The Danish energy giant said that it has initiated a structured divestment process for the Danish downstream business following the conclusion of a strategic review by its board of directors and executive management.

Ørsted, in a statement, said: “The conclusion of the review is that the continued technological innovation in green energy is expected to translate into continued cost reductions and a gradual decrease in subsidies on the journey towards producing and selling green energy entirely on commercial terms.

“Ørsted’s access to sales of energy solutions to corporate and wholesale customers building on its presence in offshore wind, bioenergy, energy storage and other renewable energy technologies will therefore become still more strategically important.”

The company said that it will focus on bolstering its market access further in the future in Denmark, the UK, Germany and Sweden.

Ørsted’s power distribution business, which is run under its subsidiary Radius, serves nearly a million electricity customers in the Copenhagen area, North Zealand and parts of central Zealand.

The company’s residential business sells electricity to nearly 733,000 customers and gas to about 91,000 customers. It also services close to 40,000 gas customer’s boilers.

On the other hand, Ørsted’s City Light business is responsible for the operation and maintenance of nearly 160,000 street lights across 15 municipalities in Zealand.

Ørsted said that the Danish power distribution and residential customer businesses are not a sales channel that back the long-term international growth of the company in renewable. It further said that their strategic and financial importance is expected to be reduced more in the future compared to the company’s fast growing global business in green energy.

In another move, Ørsted will establish a new business unit called Customer Solutions which will combine its activities across the corporate customer and trading businesses.

The Danish energy company said that the activities planned for divestment will be organized in a separate business unit.