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Sat 28 Feb 2009 04:00 AM

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Pragmatically bullish

UME caught up with Frank Duggan, group senior vice president of ABB, on the sidelines of the World Future Energy Summit to discuss sustainability and the credit crunch.

UME caught up with Frank Duggan, group senior vice president of ABB, on the sidelines of the World Future Energy Summit to discuss sustainability and the credit crunch.How does ABB approach the sustainability?

I think the biggest area where ABB can make a difference to the globe is as an enabler of sustainable, renewable, energy sources.

For instance, we don't make the wind turbines themselves, but we make the products that make the wind turbines connectable and optimise them to get the highest efficiency out of them in generation. We have efficient generators to allow them to reach up to 7MW on each turbine.

But then there is also the question of how you take that power to an area where it is needed? The problem is with a lot of renewable energy is the source is in an area where it's not used.

Actually we have developed a lot around the area of working with the mechanical manufacturers to get that mechanical energy turned into electrical energy and then bringing it in a cost effective and economical way to where it is needed. For example, last year we won a contract with EON, which allowed EON to put a wind farm 200km out in the North Sea and bring [the electricity] back onto the land.

That was a world's first. That then makes for a different environment for building wind farms, because one of the problems with building them onshore is the aesthetics.

We are also very clearly focused on the whole area of energy saving. At the moment we predominantly look at electrical energy saving and are thinking about how to expand beyond that.

How do your goals and targets differ for the Middle East?

I think most people who are not in the Middle East would say that it is not an area that is driving energy conservation, because people see it as producing an abundance of electricity. The reality is that the Middle East would prefer to use its oil and gas for other things than to produce electricity.

I think the problem people outside the Middle East don't recognise is that there is not the greatest abundance of gas. So that is one of the reasons they are driving to find alternative energy sources here.

What's the difference between here and the rest of the world? There is an awareness here and a focus on finding alternative sources for both social and economic reasons. Socially as the CEO of Masdar put it, they should do it and they can because they have the money. I think it's clear it's also preserving a scarce asset.

How will the credit crunch affect sustainable goals?

One could look at it two ways. The easy thing for many people to do would be to look at this as an easy source of saving and not to have the same focus on sustainability.

But on the other hand, if you are more energy efficient and optimised it gives you a good payback. From our perspective, we want to be associated with energy efficiency and sustainability. You can't just jump in and out of things like that just because the wind is blowing in a different direction. I think it would be short sighted to stop investing.

Has ABB been involved in Masdar projects?

Yes, initial discussions have taken place in a few areas of joint collaboration on maybe some research opportunities. It's only at the tentative stage, but we are also considering looking at Masdar for a location for our operations in Abu Dhabi.

What challenges do you see ahead?

In the UAE a lot of short-term focus is on the perceived slow down in construction. It's a mixed bag because many customers I have met said they see this as a positive thing for them.

Many customers see this as an opportunity for infrastructure projects, because they believe they are going to get more value for money. There is going to be a better availability of engineers and they believe that they will get a better quality of product for their investment dollar.

We don't yet see any reduction in the tendering stock but I would say it's moving into the infrastructure side of things both from industry and from the state. There is definitely going to be a strong investment in infrastructure and the signs are that looks to be continuing. Many of the governments have indicated that they are going to increase their budgets this year.

But we do see a slowdown although there are encouraging signs: Saudi Arabia is a big country with a lot of demands; in the UAE the oil and gas projects are still going ahead. So I don't have an overtly pessimistic view ... I think this is a region that has a history of rebounding very quickly. So I would say we are pragmatically bullish.

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