ABB to Power Western Saudi Arabia - Analyst Blog

Leading power and automation technologies supplier ABB Ltd ABB received a $110 million order from Saudi Electricity Company to construct substations to support grid interconnection and boost electricity transmission capacity, primarily in the western region of Saudi Arabia.

The new substations that will be constructed will connect the Taif East Governorate, part of the Mecca region, to the national 380 kilovolt (kV) transmission grid. The new substations will generate power of about 110 kV and will supply electricity to the areas of Turbah, Al-Khurmah and Rania, thereby avoiding the use of diesel-generated power in these areas.

Substations are important installations in the power grid that transform voltage levels per requirement, thereby facilitating reliable and efficient transmission and distribution of electricity. The substations primarily include equipment that protect and control the flow of electrical power.

Per the order, ABB's scope of work includes designing, supply, installation and commissioning of a 380/110 kV bulk supply point substation and upgrading the existing remote-end substations in Bisha and Sised to support the 380 kV grid interconnection. ABB will provide the substations with its gas-insulated switchgear GIS and hybrid technologies that will ensure reliability and efficiency while reducing the environmental footprint.

This apart, ABB will also be providing control and protection equipment, auxiliary systems and substation automation equipment which are in compliance with the international IEC61850 standard to enable monitoring and control of the substations from a remote control center.

Prior to this in Jan 2014, ABB Ltd. had received a contract from King Abdullah Economic City (KAEC) for providing substations to boost its transmission capacity and electric supply. Also ABB was awarded a contract by Saudi Electricity Company to design, supply, install and commission an expansion of the 380 kV (kilovolt) Haramain high-speed railway (HHR3) substation that supplies electricity to KAEC at 110 kV. This proves ABB's strong presence in Saudi Arabia.

ABB is the leading supplier of air- and gas-insulated substations and has more than 10,000 installations across the globe, with voltage levels of up to 1,100 kV. These substations serve various industries including utility, industry and commercial customers and also sectors like railways, urban transportation and renewables.

ABB currently holds a Zacks Rank #5 (Strong Sell). However, other stocks in the Power sector which are worth considering at the moment are Quanta Services Inc. PWR, Franklin Electric FELE and Enersys Inc. ENS, all three carry a Zacks Rank #2 (Buy).