center, Sage Draw Wind, Sunflower Wind, Tahoka Wind, Western Trail, and Willow Springs Wind. Europe: Portfolio of projects.

## CCUs in Bioenergy & Other

The Danish CHP plants constitute a single CCU, as well as production planning is for the entire Danish portfolio. The Danish offshore wind gas pipeline system is deemed to constitute an independent CCU.

## Significant CCUs

Central CHP plants (including goodwill) and the offshore gas pipeline system.



## Impairments

Note 3.2 – continued

<table><tr><td></td><td></td><td></td><td></td><td></td><td colspan="3">TCI bonus credits assumed in impairment tests</td><td colspan="3">Sensitivity impact DKK billion</td></tr><tr><td>CGUs</td><td>Impairment losses</td><td>Recoverable amount</td><td>ITC bonus earnings</td><td>Probability weighted average remaining life</td><td>No ITC bonus credits</td><td>40% ITC bonus credits, 100% no probability weighted average remaining life</td><td>+50% no probability weighted average remaining life</td><td>-50% no probability weighted average remaining life</td><td>-50% no probability weighted average remaining life</td><td></td></tr><tr><td>DKKm</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ocean Wind 1</td><td>19,875</td><td>n.a.</td><td>n.a.</td><td>n.a.</td><td>n.a.</td><td>n.a</td><td>n.a</td><td>n.a</td><td>n.a</td><td>n.a.</td></tr><tr><td>Sunrise Wind</td><td>2,069</td><td>2,006</td><td>10%</td><td>95%</td><td>(1.0)</td><td>0.1</td><td>(0.7)</td><td>0.7</td><td>0.6</td><td>0.6</td></tr><tr><td>Revolution Wind</td><td>2,706</td><td>3,723</td><td>10%</td><td>95%</td><td>(1.0)</td><td>0.1</td><td>(0.7)</td><td>0.6</td><td>0.6</td><td>0.6</td></tr><tr><td>South Fork</td><td>554</td><td>2,993</td><td>10%</td><td>0%</td><td>n.a</td><td>n.a</td><td>n.a</td><td>(0.2)</td><td>0.2</td><td>0.2</td></tr><tr><td>Block Island</td><td>322</td><td>1,304</td><td>n.a.</td><td>n.a.</td><td>n.a.</td><td>n.a</td><td>n.a</td><td>0.0</td><td>0.0</td><td>0.0</td></tr><tr><td>Offshore</td><td>25,526</td><td>10,026</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Onshore</td><td>927</td><td>2,667</td><td>n.a.</td><td>n.a.</td><td>n.a.</td><td>n.a.</td><td>(0.3)</td><td>0.3</td><td>0.3</td><td>0.3</td></tr><tr><td>Bioenergy &amp; Other</td><td>322</td><td>n.a.</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total</td><td>26,775</td><td>12,693</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

Supply chain (including revenue and OPEX)
The Ocean Wind 1, Sunrise Wind, and Revolution Wind projects have been adversely impacted by supply chain bottlenecks on top of the cost inflation experienced in recent years. In late August, we concluded that risks remained in the suppliers' ability to deliver on their commitments and contracted schedules, in part due to worldwide vessel scarcity. These risks could create knock-on effects, requiring future remobilisations to finish installation as well as potentially delayed revenues, extra costs, and other business case implications.

At 31 December 2023, these risks are still present, and assumptions and estimates in relation to these risks have been reassessed and taken into consideration in our impairment calculations. Further, our impairment tests are based on a probability-weighted assessment of the likelihood of these and other supply chain impacts. While we are taking mitigating actions to the extent possible, we continue to see risks, especially regarding vessel availability.

The effect from changes in supplier-related assumptions, including derived impacts on revenue and OPEX, has led to an impairment loss of DKK 17.8 billion and relates to our US offshore projects. The main part relates to Ocean Wind 1. Furthermore, we now assume a new installation approach with a longer timeline for Revolution Wind and Sunrise Wind.

Investment tax credit guidance
The 2022 Inflation Reduction Act (IRA) reaffirmed the existing 30% ITC for all US offshore projects. The IRA also made two additional 10% ITC bonus credits available to projects meeting 'domestic content' and 'energy community' criteria. Projects can qualify for one or both ITC bonus credits.

The US treasury has provided preliminary guidance on how ‘energy community’ and ‘domestic content’ requirements will be defined and implemented by the Internal Revenue Service (IRS), and which exemptions to the requirements may be allowed.

## Estimation uncertainty and sensitivity analyses

Due to the impairments recognised, estimation uncertainty exists on the assets impaired. The assumptions with major uncertainties include investment tax credits, interest rates, ORCE levels, and the discount rate.

The sensitivity analyses presented in the table show the related impact on impairment losses when a change in a given assumption increases or decreases the 'value-in-use' for our CGUs. The analyses are performed with all other assumptions unchanged.

We have included sensitivity analyses of impairment effects if WACC levels or assumptions related to ITC bonus credits change. The high probabilities for Revolution Wind and Sunrise Wind qualifying for the additional 10% ITC bonus credits are based on our assessment that the other assumptions related to Onshore wind fields as defined by the current 'energy community' guidance.

If WACC had increased by 50 basis points in the impairment test of e.g. Revolution Wind as of 31 December 2023, the impairment loss would have been DKK 0.6 billion higher.

If we had not included the probability-weighted additional 10% ITC bonus credits in the impairment test, the impairment loss of 31 December 2023, the impairment loss would have been DKK 1.0 billion higher.

## Impairment breakdown on balance sheet

The total impairment losses are recognised with DKK 19,282 million under 'Property, plant, and equipment' and DKK 7,493 million under 'Provisions' as 'Onerous contracts'.



## Impairments

Note 3.2 – continued

In our impairment testing, we have assumed a 95% probability of achieving an additional 10% ITC bonus credit for Revolution Wind and Sunrise Wind due to the brownfield status of both sites under the current 'energy community' guidance. These assumptions are unchanged compared to our expectations as of 30 September 2023 and 31 December 2022. However, for Ocean Wind 1, we reduced the probability of achieving an additional 10% ITC bonus credit from 95% at the end of 2022 to 15% as of 30 September 2023. As at 31 December 2023, Ocean Wind 1 is terminated, and the probability of achieving ITC is no longer relevant.

For the impairment testing in September, we changed our tax credit monetisation assumptions as a result of the deterioration of the business cases and our understanding of market conditions for third-party tax monetisation of US offshore wind ITCs. These changes, which were kept in December, had a negative impact on the recoverable amounts.

The effect from the change in assumptions related to achieving and monetising ITCs for offshore projects is included in the impairment loss with DKK 4.7 billion.

## Sunrise Wind OREc price

In 2019, Sunrise Wind signed a 25-year OREc purchase-and-sale agreement with the New York State Energy Research and Development Authority (NYSERDA), with an OREc strike price at USD 110 per MWh.
In June 2023, we submitted a petition to the state of New York to increase the OREc price by 27% to USD 140 per MWh due to significant cost and inflation increases since the agreement was entered into. This petition was denied by the state on 12 October 2023.

Following the rejected petition and the outcome of the New York 3 tender in October, the state of New York commenced a new solicitation for capacity with bid deadline on 25 January 2024. Together with our partner, we decided to rebid our Sunrise Wind project at a bid price level reflecting the current component and financing costs.

As a consequence of participating in the solicitation, the OREc awarded in 2019 is no longer valid, meaning that we will have a merchant project if we do not get an award. In our impairment test for Q4 2023, we have assumed a 75% probability of achieving an award, whereas we assumed a 50% probability of an award in the impairment test prepared in G3 2023.

The higher applied probability weighting is based on the evaluation criteria of the request for proposal (RFP), the size of the solicitation, a competitor analysis, and the price level we submitted.

If we get an award, the impairment loss will be reduced by approx. DKK 1.8 billion. If we do not get an award, the impairment loss will be approx. DKK 5.5 billion higher. These sensitivity analyses are performed with

## 5 Accounting policies

For the purpose of assessing impairment losses, Intangible assets, and "Property, plant, and equipment" are grouped at the level for which there are separately identifiable cash flows (cash-generating units (CCUs)).

CCUs are assessed for impairment whenever events or circumstances indicate that the carrying amount of an asset or group of assets exceeds its recoverable indication of impairment exists, an estimate of the asset's or CCUs' recoverable amount is made.

The value of a CCU is impaired if the net book value exceeds the recoverable amount, which is the higher of the estimated value-in-use and the fair value of the CCU. The recoverable amount calculations are based on management's expectations to future cash flows from financial forecasts and business plans and include a number of assumptions. The assumptions and estimates in the proposal is used for feedback and is based on a multiple analysis and discounted cash flow models, if a business case is available.

Estimating expected cash flows involves a number of assumptions, including the discount rate, future cash flows and assumptions for the forecast periods are CAPEX (including knock-on effects from supplier delays, etc.), inflation, terms of conditions in new power purchase agreements, possible renegotiations of existing ORECs (which do not have inflation indexation), eligibility for bonus ITCs, and tax equity arrangements or alternative ways of monetising the ITCs. All these key estimates and assumptions are determined specifically for each CCU.
The discount rate applied when calculating value-in-use takes general risks into account and is based on the weighted average cost of capital (WACC) after tax, whereas the estimated future cash flows are adjusted for risks specific to the asset. Estimated future cash flows are discounted using a nominal post-tax discount rate.

Impairment losses are recognised in the income statement and, except in the case of goodwill, reversed if there has been a change in the estimates used to determine the CCUs' recoverable amount. The reversal of impairment losses is recognised in income in the income statement net of depreciation if no impairment loss had been recognised for the CCU.



## Impairments

Note 3.2 – continued

all other assumptions unchanged. The outcome of the solicitation is expected in March.

## Increasing interest rates

The US long-dated interest rate has increased significantly during the last couple of years and took another increase of approx. 75 bps from 30 June to 30 September 2023, after which it decreased approx. 50 bps from 30 September to 31 December 2023.

The effect from the increase and subsequent decrease in the interest rate was asymmetrical, as we terminated the Ocean Wind 1 project on 31 October 2023. The net effect of the change in interest rate assumptions was an impairment of DKK 4.4 billion after reversing losses of DKK 1.9 billion compared to the recognised impairment loss in our interim financial report for the first nine months of 2023. These impairment losses relate to our US offshore and onshore projects.

Seabed value of Ocean Wind 1 and Skipjack Wind When estimating the recoverable amount of the seabed relates to Ocean Wind 1 and Skipjack Wind, we have used the approach 'fair value less costs of disposal' (FVCLD) to determine if the carrying amounts exceed the recoverable amounts.

We have used multiple analysis and discounted cash flow models where a business case is available to estimate the recoverable amount of the seabeds. These valuations are subject to significant uncertainties. There are limited transactions for seabeds in the market and limited auctions reflecting what a third party could obtain as a PPA (OREC) price in a re-bid or new tender under the current component and financing costs. Our assessments include comparisons with current merchant prices, such as the winning prices in the New York 3 round, multiples from the 2022 NY Bigg Bureau of Ocean Energy Management (BOEM) lease auction, and other relevant lease sales in the US, such as in North Carolina and California. The fair value measurements are categorised as level 3 of the fair value hierarchy.

## Potential consequences of further adverse development

In addition to the sensitivities described, further adverse developments may lead us to cease development of or reconfigure projects currently under development. Besides impairing the capitalised value of these projects, ceasing to develop projects could lead to compensation to suppliers or other stakeholders for cancelling contracts. Costs related to canceling contracts will be recognised as 'Other operating expenses' in our income statement (part of EBITDA) when the obligation arises, and to the extent these exceed already recognised onerous contracts.

## Impairment losses relating to intangible assets
We have not recognised any material impairment losses to goodwill or other intangible assets in 2023.

Goodwill primarily relates to Onshore Europe.

## Key accounting estimate

Key assumptions in impairment tests
Value-in-use calculations are based on management's expectations to future cash flows from financial budgets and forecasts and include a number of assumptions and estimates.

These assumptions include construction schedules, estimates of future market conditions, costs, assumptions and estimates of future activities, inflation, discount rates, useful lives of the projects, tax incentives, including the ability to qualify for tax credits from the US Inflation Reduction Act, etc.

The market prices applied are based on available information and are a period of up to five years and our best estimate of long-term prices for the remainder of the period.

As goodwill relates to greenfield onshore wind and solar development in Europe, an assumption included in the value-in-use calculations for goodwill is the ability to develop new sites. This assumption is based on current and future build-out plans for renewable energy in Europe.

While there are inherent uncertainties in the assumptions, the assumptions reflect management's best estimate over the lives of the Group's CCUs.



## Acquisition of enterprises

Note 3.3

<table><tr><td colspan="3">Cash flows used for acquisitions</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Fair value at time of acquisition:</td><td></td><td></td></tr><tr><td>Other intangible assets than goodwill</td><td>-</td><td>167</td></tr><tr><td>Property, plant, and equipment</td><td>-</td><td>2,342</td></tr><tr><td>Joint ventures</td><td>-</td><td>339</td></tr><tr><td>Contract assets and liabilities, net</td><td>-</td><td>(76)</td></tr><tr><td>Other receivables</td><td>-</td><td>1,000</td></tr><tr><td>Other receivables</td><td>-</td><td>73</td></tr><tr><td>Receivables from associates and joint ventures</td><td>-</td><td>174</td></tr><tr><td>Cash</td><td>-</td><td>432</td></tr><tr><td>Interest-bearing debt, excl. lease liabilities</td><td>-</td><td>(437)</td></tr><tr><td>Provisions</td><td>-</td><td>(10)</td></tr><tr><td>Deferred tax</td><td>-</td><td>-</td></tr><tr><td>Deferred tax</td><td>-</td><td>(525)</td></tr><tr><td>Other liabilities</td><td>-</td><td>(234)</td></tr><tr><td>Net assets acquired</td><td>-</td><td>2,380</td></tr><tr><td>Goodwill</td><td>-</td><td>1,718</td></tr><tr><td>Purchase price</td><td>-</td><td>4,098</td></tr><tr><td>Cash, available and acquired</td><td>-</td><td>(432)</td></tr><tr><td>Contingent consideration</td><td></td><td></td></tr><tr><td>Accrued purchase price</td><td>-</td><td>(260)</td></tr><tr><td>Cash flow used for acquisition of enterprises</td><td>-</td><td>3,406</td></tr><tr><td>Purchase price</td><td>-</td><td>4,091</td></tr><tr><td>Adjustments for cash</td><td>-</td><td>(432)</td></tr><tr><td>Adjustments for interest-bearing debt</td><td>-</td><td>437</td></tr><tr><td>Adjustments for other debt and net working capital items</td><td>-</td><td>(65)</td></tr><tr><td>Adjustments for cash, debt, and net working capital items in JVs</td><td>-</td><td>1,118</td></tr><tr><td>Enterprise value</td><td>-</td><td>5,149</td></tr></table>

## We had no acquisition of enterprises during 2023.

On 19 September 2022, we acquired Ostwind, a German and French onshore wind platform. The acquisition of Ostwind constituted Ørsted's entry into the sizeable and growing German and French onshore markets and substantially expanded Ørsted's onshore footprint in Europe.

During 2023, the opening balances for Ostwind have been finalised without any adjustments to the provisional opening balances.

## § Accounting policies

Acquisition of enterprises is recognised using the acquisition method. Under this method, assets and liabilities as well as contingent liabilities of the acquired enterprise are measured at fair value on the date of acquisition.

The fair values of production assets and assets under construction are normally determined by reference to the purchase price. The value of valued at present value based on the expected cash flows they can generate, including any non-separable power purchase agreements, and on income, such as production tax credits.

The fair value of derivatives is determined using the valuation model specified in note 1. The value is based on market prices or expectations for prices over the term of the derivatives.

The fair values of other assets and liabilities are valued using the approach we find most relevant for the individual item, which can be either a market approach, an income approach, or a cost approach.

The fair value of enterprises is included in the on-soldated financial statements from the date of acquisition, which is the date when we obtain control.

When an acquired enterprise has entered into a power purchase agreement classified as a derivative, the fair value of the agreement is used, will be included in the opening balances. Post-acquisition, this fair value is recognised as an adjustment to revenue over the duration of the contract, based on the fair value calculation at the time of the acquisition.



## Inventories

Note 3.4

<table><tr><td>Inventories</td><td></td><td></td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Offshore transmission assets</td><td>3,944</td><td>5,119</td></tr><tr><td>Biomass</td><td>928</td><td>778</td></tr><tr><td>Cool</td><td>566</td><td>1,169</td></tr><tr><td>Gas</td><td>2,167</td><td>4,557</td></tr><tr><td>Oil</td><td>339</td><td>354</td></tr><tr><td>Green certificates</td><td>0</td><td>20,209</td></tr><tr><td>Carbon emission allowances (purchased)</td><td>213</td><td>0</td></tr><tr><td>Other</td><td>11</td><td>24</td></tr><tr><td>Total inventories</td><td>10,539</td><td>14,103</td></tr><tr><td>Inventories recognised as an expense in &#x27;Cost of sales&#x27; during the year</td><td>9,626</td><td>15,427</td></tr></table>

Inventories measured at fair value are disclosed in note 6.6.6 Fair value measurement.

‘Offshore transmission assets’ relates to the Hornsea 3 transmission asset. The remaining 50% of the Hornsea 2 transmission asset was divested in 2023.

‘Gas’ primarily relates to our gas trade activities.

‘Green certificates’ are primarily renewable obligation certificates (ROCs), which are issued to renewable energy power generators in the UK.

## § Accounting policies

Offshore transmission assets are recognised as inventory until divestment and measured at cost. The costs comprise costs of materials used in construction, site labour costs, costs of renting equipment as well as indirect production costs, such as employee costs.

Gas storage in non-Danish facilities are managed as inventory. The cost of gas storage facilities is recognised at fair value less costs to sell. Changes in the fair value less costs to sell are recognised in cost of sales in the period of the change.

Gas in Danish storage facilities are recognised at cost, determined as a weighted average of the previous month's purchase price, including transport costs.

Purchased carbon emission allowances are measured at market value.

Green certificates, which we earn by generating power using renewable energy sources, are recognised in inventories in step with our generation. We measure green certificates (earned and bought) at cost using the first-in, first-out (FIFO) principle.

Other inventories are measured at cost, determined on a first-in, first-out basis (e.g. for coal and biomass) or by net realisable value, if net realisable value is lower.

Inventories are written down to the lower of net realisable value and cost price. For offshore transmission assets, it is the expected final transfer value announced by Ofgem.

The net realisable value is the sum (discounted) which the inventories are expected to generate through a normal sale.



## Contract assets and liabilities

Note 3.5

<table><tr><td colspan="3">Revenue from contracts with customers</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Revenue included in contract liabilities at the beginning of the year</td><td>(6)</td><td>21</td></tr><tr><td>Revenue from performance obligations satisfied in previous years</td><td>(592)</td><td>(471)</td></tr><tr><td colspan="3">Contract balances</td></tr><tr><td colspan="3">DKKm</td></tr><tr><td colspan="3">Contract assets</td></tr><tr><td>Current contract assets</td><td>802</td><td>408</td></tr><tr><td>Total contract assets</td><td>802</td><td>408</td></tr><tr><td colspan="3">Contract liabilities</td></tr><tr><td>Non-current contract liabilities</td><td>3,297</td><td>3,085</td></tr><tr><td>Current contract liabilities</td><td>2,785</td><td>2,269</td></tr><tr><td>Total contract liabilities</td><td>6,082</td><td>3,354</td></tr></table>

The table shows the amount of our revenue relating to contract liabilities carried forward (as prepayments and deferred revenue) and the amount relating to performance obligations satisfied in a prior year (e.g. renegotiations or constraints on variable considerations that are not recognised until they are highly probable).

## Contract assets and contract liabilities primarily related to:

- the construction of offshore wind farms with partners, with each party typically owning 50% of the offshore wind farm

• prepayments from heat customers.

Our contract assets primarily related to the construction of Greater Changhua 1.

At the end of 2023, current contract liabilities related to the construction of Borkum Riffgrund 3 and Gode Wind 3. Non-current contract liabilities primarily related to prepayments from heat customers.

At the end of 2022, contract liabilities related to the construction of Borkum Riffgrund 3.

## § Accounting policies

We recognise a contract asset when we perform a service or transfer goods in advance of receiving consideration, and the consideration is conditional. When the consideration is unconditional, and the goods or services are delivered, we recognise a receivable. An obligation is a consideration if unconditional if only the passage of time is required before the payment is due.

Contract assets are measured at the transaction price of the goods delivered or services performed less invoicing on account.

We recognise a contract liability when the invoicing on account and expected losses exceed the transaction price of the goods or services transferred to our customer.



## Trade receivables

Note 3.6

## Supply chain finance

Note 3.7

<table><tr><td colspan="3">Trade receivables</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Trade receivables, not due</td><td>10,480</td><td>11,025</td></tr><tr><td>Trade receivables, 1-30 days overdue</td><td>291</td><td>892</td></tr><tr><td>Trade receivables, more than 30 days overdue</td><td>358</td><td>835</td></tr><tr><td>Trade receivables, write-downs</td><td>(22)</td><td>(51)</td></tr><tr><td>Total trade receivables</td><td>11,107</td><td>12,701</td></tr></table>

We continuously perform credit ratings of our customers. For customers with a general credit risk, a write-down of 0-1% is carried out on initial recognition.

In 2023, we have written-down a loan given to support US suppliers in the amount of DKK 571 million, which we do not expect to recover after the termination of Ocean Wind 1 and 2. Except for this, we have not made any write-downs of receivables in 2023 or 2022.

Reversal of write-downs was DKK 29 million.

## $ Accounting policies

We keep our receivables until maturity, and therefore, they are measured at amortised cost.

Write-downs are carried out from initial recognition of our receivables. The write-down is calculated as the difference between the carrying amount of the receivable and the net present value of expected future cash flows from the receivable. The discount rate used is the effective interest rate for the individual receivable or the individual portfolio.

We apply the simplified approach to the write-down of trade receivables, which permits calculating the write-down as the full loss during the entire term of the receivable.

<table><tr><td rowspan="2"></td><td colspan="3">2023</td><td>2022</td></tr><tr><td>Supply chain finance – liabilities paid by supplier finance banks DKKm</td><td>Recognised in balance sheet</td><td>Of which is paid by supplier finance banks</td><td>Recognised in balance sheet</td></tr><tr><td>Trade payables</td><td>14,915</td><td>1,571</td><td>20,641</td><td>482</td></tr></table>

We have entered into supply chain finance agreements with a limited number of suppliers. This provides the supplier with the possibility of requesting the participating bank to pay the invoice before our due date.

We expect that more of our suppliers will make use of supply chain finance in the future.
'Trade payables', to which supplier financing is offered, retain their classification in our balance sheet.

Liabilities that are part of supply chain finance are due 120-180 days after invoice date. Comparable liabilities that are not part of supply chain finance are due up to 90 days after invoice date.



## Other receivables and other payables

Note 3.6

<table><tr><td>Other receivables</td><td></td><td></td></tr><tr><td>DK/m</td><td>2023</td><td>2022</td></tr><tr><td>Receivables from the divestment of assets and enterprises</td><td>1,472</td><td>7,644</td></tr><tr><td>Receivables from the divestment of equity investments to non-controlling interests</td><td>735</td><td>713</td></tr><tr><td>Collateral provided \( ^{1} \)</td><td>4,773</td><td>5,888</td></tr><tr><td>Cash, not available for use</td><td>481</td><td>2,471</td></tr><tr><td>VAT and other indirect tax receivables</td><td>1,640</td><td>1,392</td></tr><tr><td>Prepayments</td><td>1,640</td><td>1,392</td></tr><tr><td>Deposits</td><td>308</td><td>624</td></tr><tr><td>Other</td><td>2,990</td><td>3,930</td></tr><tr><td>Total other receivables</td><td>13,664</td><td>23,532</td></tr><tr><td>Of which, working capital</td><td>6,739</td><td>9,896</td></tr><tr><td>Of which, other capital employed</td><td>1,847</td><td>7,876</td></tr><tr><td>Of which, interest-bearing net debt</td><td>5,078</td><td>5,760</td></tr><tr><td>Other payables</td><td></td><td></td></tr><tr><td>DK/m</td><td></td><td></td></tr><tr><td>M&amp;A related liabilities</td><td>2,753</td><td>4,203</td></tr><tr><td>Payables related to the divestment of assets \( ^{2} \)</td><td>2,900</td><td>2,904</td></tr><tr><td>Accrued interest</td><td>3,097</td><td>2,358</td></tr><tr><td>Collateral received \( ^{3} \)</td><td>287</td><td>1,184</td></tr><tr><td>Salary-related items payable</td><td>844</td><td>671</td></tr><tr><td>VAT and other indirect taxes payable</td><td>535</td><td>593</td></tr><tr><td>Other deferred income</td><td>104</td><td>345</td></tr><tr><td>Other</td><td>1,978</td><td>2,623</td></tr><tr><td>Total other payables</td><td>12,498</td><td>14,881</td></tr><tr><td>Of which, working capital</td><td>3,306</td><td>3,384</td></tr><tr><td>Of which, other capital employed</td><td>5,854</td><td>6,574</td></tr><tr><td>Of which, interest-bearing net debt</td><td>3,336</td><td>4,923</td></tr></table>

 \( ^{1} \)  The collateral provided by the Group is receivables from banks in connection with hedging activities.

 \( ^{2} \)  Mainly related to the divestment of a portfolio of four onshore projects.

 \( ^{3} \)  The collateral received by the Group is cash received from banks in connection with the hedging of derivatives.



## Tax equity liabilities

Note 3.9

<table><tr><td colspan="3">Tax equity liabilities</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Balance at 1 January</td><td>16,393</td><td>14,564</td></tr><tr><td>Contribution received from tax equity partners</td><td>2,942</td><td>1,945</td></tr><tr><td>Additions from acquisitions</td><td>-</td><td>643</td></tr><tr><td>Tax attributes and PTC/ITCs recognised in other operating income</td><td>(2,531)</td><td>(2,521)</td></tr><tr><td>Cash paid to tax equity partners</td><td>(219)</td><td>(301)</td></tr><tr><td>Tax equity partner&#x27;s contractual return</td><td>(1,200)</td><td>(1,200)</td></tr><tr><td>Exchange rate adjustments</td><td>(543)</td><td>929</td></tr><tr><td>Balance at 31 December</td><td>17,007</td><td>16,393</td></tr><tr><td>Of which, working capital</td><td>15,811</td><td>15,157</td></tr><tr><td>Of which, interest-bearing debt</td><td>1,196</td><td>1,236</td></tr></table>

In the US, we have fifteen operational wind and solar farms with tax equity partners. During 2023, we commissioned the onshore wind farm Sunflower, and we received a tax equity contribution from our partner for this project. We also received a tax equity contribution related to our offshore wind farm South Fork, which is still under construction.

## Description of tax equity partnerships

Tax equity partnerships are characterised by a tax equity partner, who contributes an upfront payment as part of the initial project investment and generally does not have an operational role in the project. The partner receives a contractually agreed return on the contribution. In order to ‘repay’ the initial contribution and the return, a disproportionate share of the production tax credits (PTCs) or the investment tax credits (ITCs) and other tax attributes (accelerated tax depreciation and other taxable results) are allocated to the partner during the first part of the project’s lifetime. The partner also receives some cash payment-based percentages specified in the partnership agreements. Once the partner receives the agreed return, the agreement flips, and the partner is typically entitled to a minor part of the cash distributions from the project, unless we repurchase this right from them, which is highly likely.
5 Accounting policies

Due to the operational and financial nature of the tax equity partnership, we normally have the power to effect relevant activities and make decisions for the projects as the managing partner in the agreements. Therefore, we normally fully consolidate companies that have tax equity partners.

The tax equity contribution generally has the characteristics of a liability as the initial contribution is repaid, including an agreed return, and the partner does not share in the risks of the project in the same way as a shareholder.

As such, the contribution is accounted for as a liability and measured at amortised cost. The liability is based on the expected method of repayment and is divided into:

- a net working capital element to be repaid in the first half of the project, and
- an interest-bearing debt element expected to be repaid through cash distributions.

The partner’s agreed return is expensed as a financial expense and is recognised as an increase of the tax equity liability. PTCs, ITCs and other tax attributes transferred to the tax equity partner are recognised as other operating income. PTCs are recognised in the periods earned, while ITCs and other tax attributes are recognised on a straight-line basis. The amortised contractual length of the partnership.

In addition to the above, we recognise a liability for the expected purchase price for the partner's post-flip rights to cash distributions. This liability is recognised as a financial liability. The partner is expensed as a financial item. This recognition reflects the intention and high likelihood that we will purchase the partner's post-flip rights, and they are part of the financial costs of the arrangement.

## 6 Key accounting judgement

## Recognition of tax equity partnerships

On formation of a tax equity partnership, we assess the appropriate recognition of the partner's contribution as well as the method of recognition for the elements used to repay the partner, such as PTCs, ITCs, and tax attributes.

When assessing the recognition of the partner's contribution, we look at:

- the expected flows of PTCs/ITCs, tax attributes, and cash payments to the partner
- the cash obligations of both us and the tax equity partner.

The deferral of the income related to tax attributes and the recognition of the contribution as working capital or interest-bearing debt are effected by our expectation to the size, method, and timing of repayments.

## Government support in the US

In the US, PTCs, ITCs, and other tax attributes are used to incentivise investment in renewable energy assets – similar to subsidies in other countries.



## Provisions and contingent liabilities

Note 3.10

<table><tr><td rowspan="2"></td><td colspan="7">2023</td><td colspan="2">2022</td></tr><tr><td>Provisions
DKHm</td><td>Decom-
missioning
obligations</td><td>Onerous
contracts</td><td>Other
provisions</td><td>Total</td><td>Decom-
missioning
obligations</td><td>Onerous
contracts</td><td>Oth
provisions</td><td>Total</td></tr><tr><td>Provisions at 1 January</td><td></td><td>14,076</td><td>280</td><td>5,350</td><td>19,706</td><td>8,651</td><td>866</td><td>6,171</td><td>15,868</td></tr><tr><td>Exchange rate adjustments</td><td></td><td>62</td><td>(675)</td><td>11</td><td>(602)</td><td>(203)</td><td>(5)</td><td>(41)</td><td>(249)</td></tr><tr><td>Foreign exchange differences</td><td></td><td>(50)</td><td>(4,206)</td><td>-</td><td>(4,206)</td><td>-</td><td>(1,500)</td><td>(1,500)</td><td>(1,500)</td></tr><tr><td>Provisions reversed during the year</td><td></td><td>-</td><td>-</td><td>(1,447)</td><td>(1,447)</td><td>-</td><td>(300)</td><td>(1,359)</td><td>(1,659)</td></tr><tr><td>Provisions made during the year</td><td></td><td>526</td><td>20,246</td><td>1,150</td><td>21,922</td><td>832</td><td>1</td><td>1,662</td><td>2,495</td></tr><tr><td>Disposals</td><td></td><td>(349)</td><td>-</td><td>(12)</td><td>(361)</td><td>(376)</td><td>-</td><td>-</td><td>(376)</td></tr><tr><td>Additions on acquisition of enterprises</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>33</td><td>-</td><td>-</td><td>33</td></tr><tr><td>Divestment of enterprises</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(35)</td></tr><tr><td>Change in estimates</td><td></td><td>(1,790)</td><td>-</td><td>-</td><td>-</td><td>(1,790)</td><td>4,087</td><td>-</td><td>4,087</td></tr><tr><td>Transferred to or from assets and liabilities classified as held for sale</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>414</td><td>-</td><td>-</td><td>414</td></tr><tr><td>Interest element of provisions</td><td></td><td>482</td><td>9</td><td>4</td><td>495</td><td>438</td><td>22</td><td>-</td><td>460</td></tr><tr><td>Total provisions at 31 December</td><td></td><td>12,977</td><td>15,654</td><td>4,232</td><td>32,863</td><td>14,076</td><td>280</td><td>5,350</td><td>19,706</td></tr><tr><td>Falling due as follows:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In O-1 year</td><td></td><td>250</td><td>15,007</td><td>698</td><td>15,955</td><td>217</td><td>31</td><td>337</td><td>585</td></tr><tr><td>In 1-5 years</td><td></td><td>1,499</td><td>536</td><td>3,350</td><td>5,385</td><td>1,798</td><td>154</td><td>4,632</td><td>6,584</td></tr><tr><td>After 5 years</td><td></td><td>11,228</td><td>111</td><td>164</td><td>11,523</td><td>12,061</td><td>95</td><td>361</td><td>12,537</td></tr><tr><td>Decommissioning obligations by segment</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DKHm</td><td>0-5 years</td><td>5-10 years</td><td>10-20 years</td><td>After 20 years</td><td>2023</td><td>2022</td><td></td><td></td><td></td></tr><tr><td>Offshore</td><td>1,160</td><td>2,544</td><td>2,833</td><td>2,303</td><td>8,840</td><td>10,233</td><td></td><td></td><td></td></tr><tr><td>Onshore</td><td>-</td><td>-</td><td>42</td><td>2,020</td><td>2,062</td><td>1,769</td><td></td><td></td><td></td></tr><tr><td>Bioenergy &amp; Other</td><td>589</td><td>260</td><td>204</td><td>1,022</td><td>2,075</td><td>2,074</td><td></td><td></td><td></td></tr><tr><td>Total</td><td>1,749</td><td>2,804</td><td>3,079</td><td>5,345</td><td>12,977</td><td>14,076</td><td></td><td></td><td></td></tr></table>

## Decommissioning obligations

Decommissioning obligations comprise estimated expenses relating to decommissioning and disposal of our offshore wind, onshore wind, and solar farms, the restoration of seabeds, the decommissioning of our CHP plants, the Nybro gas plant, and our oil and gas pipes.

We are obliged to decommission our wind and solar farms and restore the surroundings. When we construct offshore wind farms in cooperation with partners, they are liable for their share of the decommissioning costs. Therefore, we have only included the decommissioning obligations associated with our ownership interest in the offshore wind farms.

## Other provisions

Other provisions comprise primarily:

• offshore partnership provisions, including warranty obligations

• obligations in relation to the divestment of our oil and gas business in 2017

• obligations in respect of our own carbon emissions
• other contractual obligations.



## Provisions and contingent liabilities
Note 3.10 – continued

## Onerous contracts

Onerous contracts primarily relate to ceasing the development of Ocean Wind 1 where we have a provision of DKK 15 billion at the end of 2023. The provision relates to cancellation fees on contracts and has been recognised in two steps.

First, as on anorous contract provision as part of the impairment of Ocean Wind 1 in the interim financial report for the first nine months of 2023 (CAPEX provision), net of investments incurred on the project up until it was terminated on 1 November.

Secondly, a further provision was recognised at year-end ("Other operating expenses" provision) to cover cancellation fees not covered by the provision on 30 September 2023.

As a result, a total of DKK 9.6 billion was recognised in "Other operating expenses", with the remaining amount being recognised in "Impairment losses on intangible assets, and property, plant and equipment".

'Used during the year' primarily relates to CAPEX spent on construction of Ocean Wind 1 until the termination of the project and other costs associated with terminating the project. 'Used during the year' also relates to CAPEX spent on the construction of Sunrise Wind.
When measuring the provision for 'Onerous contracts' related to the cancellation fees, we have assessed the contracts related to the Ocean Wind 1 project. This assessment has included an evaluation of the contractual terms, including whether the contracts will be terminated for cause or convenience, and the expected costs of fulfilling or cancelling the contracts.

The most significant contracts relate to the construction and installation of wind turbine generators, export cable systems, fabrication and construction of pipes and foundations, offshore and onshore substations, and other contractual agreements for transportation, mobilisation, and installation of components.

The assessment also includes an evaluation of the possibilities of reusing or selling certain project development assets and reselling the seabed lease to a third party. We expect to reuse the export cables for another offshore wind farm project, which is reflected in the provision.

The measurement of the total provision is impacted by significant estimates and judgements and depends on negotiations with subcontractors and contractual partners. As of 31 December 2023, we have only agreed on settlement of a small portion of the contracts' value. While the recognised provision is management's best estimate, the outcome could deviate materially.

## § Accounting policies

Provisions are recognised when the following criteria are fulfilled:

• We have a legal or constructive obligation as a result of an order event.
• The settlement of the obligation is expected to result in an outflow of resources.
• The obligation can be measured reliably.

Decommissioning obligations are measured at the present value of the future liability in respect of decommissioning as expected at the balance sheet date. The present value of the provision is determined by discounting the present value of the cost of property, plant, and equipment and depreciated together with the associated asset. The discount rate is determined by the market rate in the income statement under financial expenses.

For onerous contracts, a provision is made when the expected income to be derived from a contract is lower than the unavoidable cost of meeting our obligations under the contract.

Provisions concerning carbon emissions are recognised when our actual emissions exceed our holding of carbon emission allowances.

## p Key accounting estimate

## Assumptions for provisions

We continually assess our provisions recognised to cover contractual obligations and claims raised against Ørsted. Timing, probabilities, amounts, etc., which have a bearing on our provisions' estimates, are updated quarterly based on our expectations.

Estimates of provisions are based on our expectations of, for example:

• timing and scope of obligation
• future cost level
• discount rate

If deemed material, non-current provisions are discounted using either the structural risk-free interest rate or the incremental borrowing rate. The structural risk-free interest rate is used for decommissioning liabilities and onerous contracts. It is calculated as the sum of real return (gross domestic product growth rate), inflation, and inflation adjustment for other risks. Separate structural risk-free interest rates are calculated for Europe, the UK, the US, and Taiwan.

The outcome of our contractual obligations and claims may depend on future events, which are uncertain and uncertain.

Key assumptions in estimating cancellation fees
Measuring the provision for 'Onerous contracts' related to cancellation fees for Ocean Wind 1 is based on the current market conditions, including estimates and judgements. On contract level, we have assessed the contractual terms and obligations, including the expected costs of fulfilling or cancelling the contract, and the likelihood of cancellations on evaluation of the possibilities of reusing or selling certain project development assets and reselling of the seabed lease to a third party.

To a high degree, the estimation of the total provision is based on the current market conditions and contractual partners, which impact the settlement of individual contracts. The measuring and estimation of the total provision for 'Onerous contracts' is based on management's expectations and best estimate of total costs.



## Provisions and contingent liabilities
Note 3.10 – continued

## Contingent liabilities

## Liability to pay compensation

In case of any environmental accidents or other types of damage caused by our gas and oil transport, the companies Ørsted Salg & Service A/S and Danish Oil Pipe A/S are liable to pay compensation according to legislation. This also applies if there is no proof of negligence (strict liability). We have taken out insurance to cover any such claims.

## Secondary liability

As part of the divestment of our oil and gas business in 2017, we assumed a secondary liability regarding the decommissioning of offshore installations.

## Litigation

We are party to a number of court cases and legal disputes. In our assessment, none of these will significantly impact Ørsted's financial position, neither individually nor collectively.

We have been party to actions relating to the Danish competition authorities' claim that the former Elsam A/S and Elsam Kraft A/S ('Elsam'), now part of Ørsted, charged excessive prices in the Danish wholesale power market in the period 1 July 2003 to 31 December 2006. There are no longer any outstanding cases with the competition authorities claiming Elsam infringed competition law, but in connection with the former cases, some energy trading companies, some of their customers, and others have filed claims for damages, which are still pending. The biggest claim was filed in 2007 before the Copenhagen Maritime & Commercial Court, amounting to approx. DKK 4.4 billion with addition of litigation interest. The case is at the moment under preparation for the Maritime & Commercial Court.

Ørsted is involved in ongoing transfer pricing disputes. For further information, we refer to section 4.1 "Approach to taxes".

## Change of control

Some of our activities are subject to consents, permits, and licences granted by public authorities. We may be faced with a claim for acceptance of any transfer, possibly with additional terms and conditions, if the Danish state holds less than 50% of the share capital or voting rights in Ørsted A/S. Read more in note 5.1 "Interest-bearing net debt and FFO".



## Non-controlling interests

Note 3.11

<table><tr><td rowspan="2"></td><td colspan="3">Gunfleet Sands Holding Ltd. Group</td><td colspan="2">Walney (UK) Offshore Windfors Ltd.</td><td colspan="2">Ocean Wind JV Holco LLC</td></tr><tr><td>2023</td><td>2022</td><td>2023</td><td>2022</td><td>2023</td><td>2022</td><td>2023</td></tr><tr><td>Non-controlling interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DKkm</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Statement of comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue</td><td>564</td><td>518</td><td>1,462</td><td>1,348</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Cost</td><td>318</td><td>317</td><td>775</td><td>608</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Profit (loss) for the year</td><td>65</td><td>70</td><td>215</td><td>76</td><td>-</td><td>-</td><td>(21)</td></tr><tr><td>Total comprehensive income</td><td>93</td><td>4</td><td>298</td><td>(1,13)</td><td>-</td><td>-</td><td>2</td></tr><tr><td>Profit (loss) for the year attributable to non-controlling interests</td><td>32</td><td>35</td><td>108</td><td>38</td><td>-</td><td>-</td><td>(5)</td></tr><tr><td>Balance sheet</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Non-current assets</td><td>1,376</td><td>1,582</td><td>3,778</td><td>4,424</td><td>-</td><td>-</td><td>8,234</td></tr><tr><td>Current assets</td><td>1,176</td><td>1,192</td><td>3,778</td><td>4,424</td><td>-</td><td>-</td><td>8,234</td></tr><tr><td>Non-current liabilities</td><td>536</td><td>607</td><td>1,072</td><td>1,352</td><td>-</td><td>-</td><td>310</td></tr><tr><td>Current liabilities</td><td>135</td><td>58</td><td>235</td><td>290</td><td>-</td><td>-</td><td>908</td></tr><tr><td>Carrying amount of non-controlling interests</td><td>454</td><td>543</td><td>1,402</td><td>1,570</td><td>-</td><td>-</td><td>1,843</td></tr><tr><td>Statement of cash flows</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash flows from operating activities</td><td>360</td><td>246</td><td>597</td><td>544</td><td>-</td><td>-</td><td>93</td></tr><tr><td>Cash flows from investing activities</td><td>(61)</td><td>-</td><td>(8)</td><td>(29)</td><td>-</td><td>-</td><td>(5,710)</td></tr><tr><td>Cash flows from financing activities</td><td>(275)</td><td>(261)</td><td>(647)</td><td>(413)</td><td>-</td><td>-</td><td>5,830</td></tr><tr><td>- of which, dividends paid to non-controlling interests</td><td>(135)</td><td>(128)</td><td>(278)</td><td>(156)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Transactions with non-controlling interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DKkm</td><td>2023</td><td>2022</td><td>Subsidaries with significant non-controlling interests \( ^{1} \)</td><td>Non-controlling interest</td><td>Registered office</td><td></td><td></td></tr><tr><td>Transactions with non-controlling interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Dividends paid to non-controlling interests</td><td>(413)</td><td>(294)</td><td>Gunfleet Sands Holding Ltd.</td><td>49.9%</td><td>London, UK</td><td></td><td></td></tr><tr><td>Dividends paid to non-controlling interests</td><td>(7,032)</td><td>-</td><td>Walney (UK) Offshore Windfors Ltd.</td><td>49.9%</td><td>London, UK</td><td></td><td></td></tr><tr><td>Divestment of equity investments to non-controlling interests</td><td>(153)</td><td>3</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other capital transactions with non-controlling interests</td><td>537</td><td>1,461</td><td>1</td><td></td><td></td><td></td><td></td></tr><tr><td>Total transactions, cf. statement of cash flows</td><td>(7,061)</td><td>1,170</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Divestment of equity investments to non-controlling interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Changes in receivables relating to the acquisition and divestment of non-controlling interests</td><td>(7,185)</td><td>3</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash selling price, total</td><td>(7,185)</td><td>3</td><td></td><td></td><td></td><td></td><td></td><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></tr></table>

In the table, we provide financial information for subsidiaries with significant non-controlling interests. The amounts stated are the consolidated accounting figures of the individual enterprises or groups, determined according to our accounting policies. Amounts are stated before intra-group eliminations.

In the table, we provide financial information for subsidiaries with significant non-controlling interests. The amounts stated are the consolidated accounting figures of the individual enterprises or groups, determined according to our accounting policies. Amounts are stated before intra-group eliminations.

In 2023, we acquired the remaining 25% equity stake in Ocean Wind JV Holco LLC. The acquisition provided Drs'net with 100% ownership of Ocean Wind JV Holco LLC. Hence, financial information is only provided for 2023.

In 2023, we also acquired the remaining 50% equity stakes in Bay State Wind LLC and BSW Projectco LLC (Lease Area 500), respectively. Subsidiaries with immaterial non-controlling interests.



## Tax
Note 4

The Group’s taxes reflect our business operations and applicable tax legislation in the countries where we operate.
Development in current and deferred tax asset and liabilities (tax, net), 2022-2023
DKKm

Tax, net asset
Tax on profit (loss) for the year
Tax on other comprehensive income
Corporate taxes paid
Other effects



Corporate income tax paid by segment, 2023
DKKm

Offshore
Onshore
Biotechnology & Other
O'Rsted A/S and other activities
Total



## 2.7 bn

Corporate income tax paid by the Group in 2023 totalled DK 2,717 million against DK 1,263 million in 2022.

## 2.9 bn

Current corporate income tax in 2023 totalled DK 2,876 million against DK 2,906 million in 2022.

## 7.9 bn

Our total tax contribution in 2023 totalled DK 7,887 million against DK 6,500 million in 2022.

## -6%

Effective tax rate for the Group for 2023 was -6% against 15% in 2022.



'Other adjustments' include changes in tax rates, movements in uncertain tax positions, tax concerning previous years, and unrecognised tax losses. Impairment and cancellation fees are primarily related to the termination of the Ocean Wind 1 project.



## Approach to taxes
Note 4.1

At Ørsted, we want to provide user-friendly and transparent information about our global tax positions.

We are committed to paying the right amount of tax, at the right time, in the right place – in accordance with the tax laws of the countries where we operate. We seek to comply not only with the letter of the law but also with the underlying tax policy intent.

We believe that taxes are a core part of our corporate social responsibility.

We are committed to conducting our business in a way that contributes to the United Nations' Sustainable Development Goals (SDGs). Taxes are a key contribution to the SDGs, in particular target 16.6 on the development of effective, accountable, and transparent institutions.

For more details on our approach to taxes, we refer to our tax policy, which can be found here: orsted.com/tax-policy.

## Transparency and sustainability

We continue to report with inspiration from the GRI (Global Reporting Initiative) 207: Tax standard when presenting our approach to and reporting of tax. The purpose of our transparency initiatives is to create certainty around our tax positions for our stakeholders, such as investors and the local communities where we pay our taxes, and where we operate.
In line with our tax policy, we engage constructively in national and international dialogue with governments, business groups, and civil society to support the development of effective tax systems, legislation, and administration. We believe that by providing relevant and constructive input, we can contribute to an informed discussion around taxes and tax policy. The purpose of our engagement is to promote the development of tax regimes that support the green transformation.

During 2023, we have submitted two responses to public consultations by the OECD on Pillar 2 as well as offered our perspectives in a panel debate arranged by OECD on simplification of the Pillar 2 rules. Further, we have provided our responses on several public consultations in the US pertaining to the implementation of and guidance to the Inflation Reduction Act. To promote responsible tax practices, we are engaging with CSR Europe on developing a European index for responsible tax practices. Further, we participated in several panel debates, including at the Danish people's meeting, 'Folkemødet', in Denmark, with a view to promoting responsible tax practices.

In connection with the national implementation of the European revenue cap, we have engaged in discussions with the governments in Denmark, Germany, and the Netherlands, offering our industry insights on the workings of the power markets as well as hedging profiles of large integrated energy companies. Similarly, we have participated in discussions with the UK government in respect of the adoption and implementation of the UK Electricity Generator Levy, referred to as windfall taxes. Due to declining power prices, the windfall tax regimes have not impacted us significantly.

By engaging with civil society and gathering input on, for example, how we share information, we believe we can contribute to increasing the public's confidence in the corporate tax system.

As a testament to our progressive and transparent approach to tax we have, besides being Fair Tax Mark accredited for the second year running, achieved an overall tax compliance risk management rating of 'low' by HMR Revenue & Customs (the UK) in the Business Risk Review (BRR-1).

## Pillar 2

In December 2021, OECD released the Pillar 2 model rules to reform international corporate taxation. The key purpose of these rules is to ensure that large multinational groups (defined by having a global revenue exceeding EUR 750 million) are subject to a minimum effective tax rate of 15%. The rules will have to be implemented in national legislation in all individual countries that decide to adopt them. Many countries, including Denmark where the ultimate parent company of the Ørsted Group is headquartered, have already implemented the rules.



## UN SDG (no. 16)

We are transparent about our approach to tax. We actively participate in the development of effective, accountable, and transparent legislation by our engagement with the OECD on Pillar 2.

## B

We endorse the B Team Responsible Tax Principles. The B Team is a group of business leaders, working to redefine the culture of accountability in business, for example by focusing on the role of senior operations by creating and cascading new norms of corporate leadership that can build a better world.

## IRSB 4400

AUP on application of GRI 207: Tax
We have drawn inspiration from the GRI 207: Tax standard when presenting our approach to and reporting of tax. The GRI 207: Tax standard is a key part of a statement (IRSB 4400 – Agreed Upon Procedures/AUP) from our auditors on our application of GRI 207: Tax.

## Fair Tax \( ^{®} \) 

The Fair Tax Mark accreditation scheme seeks to encourage and recognise businesses that pay the right amount of corporation tax at the right time and in the right place. We seek to pay tax responsibly and transparently and are proud to have qualified for the Fair Tax Mark in 2022 and again in 2023.



## Approach to taxes

Note 4.1 – continued

Based on initial analysis of our 2023 figures and 2024 forecast, we expect to benefit from the temporary safe harbour rules in all of the jurisdictions where we operate.

## Tax governance

Taxes are overseen by the Board of Directors, and within the Board, the Chair of the Audit & Risk Committee is accountable for our tax policy. The responsibility for tax risk management lies with the CFO and is overseen by the Audit & Risk Committee. The day-to-day tax management is handled by a centralised global tax team.

Our tax function is involved in the planning, implementation, and documentation of all significant business decisions and processes to ensure a coordinated assessment of all tax compliance and risks. The tax function also regularly monitors and updates tax risks and related controls.

Complying with tax rules can be complex, as the interpretation of legislation and case law may not always be clear cut and may change over time, giving rise to tax risks. We have implemented a governance framework, which ensures appropriate processes and organisational structures to identify, assess, monitor, and manage tax risks at different levels of the Group. We manage our tax risks by preventing unnecessary disputes, which we strive to achieve through strong technical positions, thorough documentation and explanations of our positions, robust compliance procedures, and by engaging in up-front dialogues with tax authorities.
We define a tax risk as any consequence relating to the application of our tax policy, day-to-day operations, compliance, or external reporting that impacts the business in the form of cash liabilities, financial reporting misstatements, or reputational damage. We continuously update our tax control framework to ensure that we are aligned with business objectives and stakeholder expectations.

We have a standardised review process in place, and our controls are continuously reviewed, assessed, and, where applicable, substituted by automated processes. Tax decisions in relation to matters which are subject to approval by the Group Executive Team or the Board of Directors are approved by the Head of Tax.

Our tax risk management work includes considering uncertain tax positions, e.g. when we have taken a position where there is an uncertainty created by a comparison of the wording of the law, the expressed policy intent or lack thereof, or fluctuating or divergent application by tax authorities or judicial systems in the countries where we operate.

Occasionally, a multinational enterprise like Ørsted faces potential double taxation. This occurs when two or more tax jurisdictions seek to tax the same business income. We believe that profit should only be taxed once, and where the value is created in line with the position of the OECD.
In response to the tax risks connected to cross-border activities, including the controversies described in this section, we have made tax-related provisions in accordance with IAS 12, IAS 37, and relevant interpretation, such as IFRIC 23. The provisions have been calculated based on differences in tax rates and statistical risks of suffering economic or legal double taxation.

## Tax planning and use of tax incentives

We only use business structures that are driven by commercial considerations and aligned with our business activities. We do not use so-called secrecy jurisdictions or tax havens to avoid taxes. If we establish an entity in a low or nil-rate jurisdiction, it will be for substantive and commercial reasons. This is the case with our Isle of Man entity, which holds a licence to develop and build a local offshore wind farm providing renewable energy to the Isle of Man, and with our Singapore entity, which provides technical and administrative services to wind farm projects. To remain competitive, we make use of incentives and tax relief implemented by governments where we have commercial substance, and our business activities are the intended beneficiaries of such incentives and relief. The tax function uses risk and opportunities analyses to provide strong business case assessment and forecast tax data. We therefore include the expected outcome of such opportunities in our long-term planning and decisions, and we seek to get certainty on the available incentives and tax reliefs in our planning activities.



## Approach to taxes

Note 4.1 – continued

## Tax controversies

During 2023, the Danish Tax Agency has opened further enquiries on development services in relation to non-Danish wind farms.

To date, Ørsted Wind Power A/S has received final administrative decisions from the Danish Tax Agency in relation to the development of the offshore wind farms Hornsea 1, Walney Extension, Racco Bank, and Borssele 1 & 2. We have also received an information request in relation to the offshore wind farm Hornsea 2. In all its decisions, the Danish Tax Agency claims that Ørsted Wind Power A/S has not acted at arm's length terms when charging fees for technical development services provided to the project companies. The Danish Tax Agency claims that the full value of expected, future cash flows related to the offshore wind farms should be taxed in Denmark.

Up until 31 December 2023, the Danish Tax Agency has increased Ørsted Wind Power A/S's tax payments to Denmark with DKK 8.9 billion for the income years 2015-2017. The amount, which is excluding any interest, is detailed per wind farm in the table below.

The table illustrates the tax payable to Denmark per wind farm, should the Danish Tax Agency's position prevail, and the expected corresponding adjustments. The Danish tax would be payable upfront, plus interests since the original decisions, and the corresponding adjustments would crystallise over the remaining lifetime of the wind farms.

As described in our key accounting estimates on page 189, we have made provisions for uncertain tax positions according to IFRIC 23. In relation to these transfer pricing disputes, we have used a weighted average of several different scenarios, where the base case is that we will win the cases, but a number of scenarios include different adjustments resulting in increased tax payable to Denmark. The scenarios with additional tax payable to Denmark assumes corresponding adjustments.

<table><tr><td>Decisions made by the Danish Tax Agency
DK/m</td><td>Walney Extension</td><td>Hornsea 1</td><td>Racco Bank</td><td>Borssele 1 &amp; 2</td><td>Totalt</td></tr><tr><td>Potential additional Danish tax payment excluding any interest</td><td>2,949</td><td>2,337</td><td>2,488</td><td>1,088</td><td>8,862</td></tr><tr><td>Tax value of potential corresponding adjustment</td><td>2,651</td><td>2,294</td><td>2,236</td><td>1,180</td><td>8,361</td></tr><tr><td>Likely timing of settlement of potential tax in Denmark, if the Danish Tax Agency prevails</td><td>1st half of 2025</td><td>1st half of 2025</td><td>TBD \( ^{1} \)</td><td>TBD \( ^{1} \)</td><td></td></tr></table>

 \( ^{1} \)  Timing of settlement is likely to follow the same process and timeline as for Walney Extension and Hornsea 1.

Hornsea 1 and Walney Extension tax audit timeline



## Tax controversies timeline

Tax controversies related to the development services provided from Denmark into the project products outside of Denmark take multiple years to settle. The dispute concerning Hornsea 1 and Walney Extension has currently been ongoing for more than eight years from initiation of an independent pricing agreement, which failed when the Danish Tax Agency chose to terminate negotiations with the British tax authorities (HMR Revenue & Customs) and instead initiated an audit. The next step is for the cases to be settled in arbitration, which we expect to happen in the latter half of 2024. Above, we have summarised the timeline for Hornsea 1 and Walney Extension, as we have included a status of the other projects, which is a transfer pricing audit has started.

## Racco Bank

We have appealed the administrative decision to the Danish Tax Tribunal. We continue to consider our further options, including an elaborated appeal to the Danish Tax Tribunal, and we have appealed to the court system, or a request for a MAP under the double tax agreement between Denmark and the UK.

## Borssele 1 & 2

We have appealed the administrative decision to the Danish Tax Tribunal. We continue to consider our further options, including an elaborated appeal to the Danish Tax Tribunal, a direct appeal to the court system, or a request for a MAP under the double tax agreement between Denmark, the Netherlands, and the EU Arbitration Convention.

## Hornsea 2

The Danish Tax Agency issued an information request in October 2023. Discussions are on-going. In Denmark, the deadline for issuing a draft administrative decision is on 1 May 2024.

## Racco Bank

We have appealed the administrative decision to the
Burbio Bank Extension and Borkum Riffgrund 2 without
adjustments.



## Tax on profit (loss) for the year
Note 4.2

<table><tr><td rowspan="2">Effective tax rate
DKKmn. %</td><td colspan="3">2023</td><td>2022</td></tr><tr><td>DKK million</td><td>%</td><td>DKK million</td><td>%</td></tr><tr><td>Tax on profit (loss) for the year can be explained as follows:</td><td></td><td></td><td></td><td></td></tr><tr><td>Calculated 22% tax on profit (loss) before tax</td><td>4,186</td><td>22</td><td>(3,874)</td><td>22</td></tr><tr><td>Adjustments of calculated tax in foreign subsidiaries in relation to 22%</td><td>825</td><td>4</td><td>348</td><td>(2)</td></tr><tr><td>Tax effect of:</td><td></td><td></td><td></td><td></td></tr><tr><td>Non-taxable income and non-deductible costs, net</td><td>1,519</td><td>8</td><td>2,243</td><td>(13)</td></tr><tr><td>Unrecognised tax assets</td><td>(8,084)</td><td>(43)</td><td>(851)</td><td>4</td></tr><tr><td>Taxable equity contributions</td><td>874</td><td>5</td><td>(354)</td><td>2</td></tr><tr><td>Movements in uncertain tax positions</td><td>(251)</td><td>(1)</td><td>10</td><td>-</td></tr><tr><td>Changes in tax rates</td><td>(21)</td><td>-</td><td>29</td><td>-</td></tr><tr><td>Adjustment of tax concerning previous years</td><td>(204)</td><td>(1)</td><td>(364)</td><td>2</td></tr><tr><td>Effective tax for the year</td><td>(1,156)</td><td>(6)</td><td>(2,613)</td><td>15</td></tr></table>

## Income tax

Tax on profit (loss) was DKK 1,156 million in 2023 against DKK 2,613 million in 2022. The effective tax rate was -6% in 2023 against 15% in 2022.

The effective tax rate was primarily affected by the largely tax-exempt divestments of the offshore wind farms Goide Wind 3 and London Arroy, the non-recognition of deferred tax assets in connection with the termination of the Ocean Wind 1 project, and the recognition of deferred tax liabilities in connection with capitalisation of project costs in the US where we have entered into tax equity agreements on the following projects:
Sunflower Wind





Sparta Solar



Old 300

And from the final build-up recognition of deferred tax liabilities on:



South Fork Wind

See more regarding tax equity partnerships in notes 3.9 'Tax equity liabilities' and 4.3 'Deferred tax'.

Further, the deferred tax liability previously recognised on Ocean Wind 1 has been reversed in connection with the ceasing of that project.

The adjustment of tax concerning previous years primarily relates to tax in France regarding our Ostwind activities.

The effective tax rate in 2022 was primarily affected by the largely tax-exempt divestments of the offshore wind farms Hornsea 2 and Borkum Riffgrund 3 and the recognition of a deferred tax liability in connection with tax equity partnerships in the US related to Helena Energy Center, Old 300, the North-East cluster, and Ocean Wind 1.

## § Accounting policies

Tax for the year consists of current tax, changes in deferred tax, and adjustments in respect of previous years. Tax on profit (loss) for the year is recognised in the income statement. Tax relating to other items is recognised in other comprehensive income.

Our uncertain tax positions are measured by applying the enacted tax rates that are used in the opening and which method we expect to better predict the resolution of the uncertainty:

• The most-likely-outcome method is applied in cases where there are only two possible outcomes.

• The weighted-average method is used in cases where there are more than two possible outcomes.

Our uncertain tax positions are recognised under 'Income tax' or 'Deferred tax', depending on how the realisation of the tax position will affect the financial statement.

We have adopted the narrow-scope amendments to IAS 12, 'Income taxes', which provide temporary relief from accounting for deferred taxes arising from the implementation of the Pillar 2 model rule.



## Tax on profit (loss) for the year

Note 4.2 – continued

<table><tr><td>Income tax</td><td></td><td></td></tr><tr><td>DK\(m</td><td>2023</td><td>2022</td></tr><tr><td>Tax on profit (loss) for the year</td><td>(1,156)</td><td>(2,613)</td></tr><tr><td>Tax on other comprehensive income</td><td>(4,566)</td><td>(236)</td></tr><tr><td>Tax on hybrid capital related to equity</td><td>2</td><td>13</td></tr><tr><td>Total tax for the year</td><td>(5,720)</td><td>(2,836)</td></tr><tr><td>Tax on profit (loss) for the year can be broken down as follows:</td><td></td><td></td></tr><tr><td>Current tax</td><td>(2,876)</td><td>(2,004)</td></tr><tr><td>Deferred tax</td><td>1,207</td><td>868</td></tr><tr><td>Changes in tax rates</td><td>(21)</td><td>29</td></tr><tr><td>Uncertain tax positions</td><td>(251)</td><td>10</td></tr><tr><td>Tax on hybrid capital</td><td>115</td><td>104</td></tr><tr><td>Tax equity</td><td>874</td><td>(354)</td></tr><tr><td>Adjustment of tax concerning previous years</td><td>(204)</td><td>(364)</td></tr><tr><td>Tax on profit (loss) for the year</td><td>(1,156)</td><td>(2,613)</td></tr><tr><td>Tax on other comprehensive income can be broken down as follows:</td><td></td><td></td></tr><tr><td>Current tax</td><td>(1,262)</td><td>60</td></tr><tr><td>Deferred tax</td><td>(3,304)</td><td>(296)</td></tr><tr><td>Tax on other comprehensive income</td><td>(4,566)</td><td>(236)</td></tr></table>

## Tax on profit (loss) for the year and other comprehensive income

In 2023, total tax for the year was DKK 5,720 million, consisting of tax on profit (loss) for the year, tax on other comprehensive income, and tax on hybrid capital related to equity.

## Current tax

Current tax is the tax incurred by Ørsted on profit for the year. This differs from taxes paid because of payments or refunds regarding prior years and residual payments for the current year.
Because of the high level of investments and the subsequent deferrals of payable tax as a consequence of accelerated tax depreciation, our current tax is generally lower than the statutory corporate tax rates during construction and the initial years after first power from a wind farm.

## Pillar 2

We are assessing our exposure to the Pillar 2 legislation. Our initial assessment indicates the average effective tax rate based on the accounting profit being minimum 15% and within the safe harbour rules exemption.

## p Key accounting estimate

## Estimates regarding recognition of income taxes

We are subject to income taxes in all the countries where we operate. Significant judgement and estimates are required in determining the worldwide income taxes and income tax assets and liabilities, including provisions for uncertain tax positions.

While conducting business around the world, tax and transfer pricing disputes with tax authorities may occur due to the complex and sometimes complex nature of international Judgement is applied to assess the possible outcome of such disputes. We apply the methodology described in Note 4.1 to assess the Income Tax Treatments when making provisions for uncertain tax positions, and the provisions made are based on different scenarios of the circumstances in which the tax positions may be made to be adequate. The actual obligation may deviate and might lead to tax in excess of the uncertain tax provisions included. This depends on the result of litigations and settlements with the relevant tax authorities.

Ongoing tax disputes, primarily related to transfer pricing cases, are included as part of 'Income tax' and 'Deferred tax'. Estimates in respect of transfer pricing cases depend, among others, on whether corresponding adjustments can be obtained in the relevant jurisdictions, and, in terms of disputes regarding project companies with partners, whether compensation can be obtained from these partners. Any expected compensation from partners is included as part of 'Other receivables'.



## Deferred tax

Note 4.3

<table><tr><td>Net deferred tax for 2023 primarily consist of</td><td>Offshore</td><td>Onshore</td><td>Biennery &amp; Other</td><td>Other activities/ eliminations</td></tr><tr><td>Assets</td><td></td><td></td><td></td><td></td></tr><tr><td>Recognition of tax loss carryforwards</td><td>●</td><td></td><td></td><td></td></tr><tr><td>Financial instruments</td><td>●</td><td></td><td></td><td></td></tr><tr><td>Liabilities</td><td></td><td></td><td></td><td></td></tr><tr><td>Tax equity structures</td><td>●</td><td>●</td><td></td><td></td></tr><tr><td>Accelerated tax depreciation compared to accounting depreciation</td><td>●</td><td>●</td><td></td><td></td></tr><tr><td>Acquisitions</td><td></td><td>●</td><td></td><td></td></tr></table>

<table><tr><td>Deferred tax 2023</td><td></td><td></td><td></td><td></td></tr><tr><td>DKKm</td><td>Offshore</td><td>Onshore</td><td>Biennery &amp; Other</td><td>Other activities/ eliminations</td></tr><tr><td>Deferred tax, assets</td><td>10,038</td><td>64</td><td>41</td><td>(1,951)</td></tr><tr><td>Deferred tax, liabilities</td><td>1,748</td><td>3,760</td><td>148</td><td>(2,217)</td></tr><tr><td>Unrecognised tax assets</td><td>9,691</td><td>109</td><td>33</td><td>40</td></tr></table>

<table><tr><td>Deferred tax 2022</td><td></td><td></td><td></td><td></td></tr><tr><td>DKKm</td><td>Offshore</td><td>Onshore</td><td>Biennery &amp; Other</td><td>Other activities/ eliminations</td></tr><tr><td>Deferred tax, assets</td><td>14,554</td><td>61</td><td>1,457</td><td>(2,353)</td></tr><tr><td>Deferred tax, liabilities</td><td>3,471</td><td>3,915</td><td>2,496</td><td>(2,468)</td></tr><tr><td>Unrecognised tax assets</td><td>895</td><td>83</td><td>100</td><td>-</td></tr></table>

The table shows the reconciliation of deferred tax to the balance sheet by segment. The unrecognised tax asset is primarily due to ring-fenced tax losses and other losses not meeting the criteria for recognition under IAS 12. These primarily relate to losses in connection with the termination of the Ocean Wind 1 project. There is no expiry of our unrecognised tax assets. No provision for withholding tax on dividends has been included as the amounts where a concrete dividend distribution is planned are considered immaterial in 2023. Other activities/eliminations primarily consist of eliminations between segments.

## Significant movements in deferred tax assets and liabilities

## Assets

Tax loss carryforwards due to the accelerated depreciation for tax purposes.

Difference between tax and accounting treatment of financial instruments.

Adjustments to previous year's tax returns in Denmark.

Utilisation of tax loss carryforwards in Denmark and the UK and surrender of consortium relief in the UK.

Deferred tax transferred to current tax in Denmark because of the net gains on hedges.

De-recognition of tax loss carry-forwards.

## Liabilities

Recognition of tax liabilities in connection with tax equity partnerships related to Old 300, Sparta Solar, and Sunflower and the termination of Ocean Wind 1 in our US portfolio.

Adjustment related to Haystack and Muscle Shoals due to impairments for accounting purposes.

Divestment of London Array and Gode Wind 3.



## Deferred tax

Note 4.3 – continued

<table><tr><td>Development in deferred tax assets and liabilities, 2023</td><td>Deferred tax balances at 1 January, net</td><td>Movements</td><td>Deferred tax balances at 31 December, net</td><td>Assets</td><td>Liabilities</td></tr><tr><td>DKKm</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Intangible assets</td><td>(38)</td><td>(150)</td><td>(188)</td><td>18</td><td>206</td></tr><tr><td>Property, plant, and equipment</td><td>(6,134)</td><td>4,485</td><td>(1,649)</td><td>4,709</td><td>6,358</td></tr><tr><td>Other non-current assets</td><td>16</td><td>(318)</td><td>(302)</td><td>5</td><td>307</td></tr><tr><td>Current assets</td><td></td><td>(1)</td><td>(1)</td><td>1</td><td>2</td></tr><tr><td>Decommissioning obligations</td><td>2,101</td><td>105</td><td>2,206</td><td>2,212</td><td>6</td></tr><tr><td>Other non-current liabilities</td><td>415</td><td>(1)</td><td>(1)</td><td>623</td><td>244</td></tr><tr><td>Current liabilities</td><td>3,373</td><td>(3,742)</td><td>(369)</td><td>3</td><td>372</td></tr><tr><td>Tax loss carryforwards</td><td>6,572</td><td>(1,897)</td><td>4,675</td><td>4,675</td><td>-</td></tr><tr><td>Offset</td><td></td><td></td><td></td><td>(4,056)</td><td>(4,056)</td></tr><tr><td>Total</td><td>6,305</td><td>(1,552)</td><td>4,753</td><td>6,192</td><td>3,439</td></tr><tr><td>Development in deferred tax assets and liabilities, 2022</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DKKm</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Intangible assets</td><td>(40)</td><td>2</td><td>(38)</td><td>1</td><td>39</td></tr><tr><td>Property, plant, and equipment</td><td>(8,198)</td><td>2,064</td><td>(6,134)</td><td>4,001</td><td>10,135</td></tr><tr><td>Other non-current assets</td><td>(8)</td><td>24</td><td>16</td><td>30</td><td>14</td></tr><tr><td>Current assets</td><td>(50)</td><td>50</td><td>-</td><td>1</td><td>1</td></tr><tr><td>Decommissioning obligations</td><td>1,350</td><td>751</td><td>2,101</td><td>2,101</td><td>-</td></tr><tr><td>Other non-current liabilities</td><td>4,666</td><td>(4,251)</td><td>415</td><td>499</td><td>84</td></tr><tr><td>Current liabilities</td><td>3,937</td><td>(564)</td><td>3,375</td><td>3,373</td><td>-</td></tr><tr><td>Tax loss carryforwards</td><td>6,606</td><td>564</td><td>6,572</td><td>6,572</td><td>-</td></tr><tr><td>Offset</td><td></td><td></td><td></td><td>(2,859)</td><td>(2,859)</td></tr><tr><td>Total</td><td>7,665</td><td>(1,360)</td><td>6,305</td><td>13,719</td><td>7,414</td></tr></table>

For tax purposes, depreciation of fixed assets is typically accelerated compared with accounting purposes. As the accelerated depreciation is larger than our taxable profits when we make large investments, our tax loss carryforwards increase when we model wind farm order intake tax liabilities on the same wind farm or jurisdiction or offset against expected future profits from the very same wind farm or jurisdiction. Our decommissioning liability increases as we expand operations. In most tax jurisdictions, the cost is not tax-deductible before it incurs.



## Deferred tax

Note 4.3 – continued

Net deferred tax and accumulated investments, 2023
DKtbn

Net deferred tax balance

☑ Accumulated net investments



The figure shows the net deferred tax assets ( \( \downarrow \) ) or liabilities ( \( \downarrow \) ) at country level as well as total net accumulated investments in each country. The distribution of net investments is affected by the sale of assets constructed by Ørsted in Denmark for operations outside Denmark where Ørsted only has part ownership. Jurisdictions not yet material are excluded from the overview.

## 5 Accounting policies

Deferred tax is recognised in respect of all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts.

Deferred tax is not recognised in respect of temporary differences relating to:

• the acquisition of joint operations, including acquisitions of subsidiaries

- other items where differences arise at the time of acquisition, affecting neither the profit (loss) for the year nor the taxable income. However, this difference is not recognised in the income statement with company acquisitions. Except for right-of-use assets, lease liabilities, decommissioning, restoration, and similar liabilities where the corresponding amounts are recognised as part of the costs of the related assets.

Differences arising in connection with company acquisitions are recognised.

Deferred tax is measured depending on how we plan to use the assets and settle the liabilities. We offset tax assets and liabilities when the tax position of a tax year is different from the tax year in which the deferred tax assets are expected to be used. Intra-group gains and losses are eliminated when calculating deferred tax. In countries where taxes can be offset between companies due to joint taxation schemes, we have netted within a tax jurisdiction. Where no such possibility is feasible, the deferred tax is included in the gross amount on a company-by-company level.

Tax losses carried forward in jurisdictions where they can be used to offset current tax liabilities on other convincing evidence of future profits. The other convincing evidence is based on our long-term forecast model approved by the Board of Directors.

Adjustments to unrecognised tax assets are recognised in profit (loss) for other comprehensive income depending on the underlying source of the adjustment.
Deferred tax is measured based on the tax rules and rates applying when the deferred tax becomes current tax. Changes in deferred tax because of changes in tax rates are recognised in profit (loss) for the year.

Deferred tax (net liabilities) related to tax equity structures are recognised as a tax expense in the income statement. Deferred tax assets are recognised as a group in the balance sheet, and we start to or have capitalised the corresponding assets. The liability recognised is the amount that we expect to take back from the tax authorities from the equity partner is repaid, and the tax equity structure flips.

## US tax equity partnerships

We have entered into several tax equity partnership agreements in the US.

The expected value of the deferred tax liability related to property, plant, and equipment at the flat date in the tax equity partnership agreement is included in our accounts when the tax equity partnership agreement is effective, and we start to or have capitalised the corresponding assets. The deferred tax liability from existing tax equity partnerships will gradually be reduced based on accounting depreciation after the flat date. See more regarding tax equity partnerships in note 3.9 "Tax equity liabilities".



## Our tax footprint

Note 4.4

Our tax footprint is an effect of how and where we conduct our business.

## Local corporate taxes paid

We have made significant investments in offshore wind farms in the UK, Germany, the Netherlands, the US, and Taiwan, resulting in the accumulation of large tax assets in recent years. Historically, we have not paid significant taxes in these countries besides the UK. This is changing as our offshore wind farms are being commissioned and generating positive taxable income, resulting currently in paid taxes in more countries.
We are also continuously investing in the US. We do, however, not expect to pay material corporate taxes in the US in the near future due to the commercial structures in the US and the significant amount of tax assets not recognised in connection with the termination of the Ocean Wind 1 project. The funding in the US is carried out applying the US tax equity set-up, which effectively means that tax attributes are transferred to the tax equity partner as repayment and return on investment. See more regarding tax equity partnerships in note 3.9 "Tax equity liabilities".
Payments, corporate taxes
DK Km

Current year
Previous years






## Our tax footprint

Note 4.4 – continued

## A wind farm life cycle

We operate in several countries (see our global footprint in the 'Management's review'). The design of the individual tax regime in each jurisdiction impacts the tax over the life cycle of our investments and thereby the timing of our tax payments. A wind farm life cycle begins with the development phase. This includes opportunity screening, if applicable, bid preparation, and obtaining land rights, grid connection, and permits. The latter activities are further matured if an investment decision is made, and the construction phase commences, which includes construction of the wind farm. During both phases, product, people, and property taxes are borne or collected (see our total tax contribution section).

When the wind farm is commissioned and put into operation, income and positive cash flows are generated. In many cases, the effect of tax incentives results in a deferral of taxable income compared to profit before tax for accounting purposes. Conversely, once the deferral ends, the taxable income related to the wind farm will exceed the accounting profit.

For this reason, the applicable corporate tax rate and the cash tax paid will always differ, but accumulated over the lifetime of the wind farm, they will be very similar. Also, in some of the jurisdictions where we operate, there are mandatory or voluntary tax groupings. This means that we will only pay tax on the consolidated result of all our activities in that country. As a result, continued significant investments in such a country may further defer the time when we pay taxes in that country.

Wind farm life cycle example



## Project phases

<table><tr><td>Development -2-6 years</td><td>Construction -2-4 years</td><td>Operation -25-30 years</td></tr><tr><td>Consents and permits</td><td>Capital investment</td><td>Revenue</td></tr><tr><td>Site investigations</td><td>Asset construction</td><td>Operating expenses</td></tr><tr><td></td><td>Staff and contractors</td><td>Profit</td></tr><tr><td>Indirect taxes</td><td>Indirect taxes</td><td>Indirect taxes</td></tr><tr><td>Employment taxes</td><td>Employment taxes</td><td>Employment taxes</td></tr><tr><td></td><td>Corporate income taxes</td><td>Corporate income taxes</td></tr></table>

Development activities result in negative cash flows in the beginning of the project life cycle. During construction, the capital employed accelerates materially. Positive income begins when the project enters into operation.
Some corporate income taxes may be paid during development if internal development services are provided between tax jurisdictions.
Also, corporate income taxes may be paid during late-life development subject to deductibility of decommissioning costs and joint taxation legislation.



## Our tax footprint

Note 4.4 – continued

Total tax contribution
DKkm

Profit People Product Property



## Total tax contribution

The total tax contribution represents our cash tax payments to government revenues, including amounts paid through an agent. Tax does not result in a return of value to Ørsted for a right or asset used in the business.

Taxes borne by us are those that represent a direct cost and are reflected in the financial result. Taxes borne are charged to the profit and loss account.

Taxes collected are those which are generated by our operations, but do not constitute a tax liability for Ørsted. Ørsted generates the commercial activity that gives rise to the taxes and then collects and administers them on behalf of the tax authorities in the countries where we operate.

## Country-by-country reporting

To increase transparency, we present key figures on tax jurisdiction levels on the following pages. Our country-by-country reporting content widely follows the GRI 207: Tax standard. To ensure internal coherence throughout the annual report, corporate income tax is calculated based on IFRS accounting standards instead of GRI methodology. The tax incentives provided on green investments defer our tax payments, resulting in a difference between profit (loss) in the financial statements and taxable income during the life cycle of a wind farm. This is applicable in most of the countries where we operate.

## Total global taxes paid in 2023

## Profit taxes

These include taxes on company profits and taxes on goods (such as corporate income tax or withholding taxes ultimately borne by the group on a consolidated level) and collected (such as withholding tax on payments to third parties).

## People taxes

Taxes on employment, both borne and collected (including income tax and social security tax payments).

## Product taxes

Indirect taxes on the production and consumption of goods and services, including net VAT and sales tax, custom duties, windfall taxes, and insurance premium tax.

Net VAT in countries in a net refund position is excluded in the total tax contribution, as it is considered a repayment of tax already paid within the year. Included are also plant taxes, which are insignificant for this summary.

## Property taxes

Taxes on the ownership, sale, transfer, or occupancy of property.




Our 'Total tax contribution' in 2023 was DKK 7,887 million against DKK 6,500 million in 2022. The increase primarily relates to profit taxes regarding previous years in the Netherlands and France as well as profit taxes from increased activities, primarily in Europe and Taiwan. Product taxes decreased due the discontinuation of our B2B business in the UK and refunds received in relation to investments in Germany, Taiwan, and other countries as well.

Total tax contribution
DKKm

3,291
4,596

Taxes by tax type
DKKm

Taxes borne Taxes collected

Profit 2,717 787

People 295 2,127

Product 1,682

Property 279



## Our tax footprint

Note 4.4 – continued

<table><tr><td>Country-by-country key figures, 2023</td><td>Number of employees</td><td>Total employee remuneration \( ^{1} \)</td><td>Revenue from third-party sales</td><td>Revenue from in-transit group transactions with other tax jurisdictions</td><td>Property, plant, and equipment, and inventory</td><td>Balance of intra-company debt</td><td>Corporate income tax paid on a cash basis</td></tr><tr><td>DK/mm</td><td>FTE \( ^{5} \)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Denmark</td><td>4,354</td><td>4,094</td><td>62,884</td><td>6,361</td><td>15,898</td><td>65,249</td><td>59</td></tr><tr><td>Denmark</td><td>1,776</td><td>1,211</td><td>10,167</td><td>16,027</td><td>48,072</td><td>56,535</td><td>1,466</td></tr><tr><td>Poland</td><td>776</td><td>321</td><td>41</td><td>625</td><td>2,297</td><td>-</td><td>29</td></tr><tr><td>Malaysia</td><td>769</td><td>221</td><td>11</td><td>528</td><td>11</td><td>-</td><td>24</td></tr><tr><td>Malaysia</td><td>746</td><td>1,031</td><td>2,027</td><td>139</td><td>62,139</td><td>31,678</td><td>34</td></tr><tr><td>Germany</td><td>385</td><td>1,306</td><td>1,721</td><td>1,827</td><td>15,953</td><td>17,371</td><td>428</td></tr><tr><td>Taiwan</td><td>193</td><td>139</td><td>1,042</td><td>36</td><td>28,755</td><td>23,218</td><td>134</td></tr><tr><td>Netherlands</td><td>114</td><td>86</td><td>32</td><td>1,035</td><td>4,315</td><td>4,516</td><td>331</td></tr><tr><td>Ireland</td><td>105</td><td>93</td><td>659</td><td>39</td><td>4,219</td><td>1,023</td><td>11</td></tr><tr><td>The Netherlands</td><td>70</td><td>37</td><td>209</td><td>-</td><td>895</td><td>-</td><td>190</td></tr><tr><td>Singapore</td><td>70</td><td>33</td><td>-</td><td>81</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Korea</td><td>21</td><td>33</td><td>-</td><td>31</td><td>-</td><td>154</td><td>3</td></tr><tr><td>Korea</td><td>19</td><td>37</td><td>-</td><td>73</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Sweden</td><td>11</td><td>7</td><td>413</td><td>3</td><td>716</td><td>14</td><td>2</td></tr><tr><td>Spain</td><td>9</td><td>6</td><td>1</td><td>2</td><td>14</td><td>94</td><td>1</td></tr><tr><td>Spain</td><td>-</td><td>-</td><td>-</td><td>2</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Belgium</td><td>-</td><td>10</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Norway</td><td>-</td><td>1</td><td>-</td><td>2</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Netherlands</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total</td><td>8,905</td><td>7,571</td><td>79,255</td><td>27,514</td><td>190,308</td><td>200,036</td><td>2,717</td></tr><tr><td>Current tax explanation on country level, 2023</td><td>Profit (loss) before tax</td><td>Calculated (loss) before tax</td><td>Non-taxable income and non-deductible costs, net</td><td>Unrecognised tax assets</td><td>Deferred tax</td><td>Current tax on hybrid capital and other adjustments</td><td>Current tax</td></tr><tr><td>DK/mm</td><td>7,785</td><td>(1,648)</td><td>253</td><td>-</td><td>1,743</td><td>(115)</td><td>233</td></tr><tr><td>Denmark</td><td>10,795</td><td>(2,251)</td><td>1,056</td><td>(123)</td><td>(587)</td><td>-</td><td>(2,238)</td></tr><tr><td>Poland</td><td>97</td><td>(28)</td><td>(18)</td><td>-</td><td>-</td><td>-</td><td>(28)</td></tr><tr><td>Malaysia</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(42)</td></tr><tr><td>Malaysia</td><td>(37,530)</td><td>9,362</td><td>73</td><td>(7,947)</td><td>(1,508)</td><td>-</td><td>-</td></tr><tr><td>Germany</td><td>1,165</td><td>(349)</td><td>30</td><td>79</td><td>(93)</td><td>-</td><td>(333)</td></tr><tr><td>Germany</td><td>-</td><td>-</td><td>19</td><td>-</td><td>(48)</td><td>-</td><td>(47)</td></tr><tr><td>The Netherlands</td><td>395</td><td>(90)</td><td>-</td><td>-</td><td>(101)</td><td>-</td><td>(41)</td></tr><tr><td>Ireland</td><td>(495)</td><td>(26)</td><td>86</td><td>-</td><td>(14)</td><td>-</td><td>(14)</td></tr><tr><td>France</td><td>79</td><td>(20)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(5)</td></tr><tr><td>Singapore</td><td>30</td><td>(5)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(2)</td></tr><tr><td>Korea</td><td>(191)</td><td>18</td><td>-</td><td>(20)</td><td>-</td><td>-</td><td>(18)</td></tr><tr><td>Korea</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(2)</td></tr><tr><td>Sweden</td><td>(112)</td><td>23</td><td>-</td><td>(17)</td><td>(6)</td><td>-</td><td>(5)</td></tr><tr><td>Sweden</td><td>-</td><td>16</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Vietnam</td><td>(6)</td><td>1</td><td>-</td><td>(1)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Belgium</td><td>(12)</td><td>3</td><td>-</td><td>(3)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Norway</td><td>(54)</td><td>12</td><td>-</td><td>(12)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Australia</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total</td><td>(19,026)</td><td>5,011</td><td>1,519</td><td>(8,084)</td><td>(1,207)</td><td>(115)</td><td>(2,876)</td></tr></table>

## Country-by-country key figures

The table shows the reporting of financial, economic, and tax-related information for each jurisdiction where we operate. This information can be compared with our total tax contributions. Our tax contributions reflect that some of our development and construction activities have been based in Denmark, and that our operations in the coming years are beginning to ramp up in markets that have been developed. Also, we pursue the corresponding tax position as justified by hedging, which is primarily related to the tax risk.

Withholding taxes are reported under the country where the property is made.

The windfall taxes that come into effect in December 2022 have resulted in additional tax payments of DKK 3.3 million.

## Current tax explanation on country level

The table shows our profit (loss) before tax in tax jurisdictions and the corresponding tax position in the countries where we operate. The tax positions from hedges. Also, the table shows the effect from the impairment of our Ocean Wind 4 project in the US. As we do not fulfill the recognition requirements in IAS 12, the deferred tax asset associated with the impairment of the Ocean Wind 4 project from operations in the US, we may recognise the tax asset in future years.

See more on the section 'Accounting policies' in note 4.3 'Deferred tax'.

 \( ^{1} \)  Including employee costs transferred to assets.



## Capital structure
Note 5

An appropriate capital structure is important to ensure we have the ability to raise new debt with attractive terms.

The costs related to terminating our Ocean Wind 1 project as well as lower forward power prices, further supply chain delays and costs to mitigate this, increasing capital expenditures (per MW) and OPEX due to cost inflation and supply chain bottlenecks have negatively impacted our credit metric (FFO/adjusted net debt) projections in 2023. Therefore, we have taken and will continue to take measures to ensure a robust balance sheet supporting long-term growth and capital structure resilience towards 2030.

In February 2023, we issued a EUR 100 million (DKK 745 million) blue bond. The net proceeds from the issuance will be allocated to investments in offshore biodiversity.

## Equity and interest-bearing net debt
DKKbn

● Interest-bearing asset
● Interest-bearing debt
● Hybrid capital

Equity attributable to shareholders in Ørsted A/S
● Non-controlling interests

2023 45.2/92.6/19.1/56.8/1.9

2022 47.1/77.7/19.8/71.7/4.0

Capital structure
To ensure we have the financial strength to operate in the international energy and capital markets and secure financing on attractive terms, we target a solid investment grade rating with all three major rating agencies. This includes an FFO/adjusted interest-bearing net debt credit metric above 30%.

Financing policy
The aim of our financing policy is to minimise liquidity and refinancing risks while minimising financing costs and matching the currency composition of our debt with our revenue.

We obtain funding in different markets and with different maturities. Our debt is primarily consolidated in the parent company where cash resources are made available to the Group companies via an internal bank.

125.2 billion

126.1 billion

Cash management and liquidity reserve
A group-wide cash management set-up ensures optimal allocation of cash in relation to our day-to-day operations and investment programme. We target a liquidity reserve that ensures adequate coverage of our use of liquidity on a rolling 12 month forward-looking basis to limit the company's sensitivity to unforeseen developments, including unrest in the financial markets.

## 28.6%

Funds from operations (FFO)
relative to adjusted interest-bearing net
debt amounted to 28.6% at
31 December 2023 against 42.7%
at 31 December 2022.

## 47.4 bn

Our interest-bearing net debt totalled DKK 47,379 million at 31 December 2023 against DKK 30,571 million at 31 December 2022.

## 90.7 bn

Our liquidity reserve totalled DKK 90,665 million at 31 December 2023 against DKK 97,784 million at 31 December 2022.



## Interest-bearing net debt and FFO

Note 5.1

<table><tr><td>Interest-bearing debt and interest-bearing assets</td><td></td><td></td><td></td></tr><tr><td>DK/km</td><td>2023</td><td>2022</td><td></td></tr><tr><td>Interest-bearing debt:</td><td></td><td></td><td></td></tr><tr><td>Bank debt</td><td>9,031</td><td>8,913</td><td></td></tr><tr><td>Bond debt</td><td>70,589</td><td>54,368</td><td></td></tr><tr><td>Total bond and bank debt</td><td>79,620</td><td>63,281</td><td></td></tr><tr><td>Tax equity liability (see note 3.9)</td><td>1,196</td><td>1,236</td><td></td></tr><tr><td>Lease liability</td><td>8,426</td><td>8,266</td><td></td></tr><tr><td>Other interest-bearing debt</td><td></td><td></td><td></td></tr><tr><td>Debt in connection with divestments</td><td>2,900</td><td>2,904</td><td></td></tr><tr><td>Debt from receiving collateral under credit support annexes</td><td>286</td><td>1,196</td><td></td></tr><tr><td>Other interest-bearing debt</td><td>153</td><td>824</td><td></td></tr><tr><td>Total interest-bearing debt</td><td>92,581</td><td>77,707</td><td></td></tr><tr><td>Interest-bearing assets:</td><td></td><td></td><td></td></tr><tr><td>Securities</td><td>29,902</td><td>25,197</td><td></td></tr><tr><td>Loans</td><td>10,145</td><td>16,178</td><td></td></tr><tr><td>Receivables from associates and joint ventures</td><td></td><td></td><td></td></tr><tr><td>Cash, not available for use</td><td>481</td><td>2,471</td><td></td></tr><tr><td>Other interest-bearing receivables:</td><td></td><td></td><td></td></tr><tr><td>Receivables from placing collateral under credit support annexes</td><td>3,854</td><td>2,449</td><td></td></tr><tr><td>Receivables in connection with divestments</td><td>735</td><td>713</td><td></td></tr><tr><td>Other interest-bearing receivables</td><td>1,200</td><td>1,201</td><td></td></tr><tr><td>Total interest-bearing assets</td><td>45,202</td><td>47,136</td><td></td></tr><tr><td>Total interest-bearing net debt at 31 December</td><td>47,379</td><td>30,571</td><td></td></tr><tr><td>50% of hybrid capital</td><td>9,552</td><td>9,897</td><td></td></tr><tr><td>Other interest-bearing debt, add back</td><td>(3,339)</td><td>(4,924)</td><td></td></tr><tr><td>Other interest-bearing receivables, add back</td><td>4,597</td><td>3,290</td><td></td></tr><tr><td>Cash and securities not available for distribution, excluding repo loans</td><td>867</td><td>3,241</td><td></td></tr><tr><td>Total adjusted interest-bearing net debt</td><td>59,056</td><td>42,075</td><td></td></tr></table>

<table><tr><td colspan="3">Funds from operations (FFO)</td></tr><tr><td>DK/km</td><td>2023</td><td>2022</td></tr><tr><td>EBITDA</td><td>18,717</td><td>32,057</td></tr><tr><td>Change in provisions and other adjustments</td><td>8,742</td><td>(2,213)</td></tr><tr><td>Change in derivatives</td><td>4,274</td><td>(8,687)</td></tr><tr><td>Variation margin (add back)</td><td>(7,086)</td><td>10,332</td></tr><tr><td>Reservol of gain (loss) on divestment of assets</td><td>(5,745)</td><td>(10,885)</td></tr><tr><td>Income tax paid</td><td>(2,717)</td><td>11,263)</td></tr><tr><td>Interest and similar items, received/paid</td><td>1,385</td><td>(563)</td></tr><tr><td>Reservol of interest expenses transferred to assets</td><td>(453)</td><td>(586)</td></tr><tr><td>50% of coupon payments on hybrid capital</td><td>(273)</td><td>(264)</td></tr><tr><td>Dividends received and capital reductions</td><td>19</td><td>23</td></tr><tr><td>Funds from operations (FFO)</td><td>16,863</td><td>17,951</td></tr></table>

<table><tr><td>Funds from operations (FFO)/adjusted interest-bearing net debt</td><td></td><td></td></tr><tr><td>%</td><td>2024</td><td>2023</td></tr><tr><td>Funds from operations (FFO)</td><td>16,863</td><td>17,951</td></tr><tr><td>Total adjusted interest-bearing net debt</td><td>59,056</td><td>42,075</td></tr><tr><td>Funds from operations (FFO)/adjusted interest-bearing net debt</td><td>28.6%</td><td>42.7%</td></tr><tr><td>Target</td><td>Above 30%</td><td>-25.0%</td></tr></table>

FFO/(adjusted interest-bearing net debt was 28.6% compared with 42.7% in 2022. The decrease in FFO/(adjusted interest-bearing net debt) is mainly due to an increase in adjusted interest-bearing net debt of DKK 17.0 billion.

 \( ^{*} \) Interest-bearing net debt \( ^{*} $  totaled DKK 47,379 million compared with DKK 30,571 million in 2022.



## Interest-bearing net debt and FFO

Note 5.1 – continued

## Interest-bearing net debt

Interest-bearing net debt totalled DKK 47,379 million at the end of 2023, an increase of DKK 16,808 million relative to 2022. The increase in interest-bearing net debt consists of an increase in interest-bearing debt of DKK 14,874 million and a decrease in interest-bearing assets of DKK 1,934 million.

In February, we issued three new green senior bonds in the amount of EUR 2,000 million (DKK 14,685 million):

• EUR 700 million (DKK 5,210 million),

3.625% interest, maturing in March 2026

• EUR 600 million (DKK 4,465 million),

3.750% interest, maturing in March 2030

• EUR 700 million (DKK 5,210 million),

4.125% interest, maturing in March 2035.

In June, we also issued a EUR 100 million (DKK 745 million) blue senior bond with maturity in June 2028 and a fixed interest rate of 3.625%. The net proceeds from the issuance will be allocated to investments in offshore biodiversity.

## Rating

We have a corporate credit rating of BBB+/Baa1/BBB+ from Standard & Poor's, Moody's, and Fitch.

Following our announcement regarding impairment of our US portfolio on 29 August 2023, Moody's changed their outlook from stable to negative in September 2023, and Standard & Poor's and Fitch followed in November 2023.

If our ratings should be downgraded by one notch to BBB/Bao2/BBB following clarification by the rating agencies, it will not impact Ørsted's business activities.

'FFO/adjusted interest-bearing net debt' was 28.6% in 2023.

Market value of bond and bank debt
The market value of our bond and bank debt amounted to DKK 68,671 million and DKK 8,711 million, respectively, at 31 December 2023 (2022: DKK 53,358 million and DKK 8,483 million, respectively). The market value of issued bonds has been determined as the market value at 31 December (level 1 – quoted prices).

The market value of bank loans has been determined as the present value of expected future instalments and interest payments using the Group's current interest rate on loans as the discount rate (level 2 – observable inputs).

Due to the level of interest rates being lower at the time of issuance, the market value of our bond and bank debt is below the carrying amount.

<table><tr><td colspan="3">Changes in interest-bearing debt</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Interest-bearing debt at 1 January</td><td>77,707</td><td>60,358</td></tr><tr><td>Cash transactions:</td><td></td><td></td></tr><tr><td>Proceeds from raising loans</td><td>17,584</td><td>37,090</td></tr><tr><td>Instalments on loans</td><td>(1,580)</td><td>(21,482)</td></tr><tr><td>Interest on loans</td><td>(712)</td><td>(582)</td></tr><tr><td>Change in other interest-bearing debt and tax equity liability</td><td>(1,625)</td><td>1,291</td></tr><tr><td>Non-cash transactions:</td><td></td><td></td></tr><tr><td>Raising lease debt, etc.</td><td>872</td><td>1,316</td></tr><tr><td>Bank loans acquired in a business combination</td><td>-</td><td>437</td></tr><tr><td>Foreign exchange adjustments, amortisation, etc.</td><td>335</td><td>(721)</td></tr><tr><td>Interest-bearing debt at 31 December</td><td>92,581</td><td>77,707</td></tr></table>

## Loan arrangements and credit facilities

At 31 December 2023, we had bank loan obligations totalling DKK 5,030 million (2022: DKK 5,880 million) to the European Investment Bank and Nordic Investment Bank. The loans offered by these multilateral financial institutions could specific energy projects with maturities exceeding those normally available in the commercial banking market.

Furthermore, we had non-cancelable credit facilities and undrawn loan agreements of DKK 51,159 million at 31 December 2023 (2022: DKK 57,179 million) with a number of Scandinavian, international, and Taiwanese banks. See note 5.4 'Liquidity reserve' for further details.
In connection with these loan arrangements and credit facilities, we may be met with demands for cancellation and repayment of any drawn amount in the event of shareholders other than a group consisting of the Danish state and Danish power distribution companies controlling more than 50% of the share capital or voting rights in Ørsted A/S. Our financing agreements are not subject to any other unusual terms or conditions.



## Interest-bearing net debt and FFO

Note 5.1 – continued

<table><tr><td rowspan="2">Senior bonds issued at 31 December 2023 Million, currency</td><td rowspan="2">Type of financing</td><td colspan="5">Outstanding amount</td><td rowspan="2">Quoted in</td></tr><tr><td>Currency</td><td>DKK</td><td>Coupon (%)</td><td>Time of issue</td><td>Maturi</td></tr><tr><td>EUR</td><td>Green</td><td>600</td><td>4,473</td><td>2,250</td><td>June 2022</td><td>June 2028</td><td>Luxembourg</td></tr><tr><td>EUR</td><td>Green</td><td>750</td><td>5,591</td><td>1,500</td><td>Nov 2017</td><td>Nov 2029</td><td>London</td></tr><tr><td>EUR</td><td>Green</td><td>900</td><td>6,709</td><td>3,250</td><td>Sep 2022</td><td>Sep 2031</td><td>Luxembourg</td></tr><tr><td>EUR</td><td>Green</td><td>750</td><td>5,591</td><td>2,875</td><td>June 2022</td><td>June 2033</td><td>Luxembourg</td></tr><tr><td>EUR</td><td>Green</td><td>700</td><td>5,218</td><td>3,625</td><td>Feb 2023</td><td>March 2026</td><td>Luxembourg</td></tr><tr><td>EUR</td><td>Blue</td><td>100</td><td>745</td><td>3,625</td><td>June 2023</td><td>June 2028</td><td>Luxembourg</td></tr><tr><td>EUR</td><td>Green</td><td>600</td><td>4,473</td><td>3,750</td><td>Feb 2023</td><td>March 2030</td><td>Luxembourg</td></tr><tr><td>EUR</td><td>Green</td><td>700</td><td>5,218</td><td>4,125</td><td>Feb 2023</td><td>March 2035</td><td>Luxembourg</td></tr><tr><td>EUR</td><td>Green</td><td>350</td><td>3,011</td><td>2,125</td><td>May 2019</td><td>May 2027</td><td>Luxembourg</td></tr><tr><td>GBP</td><td>Green</td><td>750</td><td>6,452</td><td>4,875</td><td>Jan 2012</td><td>Jan 2032</td><td>London</td></tr><tr><td>GBP</td><td>Green</td><td>300</td><td>2,581</td><td>2,500</td><td>May 2019</td><td>May 2033</td><td>Luxembourg</td></tr><tr><td>GBP</td><td>Green</td><td>250†</td><td>2,151</td><td>CPI0.375</td><td>May 2019</td><td>May 2034</td><td>Luxembourg</td></tr><tr><td>GBP</td><td>Green</td><td>375</td><td>3,226</td><td>5,125</td><td>Sep 2022</td><td>Sep 2034</td><td>Luxembourg</td></tr><tr><td>GBP</td><td>Green</td><td>500</td><td>4,301</td><td>5,750</td><td>Apr 2010</td><td>Apr 2040</td><td>London</td></tr><tr><td>GBP</td><td>Green</td><td>575</td><td>4,947</td><td>5,375</td><td>Sep 2022</td><td>Sep 2042</td><td>Luxembourg</td></tr><tr><td>NTD</td><td>Green</td><td>4,000</td><td>880</td><td>0.920</td><td>Nov 2019</td><td>Nov 2026</td><td>Taipei</td></tr><tr><td>NTD</td><td>Green</td><td>4,000</td><td>880</td><td>0.600</td><td>Nov 2020</td><td>Nov 2027</td><td>Taipei</td></tr><tr><td>NTD</td><td>Green</td><td>3,000</td><td>660</td><td>0.700</td><td>Nov 2020</td><td>Nov 2030</td><td>Taipei</td></tr><tr><td>NTD</td><td>Green</td><td>8,000</td><td>1,759</td><td>1,500</td><td>Nov 2019</td><td>Nov 2034</td><td>Taipei</td></tr><tr><td>NTD</td><td>Green</td><td>8,000</td><td>1,759</td><td>0.980</td><td>Nov 2020</td><td>Nov 2040</td><td>Taipei</td></tr></table>

Maturity profile of issued senior bonds and bank debt
DKK billion

Issued bonds ☐ Bank debt



1 Issued principal is indexed to on outstanding amount of GBP 309 million corresponding to DKK 2,654 million at 31 December 2023. In addition to senior bonds, we have issued a number of hybrid bonds, see note 5.3 'Hybrid capital'.

## § Accounting policies

Bond debt, bank debt, and other payables are recognised at inception at market value (typically proceeds received) net of transaction costs incurred. In subsequent periods, the liabilities are measured at amortised cost, so that the difference between the cost (proceeds) and the nominal value is recognised in profit (loss) for the year as interest expenses over the term of the loan, using the effective interest rate method.

Financial liabilities are classified as current, unless the Group has an unconditional right to defer settlement of the liability to at least one year after the balance sheet date.



## Equity

Note 5.2

<table><tr><td>Earnings per share</td><td></td><td></td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Profit (loss) for the year</td><td>(20,182)</td><td>14,996</td></tr><tr><td>Interest and costs, hybrid capital owners of Ørsted A/S</td><td>(553)</td><td>(577)</td></tr><tr><td>Non-controlling interests</td><td>(324)</td><td>130</td></tr><tr><td>Ørsted&#x27;s share of profit (loss) for the year</td><td>(21,059)</td><td>14,549</td></tr></table>

<table><tr><td>(000)</td><td></td><td></td></tr><tr><td>Average number of outstanding shares</td><td>420,227</td><td>420,209</td></tr><tr><td>Dilutive effect of share programme</td><td>280</td><td>233</td></tr><tr><td>Average number of outstanding shares, diluted</td><td>420,807</td><td>420,442</td></tr></table>

<table><tr><td>(DKK)</td><td></td><td></td></tr><tr><td>Earnings per share</td><td>(50.1)</td><td>34.6</td></tr><tr><td>Diluted earnings per share</td><td>(50.1)</td><td>34.6</td></tr></table>

## Share capital

Ørsted's share capital is DKK 4,203,810,800 (2022: 4,204 million), divided into shares of DKK 10. The share capital is unchanged from last year. No shares are subject to special rights or restrictions on voting rights. All shares are fully paid up.

## Treasury shares

To secure our share programme, we have acquired treasury shares in accordance with the authorisation approved by the general meeting. The total portfolio of treasury shares consists of 150,784 shares at 31 December 2023 (2022: 154,344), corresponding to less than 0.1% of the share capital.

## Dividends

The Board of Directors recommends that dividends of DKK 0 million (2022: DKK 5,675 million) be paid for the financial year, corresponding to DKK 0 per share (2022: DKK 13.50 per share).

## Owners in Ørsted

The Danish state is the principal shareholder with an ownership interest of 50.1%. In addition, Andel have an ownership interest above 5%. See note 16 'Ownership information' in the parent company's financial statements.

## Dividend yield

<table><tr><td>2023</td><td>0</td></tr><tr><td>2022</td><td>2.1</td></tr><tr><td>2021</td><td>1.5</td></tr></table>

The graph shows the proposed dividends compared to the closing price for an Ørsted share on the last trading day of the year.



## Equity

Note 5.2 – continued

<table><tr><td rowspan="2">Reserves 2023
DK/m</td><td rowspan="2">Foreign currency
translation reserve</td><td rowspan="2">Hedging of net
investments</td><td rowspan="2">Hedging of
revenue</td><td rowspan="2">Hedging of
dividends</td><td colspan="3">Hedging reserves¹</td></tr><tr><td>Hedging of
investments</td><td>Hedging of
dividend</td><td>Hedging of
production assets</td><td>Total
reserves</td></tr><tr><td>Reserves at 1 January</td><td>(725)</td><td>(1,178)</td><td>(26,694)</td><td>-</td><td>-</td><td>2,130</td><td>-</td></tr><tr><td>Exchange rate adjustments</td><td>531</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>531</td></tr><tr><td>Value adjustments of hedging</td><td>-</td><td>(328)</td><td>24,950</td><td>(41)</td><td>108</td><td>-</td><td>24,689</td></tr><tr><td>Value adjustments transferred to:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity</td><td>-</td><td>-</td><td>(2,437)</td><td>-</td><td>-</td><td>-</td><td>(2,437)</td></tr><tr><td>Other operating income - gain on divestment of assets</td><td>(80)</td><td>21</td><td>-</td><td>(44)</td><td>-</td><td>-</td><td>(103)</td></tr><tr><td>Other operating expenses</td><td>-</td><td>-</td><td>512</td><td>-</td><td>-</td><td>-</td><td>512</td></tr><tr><td>Financial income and expenses</td><td>-</td><td>(236)</td><td>134</td><td>-</td><td>(2,308)</td><td>-</td><td>(2,410)</td></tr><tr><td>Tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tax on hedging and currency adjustments</td><td>(110)</td><td>120</td><td>(5,080)</td><td>20</td><td>484</td><td>-</td><td>(4,556)</td></tr><tr><td>Movement for the year</td><td>341</td><td>(423)</td><td>18,079</td><td>(65)</td><td>(1,716)</td><td>-</td><td>16,216</td></tr><tr><td>Total reserves including tax at 31 December</td><td>(384)</td><td>(1,601)</td><td>(8,615)</td><td>(65)</td><td>414</td><td>-</td><td>(10,251)</td></tr><tr><td>Total reserves excluding tax at 31 December</td><td>(1,093)</td><td>(2,053)</td><td>(9,827)</td><td>(85)</td><td>530</td><td>-</td><td>(12,528)</td></tr><tr><td>Reserves 2022
DK/m</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Reserves at 1 January</td><td>1,475</td><td>(1,833)</td><td>(24,585)</td><td>(460)</td><td>574</td><td>51</td><td>(24,778)</td></tr><tr><td>Exchange rate adjustments</td><td>(3,625)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,625)</td></tr><tr><td>Value adjustments of hedging</td><td>-</td><td>738</td><td>(29,935)</td><td>3,786</td><td>2,578</td><td>50</td><td>(22,763)</td></tr><tr><td>Value adjustments transferred to:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity</td><td>-</td><td>-</td><td>11,730</td><td>-</td><td>-</td><td>-</td><td>11,730</td></tr><tr><td>Other operating income - gain on divestment of assets</td><td>574</td><td>102</td><td>11,970</td><td>(3,197)</td><td>-</td><td>-</td><td>9,449</td></tr><tr><td>Other operating expenses</td><td>-</td><td>-</td><td>4,475</td><td>-</td><td>-</td><td>-</td><td>4,475</td></tr><tr><td>Financial income and expenses</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(583)</td><td>-</td><td>(583)</td></tr><tr><td>Property, plant, and equipment</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(116)</td><td>(116)</td></tr><tr><td>Tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tax on hedging and currency adjustments</td><td>851</td><td>(185)</td><td>(349)</td><td>(129)</td><td>(439)</td><td>15</td><td>(236)</td></tr><tr><td>Movement for the year</td><td>(2,200)</td><td>655</td><td>(2,109)</td><td>460</td><td>1,556</td><td>(51)</td><td>(1,689)</td></tr><tr><td>Total reserves including tax at 31 December</td><td>(725)</td><td>(1,178)</td><td>(26,694)</td><td>-</td><td>2,130</td><td>-</td><td>(26,467)</td></tr><tr><td>Total reserves excluding tax at 31 December</td><td>(1,544)</td><td>(1,510)</td><td>(33,000)</td><td>-</td><td>2,731</td><td>-</td><td>(33,323)</td></tr></table>

## Foreign currency translation reserve

The foreign currency translation reserve comprises:

exchange rate adjustments arising on translation of the financial statements of foreign entities and with a currency that is not the Group’s presentation currency;
exchange rate adjustments relating to loans that form part of our net investment in such entities

exchange rate adjustments relating to hedging transactions on our net investment in such entities

On reduction or partial reduction of the net investment, the exchange rate adjustments are recognised in profit (loss) for the year if a foreign exchange gain (loss) is realised by the divested entity. The foreign exchange gain (loss) is transferred to the item where the gain (loss) is recognised.

## Hedging of revenue

Hedging of revenue includes hedging of energy, currency, and inflation risks associated with revenue.

## Share premium reserve

The share premium reserve includes the share premium reserve of DKK 21,279 million (2022: 21,279 million), representing the excess of the amount of subscribed-for share capital over the nominal value of these shares in connection with capital injections.

Costs of hedging related to basis spread on currency swaps and option premiums included in the hedging reserve amount to DKK 6 million (2022: 10 million).



## Hybrid capital

Note 5.3

<table><tr><td>Hybrid bonds</td><td>Green due in 3017</td><td>Green due in 3019</td><td>Green due in 3021</td><td>Green due in 3022</td><td>Green due in 3021</td></tr><tr><td>Type</td><td>Subordinated</td><td>Subordinated</td><td>Subordinated</td><td>Subordinated</td><td>Subordinated</td></tr><tr><td>Carrying amount</td><td>DKK 3,668 million</td><td>DKK 4,416 million</td><td>DKK 3,697 million</td><td>DKK 3,692 million</td><td>DKK 3,630 million</td></tr><tr><td>Financial classification</td><td>Equity</td><td>Equity</td><td>Equity</td><td>Equity</td><td>Equity</td></tr><tr><td>Notional amount</td><td>EUR 500 million (DKK 3,727 million)</td><td>EUR 600 million (DKK 4,473 million)</td><td>EUR 500 million (DKK 3,727 million)</td><td>EUR 500 million (DKK 3,727 million)</td><td>GBP 425 million (DKK 3,656 million)</td></tr><tr><td>Issued</td><td>November 2017</td><td>December 2019</td><td>February 2021</td><td>December 2022</td><td>February 2021</td></tr><tr><td>Maturing</td><td>November 3017</td><td>December 3019</td><td>February 3021</td><td>December 3022</td><td>February 3021</td></tr><tr><td>Quoted in</td><td>Luxembourg</td><td>Luxembourg</td><td>Luxembourg</td><td>Luxembourg</td><td> Luxemburg</td></tr><tr><td>First redemption at par</td><td>24 November 2024</td><td>9 December 2027</td><td>18 February 2031</td><td>8 December 2028</td><td>18 February 2033</td></tr><tr><td>Coupon for the first</td><td>Seven years fixed at 2.250% p.a.</td><td>Eight years fixed at 1.750% p.a.</td><td>Ten years fixed at 1.500% p.a.</td><td>Six years fixed at 5.250% p.a.</td><td>12 years fixed at 2.500% p.a.</td></tr><tr><td>Coupon in subsequent period is adjusted every five years with the five-year euro swap</td><td>+1.899% points from 2024, +2.149% points from 2029, and +2.899% points from 2044</td><td>+1.952% points from 2027, +2.020% points from 2032, and +2.952% points from 2047</td><td>+1.860% points from 2031 and +2.610% points from 2051</td><td>+2.619% points from 2028, +2.869% points from 2033, and +3.619% points from 2048</td><td>Adjusted every five years with the five-year benchmark gilt +2.136% points from 2033 and +2.886% points from 2053</td></tr><tr><td>Deferral of interest payment</td><td>Optional</td><td>Optional</td><td>Optional</td><td>Optional</td><td>Optional</td></tr></table>

We have issued hybrid capital which is subordinate to our other creditors. The purpose of issuing hybrid capital is to strengthen our capital base and fund our investments. We have issued EUR hybrid bonds with a total nominal value of EUR 2,100 million and GBP 425 million, respectively, equivalent to DKK 19,317 million (2022: EUR 2,194 million and GBP 425 million, respectively, equivalent to DKK 19,877 million).
For all our hybrid bonds, we have the right to defer coupon payments and ultimately decide not to pay them at maturity. Deferred coupon payments become payable, however, if we decide to pay dividends to our shareholders or pay coupon payments on other hybrid bonds.

As a consequence of the special terms regarding the hybrid bonds, these are classified as equity, and therefore coupon payments are recognised in equity.

## § Accounting policies

Hybrid capital comprises issued bonds that qualify for treatment in accordance with the rules on compound financial instruments due to the specific characteristics of the bonds. The notional amount, which constitutes a liability, is recognised at present value, and equity has been increased by the difference between the net proceeds received and the notional amount of the discounted liability. The carrying amount of the liability component amounted to nil on initial recognition as the only payment obligation is the repayment of the nominal value in 1,000 years.
Coupon payments are accounted for as dividends, which are recognised directly in equity at the time the payment obligation arises. This is because the coupon is discretionary, and therefore any deferred coupon lapses upon maturity of the hybrid capital. Coupon payments are recognised in the statement of cash flows within financing activities.

On redemption of hybrid capital, the payment will be distributed between liability and equity, applying the same ratio as when the hybrid capital was issued. This means that the difference between the payment on redemption and the net proceeds from the sale of the recognised directly in equity, as the liability portion of the existing hybrid issues will be nil during the first part of the life of the hybrid capital.



## Liquidity reserve

Note 5.4

## Liquidity reserve

Liquidity reserve at 31 December 2023 amounted to DKK 90.7 billion (31 December 2022: DKK 97.8 billion).

The change in liquidity reserve is due to a decrease in cash and undrawn credit facilities of DKK 6,033 million and DKK 6,174 million, respectively. Partly countered by an increase in available securities of DKK 5,088 million.

## Collateral and margin postings

When we trade in derivatives to execute our hedging strategy, we have two alternatives:

• Trading where the market value is settled on an ongoing basis through receipt or placement of collateral.

• Trading where we accept the credit risk that will occur if we gain on the transaction.

We are trading under both types of agreements to increase the number of counterparties with whom we are engaging to achieve the most optimal price.

To mitigate and limit the potential negative impact on our cash position from temporary fluctuations in market prices, we actively manage the volume of trades between trading with and without collateral arrangements.
As of 31 December 2023, 12% (2022: 31%) of our power and gas trades and 88% (2022: 86%) of our currency, inflation, and interest rate hedges had daily margin settlements.

To limit cash impact, we also provide non-cash collateral as parent company and bank guarantees, where possible. At the end of December 2023, we had covered EUR 0.5 billion in collateral for initial margins and variation margins on energy hedges through a parent company guarantee.

Our collateral and margin payments related to trading with derivatives and collateral related to insurance liabilities and escrow accounts have decreased from DKK 17.13 billion at 31 December 2022 to DKK 79 billion at 31 December 2023. The decrease was primarily driven by the large decrease in power and gas prices. During the year, collateral payments related to variation and initial margins decreased by DKK 2.5 billion and DKK 7.1 billion, respectively, and amounted to DKK 3.9 billion at 31 December 2023.

Initial margin and variation margin relate to energy hedges, and the credit support annex (CSA) relates to currency, inflation, and interest rate hedges. Other collateral mainly relates to insurance liabilities and escrow accounts. Further securities can be placed as collateral in repo transactions as part of our cash management.

## Liquidity reserve

DKKbn

● Cash ● Securities, available ● Undrawn, non-cancellable credit facilities



## Collateral and margin postings

DKKbn

● Initial margin ● Variation margin ● Credit support annex ● Other collateral






## Liquidity reserve

Note 5.4 – continued

<table><tr><td>Cash and cash equivalents, securities</td><td></td><td></td></tr><tr><td>DK/km</td><td>2023</td><td>2022</td></tr><tr><td>Cash, cf, balance sheet</td><td>10,145</td><td>16,178</td></tr><tr><td>Bank overdrafts that are part of the ongoing cash management</td><td>(1)</td><td>(3)</td></tr><tr><td>Total cash and cash equivalents at 31 December, cf, statement of cash flows</td><td>10,144</td><td>16,175</td></tr><tr><td>Cash can be specified as follows:</td><td></td><td></td></tr><tr><td>Cash cf, balance sheet</td><td>10,145</td><td>16,178</td></tr><tr><td>Cash, not available for use</td><td>481</td><td>2,471</td></tr><tr><td>Securities can be specified as follows:</td><td></td><td></td></tr><tr><td>Securities, available</td><td>29,515</td><td>24,428</td></tr><tr><td>Securities, not available for use</td><td>387</td><td>769</td></tr><tr><td>Total securities at 31 December</td><td>29,902</td><td>25,197</td></tr></table>

The table shows our cash and securities divided into available and not available for use.

<table><tr><td>Overview of securities</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DK/km</td><td>Fixed rate</td><td>Floating rate</td><td>2023</td><td>Fixed rate</td><td>Floating rate</td></tr><tr><td>Maturities</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>2-5 years</td><td>3,064</td><td>12,032</td><td>15,096</td><td>37</td><td>12,278</td></tr><tr><td>2-5 years</td><td>371</td><td>8,287</td><td>8,658</td><td>961</td><td>6,025</td></tr><tr><td>After 5 years</td><td>2,583</td><td>3,565</td><td>6,148</td><td>1,666</td><td>4,230</td></tr><tr><td>Total carrying amount</td><td>6,018</td><td>23,884</td><td>29,902</td><td>2,664</td><td>22,533</td></tr></table>

The table shows our securities split into maturities and fixed or floating interest rates. The overview includes interest rate swaps used to manage the interest rate risk on the securities.

## Cash, cash equivalents, and securities

Securities are a key element in our liquidity reserve, and therefore, investments are mainly made in liquid AAA-rated Danish mortgage bonds and, to a lesser extent, in other bonds. Most of the securities qualify for repo transactions with the Danish central bank, Danmarks Nationalbank \( ^{+} \) .

“Securities not available for use” comprise securities pledged as collateral for:

- insurance-related provisions: DKK 387 million

at 31 December 2023: DKK 381 million)

- trading in financial instruments: DKK 0 million

at 31 December 2023 (2022: DKK 388 million).

At 31 December 2023, we had received cash collateral in the amount of DKK 286 million (2022: DKK 1,194 million) concerning the positive market value of derivatives.

## “Cash not available for use” comprises:

- collateral for power purchase agreements and trading with financial instruments: DKK 421 million (2022: DKK 366 million)

- collateral for insurance-related provisions: DKK 41 million (2022: DKK 38 million)

- payables for the purchase of gas that has not yet been settled, placed on a restricted account: DKK 0 million (2022: DKK 2,029 million)

- collateral for other transactions: DKK 19 million (2022: DKK 38 million).

## Accounting policies

Securities comprise bonds that are monitored, measured, and reported at market value on an ongoing basis in conformity with the Group's investment policy. Changes in market value are recognised in profit (loss) for the year as financial income and expenses. Purchase and sale of securities are recognised at the settlement date.

For listed securities, market value equals the market price, and for unlisted securities, market value is estimated based on generally accepted valuation methods and market data.

Divested securities where repurchase agreements are in place are recognised in the balance sheet at the settlement date as if the securities were still held. The amount received is recognised in profit (loss) for the year. The cost of the selling price and the purchase price is recognised in profit (loss) for the year over the term as interest. The return on the securities is recognised in profit (loss) for the year.



## Maturity analysis of financial liabilities

Note 5.5

<table><tr><td colspan="6">Maturity analysis of financial liabilities 2023</td></tr><tr><td>D&amp;M</td><td>2024</td><td>2025</td><td>2026-2027</td><td>After 2027</td><td>2023</td></tr><tr><td>Bank loans and issued bonds:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Notional amount</td><td>408</td><td>-</td><td>13,388</td><td>66,165</td><td>79,961</td></tr><tr><td>Interest payments</td><td>2,485</td><td>2,480</td><td>4,762</td><td>15,380</td><td>25,107</td></tr><tr><td>Trade payables</td><td>14,915</td><td>-</td><td>-</td><td>-</td><td>14,915</td></tr><tr><td>Lease liabilities</td><td>1,009</td><td>844</td><td>1,552</td><td>8,634</td><td>12,039</td></tr><tr><td>Other payables</td><td>1,215</td><td>213</td><td>443</td><td>681</td><td>1,101</td></tr><tr><td>Other non-derivative payables</td><td>4,090</td><td>1,730</td><td>808</td><td>11,390</td><td>18,018</td></tr><tr><td>Derivatives</td><td>7,611</td><td>3,445</td><td>4,015</td><td>7,404</td><td>22,475</td></tr><tr><td>Total payment obligations</td><td>30,671</td><td>8,712</td><td>24,968</td><td>109,654</td><td>174,005</td></tr><tr><td colspan="6">Maturity analysis of financial liabilities 2022</td></tr><tr><td>D&amp;M</td><td>2023</td><td>2024</td><td>2025-2026</td><td>After 2026</td><td>2022</td></tr><tr><td>Bank loans and issued bonds:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Notional amount</td><td>3,087</td><td>53</td><td>1,487</td><td>59,077</td><td>63,704</td></tr><tr><td>Interest payments</td><td>1,883</td><td>1,880</td><td>3,741</td><td>14,721</td><td>22,225</td></tr><tr><td>Trade payables</td><td>20,641</td><td>-</td><td>-</td><td>-</td><td>20,641</td></tr><tr><td>Lease liabilities</td><td>817</td><td>664</td><td>1,288</td><td>9,182</td><td>11,951</td></tr><tr><td>Tax equity debt</td><td>150</td><td>158</td><td>343</td><td>845</td><td>1,496</td></tr><tr><td>Other non-derivative payables</td><td>6,019</td><td>1,543</td><td>489</td><td>12,810</td><td>22,861</td></tr><tr><td>Derivatives</td><td>1,201</td><td>1,543</td><td>489</td><td>12,810</td><td>22,861</td><td></td></tr><tr><td>Total payment obligations</td><td>67,233</td><td>17,740</td><td>13,407</td><td>107,923</td><td>206,303</td></tr></table>

The Group's cash needs in respect of its financial loans and borrowings are shown in the table. The maturity analysis was determined on 31 December.

The maturity analysis is based on undiscounted cash flows, including estimated interest payments. Interest payments are based on market conditions and interest rate hedging entered into on 31 December. The maturity analysis does not include hybrid capital classified as equity. At 31 December 2023, we had issued hybrid capital with a notional amount totalling DKK 19,310 million due after 2027.



## Financial income and expenses

Note 5.6

<table><tr><td colspan="3">Net financial income and expenses \( ^{1} \)</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Interest expenses, net</td><td>(1,764)</td><td>(1,895)</td></tr><tr><td>Interest expenses, leasing</td><td>(308)</td><td>(256)</td></tr><tr><td>Interest element of provisions, etc.</td><td>(662)</td><td>(613)</td></tr><tr><td>Tax equity partner&#x27;s contractual return</td><td>(965)</td><td>(1,134)</td></tr><tr><td>Value adjustments of derivatives, net</td><td>1,850</td><td>1,593</td></tr><tr><td>Capital gains/losses on securities at market value, net</td><td>(1,000)</td><td>(1,000)</td></tr><tr><td>Exchange rate adjustments, net</td><td>(140)</td><td>1,343</td></tr><tr><td>Other financial income and expenses</td><td>57</td><td>(18)</td></tr><tr><td>Net financial income and expenses</td><td>(1,443)</td><td>(2,536)</td></tr></table>

<table><tr><td colspan="3">Financial income and expenses \( ^{1} \)</td></tr><tr><td>2023</td><td>2022</td><td></td></tr><tr><td>Interest income from cash, etc.</td><td>926</td><td>211</td></tr><tr><td>Interest income from securities at market value</td><td>716</td><td>157</td></tr><tr><td>Capital gains on securities at market value</td><td>489</td><td>34</td></tr><tr><td>Foreign exchange gains</td><td>4,674</td><td>8,226</td></tr><tr><td>Value adjustments of derivatives</td><td>5,548</td><td>6,885</td></tr><tr><td>Other financial income</td><td>26</td><td>1</td></tr><tr><td>Total financial income</td><td>12,379</td><td>15,514</td></tr><tr><td>Interest expenses relating to loans and borrowings, etc.</td><td>(4,167)</td><td>(2,848)</td></tr><tr><td>Interest expense transferred to assets</td><td>-</td><td>585</td></tr><tr><td>Interest expenses, leasing</td><td>(308)</td><td>(256)</td></tr><tr><td>Interest element of provisions</td><td>(257)</td><td>(513)</td></tr><tr><td>Tax equity partner&#x27;s contractual returns</td><td>(965)</td><td>(1,134)</td></tr><tr><td>Capital losses on securities at market value</td><td>-</td><td>(1,596)</td></tr><tr><td>Foreign exchange losses</td><td>(5,042)</td><td>(7,323)</td></tr><tr><td>Value adjustments of derivatives</td><td>(3,470)</td><td>(4,600)</td></tr><tr><td>Exchange rate adjustments</td><td>(66)</td><td>(1)</td></tr><tr><td>Total financial expenses</td><td>(13,822)</td><td>(18,050)</td></tr><tr><td>Net financial income and expenses</td><td>(1,443)</td><td>(2,536)</td></tr></table>

1 The table shows net financial income and expenses, corresponding to our internal reporting.

Value adjustments of derivatives, net \( ^{2} \)  and Capital gains/losses on securities at market value, net \( ^{3} \)  were both impacted by the significant increase in interest rates in 2022 as we use interest rate swaps to adjust the maturity of our bond portfolio and thereby reduce the interest rate risk of our bond portfolio. In 2023, Value adjustments of derivatives, net \( ^{4} \)  is affected by a gain of DKK 2,399 million due to hedge-infectiveness, mainly driven by less funding needed in the US after the termination of the agreement.

Exchange rate adjustments, net \( ^{5} \)  are mainly affected by inter-company balances between entities with different functional currencies and do not impact the statement of cash flows or interest-bearing net debt. Exchange Exchange rates adjustments, net \( ^{6} \)  in 2023 were mostly driven by the increase in GBP/DKK exchange rate. The GBP/DKK rate decreased significantly in 2022, which led to positive exchange rate adjustments for that period.

1 Exchange rate adjustments of currency hedging are recognised in revenue and cost of sales with a loss of DKK 451 million (2022: a charge of DKK 1 million).

Borrowing costs transferred to property, plant, and equipment under construction are calculated as the weighted average effective interest rate for general borrowing. This amounted to 3.4% in 2023 (2022: 3.1%).

## § Accounting policies

Market value adjustments of interest rate and currency derivatives that have not been entered into for hedging purposes are presented as financial income or expenses.

The accounting policy for the tax equity partner's contractual return is described in note 3.9 "Tax equity liabilities".



## Risk management
Note 6

We are exposed to financial risks in the form of market, credit, and liquidity risks as part of our business, hedging, and trading activities. Through our risk management, we monitor and proactively manage the risks according to our risk appetite.

In this note, we describe the origination, governance, and management of market and credit risks. The management of liquidity risk can be found in note 5.

Our financial market risks relate to energy prices, commodity prices related to CAPEX, currency exchange rates, interest rates, and inflation. Although not a financial risk, changes to our expected volumes produced or sold can increase or decrease the impact of these risks. The composition of the expected revenue from our offshore and onshore assets for 2024-2030 (shown to the right) illustrates the relative size of the risks.

Furthermore, our cash flows denominated in foreign currencies are exposed to changes in the value of foreign currencies against Danish kroner.

## Revenue composition of offshore and onshore assets 2024-2030





For the period 2024-2030, approximately 80% of our expected revenue from our wind and solar PV assets are fixed price inflation-indexed or fixed nominal. The remaining 20% is exposed to fluctuations in power prices.

## Currency exposure 2024-2028
DKKbn



1 For USD and NTD, we manage our risk to a natural time spread between front-end capital expenditures and long-term revenue. For USD, we have hedged more than an our current exposures in 2024-2028 due to a combination of hedges to be rolled further out in time and large changes to our forecasts following the decision not to build Ocean Wind 1 and 2.

We do not deem EUR to constitute a risk as we expect Denmark to maintain its fixed exchange-rate policy.

## ~45% inflation-indexed revenue

~45% of our revenue from offshore and onshore assets are fixed price-indexed to inflation, mainly from RIC and CFD subsidiaries in the UK and Poland.

## ~35% fixed nominal revenue

~35% of our revenue from offshore and onshore assets are fixed in nominal terms, mainly from fixed-price subsidies and CPPAs in Continental Europe, Taiwan, and the US as well as hedges swapping inflation-indexed cash flows to fixed.

## ~20% merchant revenue

~20% of our revenue from offshore and onshore assets are exposed to merchant power prices, mainly from the period after expiry of subblades or CPPAs.

## DKK -9.9 billion

The value of our hedging instruments (mainly power) that will impact EBITDA in the future amounts to a loss of DKK 9.9 billion at 31 December 2023 (2022: DKK 33.0 billion)

 \( ^{1} \)  Energy exposure before hedging does not include revenue from inflation-indexed and fixed nominal prices as these do not contain any energy exposure.

Our outright power exposure has decreased in 2023 due to the decrease in power prices.



## Risk framework

Note 6.1

The overall objective of our financial risk management is to:

• increase the predictability of our short-term income and construction costs

• protect our current and future investment capacity by stabilising key rating metrics like FFO/NIBD

• protect the long-term real value of the shareholders' investment in Ørsted.

The governance for managing market, credit, and liquidity risks are based on the three lines of defence model:

- The first line of defence is responsible for all risks we take on through our business, hedging, and trading activities.

- The second line of defence is Risk Management, which oversees the activities of the first line, challenges, monitors, and reports risk exposures, and mandate compliance.

• The third line of defence is Internal Audit.
The mandates for first line are established during the business planning processes and evaluated according to our risk appetite. An example is deciding on the target hedge level for price exposures from intermittent power production as described in note 6.2 'Energy price risks'.

In our financial risk management processes, financial risks are quantified and assessed against our risk appetite – alongside decisions on suitable risk mitigation measures. Our biggest business risks and associated risk mitigation measures are presented in the 'Risk and risk management' section in the 'Management's review'.

The Board of Directors oversees our risk management through the Audit & Risk Committee and approves associated frameworks, mandates, and limits per risk factor. See the 'Corporate governance' section in the 'Management's review' for governance around our committees.

We govern the accounting treatment and effectiveness of hedges by applying hedge accounting on energy, commodity, currency, interest rate, and inflation hedging.

## § Accounting policies

## Hedge accounting

We apply hedge accounting to our energy, commodity, currency, interest, and inflation hedges.

Almost all of the hedging instruments we use fully match the market risk of the exposure we hedge. The UK power exposure, for example, is hedged using UK power swaps or futures. Thus, the main risk for the Group is the risk of the price fluctuations and timing of the actual production versus the settlement of the hedge. This difference in timing is referred to as volume risk and is described in more detail on the next page.

To the extent that a risk needs to be hedged, and the hedge is not expected to be hedged, the risk is in the market, analyses are performed of the expected effectiveness of the hedging instrument before the hedging transaction is concluded. In this case, the hedge is not hedged. The hedging instrument may deviate from the one-to-one principle and will be determined as the ratio which most effectively hedges the desired risk.

When we conclude a hedging transaction, and each hedge is terminated, the Group measures the difference between the hedged exposure and the hedging instrument. The effective change in market value of the hedging instrument is recognised as a hedge of future cash flows in other comprehensive income in the hedging reserve.

If the hedged cash flows are no longer expected to be realised, the in-full or partially accumulated value change is transferred to profit (loss) for the year. Ineffective hedges related to energy and commodity price fluctuations are not recognised as expenses. Ineffectiveness related to other hedges are recognised in financial income or expenses.

On reallocation of the hedged cash flow, the resulting gains or losses are transferred from equity and recognised in the same item as the hedged item. However, in the case of hedge free areas from future loss, the resulting gain or loss is transferred from equity over the term of the loan.

For currency swaps, the basis spread is accounted for according to the cost of the hedging model.

## p Key accounting estimate

## Valuation of long-term power

purchase agreements

When we measure our power purchase agreements at fair value, we use estimates of non-observable prices, such as:

- production forecasts
- forecasted long-term power prices and exchange rates
- forecasted inflation expectations.

## Hedge accounting

Hedge accounting is measured using forecasted production as well as estimates regarding energy prices, intermittency, interest, currency, and inflation. The Group uses hedge accounting to measure volume overhedging is possible if the forecasted production does not materialise, which will lead to recognition of ineffectiveness.

## p Key accounting judgement

## Valuation of long-term power purchase agreements

For power purchase agreements, purchase agreements for fair value, but they cannot always be measured against quoted prices in active markets due to the long duration of the contracts. We therefore use elements of judgement when measuring the fair value, and we aim to limit the use of subjective estimates and base the fair values on external information, including external pricing and benchmark services.

## Hedge accounting

Hedge accounting is conducted to consider whether forecasted transactions are highly probable exposures as hedged items in a hedge relationship, e.g. expected production from wind farms, and judgement is made as to whether the hedge instruments applied in the hedge relationships identified are effective.



## Energy price risks

Note 6.2

Our main energy price risk stems from our intermittent power production from wind and solar PV assets. By nature, this is exposed to volume uncertainty, primarily driven by weather, price uncertainty, and the often negative correlation between the two. We are also exposed to other energy prices through our CHP plants and gas business.

Intermittent Offshore and Onshore power production Around 20% of revenue from our power production in Offshore and Onshore in 2024-2026 is exposed to power prices.

A large part of our income in Onshore comes from PTCs or ITCs related to power generation or investments in the US (see note 3.9 'Tax equity liabilities'). The tax credits are not exposed to a price risk. However, there is a price risk associated with the power produced, which we mainly reduce by entering into CPPAs. The current CPPAs cover approx. 73% of the expected generation for the period 2024-2026. In general, the CPPAs are structured with a minimum price per MWh and a mechanism where we retain most of the upside from high power prices.
To mitigate our residual exposure to power price risks, we mainly use fixed-volume hedges. As both the value, volume produced, and the actual hourly production profile delivered by our assets differ from the fixed-volume hedges we use, we account for this in our hedging policy and strategies. The correlation between volumes produced and power prices is often negative, which is referred to as volume risk.

A dynamic hedging approach is used to hedge up to 70% of the residual power price exposure within a two-year horizon. This hedging level significantly reduces the risk of being overhedged while providing an adequate risk reduction.

We may hedge beyond the two-year horizon if the price level is commercially attractive.

## Volume risk

☐ Volume risk ☐ Fixed-volume hedges



The grey area illustrates the volume risk where our actual production is either above or below the fixed volume in our hedges. When the additional value of the production (volume x market price) in area 1 does not match the missing value of the production in area 2, our actual production will not fully match our fixed-volume hedges. Due to the large share of renewable capacity, high production causes lower prices and vice versa.

Development in power prices, DKK



The graph shows the historic development in monthly average spot power prices for the past three years and the forward rates for 2024 and 2025 as of 31 December 2023. The graph covers our main markets where we are exposed to power prices.

 \( ^{1} \)  Average of DKK1 and DKK2.

 \( ^{1} \)  Average of north and west.



## Energy price risks

Note 6.2 – continued

## Power generation at our CHP plants

Our combined heat and power (CHP) plants consist of biomass- and fossil-fuelled plants in Denmark. The profitability of power generation is determined by the difference between the selling price of power and the purchase price of fuel and, for other fuels than biomass, carbon emission allowances. If the spreads are attractive, we provide condensing power generation in addition to CHP generation. The total net risk associated with power from CHP generation for the period 2024-2026 is DKK 5.9 billion after hedging, covering both heat-bound and condensing base generation. We are not exposed to price risks related to heat generation.

## Gas sales

The price risk associated with sale of gas stems from differences in the sale and purchase prices. To the extent we purchase gas at a fixed price, we aim to use hedges to swap the purchase into a variable price. When we both have a variable purchase and sales price, our margin becomes fixed. The main risk after hedging is related to contracts where the purchase price is fixed, but where the volumes delivered to us depend on our suppliers' actual production.

## Risk after hedging

Our energy exposure after hedging for the years 2024-2026 can be summarised as shown in the table.

<table><tr><td>Risk after hedging</td><td>Effect of price change</td></tr><tr><td>DKKbn</td><td>+10%</td></tr><tr><td>Power: 14.2 sell position</td><td>+1.4</td></tr><tr><td>Spread (power): 5.9</td><td>+0.6</td></tr></table>

A 10% increase in the power price will result in a gain of DKK 1.4 billion over the period 2024-2026, all else remaining unchanged. Gas and oil activities have a limited risk after hedging of DKK 0.0 billion for the period 2024-2026.

## $ Principles for estimating exposures

Exposure is calculated as the expected production (or net purchase/sale) times the forward price for the respective years.

## Composition of revenue from generation of power in Offshore and Onshore

Merchant exposure (after hedges)
Fixed-volume hedges
As generated CPPAs
Guaranteed minimum price with potential upside
Fixed-price subsidy



The graph shows the split of the expected revenue from generation of power in Offshore and Onshore in 2024 and 2025. The revenue from inflation-indexed or fixed nominal (covered by the three blue components in the graph) is 81% and 81%, respectively compared to the 50% from inflation-indexed or fixed nominal from 2024-2030 shown in section 6.0.

## Power price exposure before hedges for 2024-2026 split on markets
DKKbn



The graph shows our power exposure towards power prices in different markets before hedges for the period 2024-2026.



## Inflation and interest rate risks
Note 6.3

Approximately 80% of our revenue from offshore and onshore assets for the period 2024-2030 stems from either fixed nominal or inflation-indexed contracts. The long duration of these cash flows exposes us towards changes in interest rates and inflation, particularly for assets where the fixed nominal price received is constant regardless of interest rate, inflation, or merchant price level.

We have seen this first-hand during 2023 when increases from both interest rates and inflation affected our portfolio, particularly our fixed nominal assets in the US through rising interest rates, affecting the cost of capital and inflation through higher CAPEX and dilution of the value of our ORECs (PPAs).

Our risk framework builds on the important central assumption that shareholders prefer exposure to inflation-indexed cash flows over nominal cash flows, as this protects the real value of their investment. We apply an asset and liability management framework for handling interest rate and inflation risk. The objective is to manage the shareholders' real value by ensuring that fixed rate debt is matched with fixed nominal cash flows.

## Inflation risk

We actively incentivise assets with inflation-indexed revenue streams in business decisions to mitigate our cost-inflation risk. Our cost inflation mainly stems from OPEX, COGS, DEVEX, and CAPEX, which to a large extent increase with inflation. In addition, CAPEX is exposed to the price development in a number of commodities, most significantly steel. When the commodity adjustment mechanisms in our CAPEX contracts are based on financially tradeable indices, we aim to hedge the risk. Operational costs are assessed together with the inflation-indexed revenue to reduce the net risk.

## Development in inflation and interest rates %
%



The graph shows the historic development in interest and inflation rates for the past three years. The graph covers our main markets where we are exposed to interest and inflation.

Inflation-indexed revenue in 2024-2030 is partly offset by inflation-indexed operational costs



 \( ^{1} \)  Operational costs are comprised of OPEX, COGS, and DEVEX after deduction of income from PTCs.



## Inflation and interest rate risks

Note 6.3 – continued

## Interest rate risk

We actively match our debt with our assets per currency and modified duration. Modified duration of both assets and debt is the change in value in response to a 1 percentage point change in interest rates. As a rule of thumb, modified duration is matched within  \( \pm2 \)  percentage points. For example, the fixed nominal cash flows from our Taiwanese projects with an average of 8.4% in modified duration are matched with fixed-rate NTD debt with roughly 9.0% modified duration.

For assets in operation and under construction, 95% of the lifetime present value of fixed nominal cash flow, excluding CAPEX, is matched with corresponding fixed-rate senior and hybrid debt. Part of this matching has been done by entering into inflation swaps on our inflation-indexed CFD and ROC revenue in the UK to match our fixed-rate debt. As our portfolio of awarded assets mature, we can execute interest rate swaps to lock in the interest rates before funding is secured.
A total of 25% of the lifetime present value of fixed nominal cash flows, excluding CAPEX, on our awarded pre-construction offshore assets are matched with interest rate swaps.

Finally, when we farm down part of an offshore asset, we normally hedge part of the interest, inflation, and currency risks related to the divestment proceeds.

## Fixed-rate debt used to protect fixed nominal cash flows against interest rate increases

Fixed-rate debt and hybrids

Assets in operation and under construction \( ^{1} \) 

For assets in operation and under construction, approximately 95% of the fixed nominal cash flows are matched with a fixed interest rate on our inflation-indexed CFD.

1 Lifetime present value of fixed nominal cash flows, excluding CAPEX, Assets under construction include the Borikun Riffgrund 3, Code Wind 3, Greater Changhua 1 and 2a and South Fork Wind offshore wind farms.

## Interest rate hedging for awarded assets to increase as they progress towards construction

Interest rate swaps

Awarded assets (pre-construction)?

For awarded assets where construction has not started, approximately 25% of the fixed nominal cash flows are matched with interest rate swaps.

 \( ^{2} \)  Awarded assets (pre-construction) include Greater Changhua 2b and 4, Revolution Wind, and Sunrise Wind.



## Inflation and interest rate risks

Note 6.3 – continued

<table><tr><td rowspan="2">Cash flow hedge accounting 2023
DK(km)</td><td rowspan="2">Contractual principal amount</td><td colspan="4">Maturity analysis</td><td colspan="2">Market value</td><td colspan="4">Expected transfers to income statement</td></tr><tr><td>2024-27</td><td>2028-33</td><td>After 2033</td><td>Asset</td><td>Liability</td><td>Recopined in comprehensive income</td><td>2024</td><td>2025</td><td>After 2025</td><td></td></tr><tr><td>EBITDA impact</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Inflation swap (pay variable/receive fixed - UK), review</td><td>22,883</td><td>6,409</td><td>12,818</td><td>3,656</td><td>-</td><td>(3,125)</td><td>(3,414)</td><td>(202)</td><td>(204)</td><td>(3,008)</td><td></td></tr><tr><td>Interest rate swap (pay fixed/receive variable - NTD), divestment</td><td>4,776</td><td>4,776</td><td>-</td><td>-</td><td>-</td><td>(85)</td><td>(85)</td><td>(85)</td><td>-</td><td>-</td><td></td></tr><tr><td>Financial items impact</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate swap (pay fixed/receive variable - USD), future loan issuance</td><td>3,036</td><td>-</td><td>-</td><td>3,036</td><td>-</td><td>(1,42)</td><td>530</td><td>-</td><td>-</td><td>530</td><td></td></tr><tr><td>Interest rate swap (pay fixed/receive variable - NTD), future loan issuance</td><td>2,639</td><td>-</td><td>-</td><td>2,639</td><td>-</td><td>(6)</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td></tr><tr><td>Cash flow hedge accounting 2022</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>EBITDA impact</td><td></td><td>2023-26</td><td>2027-32</td><td>After 2032</td><td></td><td></td><td></td><td>2023</td><td>2024</td><td>After 2024</td><td></td></tr><tr><td>Inflation swap (pay variable/receive fixed - UK), revenue</td><td>22,295</td><td>6,244</td><td>9,681</td><td>6,370</td><td>-</td><td>(3,070)</td><td>(3,366)</td><td>-</td><td>(202)</td><td>(3,164)</td><td></td></tr><tr><td>Financial items impact</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate swap (pay fixed/receive variable - USD), future loan issuance</td><td>15,678</td><td>-</td><td>-</td><td>15,678</td><td>478</td><td>(3)</td><td>2,727</td><td>49</td><td>189</td><td>2,489</td><td></td></tr><tr><td></td><td></td><td>2023</td><td></td><td>2022</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Contracts accounted for at fair value through profit or loss (financial items)</td><td>Contractual principal amount</td><td>Market value</td><td>Contractual principal amount</td><td>Market value</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DK(km)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate swaps (pay fixed/receive variable)</td><td>21,806</td><td>(369)</td><td>8,902</td><td>1,103</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

Interest rate swaps are used to adjust the maturity of our bond portfolio.

The year 2023 includes ineffective USD interest rate swaps with a contractual principal amount of DKK 12,148 million.

Interest rate swaps are used to adjust the maturity of our bond portfolio.

We hedge our UK inflation risk related to revenue from ROC and CID subsidies. Furthermore, we hedge the interest and inflation risk related to divestments. All the inflation risk that we hedge are separately managed and are not hedged.

We hedge the interest on expected USD (inc 2020) and NTD (inc 2023) debt issuance (USD and NTD interest risk). The size of the expected USD issuance has been reduced and postponed to 2025 or 2026 due to less funding needed after the termination of Ocean Wind 3. The interest rate hedges are also hedged against the risk of the ineffectiveness of DKK 2,344 million (gain) (2022: ineffectiveness gain of DKK 529 million) related to the US interest rate hedges in financial income and DKK 6 million (expense) related to the Taiwanese interest rate hedges. The interest rate hedges are, however, hed on early redemption of an EIB loan, resulting in recognised ineffectiveness of DKK 4.1 million (2022: DKK 0 million) in financial expenses.



## Currency risks

Note 6.4

Our cash flows consist of multiple different currencies, which expose us to fluctuations in currency exchange rates. Our main currency exposures are GBP, USD, and NTD. While our exposure to EUR is also significant, we do not deem EUR to constitute a risk as we expect Denmark to maintain its fixed exchange-rate policy.

For GBP, our significant earnings from assets in operation and expected farm-downs are larger than our planned CAPEX, resulting in a net-positive GBP exposure, both short- and long-term. The net exposure was lowered in 2023 by the inclusion of more planned GBP CAPEX following FID for Hornsea 3. A 10% increase in the GBP/DKK exchange rate will result in a gain of DKK 1.2 billion over the period 2024-2028, all else remaining unchanged.

For USD, our portfolio of offshore and onshore development and operating assets translate to a short- to medium-term negative USD exposure. However, on a longer time horizon, revenue from assets result in a net positive USD exposure.

Our general approach to managing currency risks is to use structural risk management tools, such as local currency sourcing contracts, netting income and expenses in the same currency, issuing local currency debt to naturally balance our portfolio, and prioritising local currency costs to match revenue in our asset projects to minimise the need for hedging.
The currency denomination of debt issuance is aimed at optimising the currency composition of net debt with that of forecasted FFO to ensure stability in FFO/ NIBD against adverse movements in exchange rates. Debt can be particularly effective in new markets to mitigate the time-spread risk since the proceeds from the debt issuance can be used to fund and hedge construction costs, while the debt repayment profile can be sculpted to match future revenue.

The residual currency risk after netting of exposures and debt are managed via financial derivatives according to our desired risk appetite. Our overall hedge horizon is five years, covering only highly certain cash flows to avoid hedge ineffectiveness. For energy price risks in foreign currencies, we do not hedge the exchange rate risk until the energy exposure has been hedged. For cash flows that relate to subsidised GBP income from our UK offshore wind farms less operating expenses, we hedge on a declining level over a five-year rolling horizon. The target is to hedge 100% in year 1, declining by 20 percentage points each year to 20% in year 5.

Our currency exposure from production, sales, investments, and divestments after hedging for the years 2024-2028 can be summarised as shown in the table.

<table><tr><td></td><td colspan="2">Effect of price change</td></tr><tr><td>Risk after hedging</td><td></td><td></td></tr><tr><td>DKKbn</td><td>+10%</td><td>-10%</td></tr><tr><td>GBP 11.6 sell position</td><td>+1.2</td><td>-1.2</td></tr><tr><td>USD 4.8 buy position</td><td>-0.5</td><td>+0.5</td></tr><tr><td>NTD 3.2 sell position</td><td>+0.3</td><td>-0.3</td></tr></table>

GBP exposures \( ^{1} \) 
DKKbn



Development in currency rates \( ^{2} \) 



 \( ^{1} \)  The graph shows our GBP exposure before and after hedges from divestments and investments, green certificates, and hedged energy.

 \( ^{2} \)  The graph shows the historic development in spot currency rates for the past three years and the forward rates for 2024 and 2025 as of 31 December 2023.



## Currency risks

Note 6.4 – continued

<table><tr><td rowspan="2">Currency cash flow hedge accounting 2023</td><td rowspan="2">Contractual principal amount</td><td colspan="4">Maturity analysis</td><td colspan="3">Market value</td><td colspan="3">Expected transfers to income statement</td></tr><tr><td>2024</td><td>2025</td><td>After 2025</td><td>Asset</td><td>Liability</td><td>Recognised in comprehensive income</td><td>2024</td><td>2025</td><td>After 2025</td><td></td></tr><tr><td>EBITDA impact</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>GBP forwards and cross-currency swaps</td><td>24,191</td><td>5,961</td><td>6,115</td><td>12,115</td><td>131</td><td>(481)</td><td>(331)</td><td>(218)</td><td>(33)</td><td>(80)</td><td></td></tr><tr><td>USD forwards</td><td>3</td><td>3</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td></tr><tr><td>Currency cash flow hedge accounting 2022</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DKKm</td><td></td><td>2023</td><td>2024</td><td>After 2024</td><td></td><td></td><td></td><td>2023</td><td>2024</td><td>After 2024</td><td></td></tr><tr><td>EBITDA impact</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>GBP forwards and cross-currency swaps</td><td>24,199</td><td>2,953</td><td>7,416</td><td>13,830</td><td>151</td><td>-</td><td>182</td><td>(109)</td><td>29</td><td>262</td><td></td></tr><tr><td>USD forwards</td><td>3</td><td>-</td><td>3</td><td>-</td><td>-</td><td>(21)</td><td>2</td><td>1</td><td>1</td><td>-</td><td></td></tr><tr><td>Impact on other line items</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>GBP forwards (Interest payments)</td><td>553</td><td>553</td><td>-</td><td>-</td><td>32</td><td>-</td><td>4</td><td>4</td><td>-</td><td>-</td><td></td></tr></table>

The GBP exchange rate for hedges impacting EBITDA in 2024 and 2025 is hedged at an average of GBP/DKK 8.3 and 8.2, respectively. Ineffectiveness from currency cash flow hedges in 2023 amounts to a loss of DKK -134 million (2022: DKK 169 million) recognised in financial items.

<table><tr><td rowspan="2">Contracts accounted for at fair value through profit or loss (financial items)</td><td colspan="3">2023</td><td>2022</td></tr><tr><td>Contractual principal amount</td><td>Market value</td><td>Contractual principal amount</td><td>Market value</td></tr><tr><td>Currency</td><td></td><td></td><td></td><td></td></tr><tr><td>Forward exchange contracts</td><td>24,504</td><td>(54)</td><td>30,549</td><td>27</td></tr></table>

The table shows cash management positions which are not hedge accounted. The positions consist of EUR and, to a lesser extent, GBP and USD.



## Currency risks

Note 6.4 – continued

<table><tr><td colspan="3">Hedging of net investments in foreign subsidiaries</td><td rowspan="2">Of which, non-controlling interest</td><td rowspan="2">Hedged amount in currency</td><td rowspan="2">Net position</td><td rowspan="2">Accumulated exchange rate adjustments</td></tr><tr><td>Currency 2023</td><td>Net investment</td></tr><tr><td>GBP</td><td>70,682</td><td>(1,676)</td><td>(31,197)</td><td>37,609</td><td>(3,075)</td><td></td></tr><tr><td>EUR</td><td>37,602</td><td>-</td><td>-</td><td>37,602</td><td>9</td><td></td></tr><tr><td>USD</td><td>22,809</td><td>-</td><td>(20,045)</td><td>2,764</td><td>(301)</td><td></td></tr><tr><td>NTD</td><td>25,778</td><td>-</td><td>(5,937)</td><td>19,841</td><td>131</td><td></td></tr><tr><td>Other</td><td>3,853</td><td>-</td><td>-</td><td>3,853</td><td>90</td><td></td></tr><tr><td>Total</td><td>160,724</td><td>(1,676)</td><td>(57,179)</td><td>101,669</td><td>(3,146)</td><td></td></tr><tr><td colspan="7">Currency 2022</td></tr><tr><td>GBP</td><td>54,674</td><td>(2,132)</td><td>(34,536)</td><td>18,006</td><td>(3,806)</td><td></td></tr><tr><td>EUR</td><td>35,004</td><td>-</td><td>-</td><td>35,004</td><td>(49)</td><td></td></tr><tr><td>USD</td><td>29,881</td><td>(1,639)</td><td>(21,916)</td><td>6,126</td><td>617</td><td></td></tr><tr><td>NTD</td><td>14,884</td><td>-</td><td>(6,122)</td><td>8,762</td><td>288</td><td></td></tr><tr><td>Other</td><td>1,892</td><td>-</td><td>-</td><td>1,892</td><td>(104)</td><td></td></tr><tr><td>Total</td><td>136,335</td><td>(3,971)</td><td>(62,574)</td><td>69,790</td><td>(3,054)</td><td></td></tr></table>

<table><tr><td>Net investment hedges 2023</td><td>Contractual principal amount</td><td>2024</td><td>2025</td><td>After 2025</td><td>Asset</td><td>Liability</td></tr><tr><td>DKKm</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>GBP issued senior bonds</td><td>26,669</td><td>-</td><td>-</td><td>26,669</td><td>-</td><td>-</td></tr><tr><td>GBP forwards and cross-currency swaps</td><td>4,528</td><td>774</td><td>1,131</td><td>2,623</td><td>7</td><td>-</td></tr><tr><td>USD bank loans</td><td>1,332</td><td>-</td><td>-</td><td>1,332</td><td>-</td><td>-</td></tr><tr><td>USD forwards and cross-currency swaps</td><td>16,713</td><td>4,926</td><td>3,934</td><td>9,853</td><td>657</td><td>-</td></tr><tr><td>NTD issued senior bonds</td><td>5,937</td><td>-</td><td>-</td><td>5,937</td><td>-</td><td>-</td></tr><tr><td colspan="7">Net investment hedges 2022</td></tr><tr><td>DKKm</td><td></td><td>2023</td><td>2024</td><td>After 2024</td><td>-</td><td>-</td></tr><tr><td>GBP issued senior bonds</td><td>25,983</td><td>-</td><td>-</td><td>25,983</td><td>-</td><td>-</td></tr><tr><td>GBP forwards and cross-currency swaps</td><td>8,553</td><td>4,895</td><td>-</td><td>3,658</td><td>92</td><td>-</td></tr><tr><td>USD bank loans</td><td>5,194</td><td>-</td><td>-</td><td>5,194</td><td>-</td><td>-</td></tr><tr><td>USD forwards and cross-currency swaps</td><td>16,722</td><td>3,114</td><td>8,919</td><td>4,689</td><td>-</td><td>(676)</td></tr><tr><td>NTD issued senior bonds and forwards</td><td>6,122</td><td>-</td><td>-</td><td>6,122</td><td>-</td><td>-</td></tr></table>

Ineffectiveness from net investment hedges in 2023 amounts to a gain of DKK 236 million (2022: DKK 0 million), recognised in financial items. The ineffectiveness is caused by the impairments on our US activities.

The net position expresses the accounting exposure, if for example, the GBP/DKK exchange rate increased by 10% on 31 December 2023, equally would have increased by DKK 3,761 million, corresponding to 10% of DKK 37,609 million.

Hedging of net investments in foreign subsidiaries
Our foreign subsidiaries entail currency risks. We hedge these currency risks by raising loans in foreign currencies and by entering into forward exchange contracts, currency swaps, and options.

On 31 December 2023, the accumulated exchange rate adjustments totalled DKK -3,146 million (2022: DKK -3,054 million), divided between the exchange rate adjustment of the net investment of DKK -1,093 million (2022: DKK -1,544 million) and the hedging thereof of DKK -2,053 million (2022: DKK -1,510 million).

## § Accounting policies

Hedging of net investments in foreign subsidiaries
Changes in the market value of currency derivatives and currency adjustment of loans that are classified as net investment hedges in foreign subsidiaries or associates are recognised in the consolidated financial statements directly in equity within a separate foreign currency translation reserve.



## Credit risks

Note 6.5

<table><tr><td>Offsetting of financial assets DKfm</td><td>Derivatives</td><td>Trade receivables</td><td>2023</td><td>Derivatives</td><td>Trade receivables</td><td>2022</td></tr><tr><td>Financial assets</td><td>17,775</td><td>21,728</td><td>39,503</td><td>43,507</td><td>121,693</td><td>165,200</td></tr><tr><td>Financial liabilities, offset</td><td>(6,911)</td><td>(16,849)</td><td>(23,760)</td><td>(22,232)</td><td>(114,438)</td><td>(136,670)</td></tr><tr><td>Financial assets in the balance sheet</td><td>10,864</td><td>4,879</td><td>15,743</td><td>21,275</td><td>7,255</td><td>28,530</td></tr><tr><td>Amounts not offset in the balance sheet:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Liabilities with offsetting rights</td><td>(2,529)</td><td>-</td><td>(2,529)</td><td>(7,094)</td><td>-</td><td>(7,094)</td></tr><tr><td>Collateral received</td><td>(468)</td><td>-</td><td>(468)</td><td>(4,515)</td><td>-</td><td>(4,515)</td></tr><tr><td>Net</td><td>7,867</td><td>4,879</td><td>12,746</td><td>9,666</td><td>7,255</td><td>16,921</td></tr><tr><td>Offsetting of financial liabilities DKfm</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Financial liabilities</td><td>17,864</td><td>20,981</td><td>38,845</td><td>60,891</td><td>121,661</td><td>182,552</td></tr><tr><td>Financial assets, offset</td><td>(6,911)</td><td>(16,849)</td><td>(23,760)</td><td>(22,232)</td><td>(114,438)</td><td>(136,670)</td></tr><tr><td>Financial liabilities in the balance sheet</td><td>10,953</td><td>4,132</td><td>15,085</td><td>36,659</td><td>7,233</td><td>45,882</td></tr><tr><td>Amounts not offset in the balance sheet:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets with offsetting rights</td><td>(2,529)</td><td>-</td><td>(2,529)</td><td>(7,094)</td><td>-</td><td>(7,094)</td></tr><tr><td>Collateral provided</td><td>(4,214)</td><td>-</td><td>(4,214)</td><td>(2,744)</td><td>-</td><td>(2,744)</td></tr><tr><td>Net</td><td>4,210</td><td>4,132</td><td>8,342</td><td>28,821</td><td>7,233</td><td>36,044</td></tr></table>

A large part of the gross assets and liabilities can be offset due to the nature in trading activities where energy is both purchased and sold with a limited number of participants in the energy markets.

In addition, the high energy prices increase the gross values to be netted, especially in 2022.

<table><tr><td>Credit quality of the Group&#x27;s counterparties \( ^{1} \)</td><td>2023</td><td>2022</td></tr><tr><td>AAA/Aaa</td><td>27,301</td><td>23,351</td></tr><tr><td>AA/Aa</td><td>7,518</td><td>2,568</td></tr><tr><td>A/A</td><td>10,501</td><td>23,551</td></tr><tr><td>BBB/Baa</td><td>9,020</td><td>15,665</td></tr><tr><td>Other</td><td>9,198</td><td>16,649</td></tr><tr><td>Total credit exposure</td><td>63,538</td><td>81,784</td></tr></table>

 \( ^{1} \)  The figures do not reflect our actual credit exposure, as the positions are calculated before offsetting our debt to such counterparties.

We are exposed to credit risks from our hedging activities, construction activities, and all other activities where a counterparty's failure to meet their obligations may cause a loss. A large part of our credit risk is towards major international energy companies, suppliers, and banks. Where possible, the underlying contracts include minimum credit rating clauses, netting provisions, and other risk-mitigating clauses.

We mitigate our credit risks mainly by:

having minimum rating requirements

monitoring the credit worthiness on the ongoing basis to be able to react in due time

requiring that collateral be furnished or credit

security put in place.

Mitigating our credit risk is not always commercially possible and can be omitted if deemed necessary and balanced. For the most significant counterparties, an internal rating is assigned in connection with establishing credit limits. The rating is based on information from external credit rating agencies, publicly available information, credit risk information systems, and our own analyses.

In 2023, we have expensed a loan given to our US suppliers in the amount of DKK 571 million, which we do not expect to recover after the termination of Ocean Wind 1 and 2. Apart from this, we have not made any significant impairments on receivables in 2022 or 2023.



## Fair value measurement

Note 6.6

<table><tr><td>Fair value hierarchy of financial instruments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>DKKm</td><td>Quoted prices (level 1)</td><td>Observable inputs (level 2)</td><td>Non-observable inputs (level 3)</td><td></td><td>Quoted prices (level 1)</td><td>Observable inputs (level 2)</td><td>Non-observable inputs (level 3)</td></tr><tr><td>Assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash inventory</td><td>1,513</td><td>-</td><td>1,513</td><td>3,442</td><td>-</td><td>-</td><td>3,442</td></tr><tr><td>Total inventory</td><td>1,513</td><td>-</td><td>1,513</td><td>3,442</td><td>-</td><td>-</td><td>3,442</td></tr><tr><td>Bonds</td><td>-</td><td>29,902</td><td>-</td><td>29,902</td><td>-</td><td>25,197</td><td>25,197</td></tr><tr><td>Total securities</td><td>-</td><td>29,902</td><td>-</td><td>29,902</td><td>-</td><td>25,197</td><td>25,197</td></tr><tr><td>Energy derivatives</td><td>4,484</td><td>5,701</td><td>559</td><td>10,744</td><td>14,474</td><td>7,241</td><td>563</td></tr><tr><td>Currency derivatives</td><td>-</td><td>749</td><td>-</td><td>749</td><td>-</td><td>1,378</td><td>-</td></tr><tr><td>Interest and inflation derivatives</td><td>-</td><td>336</td><td>-</td><td>336</td><td>-</td><td>1,581</td><td>-</td></tr><tr><td>Total derivative assets</td><td>4,484</td><td>6,786</td><td>559</td><td>11,829</td><td>14,474</td><td>10,200</td><td>563</td></tr><tr><td>Liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Energy derivatives</td><td>5,149</td><td>4,424</td><td>8,087</td><td>17,660</td><td>12,871</td><td>24,592</td><td>15,250</td></tr><tr><td>Currency derivatives</td><td>-</td><td>489</td><td>-</td><td>489</td><td>-</td><td>1,773</td><td>-</td></tr><tr><td>Interest and inflation derivatives</td><td>-</td><td>4,063</td><td>-</td><td>4,063</td><td>-</td><td>3,073</td><td>-</td></tr><tr><td>Total derivative liabilities</td><td>5,149</td><td>8,976</td><td>8,087</td><td>22,212</td><td>12,871</td><td>29,438</td><td>15,250</td></tr></table>

All assets and liabilities measured at market value are measured on a recurring basis.

We measure our securities and derivatives at fair value. A number of our derivatives, mainly power purchase agreements, are measured based on unobservable inputs due to the long duration of the contracts.

The most significant non-observable inputs are the long-term US power prices (mainly ERCOT) and the German power prices.

## Valuation principles and process

In order to minimise the use of subjective estimates or modifications of parameters and calculation models, it is our policy to determine fair value based on the external information that most accurately reflects the market values. We use pricing services and benchmark services to increase the data quality. Market values are determined by the Risk Management function.

We use external price providers to ensure a high quality in our price curves. Where prices are not available, we model the prices based on our prior experience and best estimates. Where relevant and possible, we validate our price curves against third-party data.

## Fair value hierarchy

Market values based on quoted prices comprise quoted securities and derivatives that are traded in active markets. The market values of derivatives traded in an active market is often settled on a daily basis, thereby minimising the market value presented on the balance sheet.

Market values based on observable inputs comprise derivatives where valuation models with observable inputs are used to measure fair value.
Market values based on non-observable inputs mainly comprise long-term power purchase agreements (CPPAs) that lock the power price of the expected power generation over a period of up to 10-20 years. Due to the long duration of these CPPAs, power prices are not observable for a large part of the duration. The most significant non-observable inputs are based on US power prices (mainly ERCOT) and German power prices.

## Estimating as-produced power prices

Since our CPPAs are normally settled on the actual production, and the power prices available in the market are based on a constant production (flat profile), we take into account that our expected production is not constant, and thus our CPPAs will not be settled against a flat profile price (see description of volume risk in note 6.2). For the majority of our markets, the flat profile power price can be observed for a maximum of four to six years in the market, after which an active market no longer exists.



## Fair value measurement

Note 6.6 – continued

<table><tr><td>Derivatives valued on the basis of unobservable input</td><td></td><td></td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Market value at 1 January</td><td>(14,687)</td><td>(7,448)</td></tr><tr><td>Value adjustments through profit or loss</td><td>(31)</td><td>(322)</td></tr><tr><td>Value adjustments through other comprehensive income</td><td>3,766</td><td>(6,476)</td></tr><tr><td>Sales/redemptions</td><td>1,366</td><td>1,190</td></tr><tr><td>Purchases/issuances</td><td>750</td><td>(497)</td></tr><tr><td>Transferred from quoted prices and observable input</td><td>-</td><td>-</td></tr><tr><td>Transferred to quoted prices and observable input</td><td>1,308</td><td>639</td></tr><tr><td>Market value at 31 December</td><td>(7,528)</td><td>(14,687)</td></tr></table>

<table><tr><td>Unobservable input per commodity price</td><td></td><td></td></tr><tr><td>DKKm</td><td></td><td></td></tr><tr><td>US ERCOT power prices</td><td>(5,261)</td><td>(5,580)</td></tr><tr><td>German power prices</td><td>(1,484)</td><td>(5,643)</td></tr><tr><td>US IPOR power prices</td><td>(757)</td><td>(2,263)</td></tr><tr><td>Other power prices</td><td>(37)</td><td>(2,132)</td></tr><tr><td>Gas prices</td><td>(9)</td><td>(70)</td></tr><tr><td>Total</td><td>(7,528)</td><td>(14,687)</td></tr></table>

The main unobservable inputs are US power prices and German power prices.

<table><tr><td></td><td></td><td colspan="2">Power price (DKK/MWh)</td><td colspan="2">Sensitivity (DKKm)</td></tr><tr><td>Overview of significant unobservable inputs and sensitivities</td><td>Weighted average</td><td>Monthly minimum</td><td>Monthly maximum</td><td>+25%</td><td>-25%</td></tr><tr><td>Intermittency-adjusted power price</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>US ERCOT (2024-2033)</td><td>297</td><td>81</td><td>971</td><td>(3,303)</td><td>3,634</td></tr><tr><td>Germany (2025-2035)</td><td>440</td><td>332</td><td>654</td><td>(1,256)</td><td>1,256</td></tr><tr><td>US MISO (2024-2033)</td><td>302</td><td>149</td><td>422</td><td>(530)</td><td>520</td></tr><tr><td>US SPP (2024-2035)</td><td>189</td><td>128</td><td>358</td><td>(436)</td><td>583</td></tr><tr><td>Ireland (2024-2042)</td><td>524</td><td>389</td><td>808</td><td>(69)</td><td>69</td></tr></table>

The table shows the significant unobservable inputs used in the fair value measurements categorised as level 3 of the fair value hierarchy, together with a sensitivity analysis as at 31 December 2023.

If intermittency-adjusted power prices in Germany as of 31 December 2023 increased/decreased by 25%, the market value would decrease/increase by DKK 1,250 million.

## Valuation techniques and significant

## unobservable inputs

We use a discounted cash flow model for the valuation of power derivatives.

The US power purchase agreements give exposure to the long-term US power prices, mainly in the ERCOT, SPP, and MISO regions. The power price is observable for the first four to six years. For the following four to six years, the power price is estimated based on observable inputs (gas prices and heat rates). For the subsequent period, the power price is non-observable and estimated by extrapolating the power price towards the U.S. Energy Information Administration's long-term power price forecast, assuming similar seasonality as in previous periods. As only a minor part of the contract period is within the period when power prices are non-observable, we classify the contracts as based on observable input.

In Germany and other countries where we have long-term PPA contracts, the power price is observable for up to five years. When power prices are no longer observable in the market, we have estimated the power price by extrapolating the last year with an observable power price, taking expected inflation and seasonality into account.

## Acquired CPPAs

The initial negative fair value from long-term CPPAs acquired in a business combination is recognised as revenue in profit or loss in the future period to which the market value relates. This effectively increases or decreases the revenue from the contract price to the forward price at the closing date.

In 2023, we have recognised an income of DKK 197 million (2022: DKK 228 million) related to the initial fair value from CPPAs. The total amount of initial fair value as of 31 December 2023 amounts to a loss of DKK 1,243 million (2022: loss of DKK 1,497 million), which will be recognised as revenue in a future period.

## 5 Accounting policies

When the fair value at 'initiation recognition' differs from the transaction price, and the fair value is not purely based on observable prices, the difference between the fair value at initial recognition and the transaction price is deferred and recognised over the lifetime of the PPA.



## Energy trading portfolio

Note 6.7

<table><tr><td></td><td></td><td colspan="2">2023</td><td>2022</td></tr><tr><td>Overview of the Group&#x27;s energy trading portfolio(1)</td><td>Contractual principal amount</td><td>Unrealised gain/(loss)</td><td>Contractual principal amount</td><td>Unrealised gain/(loss)</td></tr><tr><td>PDW swaps (sell position)</td><td>3,305</td><td>(492)</td><td>4,683</td><td>(7,854)</td></tr><tr><td>Power options (buy position)</td><td>5,906</td><td>1,406</td><td>3,060</td><td>8,680</td></tr><tr><td>Gas swaps and options (sell position)</td><td>2,138</td><td>(312)</td><td>3,601</td><td>(774)</td></tr><tr><td>Oil swaps and options (buy position)</td><td>156</td><td>(137)</td><td>498</td><td>(204)</td></tr><tr><td>Other (sell position)</td><td>175</td><td>13</td><td>74</td><td>(50)</td></tr></table>

## Trading mandates \( ^{2} \) 

<table><tr><td>V&R Limit in 2023: DKK 100 million</td><td>Stress Limit in 2023: DKK 400 million</td><td>Maximum open positions in trading portfolio</td></tr><tr><td>V&R indicates the largest loss in one trading day at a probability of 95%. V&R is based on data for the past 45 trading days, with the heaviest weighting being assigned to the most recent trading days.</td><td>Stress indicates the largest daily loss we risk sustaining with the given portfolio. Stress is based on data from 1 January 2006 to the present day.</td><td>• Max. 6 TWh of power
• Max. 9.5 TWh of gas
• Max. 1 million boe of oil
• Max. 1.5 million tonnes of carbon emissions
• Max. 0.5 million tonnes of coal and biomass</td></tr></table>

## Daily positions in the trading portfolio, market trading mandates \( ^{2} \) 
DKKm



1 The contractual principal amount has been determined as the net position per derivative type. The risks associated with our options are smaller than for our swaps. The market value mostly consists of received exposure from our units with settlement at maturity, whereas part of the external trade is settled on a daily basis and included with the settled margin.

 \( ^{2} \)  Trading activities are carried out under mandates approved by the Board of Directors. The mandates comprise a value-at-risk (VaR) mandate and a stress mandate as well as a limit for the maximum positions measured in energy units per product (power, gas, etc.).

3 The graph shows the daily VaR position for the period 2022-2023. VaR reached DKK 280 million on 9 March 2022, causing a passive breach of the Board of Directors' mandate of DKK 100 million due to the risk of a power outage. The graph also shows the daily positions for Europe, causing the European energy prices to spike. In 2022, there were further passive breaches in August due to Russian gas supply cuts and in September-November due to a halt of gas through the Nord Stream 1 and 2 pipelines after the explosions in September.

## § Accounting policies

Market value adjustments of physical and financial contracts relating to energy that are entered into with the purpose of generating gains from short-term price changes are recognised as revenue.

## Trading portfolio

The purpose of our trading portfolio is to:

• optimise hedging execution

• contribute to increased market insight

• profit from short-term fluctuations in energy prices.

The energy trading portfolio receives the exposure from our assets and takes that exposure into the external market in the most efficient way possible, given the mandates shown to the left. The overview of the Group's energy trading portfolio to the left is the net of the internal exposures received from the assets and the external trades in line with internal risk management.

The trading portfolio primarily consists of positions in power and gas.

The trading portfolio constitutes a smaller part of our total portfolio of derivatives, and the associated risk is limited.



## Categories of financial instruments

Note 6.8

<table><tr><td colspan="3">Categories of financial instruments</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Energy, currency, and interest derivatives</td><td>7,251</td><td>17,775</td></tr><tr><td>Securities</td><td>29,902</td><td>25,197</td></tr><tr><td>Financial assets measured at fair value via the income statement</td><td>37,153</td><td>42,972</td></tr><tr><td>Energy derivatives</td><td>3,763</td><td>6,709</td></tr><tr><td>Currency derivatives</td><td>795</td><td>275</td></tr><tr><td>Interest and inflation derivatives</td><td>-</td><td>478</td></tr><tr><td>Derivatives (asset) used as hedging instruments</td><td>4,578</td><td>7,462</td></tr><tr><td>Trade receivables</td><td>11,107</td><td>12,701</td></tr><tr><td>Other accounts receivable</td><td>7,200</td><td>9,459</td></tr><tr><td>Other debtors</td><td>10,626</td><td>18,649</td></tr><tr><td>Financial assets measured at amortised cost</td><td>28,933</td><td>40,809</td></tr><tr><td>Energy, currency, and interest derivatives</td><td>3,712</td><td>12,551</td></tr><tr><td>Financial liabilities measured at fair value via the income statement</td><td>3,712</td><td>12,551</td></tr><tr><td>Energy derivatives</td><td>14,661</td><td>41,237</td></tr><tr><td>Currency derivatives</td><td>481</td><td>697</td></tr><tr><td>Interest and inflation derivatives</td><td>3,358</td><td>3,073</td></tr><tr><td>Derivatives (liabilities) used as hedging instruments</td><td>18,500</td><td>45,007</td></tr><tr><td>Bank loans and issued bonds</td><td>79,620</td><td>63,281</td></tr><tr><td>Trade payables</td><td>14,915</td><td>20,641</td></tr><tr><td>Other accounts payable</td><td>8,591</td><td>11,310</td></tr><tr><td>Financial liabilities measured at amortised cost</td><td>103,126</td><td>95,232</td></tr></table>

The categories indicate how the financial instruments are recognised in the financial statement.

Financial instruments are used for various purposes. The purpose determines the category, and whether the value adjustment of the instrument should be recognised in the profit (loss) for the year or as part of the hedging reserve in equity.

The fair value of financial instruments measured at amortised cost is identical to the carrying amount with the exception of bank loans and issued bonds where the market value is stated in note 5.1 'Interest-bearing net debt and FFO'.



## Sensitivity analysis of financial instruments

Note 6.9

<table><tr><td rowspan="2">Sensitivity analysis of financial instruments</td><td colspan="4">31 December 2023</td><td colspan="4">31 December 2022</td></tr><tr><td>Price change</td><td>Effect on profit (loss) before tax</td><td>Effect on equity before tax</td><td>Effect on profit (loss) before tax</td><td>Effect on equity before tax</td><td></td><td></td><td></td></tr><tr><td>DKKm</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Power</td><td>25%</td><td>(277)</td><td>(8,119)</td><td>(1,791)</td><td>(14,382)</td><td></td><td></td><td></td></tr><tr><td></td><td>-25%</td><td>562</td><td>8,263</td><td>1,794</td><td>14,402</td><td></td><td></td><td></td></tr><tr><td>Gas</td><td>25%</td><td>(588)</td><td>(127)</td><td>(764)</td><td>177</td><td></td><td></td><td></td></tr><tr><td></td><td>-25%</td><td>588</td><td>127</td><td>764</td><td>(177)</td><td></td><td></td><td></td></tr><tr><td>Oil</td><td>25%</td><td>(360)</td><td>260</td><td>253</td><td>(6)</td><td></td><td></td><td></td></tr><tr><td></td><td>-25%</td><td>360</td><td>(158)</td><td>608</td><td>(6)</td><td></td><td></td><td></td></tr><tr><td>GBP</td><td>10%</td><td>817</td><td>(2,965)</td><td>(2,430)</td><td>(4,727)</td><td></td><td></td><td></td></tr><tr><td></td><td>-10%</td><td>(817)</td><td>2,965</td><td>2,430</td><td>4,727</td><td></td><td></td><td></td></tr><tr><td>USD</td><td>10%</td><td>(2,070)</td><td>(662)</td><td>(947)</td><td>(853)</td><td></td><td></td><td></td></tr><tr><td></td><td>-10%</td><td>2,070</td><td>662</td><td>947</td><td>853</td><td></td><td></td><td></td></tr><tr><td>NTD</td><td>10%</td><td>(386)</td><td>96</td><td>-</td><td>-</td><td></td><td></td><td></td></tr><tr><td></td><td>-10%</td><td>386</td><td>9</td><td>743</td><td>-</td><td></td><td></td><td></td></tr><tr><td>EUR</td><td>1%</td><td>(212)</td><td>(15)</td><td>(899)</td><td>(125)</td><td></td><td></td><td></td></tr><tr><td></td><td>-1%</td><td>212</td><td>15</td><td>899</td><td>125</td><td></td><td></td><td></td></tr><tr><td>Inflation</td><td>1% point</td><td>-</td><td>(2,059)</td><td>-</td><td>(2,162)</td><td></td><td></td><td></td></tr><tr><td>Interest</td><td>1% point</td><td>620</td><td>920</td><td>(332)</td><td>1,224</td><td></td><td></td><td></td></tr></table>

The sensitivity analysis in the table shows the effect of market value changes, assuming a relative price change at 31 December.

The effect on profit (loss) before tax comprises financial instruments that remained open at the balance sheet date, and which have an effect on profit (loss) in the current financial year.

Effect on equity before tax comprises financial instruments that remained open at the balance sheet date, and which are value-adjusted directly in equity.

Financial instruments include derivatives as well as receivables and payables in foreign currencies.

The illustrated sensitivities only comprise the impact of our financial instruments.
If the hedged exposure had been included in the sensitivity analysis, the effect of a price change would have been reduced or offset entirely.

Net investments and associated hedging of net investments in foreign subsidiaries are not included in the table, as the effects of the sum of the investments and the hedging are considered to be neutral to changes in currencies.

A 10% increase in the currencies hedged in connection with net investments would reduce equity by DKK 5,718 million (2022: DKK 6,257 million).



## Other notes
Note 7

## Related-party transactions
Note 7.1

<table><tr><td>Joint ventures</td><td>2023</td><td>2022</td></tr><tr><td>Dividends received</td><td>86</td><td>70</td></tr><tr><td>Capital transactions, net</td><td>(222)</td><td>(92)</td></tr><tr><td>Sales of goods and services</td><td>64</td><td>-</td></tr><tr><td>Receivables</td><td>9</td><td>-</td></tr></table>

<table><tr><td>Associates</td><td></td><td></td></tr><tr><td></td><td></td><td></td></tr><tr><td>Capital transactions, net</td><td>(54)</td><td>(37)</td></tr><tr><td>Sale of goods and services</td><td></td><td>14</td></tr><tr><td>Purchase of goods and services</td><td>(1.86)</td><td>(1.80)</td></tr><tr><td>Receivables</td><td></td><td>-</td></tr><tr><td>Payables</td><td>(25)</td><td>(44)</td></tr></table>

Related parties that have control over the Group comprise the Danish state, represented by the Danish Ministry of Finance.

Other related parties are the Group’s associates and joint ventures, members of the Board of Directors and the Executive Board, and other senior executives.

See note 7.4 'Company overview' for an overview of our joint ventures and associates.

Related-party transactions are made on arm's length terms. Intra-group transactions have been eliminated in the consolidated financial statements.
The remuneration and share programmes for the Group Executive Team and the Board of Directors are described in notes 2.7 'Employee costs' and 2.8 'Share-based payment'.

We use the exemption set out in IAS 24.25 concerning entities in which the Danish state is a related party, and therefore transactions with government-related companies are not disclosed.

There were no other related-party transactions during the period.



## Auditor's fees

Note 7.2

PwC is Ørsted's auditor appointed by the annual general meeting. PwC audits the consolidated financial statements of Ørsted and our subsidiaries' statutory financial statements in all the countries where we are represented.

It is our policy that the annual fee for non-audit services provided by our statutory auditor cannot exceed the annual fee for statutory audit services measured at Group level. The cap may be exceeded subject to approval by the Audit & Risk Committee.

'Other assurance engagements' primarily included reviews of ESG data, assurance services related to the issuance of bonds, audit of special regulatory financial statements, and assurance services related to other reporting to third parties.
'Tax and VAT advice' primarily included advice in connection with tax due diligence, transfer pricing advice, and advice in connection with the preparation and review of tax returns.

'Other services' included other consultancy services, primarily related to vendor due diligence and regression testing.

Fees for services other than statutory audit supplied by PwC Denmark to Ørsted amounted to DKK 8 million (2022: DKK 7 million) and consisted of assurance services related to the issuance of bonds, due diligence, regression testing, review of ESG data, and other general accounting, tax, and transfer pricing advice.

<table><tr><td>Auditor&#x27;s fees</td><td></td><td></td></tr><tr><td>DKKmn</td><td>2023</td><td>2022</td></tr><tr><td>Audit and audit-related fees</td><td></td><td></td></tr><tr><td>Statutory audit</td><td>37</td><td>30</td></tr><tr><td>Other assurance engagements</td><td>5</td><td>4</td></tr><tr><td>Non-audit services</td><td></td><td></td></tr><tr><td>Tax and VAT advice</td><td>2</td><td>3</td></tr><tr><td>Audit</td><td>2</td><td>3</td></tr><tr><td>Total fees to PwC</td><td>48</td><td>40</td></tr><tr><td>Fee for non-audit services in percent of statutory audit fee</td><td>28%</td><td>31%</td></tr><tr><td>PwC Denmark non-audit service ratio</td><td>74%</td><td>69%</td></tr></table>

The non-audit services provided by the Group auditor in Denmark cannot exceed 70%. The "PwC Denmark non-audit service ratio" includes an assurance service related to a contemplated bond issuance for which we have received an exemption from the Danish Business Authorities. The "PwC Denmark non-audit service ratio", excluding this exempted service, constitutes 55% for 2023.



## Non-IFRS financial measures

Note 7.3

We present financial measures in the consolidated financial statements to describe the Group’s financial performance and cash flows. We use these financial measures as we believe they provide valuable information to our stakeholders and management.

The financial measures should not be considered a replacement for the performance measures as defined under IFRS but rather as supplementary information.

The financial ratios are an overview of our financial performance and operational efficiency based on common ratio types relevant to Ørsted.

Our definitions of the financial measures and reasoning for using them are shown in the table.

<table><tr><td></td><td>Description</td><td>Reason for the use of the measurements</td></tr><tr><td>EBITDA</td><td>Reflecting 'Earnings before interest, taxes, depreciation, amortisation, and impairments'.</td><td>Measurement for our core operationl performance. Given our capital-intensive portfolio of assets, our primary operations are best measured by excluding depreciation and financing costs. Ørsted guides externally on this non-IFRS measure.</td></tr><tr><td>Net interest-bearing debt (NIBD)</td><td>Equals interest-bearing debt to be repaid in cash, including issued bonds, bank debt and lease liabilities, less securities, cash, and other interest-bearing assets.</td><td>Measurement of the sum of our interest-bearing assets and liabilities. Thus, important for management to monitor in order to ensure adequate debt levels.</td></tr><tr><td>Gross investments</td><td>Gross investments reflect our total investments in assets and enterprises. It comprises investments in subsidiaries, joint ventures, and equity investments, purchase and sale of securities, loans to joint ventures and joint operations, purchases and sale of securities, loans to joint ventures and joint operations, and divestments of assets and enterprises. To this is added acquired debt and restricted cash in connection with acquisitions.</td><td>Measurement used to monitor the net interest-bearing debt impact of our investment activities in assets and enterprises. Ørsted guides externally on this non-IFRS measure.</td></tr><tr><td>Net investments</td><td>Net investments are gross investments less divestments of assets and enterprises, the selling price for non-controlling interests, and subsequent capital injections from non-controlling interests. Furthermore, interest-bearing debt transferred in connection with a divestment is deducted.</td><td>Measurement to monitor the net interest-bearing debt impact of our investment activities in assets and enterprises, net of divestments.</td></tr><tr><td>Funds from operations (FFO)</td><td>EBITDA adjusted for gain (loss) on divestment of assets, variation margin, change in provision and other adjustments, income tax paid, interest and similar items, received or paid, including capitalised interest expenses; 50% of coupon payments on hybrid capital; dividends received, and capital reductions.</td><td>Measurement used to monitor our funds, directly and indirectly, generated from our funds. Funds from operations is the numerator in our rating metric.</td></tr><tr><td>Adjusted interest-bearing net debt</td><td>Adjusted interest-bearing net debt is interest-bearing net debt plus: - cash and securities not available for distribution (excluding repo loans) - 50% of hybrid capital - Other interest-bearing debt (add back) - Other interest-bearing receivables (add back)</td><td>Measurement used as an indicator of our interest-bearing net debt in a format comparable to the ones used by rating agencies. Net interest-bearing debt is the denominator in our rating metric.</td></tr><tr><td>FFO to adjusted interest-bearing net debt</td><td>Adjusted FFO</td><td>Measurement used to monitor our ability to generate funds from our operations which can serve our interest-bearing debt. It is the metric used by rating agencies when assessing their rating of Ørsted.</td></tr><tr><td>Free cash flow (FCF)</td><td>Free cash flows are cash flows from operating activities and divestments less gross investments.</td><td>Measurement used as an indicator to see if we can self-fund our growth.</td></tr><tr><td>Capital employed</td><td>Capital employed are all assets and liabilities, except for equity and interest-bearing net debt.</td><td>Measurement used to monitor the capital tied within the business which is utilised for the primary activities of generating profits.</td></tr></table>



## Non-IFRS financial measures

Note 7.3 – continued

<table><tr><td>Description</td><td>Reason for the use of the measurements</td></tr><tr><td>Return on capital employed (ROCE)</td><td>EBITCommon measurement to monitor the return generated on the capital invested within the company over the duration of the year passed.</td></tr><tr><td>Average capital employed</td><td></td></tr><tr><td>Proposed dividend per share (DPS)</td><td>Total proposed dividendNumber of shares at year end</td></tr><tr><td>Dividend yield</td><td>Dividend per share (proposed)Share price on the last trading day of the year</td></tr><tr><td>Average number of shares</td><td>1Number of days</td></tr><tr><td>Net working capital</td><td>Net working capital is inventories, contract assets (net), trade receivables, and other current operating assets less trade payables, other current operating liabilities, and working capital elements of tax equity balances.</td></tr><tr><td>Other definitions (IFRS financial measure)</td><td></td></tr><tr><td>Profit (loss) per share</td><td>Shareholder&#x27;s share of the profit (loss) for the periodAverage number of shares</td></tr><tr><td>Diluted profit (loss) per share</td><td>Shareholder&#x27;s share of the profit (loss) for the periodAverage number of shares, including dilutive effect of free shares</td></tr></table>



## Company overview

Note 7.4

<table><tr><td>Segment/company</td><td>Country</td><td>Type1</td><td>Ownership interest</td></tr><tr><td>Parent Company</td><td></td><td></td><td></td></tr><tr><td>Orsted A/S</td><td>Denmark</td><td></td><td></td></tr><tr><td>Offshore</td><td></td><td></td><td></td></tr><tr><td>Anholt Hovland/middelpark I/S</td><td>Denmark</td><td>JO</td><td>50%</td></tr><tr><td>Borkum Riffgrund 1 Windpark A/S GmbH &amp; Co. oHG</td><td>Germany</td><td>JO</td><td>50%</td></tr><tr><td>Borkum Riffgrund 2 Offshore Wind Farm GmbH &amp; Co. oHG</td><td>Germany</td><td>JO</td><td>50%</td></tr><tr><td>Borsslee Windfarm C.V.</td><td>The Netherlands</td><td>JO</td><td>50%</td></tr><tr><td>Bressea Ltd:</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>Code Wind 1 Offshore Wind Farm GmbH &amp; Co. oHG</td><td>Germany</td><td>JO</td><td>50%</td></tr><tr><td>Code Wind 2 Offshore Wind Farm RS GmbH</td><td>Germany</td><td>JO</td><td>50%</td></tr><tr><td>Code Wind 3 GmbH &amp; Co. oHG</td><td>Germany</td><td>JO</td><td>50%</td></tr><tr><td>Greater Changuha Offshore Wind Farm NLV Ltd.</td><td>Taiwan</td><td>S</td><td>100%</td></tr><tr><td>Greater Changuha Offshore Wind Farm SE Ltd2:</td><td>Taiwan</td><td>JO</td><td>50%</td></tr><tr><td>Greater Changuha Offshore Wind Farm SW Ltd2</td><td>Taiwan</td><td>S</td><td>100%</td></tr><tr><td>Horsaa 1 Limited2</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>Horsaa 2 Limited2</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>Orsted Borsslee Holding BV</td><td>The Netherlands</td><td>S</td><td>100%</td></tr><tr><td>Orsted Horsaa 1 Holdings Limited</td><td>The UK</td><td>S</td><td>100%</td></tr><tr><td>Orsted Horsaa Project Three (UK) Ltd</td><td>The UK</td><td>S</td><td>100%</td></tr><tr><td>Orsted Horsaa Two Holdings Ltd</td><td>The UK</td><td>S</td><td>100%</td></tr><tr><td>Orsted North America Inc</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Orsted Røa Holding Ltd</td><td>The UK</td><td>S</td><td>100%</td></tr><tr><td>Orsted Race Bank (Holding) Ltd</td><td>The UK</td><td>S</td><td>100%</td></tr><tr><td>Orsted Taiwan Ltd</td><td>Taiwan</td><td>S</td><td>100%</td></tr><tr><td>Orsted Walney Extension Holdings Limited</td><td>The UK</td><td>S</td><td>100%</td></tr><tr><td>Orsted West of Duddon Sands (UK) Ltd</td><td>The UK</td><td>S</td><td>100%</td></tr><tr><td>Race Bank Wind Farm Limited2</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>Røa Holding Ltd</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>Sonningmayd Wind Limited2</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>Soundmark Wind Limited2</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>South Fork, LLC2</td><td>The US</td><td>JO</td><td>50%</td></tr><tr><td>Walney (UK) Offshore Windfarms Limited</td><td>The UK</td><td>S</td><td>50%</td></tr><tr><td>West Of Duddon Sands</td><td>The UK</td><td>JO</td><td>50%</td></tr><tr><td>Orsted Horsa Rev 2 A/S</td><td>Denmark</td><td>S</td><td>100%</td></tr><tr><td>Orsted Wind Farm A/S</td><td>Denmark</td><td>S</td><td>100%</td></tr><tr><td>Orsted Vind Power Holding A/S1</td><td>Denmark</td><td>S</td><td>100%</td></tr></table>

<table><tr><td>Segment/company</td><td>Country</td><td>Type1</td><td>Ownership interest</td></tr><tr><td>Onshore</td><td></td><td></td><td></td></tr><tr><td>2W Permian Solar, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Eleven Mile Solar Center, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Haystack Wind Project, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Helena Wind, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Lincoln Land, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Rockingbird Solar Center, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Hudson Solar Solar, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Old 300 Solar Center, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Orsted Onshore Ireland Green Energy Limited</td><td>Ireland</td><td>S</td><td>100%</td></tr><tr><td>Sage Draw Wind, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Sparta Solar, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Sunflower Energy, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Tahoe Wind, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Western Trail Wind, LLC</td><td>The US</td><td>S</td><td>100%</td></tr><tr><td>Orsted Onshore Holding A/S3</td><td>Denmark</td><td>S</td><td>100%</td></tr><tr><td>Bienergy &amp; Other</td><td></td><td></td><td></td></tr><tr><td>Orsted Bienergy &amp; Thermal Power A/S3</td><td>Denmark</td><td>S</td><td>100%</td></tr><tr><td>Orsted Salg &amp; Service A/S3</td><td>Denmark</td><td>S</td><td>100%</td></tr><tr><td>Shredd Functions</td><td></td><td></td><td></td></tr><tr><td>Orsted North America Holding A/S</td><td>Denmark</td><td>S</td><td>100%</td></tr><tr><td>Orsted Vind Power TV Holding A/S</td><td>Denmark</td><td>S</td><td>100%</td></tr></table>

1 S = subsidiary, JO = joint operation.

1 The company is owned through a company which is not owned

2 The company is owned through a company which is not owned

Ultimate ownership interest in the company

 \( ^{3} \)  Subsidiaries owned directly by Orsted A/S.

Companies without significant activities are not included in the list. A full comprehensive list of companies is available at:

https://orsted.com/company/overview



## Events after the reporting period
Note 7.5

## Sunrise Wind

In 2024, Ørsted signed an agreement to acquire Eversource's 50% share of Sunrise Wind. The acquisition is subject to the successful award of Sunrise Wind in the state of New York solicitation for offshore wind capacity. The acquisition would give Ørsted 100% ownership of Sunrise Wind.



## Parent company
financial statements

233 Income statement
233 Balance sheet
234 Statement of changes in equity

235 Notes

1 Basis of reporting
2 Employee costs
3 Financial income and expenses
4 Tax on profit (loss) for the year and deferred tax
5 Distribution of net profit
6 Property, plant, and equipment
7 Investments in subsidiaries
8 Receivables from subsidiaries
9 Derivatives
10 Securities
11 Loans and borrowings
12 Dividends
13 Related-party transactions
14 Contingent liabilities
15 Auditor's fees
16 Ownership information

→ Ørsted donated almost 1,000 acres of land adjacent to Mockingbird Solar Center to The Nature Conservancy to protect native prairie in north-east Texas.

Less than one percent of the original tallgrass prairies of Texas survive today, and less than five percent remain nationally. Our joint conservation effort will be the largest preservation effort on record for this type of native prairie and Ørsted's first biodiversity initiative in the US.






## Income statement

1 January – 31 December

## Balance sheet

31 December

<table><tr><td>Note</td><td>Income statement DKfKm</td><td>2023</td><td>2022</td></tr><tr><td>1</td><td>Revenue</td><td>259</td><td>229</td></tr><tr><td>2</td><td>Employee costs</td><td>(59)</td><td>(82)</td></tr><tr><td></td><td>External expenses</td><td>(172)</td><td>(243)</td></tr><tr><td></td><td>Operating profit (loss) before depreciation, amortisation, and impairment losses (EBITDA)</td><td>28</td><td>(96)</td></tr><tr><td></td><td>Amortisation, depreciation, and impairment losses on property, plant, and equipment</td><td>(113)</td><td>(112)</td></tr><tr><td></td><td>Operating profit (loss) (EBIT)</td><td>(85)</td><td>(208)</td></tr><tr><td>3</td><td>Gain (loss) on divestment of enterprises</td><td>791</td><td>(224)</td></tr><tr><td>3</td><td>Financial income</td><td>21,262</td><td>23,126</td></tr><tr><td>3</td><td>Financial expenses</td><td>(15,114)</td><td>(19,673)</td></tr><tr><td></td><td>Profit (loss) before tax</td><td>6,854</td><td>3,021</td></tr><tr><td>4</td><td>Tax on profit (loss) for the year</td><td>(1,240)</td><td>344</td></tr><tr><td>5</td><td>Profit (loss) for the year</td><td>5,614</td><td>3,365</td></tr></table>

<table><tr><td>Note</td><td>Assets DKfKm</td><td>2023</td><td>2022</td></tr><tr><td>6</td><td>Land and buildings</td><td>569</td><td>712</td></tr><tr><td>7</td><td>Property, plant, and equipment</td><td>569</td><td>712</td></tr><tr><td>7</td><td>Investments in subsidiaries</td><td>50,864</td><td>51,276</td></tr><tr><td>8</td><td>Receivables from subsidiaries</td><td>194,064</td><td>163,616</td></tr><tr><td>4</td><td>Deferred tax</td><td>246</td><td>33</td></tr><tr><td></td><td>Other receivables</td><td>13</td><td>14</td></tr><tr><td></td><td>Financial assets</td><td>245,187</td><td>214,939</td></tr><tr><td></td><td>Non-current assets</td><td>245,756</td><td>215,651</td></tr><tr><td>9</td><td>Receivables from subsidiaries</td><td>42,635</td><td>28,542</td></tr><tr><td></td><td>Derivatives</td><td>5,092</td><td>6,661</td></tr><tr><td></td><td>Other receivables</td><td>4,379</td><td>2,702</td></tr><tr><td></td><td>Loans</td><td>52,106</td><td>37,961</td></tr><tr><td>10</td><td>Securities</td><td>29,514</td><td>24,428</td></tr><tr><td></td><td>Cash</td><td>4,324</td><td>8,840</td></tr><tr><td></td><td>Current assets</td><td>85,944</td><td>71,229</td></tr><tr><td></td><td>Assets</td><td>331,700</td><td>286,880</td></tr></table>

<table><tr><td>Note</td><td>Equity and liabilities DKfKm</td><td>2023</td><td>2022</td></tr><tr><td></td><td>Share capital</td><td>4,204</td><td>4,204</td></tr><tr><td></td><td>Reserves</td><td>414</td><td>2,130</td></tr><tr><td></td><td>Retained earnings</td><td>51,597</td><td>46,530</td></tr><tr><td></td><td>Proposed dividends</td><td>-</td><td>5,675</td></tr><tr><td></td><td>Equity attributable to shareholders in Ørsted A/S</td><td>56,215</td><td>56,539</td></tr><tr><td>11</td><td>Hybrid capital</td><td>19,103</td><td>19,793</td></tr><tr><td></td><td>Total</td><td>75,318</td><td>76,332</td></tr><tr><td>12</td><td>Other provisions</td><td>1,731</td><td>1,649</td></tr><tr><td>11</td><td>Lease liabilities</td><td>514</td><td>659</td></tr><tr><td>11</td><td>Bond and bank debt</td><td>69,695</td><td>54,033</td></tr><tr><td></td><td>Non-current liabilities</td><td>71,980</td><td>56,641</td></tr><tr><td>12</td><td>Other provisions</td><td>8</td><td>22</td></tr><tr><td></td><td>Lease liabilities</td><td>115</td><td>107</td></tr><tr><td>9</td><td>Bond and bank debt</td><td>1,281</td><td>1,547</td></tr><tr><td></td><td>Lease liabilities</td><td>1,281</td><td>1,547</td></tr><tr><td></td><td>Trade payables</td><td>107</td><td>64</td></tr><tr><td></td><td>Payables to subsidiaries</td><td>175,457</td><td>142,297</td></tr><tr><td></td><td>Other payables</td><td>1,687</td><td>2,306</td></tr><tr><td></td><td>Income tax</td><td>766</td><td>-</td></tr><tr><td></td><td>Current liabilities</td><td>164,402</td><td>151,907</td></tr><tr><td></td><td>Liabilities</td><td>256,382</td><td>208,548</td></tr><tr><td></td><td>Equity and liabilities</td><td>331,700</td><td>286,880</td></tr></table>



## Statement of changes in equity

1 January – 31 December

<table><tr><td>Statement of changes in equity
DK/m</td><td>Share capital</td><td>Hedging reserve</td><td>Retained earnings</td><td>Proposed dividends</td><td>Shareholders in &quot;Ord&#x27;ed A/S</td><td>Hybrid capital</td><td>Total</td></tr><tr><td>Equity at 1 January 2023</td><td>4,204</td><td>2,130</td><td>46,530</td><td>5,675</td><td>58,539</td><td>19,793</td><td>78,332</td></tr><tr><td>Profit (loss) for the year</td><td>-</td><td>-</td><td>5,061</td><td>-</td><td>5,061</td><td>553</td><td>5,614</td></tr><tr><td>Dividends paid</td><td>-</td><td>-</td><td>2</td><td>(5,675)</td><td>(5,673)</td><td>-</td><td>(5,673)</td></tr><tr><td>Value adjustments of hedging instruments</td><td>-</td><td>108</td><td>-</td><td>-</td><td>108</td><td>-</td><td>108</td></tr><tr><td>Value adjustments transferred to financial income and expenses</td><td>-</td><td>(2,308)</td><td>-</td><td>-</td><td>(2,308)</td><td>-</td><td>(2,308)</td></tr><tr><td>Share-based payments</td><td>-</td><td>484</td><td>-</td><td>-</td><td>484</td><td>-</td><td>484</td></tr><tr><td>Coupon payments, hybrid capital</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(546)</td><td>(546)</td></tr><tr><td>Disposals, hybrid capital</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(699)</td><td>(699)</td></tr><tr><td>Share-based payments</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Changes in equity in 2023</td><td>-</td><td>(1,716)</td><td>5,067</td><td>(5,675)</td><td>(2,324)</td><td>(690)</td><td>(3,014)</td></tr><tr><td>Equity at 31 December 2023</td><td>4,204</td><td>414</td><td>51,597</td><td>-</td><td>56,215</td><td>19,103</td><td>75,318</td></tr><tr><td>Equity at 1 January 2022</td><td>4,204</td><td>573</td><td>49,411</td><td>5,255</td><td>59,443</td><td>17,984</td><td>77,427</td></tr><tr><td>Profit (loss) for the year</td><td>-</td><td>-</td><td>2,788</td><td>-</td><td>2,788</td><td>577</td><td>3,365</td></tr><tr><td>Dividends paid</td><td>-</td><td>-</td><td>2</td><td>(5,255)</td><td>(5,253)</td><td>-</td><td>(5,253)</td></tr><tr><td>Value adjustments of hedging instruments</td><td>-</td><td>-</td><td>(5,675)</td><td>5,675</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Value adjustments transferred to financial income and expenses</td><td>-</td><td>2,578</td><td>-</td><td>-</td><td>2,578</td><td>-</td><td>2,578</td></tr><tr><td>Tax on changes in equity</td><td>-</td><td>(583)</td><td>-</td><td>-</td><td>(583)</td><td>-</td><td>(583)</td></tr><tr><td>Coupon payments, hybrid capital</td><td>-</td><td>(438)</td><td>-</td><td>-</td><td>(438)</td><td>13</td><td>(425)</td></tr><tr><td>Additions, hybrid capital</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(529)</td><td>(529)</td></tr><tr><td>Disposals, hybrid capital</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>3,693</td><td>3,693</td></tr><tr><td>Share-based payments</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1,945)</td><td>(1,945)</td></tr><tr><td>Changes in equity in 2022</td><td>-</td><td>1,557</td><td>(2,881)</td><td>420</td><td>(904)</td><td>1,809</td><td>905</td></tr><tr><td>Equity at 31 December 2022</td><td>4,204</td><td>2,130</td><td>46,530</td><td>5,675</td><td>58,539</td><td>19,793</td><td>78,332</td></tr></table>



## Basis of reporting

Note 1

## Accounting policies

The parent company financial statements have been prepared in accordance with the provisions of the Danish Financial Statements Act ('Årsregnskabsloven') (reporting class D).

The accounting policies remain unchanged from previous year.

Unless otherwise stated, the financial statements are presented in Danish kroner (DKK).

The parent company accounting policies are consistent with the accounting policies described for the consolidated financial statements, with the following exceptions.

## Foreign currency translation

We recognise exchange rate adjustments of receivables from and payables to subsidiaries as financial income and expenses in the income statement when the balances are accounted for as part of the total net investment in foreign enterprises. Likewise, we recognise foreign exchange gains and losses on loans and derivatives in the income statement as financial income and expenses when they have been entered into hedge net investment in the foreign enterprises.

## Revenue

Rental income comprises income from commercial leases and is recognised over the term of the lease. Income from services is recognised when delivery has taken place.

## Dividends from investments

Dividends from subsidiaries and associates are recognised in the income statement for the financial year in which the dividends are approved at the annual general meeting. If the dividends exceed the total income after takeover, the dividends are recognised as a reduction of the cost of the investment under assets.

## Investments

We measure our investments in subsidiaries and associates at cost. If there is any indication that the value of a company is lower than our future earnings in the company, impairment testing of the company is carried out as described in the consolidated financial statements. The carrying amount is written down to the recoverable amount whenever the carrying amount exceeds the future earnings in the company (recoverable amount).

If we have a legal or constructive obligation to cover a deficit in subsidiaries and associates, we recognise a provision for this.

## Tax

Ørsted A/S is taxed jointly with its Danish subsidiaries. The jointly taxed companies are part of joint taxation with the parent company as the management company.

Subsidiaries are included in the joint taxation from the date they are consolidated in the consolidated financial statements and up to the date on which they are no longer consolidated.

Current tax for 2023 is recognised by the individual, jointly taxed companies.

## Statement of cash flows

We do not prepare a separate statement of cash flows for the parent company. Reference is made to the consolidated statement of cash flows on pages 147-148.

## Key accounting estimate

In connection with the preparation of the financial statements, the number of accounting estimates have been made that affect the profit (loss) and balance sheet. Estimates are regularly reassessed by the management on the basis of historical experience and other factors, including:

## Impairment test

If there is any indication that the carrying amount is lower than our future earnings in a company, we test for impairment as described in the consolidated financial statements. The future earnings of the company (recoverable amount) are calculated based on assumptions concerning significant estimates.



## Employee costs

Note 2

## Financial income and expenses

Note 3

<table><tr><td>Employee costs</td><td></td><td></td></tr><tr><td>DKkm</td><td>2023</td><td>2022</td></tr><tr><td>Wages and salaries</td><td>47</td><td>70</td></tr><tr><td>Share-based payment</td><td>4</td><td>4</td></tr><tr><td>Pensions and social costs</td><td>1</td><td>1</td></tr><tr><td>Remuneration</td><td>7</td><td>7</td></tr><tr><td>Total employee costs</td><td>59</td><td>82</td></tr></table>

<table><tr><td colspan="3">Salaries and remuneration of the Executive Board</td></tr><tr><td colspan="3">DKK &#x27;000</td></tr><tr><td>Fixed salary</td><td>27,849</td><td>30,632</td></tr><tr><td>Cash-based incentive scheme</td><td>3,711</td><td>6,454</td></tr><tr><td>Share-based payment</td><td>6,270</td><td>3,989</td></tr><tr><td>Pension, incl. social security and benefits</td><td>858</td><td>860</td></tr><tr><td>Salary in notice period</td><td>8,443</td><td>14,553</td></tr><tr><td>Severance payment</td><td>53,210</td><td>53,210</td></tr><tr><td>Total</td><td>53,341</td><td>67,758</td></tr></table>

Notes 2.7 “Employee costs” and 2.8 “Share-based payment” to the consolidated financial statements describe the remuneration of the Executive Board and the Board of Directors as well as the share-based payment, termination, and bonus scheme for the Executive Board and details on the remuneration of the Board of Directors.

The parent company had an average of nine employees in 2023 (2022: eight employees).

Remuneration of the Board of Directors totals DKK 7 million (2022: DKK 7 million).

<table><tr><td colspan="3">Financial income and expenses</td></tr><tr><td>DKkm</td><td>2023</td><td>2022</td></tr><tr><td>Interest income from cash, etc.</td><td>528</td><td>104</td></tr><tr><td>Interest income from subsidiaries</td><td>10,516</td><td>4,006</td></tr><tr><td>Interest income from securities at market value</td><td>707</td><td>150</td></tr><tr><td>Reversal impairment of investments in subsidiaries</td><td>-</td><td>165</td></tr><tr><td>Foreign exchange gains</td><td>1,356</td><td>3,531</td></tr><tr><td>Value adjustments of derivatives</td><td>6,142</td><td>11,331</td></tr><tr><td>Dividends received</td><td>13</td><td>4,061</td></tr><tr><td>Total financial income</td><td>21,262</td><td>23,126</td></tr><tr><td>Interest expenses relating to loans and borrowings</td><td>(2,759)</td><td>(1,824)</td></tr><tr><td>Interest expenses, leases</td><td>(18)</td><td>(20)</td></tr><tr><td>Interest expenses to subsidiaries</td><td>(5,413)</td><td>(765)</td></tr><tr><td>Impairment of investments in subsidiaries</td><td>-</td><td>(39)</td></tr><tr><td>Capital losses on securities at market value</td><td>-</td><td>(1,574)</td></tr><tr><td>Other financial expenses</td><td>(1,427)</td><td>(5,674)</td></tr><tr><td>Value adjustments of derivatives</td><td>(5,321)</td><td>(9,592)</td></tr><tr><td>Other financial expenses</td><td>(176)</td><td>(195)</td></tr><tr><td>Total financial expenses</td><td>(15,114)</td><td>(19,673)</td></tr><tr><td>Net financial income and expenses</td><td>6,148</td><td>3,453</td></tr></table>



## Tax on profit (loss) for the year and deferred tax

Note 4

## Distribution of net profit

Note 5

<table><tr><td>Income taxD/Km</td><td>2023</td><td>2022</td></tr><tr><td>Tax on profit (loss) for the year</td><td>(1,240)</td><td>344</td></tr><tr><td>Tax on changes in equity</td><td>486</td><td>(425)</td></tr><tr><td>Total tax for the year</td><td>(754)</td><td>(81)</td></tr><tr><td>Tax on profit (loss) for the year can be broken down as follows:</td><td></td><td></td></tr><tr><td>Current tax</td><td>(1,261)</td><td>470</td></tr><tr><td>Adjustments to deferred tax</td><td>39</td><td>(170)</td></tr><tr><td>Adjustments to current tax in respect of prior years</td><td>(192)</td><td>1</td></tr><tr><td>Adjustments to deferred tax in respect of prior years</td><td>174</td><td>43</td></tr><tr><td>Tax on profit (loss) for the year</td><td>(1,240)</td><td>344</td></tr><tr><td>Development in deferred taxD/Km</td><td></td><td></td></tr><tr><td>Deferred tax at 1 January</td><td>(33)</td><td>(160)</td></tr><tr><td>Adjustments for the year recognised in profit (loss) for the year</td><td>(39)</td><td>170</td></tr><tr><td>Adjustments to deferred tax in respect of prior years</td><td>(174)</td><td>(43)</td></tr><tr><td>Deferred tax at 31 December</td><td>(246)</td><td>(33)</td></tr><tr><td>Specification of deferred taxD/Km</td><td></td><td></td></tr><tr><td>Property, plant and equipment</td><td>125</td><td>157</td></tr><tr><td>Other current assets</td><td>(1)</td><td>(3)</td></tr><tr><td>Non-current liabilities</td><td>(301)</td><td>(144)</td></tr><tr><td>Tax loss carryforwards</td><td>(69)</td><td>(43)</td></tr><tr><td>Deferred tax, asset</td><td>246</td><td>33</td></tr><tr><td>Deferred tax, liability</td><td>-</td><td>-</td></tr></table>

<table><tr><td>Distribution of net profit</td><td></td><td></td></tr><tr><td>D/Km</td><td>2023</td><td>2022</td></tr><tr><td>Profit (loss) for the year is attributable to:</td><td></td><td></td></tr><tr><td>Shareholders in Ørsted A/S, proposed dividends for the financial year</td><td>-</td><td>5,675</td></tr><tr><td>Shareholders in Ørsted A/S, retained earnings</td><td>5,061</td><td>(2,887)</td></tr><tr><td>Interest payments and costs, hybrid capital owners of Ørsted A/S</td><td>553</td><td>577</td></tr><tr><td>Profit (loss) for the year</td><td>5,614</td><td>3,365</td></tr></table>



## Property, plant, and equipment

Note 6

<table><tr><td colspan="3">Property, plant, and equipment: Land and buildings</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Cost at 1 January</td><td>1,153</td><td>1,120</td></tr><tr><td>Additions</td><td>-</td><td>33</td></tr><tr><td>Disposals</td><td>(39)</td><td>-</td></tr><tr><td>Cost at 31 December</td><td>1,114</td><td>1,153</td></tr><tr><td>Depreciation and amortisation at 1 January</td><td>(441)</td><td>(329)</td></tr><tr><td>Depreciation and amortisation</td><td>(113)</td><td>(112)</td></tr><tr><td>Disposals</td><td>-</td><td>-</td></tr><tr><td>Depreciation and amortisation at 31 December</td><td>(545)</td><td>(441)</td></tr><tr><td>Carrying amount at 31 December</td><td>569</td><td>712</td></tr><tr><td>Value of leased assets</td><td>569</td><td>712</td></tr></table>

We have entered into leases for office premises, primarily in Gentofte, Denmark (expiring in 2028).

We have entered into operating leases with subsidiaries for sublease of office premises.

In 2023, an amount of DKK 147 million was recognised (2022: DKK 95 million) in profit (loss) for the year in respect of rental income.

## Investments in subsidiaries

Note 7

<table><tr><td colspan="3">Investments in subsidiaries</td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Cost at 1 January</td><td>51,809</td><td>36,809</td></tr><tr><td>Additions</td><td>-</td><td>15,000</td></tr><tr><td>Disposals</td><td>(412)</td><td>-</td></tr><tr><td>Cost at 31 December</td><td>51,397</td><td>51,809</td></tr><tr><td>Value adjustments at 1 January</td><td>(533)</td><td>(659)</td></tr><tr><td>Impairment losses/reversals</td><td>-</td><td>126</td></tr><tr><td>Value adjustments at 31 December</td><td>(533)</td><td>(533)</td></tr><tr><td>Carrying amount at 31 December</td><td>50,864</td><td>51,276</td></tr></table>

Note 7.4 'Company overview of the consolidated financial statements' contains an overview of subsidiaries, etc.

We have tested investments in subsidiaries for impairment by comparing the expected future income from the individual subsidiaries with their carrying amounts.

The impairment test in 2023 did not give rise to any impairment of investments in subsidiaries.

In 2022, the 'Additions' related to capital injections in Ørsted Salg & Service A/S.



## Receivables from subsidiaries

Note 8

<table><tr><td colspan="4">Non-current receivables from subsidiaries</td></tr><tr><td></td><td>2023</td><td>2022</td><td></td></tr><tr><td>DKKm</td><td></td><td></td><td></td></tr><tr><td>Cost at 1 January</td><td>163,616</td><td>107,894</td><td></td></tr><tr><td>Additions</td><td>50,485</td><td>84,636</td><td></td></tr><tr><td>Disposals</td><td>(20,037)</td><td>(28,916)</td><td></td></tr><tr><td>Cost at 31 December</td><td>194,064</td><td>163,616</td><td></td></tr></table>

## Derivatives

Note 9

<table><tr><td colspan="4">Overview of derivative positions</td></tr><tr><td>DKKm</td><td></td><td>2023</td><td>2022</td></tr><tr><td></td><td>Contractual principal amount</td><td>Market value</td><td>Contractual principal amount</td></tr><tr><td>Interest derivatives</td><td>25,141</td><td>(517)</td><td>22,185</td></tr><tr><td>Currency derivatives</td><td>39,213</td><td>826</td><td>47,318</td></tr><tr><td>Total</td><td>64,354</td><td>311</td><td>69,503</td></tr><tr><td>Assets</td><td></td><td>5,092</td><td></td></tr><tr><td>Equity and liabilities</td><td></td><td>(4,781)</td><td></td></tr></table>

See note 6.1. Risk framework \( ^{1} \)  to the consolidated financial statements and the chapter on “Risks and risk management” in the “Management’s review on pages 34-37 for more details on risk and risk management.

Ørsted A/S has assumed the subsidiaries' currency risks via forward exchange contracts, which have subsequently been hedged in the market. Furthermore, hedging contracts have been concluded to hedge the currency risk associated with investments in subsidiaries in foreign currencies.

We have also entered into a number of interest rate swaps to manage our interest rate risk.

The company has ‘fair value’ hedged loans and receivables in GBP and USD. The value of the ‘fair value’ hedge offset in the income statement amounted to DKK-162 million (2022: DKK-879 million).
Derivatives at the end of December 2023 mature as follows: 2024: DKK 177 million, 2025: DKK 370 million, after 2025: DKK-236 million (2022: DKK-651 million, 2024: DKK 89 million, after 2024: DKK 1,659 million).

All derivatives are classified based on observable inputs in the ‘fair value’ hierarchy.



## Securities

Note 10

<table><tr><td>Securities</td><td></td><td></td></tr><tr><td>DKKm</td><td>2023</td><td>2022</td></tr><tr><td>Securities, available for use</td><td>29,514</td><td>24,428</td></tr><tr><td>Total securities</td><td>29,514</td><td>24,428</td></tr></table>

Securities are a key element in our financial resources, and therefore investments are primarily made in liquid AAA-rated Danish mortgage bonds and, to a lesser extent, in other bonds. Most of the securities qualify for repo transactions in the Danish central bank, 'Danmarks Nationalbank'.

All securities are classified based on observable inputs in the fair value hierarchy.

## Loans and borrowings

Note 11

On 31 December 2023, we had issued hybrid capital with a total notional amount of DKK 19,310 million (2022: DKK 19,877 million). The hybrid bonds have a 1,000-year term and expire as follows: DKK 3,727 million in 3017, DKK 4,473 million in 3019, DKK 7,383 million in 3021, and DKK 3,727 million in 3022, respectively.

The long-term portion of lease debt amounted to DKK 514 million at 31 December 2023 (2022: DKK 659 million), of which DKK 28 million (2022: DKK 208 million) fall due in more than five years.

The long-term portion of bank loans and issued bonds amounted to DKK 69,695 million at 31 December 2023 (2022: DKK 54,033 million), of which DKK 56,769 million (2022: DKK 50,930 million) fall due in more than five years.

## Other provisions

Note 12

We have made provisions for non-current liabilities totalling DKK 1,779 million (2022: DKK 1,971 million), of which DKK 8 million fall due within 1 year, and DKK 1,771 million fall due in 1-5 years.

The provisions mainly concern the divestment of our oil and gas business in 2017 and the sale of our Danish power distribution, residential customer, and city light businesses to SEAS-NVE (now Andel) in 2020.

## Related-party transactions

Note 13

Related parties are the Board of Directors, the Executive Board, Ørsted A/S's subsidiaries, and the Danish state.

Remuneration of the Board of Directors and the Executive Board is disclosed in notes 2.7 'Employee costs' and 2.8 'Share-based payment' in the consolidated financial statements.

Our related-party transactions are made on arm's length terms.



## Contingent liabilities

Note 14

## Guarantees

Ørsted A/S has provided guarantees in connection with participation by subsidiaries and subsidiaries' joint operations and joint ventures in the construction and operation of offshore wind farms and natural gas installations as well as guarantees in respect of leases, energy trading activities, purchase, sale, and supply agreements, decommissioning obligations, farm-downs and other M&A transactions as well as secondary liability on decommissioning of offshore installations related to the divestment of the oil and gas business, etc.

Ørsted A/S acts as guarantor or surety provider with primary liability for bank liabilities in certain subsidiaries, including guarantees in favour of banks and investors covering credit facilities established and bonds issued in Taiwan.

Furthermore, in support of the ratings of Ørsted Salg & Service A/S by Moody's and Ørsted Wind Power TW Holding A/S by Taiwan Ratings, Ørsted A/S has provided general guarantees covering all obligations and liabilities undertaken in the ordinary course of business by these two entities.

## Indemnities

Ørsted A/S is taxed jointly with the Danish companies in the Ørsted Group. As management company, Ørsted A/S has unlimited as well as joint and several liability together with the other jointly taxed companies for Danish income taxes and withholding taxes on dividends, interest, and royalties related to the jointly taxed companies.

## Litigation

Ørsted is involved in ongoing transfer pricing disputes. For further information, we refer to section 4.1 "Approach to taxes" to the consolidated financial statements. Ørsted A/S is not a party to any litigation proceedings or legal disputes that could have an effect on the company's financial position, either individually or collectively.

## Auditor's fees

Note 15

<table><tr><td>Auditor&#x27;s fees</td><td></td><td></td></tr><tr><td>Dikim</td><td>2023</td><td>2022</td></tr><tr><td>Statutory audit</td><td>4</td><td>4</td></tr><tr><td>Other assurance engagements</td><td>3</td><td>3</td></tr><tr><td>Total fees to PwC</td><td>7</td><td>7</td></tr></table>

“Other assurance engagements’ primarily included assurance services related to the issuance of bonds.”

## Ownership information

Note 16

<table><tr><td>Ownership information 31 December 2023</td><td>Registered office</td><td>Ownership interests</td><td>Voting share</td></tr><tr><td>The Danish state represented by the Danish Ministry of Finance</td><td>Copenhagen K, Denmark</td><td>50.12%</td><td>50.74%</td></tr><tr><td>Andel A.M.B.A.</td><td>Svinninge, Denmark</td><td>5.01%</td><td>5.07%</td></tr></table>

The table shows the shareholders with ownership interests and voting shares of at least 5%. The difference between ownership interests and voting shares is because voting rights of Ørsted's treasury shares cannot be exercised.



# Management's statement,
auditor's reports,
and glossary

243 Statement by the Executive Board and the Board of Directors
244 Independent Auditor's Reports
249 Independent limited assurance report on selected ESG data in the Sustainability statements
251 Glossary

→ Ireland’s offshore wind footprint continues to grow. This year, we partnered with ESB, Ireland’s leading utility, in a landmark deal to develop up to 5 GW of renewable energy.

With a maritime area more than ten times the size of its landmass, Ireland is ideally positioned to grow a strong and vibrant offshore sector, which will help decarbonise the Irish electricity system and enable future renewable energy exports to Europe.






## Statement by the Executive Board and the Board of Directors

The Board of Directors and the Executive Board have today considered and adopted the annual report of Ørsted A/S for the financial year 1 January – 31 December 2023.

The consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and the parent company financial statements have been prepared in accordance with the Danish Financial Statements Act. The Management's Report has been prepared in accordance with the Danish Financial Statements Act and Article 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation).

In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the parent company's assets, liabilities and financial position at 31 December 2023, and of the results of the Group's and the parent company's operations and the consolidated cash flows for the financial year 1 January – 31 December 2023.
In our opinion, the Management's Review included in the Management's Report represents a true and fair account of the development in the Group's and the parent company's operations and financial circumstances, of the results for the year and of the financial position of the Group and the parent company as well as a description of the most significant risks and elements of uncertainty facing the Group and the parent company.

In our opinion, the Sustainability statements included in the Management's Report represents a reasonable, fair and balanced representation of the Group's sustainability performance and are prepared in accordance with the stated accounting policies.

In our opinion, the annual report of Ørsted A/S for the financial year 1 January – 31 December 2023 with the file name: Ørsted-2023-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation.

We recommend that the annual report is adopted at the annual general meeting.

Skærbæk, 7 February 2024

Executive Board:

Mads Nipper
Group President and CEO

Board of Directors:

Thomas Thune Andersen
Chair

Andrew Brown

Peter Korsholm

Leticia Francisca Torres
Mandiola \( ^{*} \) 

Rasmus Erbøe
Interim CFO

Lene Skole
Deputy Chair

Jørgen Kildahl

Dieter Wemmer

Alice Florence Marion
Vallienne \( ^{*} \) 
Henriette Fenger Ellekrog
Chief HR Officer

Annica Bresky

Julia King, the Baroness
Brown of Cambridge

Benny Gebelt \( ^{*} \) 

Anne Cathrine Collet Yde \( ^{*} \)



## Independent Auditor's Reports

To the shareholders of Ørsted A/S

## Report on the audit of the Financial Statements
Our opinion

In our opinion, the Consolidated Financial Statements give a true and fair view of the Group's financial position at 31 December 2023 and of the results of the Group's operations and cash flows for the financial year 1 January to 31 December 2023 in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act.

Moreover, in our opinion, the Parent Company Financial Statements give a true and fair view of the Parent Company's financial position at 31 December 2023 and of the results of the Parent Company's operations for the financial year 1 January to 31 December 2023 in accordance with the Danish Financial Statements Act.

Our opinion is consistent with our Auditor's Long-form Report to the Audit & Risk Committee and the Board of Directors.

## What we have audited

The Consolidated Financial Statements of Ørsted A/S for the financial year 1 January to 31 December 2023, pages 142-231 and 242-243, comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement, and the notes to the consolidated financial statements, including material accounting policy information.

The Parent Company Financial Statements of Ørsted A/S for the financial year 1 January to 31 December 2023, pages 232-243, comprise the income statement, the balance sheet, the statement of changes in equity, and the notes, including material accounting policy information.

Collectively referred to as the “Financial Statements”.

## Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor's responsibilities for the audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

## Independence

We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.

To the best of our knowledge and belief, prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 were not provided.

## Appointment

We were first appointed auditors of Ørsted A/S on 19 April 2010 for the financial year 2010. We have been reappointed annually by shareholder resolution for a total uninterrupted period of engagement of 14 years, including the financial year 2023. We were reappointed at the annual general meeting on 7 March 2023.

## Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements for 2023. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.



## Impairment of non-current assets

## Key audit matter

During 2023, Management identified impairment indicators for a number of non-current assets. The impairment indicators are the value due to, amongst others, the adverse impacts related to the supply chain, increased interest rates, as well as the ability to obtain investment tax credit (ITC) for the US portfolio.

On this basis, Management has prepared impairment tests resulting in impairment losses recognized for production and development assets; mainly related to the US offshore wind farm portfolio.

The impairment tests are based on Management's assumptions of expected cash inflows and outflows for the individual cash-generating units (CUGs), and these cash flows are discounted using the relevant discount rates (value-in-use impairment models). This requires significant estimates and judgements amongst others such as the discount rate, the discount rate used, the discount rates for schemes, impact of the supply chain challenges, cost prices, and discount rates (WACC). Furthermore, some value-in-use models are based on probability-weighted scenarios due to amongst other models for offshore renewable energy certificates (ORECs) as well as expected outcome of the supply chain and schemes.

For impairment tests related to the feedback for Ocean Wind 1 and Skipjack Wind, Management has applied fair value loss cost to sell calculations, which are based on multiple assumptions supported by discounted cash flow calculations where required data and assumptions are available.

We focused on this area because impact on the profit for the year is significant and because the impairment tests of non-current assets are considered complex and require transactions and require significant, judgements in determining the assumptions applied in the significant estimates.

Refer to notes 1.2 and 3.1-3.2 in the consolidated financial statements.

## How our audit addressed the key audit matter

As part of our audit, we challenged the impairment indicator assessments performed by Management. We considered the appropriateness of the CGUs defined by Management and the methodology used by Management to assess the carrying amount of non-current assets assigned to CGUs.

We carried out risk assessment procedures in order to obtain an understanding of IT systems, business processes, and relevant controls regarding data and assumptions used in the impairment calculations. We also assessed the risk of material misstatement and implemented to effectively address the risk of material misstatement. For selected controls that we planned to rely on, we tested whether they were performed on a consistent basis.

We challenged the impairment models prepared by Management to assess the carrying amount of non-current assets assigned to the wind farm and fair value loss cost to sell models, challenged the data and significant assumptions applied in relation to future selling prices, supply chain challenges, interest rates, as well as the ability to obtain investment tax credits (ITC). Also, we reconciled the carrying amounts of non-current assets.

In assessing the discount rates (WACC) and the overall methodology applied, we involved our valuation specialists.

Finally, we assessed the appropriateness of the related disclosures of the impairment tests in the Consolidated Financial Statement, including for sensitivity analysis expressing the significant estimation uncertainty related to the valuation of the CGUs.

## Provisions for onerous contracts

## Key audit matter

On 31 October 2023, Ørsted decided to cease the development of Ocean Wind 1 and Skipjack Wind, as well as the onshore wind contracts related to the development project, taking into consideration Ørsted's contractual obligations and the expected outcome of the cancellation of these contracts.

The provision is based on Management's assessment of the individual contractual obligations, including termination and compensation clauses, assumptions for cash outflow, as well as cash inflow from sole or reuse of parts of the project. This requires significant estimates and judgements in assessing the potential scenarios and cash flows.

We focused on this area because impact on the profit for the year is significant, and because the provisions for contractual obligations are considered complex non-routine transactions and require significant judgements in determining the assumptions applied in the significant estimates. Refer to notes 1.2 and 3.10 in the consolidated financial statements.

## How our audit addressed the key audit matter

As part of our audit, we read the accounting memorandum prepared, assessed the appropriateness of the related disclosures of the onshore wind contract and review relevant contracts for contractual obligations, read contracts on a sample basis, and obtained relevant formal confirmations from Ørsted's internal lawyers.

Furthermore, we challenged the judgements and assumptions applied by Management when calculating the provision.

Finally, we assessed the appropriateness of the related disclosures of these matters in the Consolidated Financial Statements.



## Valuation of derivative financial instruments and documentation of hedge accounting

## Key audit matter

Örsted applies hedge accounting for derivative financial instruments used for hedging of:

• energy prices, currency and inflation risks associated with revenue (energy hedges)

• commodity price and currency risks associated with the construction of wind farms

• interest rate risk associated with loans and divestments.

We focused on this area because the valuation of the derivative financial instruments (hedging instruments) and assessment of hedge relationships and hedge effectiveness are complex and require significant judgements and estimates.

On this basis, the valuation of the derivative financial instruments and the application of hedge accounting was a matter of most significance in our audit.

Refer to notes 1.2 and 6.1-6.9 in the consolidated financial statements.

## How our audit addressed the key audit matter

We carried out risk assessment procedures in order to obtain an understanding of IT systems, business processes, and relevant controls regarding derivative financial instruments and hedge accounting. For the controls, we assessed whether they were designed and operating effectively to manage the risks of the derivatives measurement. For selected controls that we planned to rely on, we tested whether they were performed on a consistent basis.

In this connection, we assessed and obtained an understanding of the exposures subject to hedging, the hedging instruments applied, the hedge relationships, including the methods, data and assumptions applied for the documentation of the fair value of hedging instruments, and hedge effectiveness.

We challenged the accounting treatment applied by Management, including in relation to the hedging instruments used and the hedge reserve recognised in the consolidated statement of comprehensive income by reviewing Management's IFRS 9 hedge documentation, including underlying memos and calculations.

We challenged the significant data, assumptions, and models applied by Management when assessing the value of the hedging instruments, the hedge relationships, and hedge effectiveness by assessing and testing the main data, significant assumptions, and models applied.

As part of our audit, we tested the valuation of the derivative financial instruments and the documentation of hedge effectiveness of energy, commodity, interest rates, and related foreign exchange risk hedges.

In assessing the valuation of the derivative financial instruments and hedging technique accounting, we involved our financial instrument specialists.

We assessed and tested the appropriateness of the related disclosures provided in the Consolidated Financial Statements.

## Income taxes

## Key audit matter

Örsted is subject to income taxes in the countries where they operate. Significant Judgments and estimates are required in determining the income taxes and in measuring income tax assets and liabilities, including uncertain tax positions.

We focused on this area because Management makes significant judgments and estimates when calculating and assessing the income taxes due to the complex nature of the tax rules related to the business activities conducted in different tax jurisdictions. Furthermore, Management makes estimates when measuring the tax assets, including when and to which extent these can be utilised in the future, and when measuring tax liabilities, including assessing deferred taxes in tax equity partnerships.

Additionally, Örsted is a party in tax and transfer pricing disputes and is therefore subject to litigation risk. Örsted has a relatively low security recognition provisions for these uncertain tax positions. Örsted has received administrative decisions from the Danish Tax Agency entitling additional tax payments and related interests, which Management disputes. The Danish Tax Agency has no authorities. Furthermore, tax cases are ongoing regarding corresponding tax adjustments.

On this basis, income taxes were a matter of most significance in our audit.

Refer to notes 1.2 and 4.1-4.3 in the consolidated financial statements.

## How our audit addressed the key audit matter

As part of our audit, we evaluated the assumptions applied by Management in determining the income tax and in measuring income tax assets and deferred taxes, including those related to tax equity partnerships, while taking into account relevant correspondence with tax authorities and external advisors.

We assessed Management's judgements and estimates of tax balances and carrying amounts as well as the related applied tax rates when calculating these. We also assessed the reasonableness of the main data and assumptions used to calculate the taxable income forecasts underlying the recognition and recoverability of the deferred tax assets relating to tax losses carried forward.

We evaluated and tested Örsted's processes for recording, assessing, and continually reassessing provisions for uncertain tax positions.

During our audit of uncertain tax positions, we obtained and reviewed the correspondence with relevant tax authorities to consider the completeness of the tax disputes and the related provisions.

We assessed the measurement of the provisions and challenged the assumptions used, including the possibility of obtaining corresponding information from the tax authorities. We also assessed the validity of different outcomes. In addition, we assessed relevant opinions obtained by Management from third parties related to the tax disputes, and we evaluated the disclosures provided by Management in the consolidated financial statements.

In assessing income taxes, we involved our tax specialists.



## Statement on Management’s Report

Management is responsible for Management’s Report, pages 3-14.1.

Our opinion on the Financial Statements does not cover Management’s Report, and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read Management’s Report and, in doing so, consider whether Management’s Report is materially inconsistent with the Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Moreover, we considered whether Management’s Report includes the disclosures required by the Danish Financial Statements Act and Article 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation).

Based on the work we have performed, in our view, Management’s Report is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act and the disclosure requirements of Article 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation). We did not identify any material misstatement in Management’s Report.

## Management’s responsibilities for the Financial Statements

Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act and for the preparation of parent company financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so.

## Auditor’s responsibilities for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.
As part of an audit in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

- identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

- obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control

- evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management

- conclude on the appropriateness of Management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the Parent Company to cease to continue as a going concern

- evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view

- obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied.



From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.

Report on compliance with the ESEF Regulation
As part of our audit of the Financial Statements we performed procedures to express an opinion on whether the annual report of Ørsted A/S for the financial year 1 January to 31 December 2023 with the filername Ørsted-2023-12-31-en.zip is prepared, in all material respects, in compliance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the Consolidated Financial Statements including notes.

Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes:

• the preparing of the annual report in XHTML format

- the selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxonomy, for all financial information required to be tagged using judgement where necessary

• ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human-readable format
• for such internal control as Management determines necessary to enable the preparation of an annual report that is compliant with the ESEF Regulation.

Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in compliance with the ESEF Regulation based on the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the auditor's judgement, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The procedures include:

• testing whether the annual report is prepared in XHTML format

• obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process

• evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes

• evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy and the creation of extension elements where no suitable element in the ESEF taxonomy has been identified

• evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy

• reconciling the iXBRL tagged data with the audited Consolidated Financial Statements.
In our opinion, the annual report of Ørsted A/S for the financial year 1 January to 31 December 2023 with the file name Orsted-2023-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation.

Hellerup, 7 February 2024

PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 3377 1231

Anders Stig Lauritsen
State Authorised Public Accountant
mne32800

Thomas Wraae Holm
State Authorised Public Accountant
mne30141



# Independent limited assurance report on selected ESG data in the Sustainability statements

To the stakeholders of Ørsted A/S

Ørsted A/S engaged us to provide limited assurance on selected ESG data as described below for the period 1 January – 31 December 2023 as stated on pages 81-130 and 141 in tables marked with a 'blue eye icon' ( \( ^{\blacklozenge} \) ) (the 'Selected ESG Data').

## Our conclusion

Based on the procedures we performed and the evidence we obtained, nothing came to our attention that causes us not to believe that the Selected ESG Data in tables marked with a 'blue eye icon' ( \( ^{\blacklozenge} \) ) for the period 1 January – 31 December 2023 for Ørsted A/S are prepared, in all material respects, in accordance with the applied accounting policies developed by Ørsted A/S as stated on pages 81-130 and 141 (the 'Accounting policies').

This conclusion is to be read in the context of what we state in the remainder of our report.

## What we are assuring

The scope of our work was limited to assurance over the Selected ESG Data as defined in the first paragraph of our report.

Regarding reporting on article 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation) on pages 81-85 we only provide limited assurance on whether the included data have been stated in accordance with the EU Taxonomy related accounting policies as stated on pages 81 and 85, and not whether the data are in compliance with the EU regulation.

## We express limited assurance in our conclusion.

Professional standards applied and level of assurance We performed a limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) (Assurance Engagements other than Audits and Reviews of Historical Financial Information) and, in respect of the greenhouse gas emissions, in accordance with International Standard on Assurance Engagements 3410 (Assurance engagements on greenhouse gas statements). The quantification of greenhouse gas emissions is subject to inherent uncertainty because of incomplete scientific knowledge used to determine the emissions factors and the values needed to combine emissions of different gases.

A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks; consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.

## Our independence and quality control

We have complied with the independence requirements and other ethical requirements in the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (IESBA Code), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior, and ethical requirements applicable in Denmark.

PricewaterhouseCoopers applies International Standard on Quality Management 1, ISQM 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements.

Our work was carried out by an independent multi-disciplinary team with experience in sustainability reporting and assurance.

## Understanding reporting and measurement methodologies

The Selected ESG Data needs to be read and understood together with the accounting policies. The accounting policies used for the preparation of the Selected ESG Data are the applied accounting policies developed by Ørsted A/S which Management is solely responsible for selecting and applying.

The absence of a significant body of established practice on which to draw to evaluate and measure ESG data allows for different, but acceptable, measurement techniques and can affect comparability between entities and over time.

## Work performed

We are required to plan and perform our work in order to consider the risk of material misstatement of the Selected ESG Data. In doing so and based on our professional judgement, we:

- evaluated the appropriateness of the accounting policies used, their consistent application and related disclosures

- made inquiries and conducted interviews with Group functions with responsibility for management and reporting of the Selected ESG Data to assess



reporting and consolidation processes, use of company-wide systems, and controls performed

• checked the Selected ESG Data on a sample basis to underlying documentation and evaluated the appropriateness of quantification methods and compliance with the accounting policies for preparing the Selected ESG Data

• performed analytical review and trend explanation of the Selected ESG Data

• considered the disclosure and presentation of the Selected ESG Data

• evaluated the obtained evidence.

## Management's responsibilities

Management of Ørsted A/S is responsible for:

• designing, implementing, and maintaining internal control over information relevant to the preparation of Selected ESG Data that are free from material misstatement, whether due to fraud or error

• establishing objective accounting policies for preparing the Selected ESG Data

• measuring and reporting the information in the Selected ESG Data based on the accounting policies

• the content of the Selected ESG Data.

## Our responsibility

We are responsible for:

• planning and performing the engagement to obtain limited assurance about whether the Selected ESG Data for the period 1 January – 31 December 2023 are prepared, in all material respects, in accordance with the accounting policies

• forming an independent conclusion, based on the procedures performed and the evidence obtained

• reporting our conclusion to the stakeholders of Ørsted A/S.

Helлеру, 7 February 2024

PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no. 3377 1231

Anders Stig Lauritsen
State Authorised Public Accountant
mne32800

Thomas Wraae Holm
State Authorised Public Accountant
mne30141



## Glossary

## Availability

Availability is calculated as the ratio of actual production to the possible production, which is the sum of lost production and actual production in a given period. The production-based availability (PBA) is impacted by grid and wind turbine outages, which are technical production losses. PBA is not impacted by market requested shutdowns and wind farm curtailments, as this is deemed not to be reflective of site performance, but due to external factors.

## Avoided emissions

The amount other sources of energy would have emitted if we had not generated energy from renewable sources.

## Awarded capacity

Offshore capacity that we have been awarded in auctions and tenders, but where we have yet to sign a PPA and take final investment decision.

## Blockage effect

The blockage effect arises from the wind slowing down as it approaches the wind turbines.

## BSUoS tariffs

Costs related to the day-to-day operation of the transmission system imposed on generators and suppliers.

## Carbon emission allowances

Carbon emission allowances subject to the European Union Emissions Trading Scheme (EU ETS).

## CID

A contract for difference is a subsidy that guarantees the difference between the market reference price and the exercise price won.

## Commissioning/COD

When our assets are in operation, and the legal liability has been transferred from the supplier to us.

## Contracted capacity

Onshore capacity where we have signed PPAs covering more than 50% of the assets' capacity, but where we have not yet taken final investment decision.

## CSRD

Corporate Sustainability Reporting Directive.

## Decided (FID) and installed capacity

Installed generation capacity plus capacity for assets where a final investment decision has been made.

## Degree days

Number of degrees in absolute figures in different zones between the average temperature and the official Danish indoor temperature of 17°C.

## DHA

Double materiality assessment.

## EPC

Engineering, procurement, and construction. The part of our business which handles the construction and installation of assets.

## ERSs

European Sustainability Reporting Standards.

## FID

Final investment decision. When the Board of Directors approves major investments for construction assets.

## Generation capacity

Forced's ownership of the asset. Offshore wind turbines are included when each turbine has passed the 240-hour test. Onshore capacities are included after COD or of the entire asset.

## Green certificates

Certificate awarded to producers of environmental-friendly power as a supplement to the market price of power in the given price area.

## Green dark spread (GDS)

Represents the contribution margin per MWh of power generated at a coal-fired CHP plant with a given efficiency. It is determined as the difference between the market price of power and the cost of the coal (including associated freight costs) and carbon emission allowances used to generate the power generation. Inefficienty hedges

When we hedge our exposure with an instrument that is not 100% correlated with the exposure, we may see inefficiency in our hedging (i.e. results from such hedges should be recognised in the PBA, immediately).

## Installed capacity

Installed capacity where the asset has been completed and has passed a final test.

## Investment tax credits (TC)

Federal tax credit based on qualifying renewable investment costs.

## Load factor

The ratio between the actual power generation in a given period relative to the average generation which is possible by continuously exploiting the maximum capacity over the same period.

## Offshore transmission assets

Connect offshore generation to the onshore grid and typically include the offshore power transmission infrastructure, an onshore substation, and the electrical equipment relating to the operation of the substation.

## Overhedging

When our hedged volumes are higher than our actual generation, we are overhedged. This is normally caused by lower wind speeds and related to financial issues if market prices are above our hedged levels.

## Partnership income

Income originating from our partners' purchase of ownership interests in the offshore wind farms. Includes both the gain in connection with the farm-down and the subsequent construction of the wind farm.

## Power purchase agreement (PPA)

An agreement between us and a buyer/seller to purchase/sell the power we generate, which includes all commercial terms (price, delivery, volumes, etc.).

## Production tax credit (PTC)

Federal tax credit based on eligible power generation in the US.

## ROCs

Renewable obligation certificates issued by Ofgem in the UK to operators of accredited generating stations for the eligible renewable energy they generate. Operators can trade ROCs with other parties.

## Tax equity

An arrangement where an investor obtains rights to federal tax credits and other tax attributes in exchange for a cash contribution.

## TCFD

Task Force on Climate-Related Financial Disclosures.

## TEC

Transmission entity capacity (TEC) defines a generator's maximum contractual level of transmission access in MW.

## TNUa tariffs

Costs related to the use of the transmission networks in the UK based on TEC.

## TRR

In addition to lost time injury, the total recordable injury rate (TRIR) also refers to the number where the injured person is able to perform restricted work the day after the accident as well as accidents where the injured person has received medical treatment.

## Wake effect

Wake within wind farms and between neighbouring wind farms. There is a wake after each wind turbine where the wind slows down. As the wind flow continues, the wake spreads, and the wind speed recovers.

## Wind speed

Shows the wind speed at Ørsted's wind farms. The wind measurements are weighted on the basis of our generation capacity and can be compared to a normal wind period.



Orsted A/S
Orstedstrasse 53
DK-7000 Fredericia
Tel.: +45 99 55 11 11
CVR no. 36213728

orsted.com

Media Relations
Martin Barlebo
Tel.: +45 99 55 95 52

Investor Relations
Rasmus Keglberg Hervig
Tel.: +45 99 55 90 95

Design and layout
e-Types with The Agency, Orsted

Images
All images by Orsted

Publication
7 February 2024