Lockheed Martin Co. (LMT) is serious about national security,
and these days that means increasing development around renewable
energy and energy efficiency technologies as much as jets or
missile defense systems, Clean Technology Insight has learned.
Building on partnerships the company announced last year to
develop utility scale solar and wave-power technologies, the
defense and aerospace giant is now working on new types of fuels
for vehicles and power plants, according to executives at the
company.
"We see energy as a major piece of what this country needs to do
both for electric reliability and security, and this is a huge
opportunity to put a lot of people to work," said Thomas Grumbly, a
vice president and customer relations executive for Lockheed Martin
Information Technology.
(This story also appeared in Clean Technology Insight
<http://www.dowjonesnews.com/newdjn/story.aspx?StoryID=DN20090304012702&TakeNo=1#Term1Term1>
, a daily newsletter and information service published by Dow Jones
& Co.)
As part of its expansion into the renewable energy market the
Bethesda, Md.-based company has set aside $10 million for
investment in energy technologies developed outside of Lockheed
Martin that could be of value to the company, according to
Grumbly.
Also, through its Seabrook, Md.-based Information Technology
business division Lockheed Martin runs an energy efficiency
services business, which it acquired with the purchase of Aspen
Corp. in 2006.
Initially a $10 million revenue business, when Lockheed acquired
it, energy efficiency services now bring in nearly $100 million in
revenue, Grumbly said.
Equally as important, though less of a cash engine at the moment
is the work the company is doing in energy generation, said Chris
Myers, vice president for business development in Lockheed Martin's
Maritime Systems and Sensors group.
"We saw that energy was going to become a national security
issue as well as global climate change issue," said Myers. So in
2007 the company began pursuing opportunities to take its
experience in manufacturing and process engineering and bring that
to the alternative energy market.
Initially the company began with solar-thermal technologies
through a development partnership with the private equity
investment firm Starwood Energy Group. Some of that firm's $433
million fund will be used to back the development of utility scale
solar projects alongside Lockheed Martin, according to a statement
the companies issued in 2007.
When the project was first announced, Lockheed and its
investment partner estimated up to 10 gigawatts of solar power
could come online globally by 2017. At a cost per watt of $3, that
generating capacity would represent a market of $30 billion.
Already the company is in the process of negotiating three
power-purchase agreements with select utilities, and is building a
solar power test-bed to prove the efficacy of the technologies it
has developed.
Lockheed also sees similar opportunities in additional renewable
energy markets like biofuels and ocean power, according to
Myers.
The company is preparing to announce a partnership that will
work on the development of non-food-based biomass-to-gasoline
technologies, Myers said.
"We're providing engineering support and engineering services to
the company that we're working with," Myers said. "We're working on
a demonstration plant right now. From there we would go to a beta
scale and then go to a commercial-scale biofuel plant."
Lockheed also sees opportunities in the ocean.
In January, Lockheed Martin and Ocean Power Technologies Inc.
(OPTT) signed a letter of intent to collaborate on the development
of a utility-scale wave-power generation project in North
America.
Through the agreement, Ocean Power Technologies will provide its
project and site-development expertise and build the power and
control systems for the plant, while Lockheed Martin will handle
the construction, systems integration and deployment of the plant,
as well as operations and maintenance services.
Deeper and further out to sea, Lockheed plans on harnessing the
ocean's thermal energy to generate power. Through a $1.2 million
cooperative agreement contract with the Department of Energy,
announced in October, Lockheed will explore the viability of ocean
thermal energy conversion, which would use the thermal gradient of
the sea to drive a heat engine.
Under the terms of the agreement, Lockheed Martin will
demonstrate a cold-water pipe-fabrication approach that can make
pipes durable enough to withstand moving the large volumes of
seawater necessary to make commercial levels of power. The company
thinks ocean-thermal technology can support both power generation
and the desalination of seawater to produce potable water.
As the company moves into renewable energy it not only increases
its potential for revenue from new business sectors, but also from
new sources.
Currently a vast majority of the company's revenue comes from
sales to the Department of Defense, which is the consumer of 58% of
Lockheed Martin's goods and services. Selling power to utilities
opens up a whole new class of customer for the defense giant.
The numbers Lockheed Martin generates from its renewable
portfolio, both in energy generation and in energy efficiency
services are dwarfed by the $11.6 billion the company saw in 2008
sales for electronic systems and the $11.6 billion it generated
from information systems and global services, but a new
multi-billion dollar market is hard to ignore, executives at the
company said.
For Myers the energy market is a perfect fit in two ways. "We're
dealing with regulated utilities and we're used to dealing with
government-regulated customers," he said. "[Furthermore], we're a
national security company and I view energy as a national security
issue."
-By Jonathan Shieber, Dow Jones Newsletters; 201-938-4305;
jonathan.shieber@dowjones.com