To determine the appropriate extent to which Ørsted A/S should utilize hybrid bonds, we must analyze its current capital structure, financial performance, funding needs, and the cost of capital environment, applying the S&P Global Ratings methodology for Regulated Utilities and Unregulated Power/Gas (as Ørsted is primarily a renewable energy generator).

**1. Current Capital Structure and Hybrid Position**
*   **Total Equity (2022):** 95,532 million DKK.
*   **Hybrid Capital (2022):** 19,793 million DKK.
*   **Total Adjusted Capital:** While "Adjusted Debt" is not explicitly provided as a single line item, we can approximate the scale. Total Liabilities are 218,610 million DKK. Even if we assume a conservative definition of Adjusted Debt (e.g., Interest-bearing debt), the hybrid component is already significant.
*   **Current Hybrid Ratio:** The prompt asks for the percentage of *Total Adjusted Capital* (Equity + Adjusted Debt).
    *   Let's estimate Total Adjusted Capital. If we assume Adjusted Debt is roughly equal to Long-term Borrowings + Short-term Borrowings + Lease Liabilities (a common proxy if specific adjustments aren't detailed), that is approx $60,451 + 2,830 + 7,697 + 569 \approx 71,547$ million DKK.
    *   Total Adjusted Capital $\approx$ Equity (95,532) + Adjusted Debt (71,547) = 167,079 million DKK.
    *   Current Hybrid % = $19,793 / 167,079 \approx 11.8\%$.
    *   Note: S&P typically grants up to 100% equity credit to hybrids with strong features, but caps the total equity credit from hybrids at 15% of Total Adjusted Capital. Ørsted is already near or above the 11.25% threshold and approaching the 15% cap in terms of outstanding stock.

**2. Financial Performance and Funding Needs**
*   **Profitability:** Ørsted reported a Profit Loss of 14,996 million DKK in 2022, up from 10,887 million DKK in 2021. EBITDA was 32,057 million DKK. The company is profitable and generating cash.
*   **Cash Flow:** Cash flow from operating activities was 11,924 million DKK. Cash flow from investing activities was -17,912 million DKK (heavy capex). Cash flow from financing activities was +13,785 million DKK.
*   **Capex Intensity:** The company is in a high growth/investment phase (Construction in Progress: 48,931 million DKK; Purchase of PPE: 33,004 million DKK). This indicates high capital intensity.
*   **Refinancing:** There is no immediate indication of a "material downgrade risk" or "very high refinancing needs" that would threaten the investment grade rating *if* the current structure is maintained. The company successfully issued 3,693 million DKK in hybrids in 2022 and repurchased 1,945 million DKK, showing active management.

**3. Cost of Capital Environment**
*   **Interest Rates:** The swap curves show a dramatic increase in rates in 2022 (10Y average went from 0.053% in 2021 to 1.927% in 2022).
*   **Credit Spreads:** The iBoxx EUR Non-Financial IG spread increased from 1.298% in 2021 to 2.295% in 2022.
*   **Hybrid Cost:** Hybrid coupons are typically higher than senior debt. In a rising rate environment, issuing new hybrids is expensive. The guidance states:
    *   15%: "Cost of hybrid in line with the current cost of debt" (Unlikely given hybrids are subordinated and rates are rising).
    *   11.25%: "Cost of hybrid will have a marginal impact on the current cost of debt."
    *   7.5%: "Cost of hybrid will slightly increase the current cost of debt."
    *   3.75%: "Cost of hybrid will increase the current cost of debt."

**4. Strategic Assessment**
*   **Current Level:** Ørsted already has ~11.8% of its estimated adjusted capital in hybrids. This places it firmly in the **11.25%** bucket or potentially touching the **15%** cap depending on the exact definition of Adjusted Debt used by rating agencies (which often add back hybrids to debt for leverage ratios but count them as equity for capitalization).
*   **Need for Issuance:** The company has high capex needs (Offshore Wind development). However, it also has strong operating cash flows and access to other financing (it raised 37,090 million DKK in borrowings in 2022).
*   **Rating Preservation:** Ørsted is a leading renewable energy company. Maintaining an Investment Grade rating is crucial. Hybrids help leverage ratios (FFO/Debt). Given the high capex, leverage pressure is real.
*   **Guideline Match:**
    *   **15%:** Requires "Very high refinancing needs OR transformational capex... Material downgrade risk without hybrid support." While capex is high, Ørsted is a market leader with strong state backing (Danish State is the ultimate parent). It does not appear to be in *distress* or facing *material downgrade risk* solely due to leverage if it manages its mix. Also, the cost of hybrids is likely *not* in line with senior debt in this rate environment; it is more expensive.
    *   **11.25%:** "High capex intensity... Investment grade preservation strongly dependent on capital structure optimization... Cost of hybrid will have a marginal impact." This fits Ørsted well. It has high capex, needs to optimize leverage to protect its rating, and already has a significant hybrid book. Issuing *more* to push towards 15% would increase the weighted average cost of capital significantly in a high-rate environment.
    *   **7.5%:** This would imply *reducing* the hybrid ratio or issuing very little. Given the ongoing heavy investment cycle (Construction in Progress ~49bn DKK), maintaining the current level of equity-like support is prudent. However, the question asks to what extent it *should utilize* hybrids. Since it is *already* at ~11-12%, advising a utilization level of 7.5% would imply deleveraging hybrids, which contradicts the "High capex" need for flexible capital. Advising 11.25% implies maintaining the current strategic allocation. Advising 15% implies increasing it further.

**Decision:**
Ørsted is already utilizing hybrids at a level corresponding to approximately 11-12% of total adjusted capital. The guidelines for **11.25%** cite "High capex intensity" and "Investment grade preservation strongly dependent on capital structure optimization," which accurately describes Ørsted's situation as it builds out offshore wind farms. Pushing to 15% is reserved for situations with "Material downgrade risk without hybrid support" and where cost is not a deterrent. Given the sharp rise in interest rates (Swap 10Y ~1.9% + Spread ~2.3% = ~4.2% base, plus hybrid premium), the cost of new hybrids is substantial. Therefore, optimizing at the current level (approx 11.25%) is the most balanced advice, avoiding the excessive cost of pushing to the 15% cap while acknowledging the need for the equity credit hybrids provide.

The option **11.25%** represents the current strategic equilibrium for a high-growth utility with strong but not distressed credit metrics, facing high capital costs.

<answer>11.25%</answer>