Orsted, Vestas Shares Rise as European Countries Agree North Sea Wind Pact

By Dominic Chopping

Shares in Orsted and Vestas Wind Systems rose Monday after a group of European countries agreed to boost offshore wind capacity in the North Sea through joint clean-energy projects.

The deal will see construction of wind farms and new subsea infrastructure, including an offshore grid that will allow the electricity produced to be transported to multiple countries.

Vestas shares were 4.9% higher in afternoon trade, while Orsted shares gained 1.3%.

Known as the Hamburg Declaration, the deal was agreed at a summit Monday by the U.K., Belgium, Denmark, France, Germany, Iceland, Ireland, Luxembourg, the Netherlands, and Norway.

U.K. Energy Secretary Ed Miliband said the plans would transform the North Sea into the world's largest "clean energy reservoir," and bolster energy security in an era of global instability.

"We are standing up for our national interest by driving for clean energy, which can get the U.K. off the fossil fuel rollercoaster and give us energy sovereignty and abundance," he said in a statement.

North Sea countries had already vowed to build 300 gigawatts of offshore wind in the North Sea by 2050 in response to Russia's invasion of Ukraine, and they have now pledged to deliver 100 gigawatts of that through the joint clean energy projects agreed Monday.

Danish wind project developer Orsted said the deal would turn the North Sea into the "green power plant of Europe," while government plans for more investment predictability, a de-risked investment framework, and coordinated build-out plan will help lower the cost of electricity from offshore wind by 30% towards 2040.

"The pact shows the leadership taken by the countries in realising the offshore potential of the North Sea, and Orsted is ready to answer to the call by investing in the build-out," Orsted Chief Executive Rasmus Errboe said.

The summit is also expected to see an agreement on connecting the offshore grid between the U.K., Germany, Belgium, Denmark and the Netherlands, with a focus on speeding up delivery through joint planning, cost-sharing and market arrangements.

In addition, a framework to deepen German and U.K. collaboration on subsea energy infrastructure is also expected to be agreed, the U.K. government said in a statement.

Write to Dominic Chopping at dominic.chopping@wsj.com