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Denmark’s Dong Energy is preparing to phase out European coal power plants by 2023 as it moves ahead with a multi-billion dollar renewables investment plan, including the development of the world’s largest offshore wind farm.
The energy company has cut its use of coal from 6.2 million tonnes a decade ago to 1.7m tonnes last year, but by 2023 it said all its power plants would run on sustainable biomass, or wood pellets, sourced from the Baltic states.
Henrik Poulsen, Dong Energy’s chief executive, said that “the future belongs to renewable energy sources”.
A new report from the Economist Intelligence Unit shows that across Europe coal-fired power generation has declined by more than 10pc in the last three years to make up less than a quarter of the total electricity mix.
The falls have been steepest in the UK where generators are under pressure from the Government to phase out coal power by 2025 and face higher costs for emitting carbon emissions due to the Treasury’s carbon tax.
Dong’s steady shift away from oil, gas and coal includes plans announced late last year to sell its £1.3bn portfolio of North Sea oil and gas assets in order to fund its development of renewable energy.
Dong has a number of offshore wind farms in development in UK waters including the Hornsea project off the Yorkshire coast, which will be the world’s largest offshore wind farm once it begins powering the UK grid at the end of the decade.
Dong expects to begin construction at the Hornsea project before the end of the year and will complete its Burbo Bank wind farm off the coast of Liverpool by the summer.
In 2017 the company will also begin producing renewable energy from the world’s first large-scale waste-fuelled project in Northwich, Mr Poulsen added.
The company’s earnings from oil and gas beat expectations in 2016 to reach DKK25.6bn (£2.9bn) while wind power earnings doubled to DKK11.9bn.
The strong operational performance drove operating profit for the year up by DKK10.4bn in 2016 to DKK19.1bn.