Recently, ABB Ltd. (ABB) received a contract from Saudi Electricity Company (SEC), Saudi Arabia’s national power transmission and distribution operator.
The contract involves execution of substation projects for SEC for an amount of more than $30 million. The country’s rising demand for electricity will be met with increased power capacity through new substations, reducing electricity losses while enhancing the stability and quality of power supply.
ABB's scope includes designing, supplying, installing and commissioning two new 132/13.8 kilovolt (kV) substations in the Al-Kharj area and in the adjoining Second Industrial City in the South-East of Riyadh. In addition, grid reliability and power quality will be improved. The country’s economy is largely dependent on oil. With the development and modernization of the country’s industrial base, this dependence will decline.
ABB will deliver high- and medium-voltage gas and air insulated switchgear, transformers, auxiliary systems and cables for the execution of this turnkey project. The company will also provide the SCADA (supervisory control and data acquisition) system and the automation, control, protection and communication system. These systems will enable monitoring and control of power assets of multiple sites from the central region control center and are designed according to the international IEC 61850 standard. The projects are expected to be completed by 2014.
The power and automation technologies provided by ABB Ltd. enable utility and industry customers to improve performance, while lowering environmental impact. The company is renowned for its turnkey air-insulated, gas-insulated and hybrid substations with voltage levels up to 1,100 kV, which enables an efficient and dependable supply and distribution of energy.
Moving ahead, the emerging markets will be a significant growth driver, with a need for high efficiency power transmission technologies. Demand in mature markets is also expected to improve. Customer capital expenditures have increased with the rise in commodity prices. Increased capacity in some later-cycle infrastructure-related businesses continues to exist. In many sectors, price stability has been attained. ABB has increased its prices to offset increasing raw material costs.
However, ABB Ltd's results are likely to be adversely impacted by macroeconomic weakness as more than 80% of the company's orders are derived from outside the US. A major competitor of ABB Ltd. is Siemens AG (SI).
ABB Ltd. is a Zurich (Switzerland) based power and automation technology company. The company operates in approximately 100 countries, structuring its global organization into five regions: Europe, Americas, Asia, the Middle East and Africa.
Currently, we maintain a Zacks #3 Rank (short-term Hold recommendation) on ABB Ltd.
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