While many investors count on contract wins to gauge the
performance of Pentagon's foremost contractor,
Lockheed Martin Corp.
) has now chosen to 'Go Green' for a cleaner tomorrow. The
company in partnership with a unit of
Ocean Power Technologies Inc.
) - Victorian Wave Partners Ltd. - plans to generate electricity
off the coast of Victoria, Australia in what will be the world's
largest wave energy project. Shares of Lockheed Martin gained
2.3% while Ocean Power shares skyrocketed 53.6% yesterday on the
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This is a major step undertaken by the companies to make ocean
energy commercially available. The project - involving three
stages - is capable of generating 2.5 megawatts (MW) of power
initially that will gradually be boosted to 62.5 MW of peak
power. This wave energy generation project is expected to
generate enough electricity to power 10,000 homes upon completion
of construction by as early as 2018.
Ocean Power's PowerBuoy technology will be used for the project.
This is a wave energy converter technology that extracts energy
from the surface motion of ocean waves. PowerBuoy moves up and
down as waves rise and fall, generating electric power from
mechanical energy. The generated electricity will be conducted to
the shore via an underwater cable. Ocean Power is the pioneer in
wave energy technology development and has established a string
of projects worldwide. It has also many projects that are
currently under development in Hawaii, Japan and Europe.
Per the agreement, Lockheed Martin is responsible for overall
project management and will assist in manufacturing designs of
PowerBuoys. The company will also lead the production of
preferred PowerBuoy components and execute system integration of
the wave energy converters.
As this wave energy project will contribute to Australia's target
of 20% energy from renewable sources by 2020, it has gotten
significant grants from the Australian Renewable Energy Agency.
Despite Lockheed Martin's popularity as a maker of fighter jets,
notably the F-35, the company has also been known for its
environmental stewardship. In Apr 2013, Lockheed Martin entered
into an agreement with Reignwood Group to develop an Ocean
Thermal Energy Conversion (OTEC) pilot power plant located off
the coast of southern China. Per the agreement, this offshore
plant with an electric generation capacity of 10 MW will be
designed by Lockheed Martin. The plant will supply all the power
for a green resort built by Reignwood Group.
Previously, Lockheed Martin had tied up with Makai Ocean
Engineering also for the development of 100 MW OTEC plants for
island communities in Hawaii and Guam.
The company presently retains a Zacks Rank #2 (Buy). Other stocks
worth considering are Zacks Ranked #1 (Strong Buy)
Northrop Grumman Corp.
) and Zacks Ranked #2 (Buy)