By RONA FRIED, PH.D. July 10, 2012
By RONA FRIED, PH.D.
While offshore wind is booming in Europe, wind turbine manufacturers are suffering in similar ways to the solar module industry and aren’t a good bet right now. So how to invest in the boom?
Think about the critical infrastructure that is holding back both land-based and offshore wind. There’s a shortage of transmission lines to connect all that wind to the grid. The same is true for many big solar plants; thus investments in transmission infrastructure go hand in hand with most investments in utility-scale clean energy.
And That Points to ABB
Based in Zurich, Switzerland, ABB has long been a leader in manufacturing transmission system components, such as electric transformers, switchgear, circuit breakers and cables.
ABB pioneered development of high-voltage power semiconductors. Its innovations vastly reduce energy losses through transmission lines — down to just 1 percent in some cases. The company introduced energy-saving variable speed drives and the frequency converters used in electric locomotives.
ABB’s transformers can improve the performance of wind turbines by as much as 70 percent. The company provides power infrastructure from “where the wind comes into the turbine until the time it touches the grid,” says Dennis McKinley, head of ABB North American Windpower.
Connecting Offshore Wind to the Mainland
Offshore wind will provide 13.1 percent of Europe’s electricity, powering 130 million homes, if all the projects currently planned go through. About 141 gigawatts (GW) in 17 European Union countries are either built, under construction, consented or planned in Europe. That’s 35 times the capacity of the 4 GW installed today.
Last year, ABB won its largest transmission contract to date, a $1 billion order to connect offshore wind farms in Germany’s North Sea to the mainland grid. The order is for a 900-megawatt (MW) high-efficiency, high-voltage direct current (HVDC) system, the world’s largest offshore system. When operational in 2015, the system will supply more than 1.5 million households with wind-generated electricity.
Power generated at Gode Wind II and other wind farms will go to an offshore HVDC converter station, then be transferred via 135 kilometers of underwater and underground cables to an onshore HVDC station on the German coast, and from there go to the mainland grid.
HVDC means high voltage in direct current, which almost eliminates power losses over long distances. ABB
previously used the technology to connect the BorWin1 wind farm and has a contract to connect the 800-MW Dolwin1 wind farm, both in the North Sea.
Connecting Desertec
As a founding member of the Desertec Industrial Initiative, ABB’s HVDC cables are being proposed to carry solar-generated electricity from the Sahara Desert. Extremely long-distance transmission cables will travel under Saharan sand and under the Mediterranean to eventually supply 15 percent of Europe’s electricity, and a substantial part of the demand in North Africa and the Middle East.
Connecting the Smart Grid
ABB is also a world leader in smart-grid technologies. Its solutions enable more distributed generation, more power generated from renewable sources and a two-way grid that can receive as well as deliver reliable power.
One of its R&D projects is a large-scale smart grid in Stockholm, Sweden, in partnership with the utility Fortum. The project is a test case for incorporating excess power from rooftop solar and other local renewable energy sources into the grid, and enabling electric vehicles to both draw electricity from the grid and feed it back in.
Diversifying in Cleantech
It’s no surprise then that ABB is buying up companies to expand its footprint in energy efficiency, smart grid and electric-vehicle charging.
ABB recently acquired Baldor Electric for $4.2 billion. One of my longtime favorite companies, Baldor leads in efficient motors and has a long history as a socially responsible employer.
ABB has also acquired several smart-grid software companies, including Ventyx, Trilliant and Obvient Strategies. It entered electric-vehicle charging by buying Epyon B.V. and a stake in ECOtality. ABB is revving up an electric-car-charging network, saying it could be a $1 billion business by 2017.
ABB is also investing in ocean power with a stake in Aquamarine Power, which makes the Oyster, an innovative near-shore wave-energy device.
To top it off, ABB now has taken ownership stakes in two concentrating solar companies: a 35 percent stake in Novatec Solar, and a leading position in GreenVolts, which plans to market large-scale systems to utilities, businesses and agriculture. “Our extensive footprint, which covers all key solar markets in the world, will help us make this technology globally accessible,” says Peter Leupp, head of ABB’s Power Systems.
Rona Fried, Ph.D., is president of sustainable Business.com, the online community for green business: daily green business and investor news, green jobs and the green investing newsletter, The Green Investor. contact Fried at rona@sustainablebusiness.com.
Consult your financial advisor before making any investment.