ABB Sees Orders Rise as Offshore Cables Carry More Power

ABB Ltd. (ABBN) said a power-cable technology that allows offshore wind farms to transmit more than twice the energy of current set-ups will boost orders at the company’s power systems division in coming years.

“It’s on the list of ABB’s most important breakthroughs in the last five years,” Chief Technology Officer Claes Rytoft said in an interview, adding that rival technologies are at least some years behind. “We know about projects that have not moved forward because they are missing this.”

The technology will spur the construction of even bigger offshore wind farms by doubling the power capacity of cable connections to about 2,600 megawatts from 1,000 megawatts today, making it the most powerful subsea connection system in the world, Rytoft said. It includes high-voltage power cables, joints and terminations.

A steady stream of cable orders may help Chief Executive Officer Ulrich Spiesshofer to strengthen the Power Systems unit, which has been grappling with delays to complex renewable energy projects. Charges at the business, which manages big-ticket projects such as offshore wind park connections, have weighed on the company’s earnings and Spiesshofer has pledged to return the division to profitability.

In Europe, Milan-based Prysmian SpA (PRY) and Paris-based Nexans SA (NEX) compete with ABB, which is Switzerland’s biggest engineering company and also makes robots and power transformers, to supply high-voltage cables.

First Orders

ABB shares have declined 11 percent this year, valuing the company at 48 billion francs ($53 billion), while the Swiss Market Index added 4.6 percent.

First orders for the new technology could come from German and U.K. transmission system operators, Rytoft said. The cables will double the amount of power that offshore wind parks can send back to the grid and will save costs by occupying less space than cables that are currently in operation, he said.

ABB has been building up its production capacity for high-voltage cables to meet demand for connecting wind parks as well as oil and gas platforms, and interconnections between countries. It’s spending $400 million to ramp up facilities in Karlskrona, Sweden, spread over four years to 2015.

While orders won’t come in immediately, Rytoft said it will boost ABB’s bids for projects to connect offshore wind parks, and orders will flow in over the coming years as utilities plan the high-voltage cable system it into their networks.

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Robert Valpuesta

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