After a 40 per cent rise in the Sensex since March 2009, the cassandras of doom are out again predicting a global collapse. With $ 11 trillion to be spent globally on creation of power generating capacities by 2030, the only problem ABB will have will be to grow fast enough to meet rising demand. A nice problem to have. What say?

I have been bullish about power equipment producers for as long as I can remember, and topping that group of concerns has been the Swiss-Swedish ABB. The $ 35 bn Zurichengineering giant builds the equipment that makes up the innards of an electric grid. It’s high voltage direct current system (HVDC) is rapidly becoming the backbone of National power grids, including India.

The corporate is positioned to benefit from the billions governments worldwide are spending to build and upgrade electrical grids so they can handle intermittent sources along with higher demand. As wind turbines and solar panels add more energy to the grid in farther flung places, ABB will be there to move energy.

ABB seems to be in a good spot. In addition to HVDC lines, ABB is pitching it’s electric transmission systems and it’s electric sparing motors to the dirtiest industries-utilities, mining, oil and gas and heavy manufacturing as a way of becoming a little bit cleaner and more efficient.

Customers have reposed their faith in the entity, with ABB reporting an order back log of $ 25 bn, out which $ 7 bn came in Q4 and $ 11 bn in Q2 of FY09.

Electricity demand is projected to double by 2030 says the International Energy Agency and $ 11 trillion will be spent by then on energy infrastructure. Half of this amount will go to transmission. Private utilities will foot most of the bill, but in many parts of socialist Asia, Government’s will be the major providers of demand.

In the US over $ 19 bn will be spent on transmission, distribution and generation, Europe plans to spend $ 6.5 bn to connect Eastern and Western Europe and China will lay out $ 132 bn to add 16,000 miles of grid lines.

ABB’s best trick is its ability to take electric current of any voltage and frequency, chop it into tiny bits and reassemble it into the form needed. It does this with power electronics-semi conductors which move, convert and transform power.

ABB’s focus on HVDC is at odds with the current concept of using alternating current to move power. ABB’s technology goes alongside Thomas Edison’s idea that power should be distributed as Direct Current. DC is ideal for moving power long distances and for moving power underground and underwater.

ABB’s HVDC system is helping China put up a 800,000 volt line, the most powerful ever, to move 6.4 GW of power 1300 miles from a station near the Three Gorges Dam to Shanghai. Last year ABB helped complete the longest undersea link in the world, stretching 360 miles between hilly Norway and flat Netherlands. This allows alternating movement of wind and hydel power between the two connecting points.

Now ABB is building the link between the biggest offshore wind farm off the coast of Germany with links to the interior, and connecting the grids of Ireland and UK through a 160 mile overland and undersea HVDC link that will move 0.5 GW of power.

The only problem that concerns like ABB have is their inability to expand power transmission output fast enough to handle the coming growth. But that’s a nice problem to have.