ABB Ltd. (ABB) announced last week that it won a marine contract worth $23 million in third quarter. ABB will provide waste heat recovery systems, each powered by a power turbine generator (:PTG), for 14 new container vessels. Following the news, the shares of ABB rose 0.4% on Nov 18.
Installing the waste heat recovery system will increase the power output of the container vessels by up to 4%. The deployment of waste heat recovery system (:WHRS) onboard ships is becoming a viable mean of reducing fuel costs. In marine propulsion plants, more than 50% of the energy from fuel is lost to heat when converted to mechanical work by the main engine.
Therefore, by supporting the ship’s main propulsion plant with a waste heat recovery solution, it is believed that up to 4% of the lost fuel energy can be recovered and converted into electricity. The WHRS system is energy efficient and reduces CO2 emissions in relation to the engine’s mechanical power output.
Per the contract, ABB is required to supply power turbines with control valves, alternators, reduction gears and dynamic compensators. The contract also requires ABB to provide two newest generation turbochargers. The electrical output of the system is 1.65 megawatt (MW).
Of the 14 ships, seven will be built at the Dalian Shipbuilding Industry Co. Ltd., (:DSIC), while the other seven vessels will be constructed at New Times Shipbuilding Co. Ltd., for China International Marine Containers Group Co. and Mediterranean Shipping Co. S.A (MSC). These container vessels are expected to be delivered in 2015 and 2016.
ABB has a Zacks Rank #3 (Hold). Other companies in the industry that look promising at the moment include VSE Corp. (VSEC), Jacobs Engineering Group Inc. (JEC) and Quanta Services Inc. (PWR). VSE Corp has a Zacks Rank #1 (Strong Buy), while Jacobs Engineering and Quanta Services both have a Zacks Rank #2 (Buy).