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The March issue featured the "Electric Vehicles Progress Report", and while global sales of hybrid and electric cars are expected to top the one million mark for the first time this year, this market is still very much in its infancy, still driven mainly by visionaries and early adopters. The efficient transportation stocks in The Green Portfolio are doing very well and one of them is the leading gainer for 2012 year-to-date, but before electric vehicles (EVs) can really reach mass adoption and hit pay dirt, a few critical things need to happen.

Throughout history, the advent of game-changing technologies, e.g. railroads and the automobile, created brand new industries to feed and support them. Just like the best wind power investments are not necessarily the makers of wind turbines and the best solar investments are not in solar panels, for electric vehicles, arguably the most important new industry is the charging infrastructure and it's in the process of being deployed as we speak. In this article we will survey the field and identify the best investment opportunities.

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Over the last couple of weeks Federal Reserve Chairman Ben Bernanke has embarked on an unprecedented public-relations campaign aimed at reassuring the markets that everything is under control. The key message repeated over and over is that the central bank will continue its ultra-accommodative monetary policy and do everything in its power to help the economy. The pledge to continue fiscal stimulation by all means possible and to keep interest rates low for years to come was music to the ears of the stock market which ended the best first quarter in 14 years.

This longstanding easy money culture and ongoing liquidity injections comes at a price, and while no one admits it, the U.S. Dollar is being thrown under the bus, increasingly endangering its status as world reserve currency.

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Rona Fried, Ph.D., Contributing Editor

With offshore wind taking off in a big, big way in Europe, many people wonder how they might invest in that. Wind turbine manufacturers are suffering in similar ways to the solar industry and aren't a good bet right now.

But when you think about the critical infrastructure - much of which is holding both land-based and offshore wind back right now - you think of the shortage of transmission lines to connect all that wind to the grid. The same is true for all those big solar plants coming online in the western U.S. Investments in transmission infrastructure now must go hand in hand with those in clean energy itself.

And that points to ABB Ltd. (ABB).

Based in Zurich, Switzerland, ABB Ltd. resulted from the 1988 merger of a Swedish corporation (ASEA) and a Swiss company (Brown, Boveri & Cie). The company has long been a leader in manufacturing and connecting the vital components of efficient transmission systems, such as electric transformers, switchgears, circuit breakers and cables. ABB also helps industrial and utility customers use less energy through automated distribution systems.

ABB pioneered the development of power semiconductors that control the flow of electricity and convert it into forms required for different applications. It's responsible for innovations that vastly reduce energy losses through transmission lines - down to just 1% in some cases - and energy-saving variable speed drives, and frequency converters used by electric trains.

Its transformers can also improve the performance of wind turbines by as much as 70%. ABB provides power infrastructure from "where the wind comes into the turbine until the time it touches the grid," says Dennis McKinley, head of ABB North American Windpower.

The company has a strong internal sustainability focus, reducing its energy use and materials, streamlining transporting goods, phasing out hazardous materials, and designing eco-efficient and recyclable products. The company has ranked number one on the Dow Jones corporate sustainability index for several years. Design engineers use life cycle analysis for product design and ABB employs some 400 sustainability officers across the 100 countries where it operates. ABB also works with suppliers on these issues. In 2012, it plans to conduct over 100 sustainability audits and provide face-to-face training with 250 suppliers.

ABB says nearly 60% of revenues are related to energy efficiency products and services that help customers save energy and reduce greenhouse gas emissions.

Connecting Offshore Wind to the Mainland

Offshore wind will provide 13.1% of Europe's electricity, powering 130 million homes, if all the projects currently planned go through. About 141 gigawatts (GW) in 17 EU countries are either built, under construction, consented, or planned in Europe. That's 35 times the capacity of the 4 GW installed today.

Last year, ABB won its largest transmission contract to date - a $1 billion order to connect offshore wind farms in Germany's North Sea to the mainland grid. The order is for a 900 MW high-efficiency, high-voltage direct current (HVDC) system, the world's largest offshore system. When it's operational in 2015, the system will supply over 1.5 million households with wind-generated electricity.

The HVDC lines, which limit electrical losses to less than 1% per converter station, will transport power generated at Gode Wind II and other wind farms to an offshore HVDC converter station. From there, the electricity will be transferred via 135 kilometers of underwater and underground cables to an onshore HVDC station on the German coast, and from there will travel to the mainland grid.

HDVC allows power to be transmitted at high voltage in direct current (DC), rather than alternating current (AC), which almost eliminates electricity losses over long distances. ABB is one of the world's most experienced underground and submarine cable manufacturers, with many record achievements to its credit, such as the 580 km long 700 MW, 450 kV cable link between Norway and the Netherlands. The technology allows for very long submarine cables of up to 2000 MW at 500 kV DC (bipole). The company's capabilities range from planning to installation.

ABB previously used the technology to connect the BorWin1 wind farm and has a contract to connect the 800MW Dolwin1 wind farm, both in the North Sea.

Connecting Desertec

As a founding member of the Desertec Industrial Initiative, (see "Remarkable Desertec Project Gains Traction" in the February 2012 issue), ABB's HVDC cables are being proposed to carry the electricity that will connect the Sahara with Europe, the Mid-East and northern Africa. Extremely long distance transmission cables will travel under Saharan sand and under the Mediterranean to eventually supply 15% of Europe's electricity, and a substantial part of the demand in Northern Africa and the Middle East.

Connecting the Smart Grid

ABB is one of the world leaders developing smart grid technologies. Its solutions enable more distributed generation, more power generated from renewable sources and a two-way grid that can receive as well as deliver reliable power.

One of its R&D projects is a large scale smart grid in Stockholm in partnership with the utility Fortum. The project is a test case for incorporating excess power from rooftop solar and other local renewable energy sources into the grid, and enabling electric vehicles to both draw electricity from the grid and feed it back in. It's also looking at energy storage options for a more flexible grid, all of this intended to lower energy consumption and emissions.

Diversifying in Cleantech

It's no surprise then that ABB is buying up companies to expand its footprint in energy efficiency, smart grid and electric vehicle charging.

Among its cleantech acquisitions is Baldor Electric, which it bought for $4.2 billion. One of our long-time favorite companies, Baldor leads in efficient motors and has a long history as one of the most socially responsible employers.

In the past year or so, ABB acquired several smart grid software companies including Ventryx, Trilliant and Obvient Strategies, and entered electric vehicle charging by buying Epyon B.V. and taking a stake in ECOtality.

ABB is revving up an electric car charging network, saying it could be a $1 billion business by 2017.

ABB is also investing in ocean power with a stake in Aquamarine Power which makes the Oyster, an innovative near-shore wave energy device we discussed in "Ocean Power, the Next Frontier" in the December 2011 issue.

To top it off, ABB also has ownership stakes in two concentrating solar companies: a 35% stake in Novatec Solar and a lead investor in GreenVolts, which plans to market large-scale systems to utilities, businesses and agriculture. "Our extensive footprint, which covers all key solar markets in the world, will help us make this technology globally accessible," says Peter Leupp, head of ABB's Power Systems.

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Rona Fried, Ph.D. is CEO of SustainableBusiness.com, which published Progressive Investor for eight years before merging with The Green Investor in November 2010.

OK, after the preceding articles it is no secret that this month' recommendation is ABB Ltd. We like the company very much for various reasons, but mostly because of its concentration in green technologies. Yes, the company is a large multinational conglomerate spanning many countries and businesses, but unlike outfits like General Electric (GE) and Siemens (SI) which are involved in everything from banking to healthcare, gas turbines and nuclear reactors, ABB comes much closer to a pure-play on alternative energy.

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