ABB Ltd. (ABB) has recently won a prized contract from a Danish transmission operator, Energinet.dk, for constructing a cable system that will connect Kriegers Flak offshore wind farm to mainland in Rodvig, Denmark. Valued at $100 million, the contract requires ABB to build an alternating current submarine cable connection to enable the transmission of power from offshore to the grids in mainland. The project is expected to be commissioned in 2018.
As per the contract, ABB will connect the offshore wind farm platforms, Kriegers Flak A and B, to Rodvig. ABB will be responsible for designing, installing and supplying three core submarine cables for transmitting high-voltage alternating current of 220 kilovolt for a total length of around 100 km.
This latest project is part of the Danish government’s ambition to eliminate the use of fossil fuel by 2050. To achieve this goal, the Danish government greatly relies on the use of wind energy as part of its Green Energy program. Hence, Kriegers Flak’s 600 Megawatt wind farm would not only provide a considerable boost to the regional energy markets, but also enhance the security of power supply by expanding transmission capacity. The farm is expected to meet the electricity needs of 6 million households and supplement the wind energy generation of the country by an impressive 40%.
Energinet.dk’s choice of ABB comes as no surprise, considering the company’s leading position as provider of high-voltage cable systems. Currently, ABB comes across as a dominant market player supplying power to city center infeeds, subsea interconnections, oil and gas platforms and most importantly, for integration of renewable energy. The company also boasts the commissioning of 25 high voltage DC connections as well as multiple AC connections.
Moreover, amid increasing usage of cable networks for integrating renewable energy into main grid, ABB’s business prospects appear promising. The company, with its leading-age technology, profound knowledge and state-of-the-art manufacturing facilities, has a competitive edge over its peers.
ABB currently has a Zacks Rank #3 (Hold). Some better-ranked stocks include ESCO Technologies Inc. (ESE), II-VI Inc. (IIVI) and Regal Beloit Corp. (RBC). All three stocks carry a Zacks Rank #1 (Strong Buy).
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