Turbines From Outer Space Lift Lockheed to New Energy

  • Falling U.S. defense spending pushes Lockheed to diversify
  • Company looking to commercialize its lithium-ion batteries

Lockheed Martin Corp. says engineering tidal turbines to withstand the relentless pounding of the Earth’s oceans isn’t much different than the machines it makes to survive the extreme conditions of outer space.

The world’s largest defense contractor is trying to redirect more of its high-tech military knowledge to civilian markets. Lockheed Martin’s new mission: apply more than a century of know-how to renewable-energy technologies that may mitigate the international security challenges of climate change.

“Tidal has a need for advanced manufacturing, engineering and systems integration,” Lockheed Martin Energy Vice President Frank Armijo said in an interview at a Bloomberg New Energy Finance conference in London. “We use some of the same technology that we use for our space programs to help protect the systems within the turbine.”

Lockheed Martin’s pivot toward international renewable energy markets reflects broader trends in the military. After Google, the U.S. Department of Defense has become the country’s second-largest buyer of emissions-free electricity, in a bid to boost energy security. At the same time, warnings by military leaders have grown louder over the potential conflicts that will be ignited by runaway global warming.

Unique Technologies

“Lockheed Martin has been involved in energy technologies for decades, meeting the needs of a lot of our federal and defense customers,” Armijo said. “Out of that, we have some unique technologies that we think can be offered across the energy marketplace.”

Lockheed Martin Energy, a unit of Lockheed’s missile and fire-control business based in Prairie, Texas, is currently working on a tidal farm in Scotland with Atlantis Resources Ltd. 

The AR1500 tidal turbine they’ll install uses materials and manufacturing processes Lockheed Martin developed to help U.S. space shuttles survive the harsh conditions of outer space. The next phase of the project will be installed in the second half of November with completion forecast early next decade.

Adding urgency to Lockheed’s International diversification and focus on renewables are recent cuts to the U.S. defense budget.

Lockheed told investors in its 2015 annual report it was “seeking to lessen our dependence on contracts with the U.S. government” because the federal government’s “significant fiscal and economic challenges” posed risks to its business.

International Growth

“We see 50 percent of our growth coming internationally,” said Armijo. “Historically, we haven’t been focused on that, we’ve had enough business and growth going on in the U.S. that in essence that’s where our priority and our growth has been but now that we’ve consolidated our entire energy portfolio, we think that the opportunity to go international is there.”

Lockheed Martin’s adjusted net income rose 1.6 percent last year to $3.7 billion last year. Even as overall revenue climbed 6.2 percent to $46.1 billion, sales fell in three of its five business divisions.

Lockheed’s move into green energy “is a smart play,” according to Bloomberg New Energy Finance analyst Logan Goldie-Scot.

In addition to making turbines, Lockheed has developed waste-to-energy technology that converts garbage and wood chips to synthetic natural gas. They also make compact lithium-ion batteries, smart grids and miniature power systems that operate with renewables. In the second half of next year, the company wants to begin selling flow batteries for projects at least a megawatt in size.

“By focusing on lithium-ion in the near term while continuing to develop its flow battery technology, they can gain experience that could be used to enhance this product in the run up to its commercial release,” Goldie-Scot said. “Flow batteries are really innovative but it’s too soon to say if they work or not.”

Lockheed’s decision to go global is already yielding some returns. It announced its first U.K. power project on Oct. 11, a $105-million waste-to-energy plant in Wales being built with CoGen Ltd. that will generate 15 megawatts. It has plans to install more across the country.

(Company corrects investment value of power plant in last paragraph.)
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