A key element of ABB’s new business strategy, unveiled as part of the company’s Capital Markets Day in London on 9 September, is to reduce risk, notably in its Power Systems division, which has been struggling in recent times, mainly due to delays and difficulties with offshore wind converter platforms in the German North Sea (BorWin 1 and Dolwin 1 and 2), and a number of PV power plant projects where ABB has taken on the role of EPC contractor.

Launching what ABB calls its Next Level strategy, CEO Ulrich Speisshofer said, as well as risk reduction, the company was also shifting its centre of gravity to "higher growth segments while enhancing competitiveness." High growth markets identified by ABB include micro and nano grids (eg in developing countries), accommodation of intermittent renewables on the grid, substation automation, PV and distributed generation, requiring a more complex digitised smarter grid with increased numbers of feed-in nodes – part of what ABB calls the "big shift in the electrical value chain" that is currently transforming the power sector. Other features of ABB’s Next Level strategy include a more market and customer focused "streamlined regional structure", down from eight to three regions: AMEA (Asia, Middle East and Africa); Americas; and Europe.

Prior to the launch of Next Level ABB had already embarked on an initiative called "Step Change", aimed at addressing problems in the Power Systems division that have impacted profitability.

The problems have essentially arisen where ABB has taken on the role of turnkey EPC contractor, becoming involved in construction of converter stations and PV power plants, rather than simply acting as the provider of the power electronics. In the future ABB will aim for better management of the risk, taking on more of a system integrator role and partnering with other companies more specialised in construction and installation.

Other recent ABB news:

  • Caithness-Moray subsea power link. ABB has won an order worth over $800 million from Scottish Hydro Electric Transmission to provide a 160 km long HVDC Light link across the Moray Firth in northern Scotland. The scope includes two 320 kV land based converter stations, one of 1200 MW capacity at Blackhillock in Moray and one of 800 MW capacity at Spittal in Caithness, plus submarine and underground cables.
  • Alliance with BYD. ABB has announced a strategic collaboration with BYD of China in energy storage, focusing on grid connected systems, microgrids and PV.