Some of the biggest buzz at the DistribuTECH conference in San Antonio this week was around a recently unstealthed startup called Glen Canyon. The Santa Cruz, Calif.-based company is promising to deliver smart meters for the unheard-of cost of $25 or less -- and it has already landed a 1.5-million-meter order from China.
Where does Glen Canyon come from, and how is the company making meters so cheaply? I talked to CEO John Heibel at the company’s DistribuTECH booth on Wednesday, and he laid out some of the details behind the company’s potentially game-changing stab at the smart meter market.
According to Heibel, there’s a fundamental disconnect between the way the utility metering industry works and the way Silicon Valley operates. While meter makers have built their smart meters from a foundation in mechanical metering, Glen Canyon’s smart meter module is more like “a communications device with metering capability,” he said.
“We integrated all the functionality of communicating electric meters into a small module, the size of a deck of cards,” he said. In the module, there’s an LCD display, and four electric meters -- that is, four of the newest release of chipsets from Cirrus Logic, a granddaddy of digital metering -- capable of measuring up to four circuits from a single device, he said.
The communications capability comes from an embedded “internet appliance” from NXP Semiconductors that combines an IEEE 802.11.4, 6LoWPAN wireless radio with a RISC-based 32-bit processor, Heibel said. NXP has been providing similar chipsets to companies like GreenWave Reality that are looking to use the latest generation of IPv6-compliant wireless technology to connect home energy devices. Smart grid partners Cisco and Itron are also using 6LoWPAN-based wireless mesh that comes from Cisco acquisition Arch Rock to link their latest generation of smart meters.
In Glen Canyon’s case, its meters use wireless mesh to connect up to gateway meters that contain either a cellular radio or, in the case of its Chinese project, an Ethernet connection, he said. That links the meters to a cloud-based software platform, built and managed by Glen Canyon, that can serve as the utility’s interface to the meter network.
The company announced Tuesday that Chinese partner Beijing Guozhiheng Power Management Technology Group Co. has ordered 1.5 million of the company’s single-phase meters for delivery over the next 18 months. Heibel told me that Glen Canyon has a second, even larger smart meter order with State Grid Corp. of China, the nation’s massive central utility, though he wouldn’t provide details.
“Half the world’s market for electric meters is China,” he said. “A quarter of the world’s market is India. The rest goes downhill from there. And these other areas are much more cost-sensitive than we are in the developed world. Our strategic position around the world is to do joint ventures with local providers in their markets.”
China wants its smart meters to be cheaper than the $150-and-up ranges seen in North America and the $100-and-up for European smart meter projects. Taiwanese research firm Yuanta Securities said in a January report that SGCC wants its smart meters to cost about $32.60 apiece on average.
In fact, some of Glen Canyon’s antecedent technology is already in China, as well as other markets. Glen Canyon the startup is backed by Glen Canyon Partners, the venture capital investment group Heibel formed in 2005. In 2010, Glen Canyon Partners and China Holley Group formed a joint venture aimed at the “electric utility measurement systems” market.
“We license to them -- they have built using our technology,” Heibel said of the Holley joint venture. In fact, he said that communications and metering technology from companies that Glen Canyon Partners has invested in has been licensed to some 100 companies around the world. That raises the specter of competition in China from heavyweight players like Holley, perhaps using similar technology to that offered by Glen Canyon to achieve the low prices that Chinese deployments are demanding.
China’s smart grid market is huge, with an estimated 500 million smart meters to be deployed in the next five years, according to Research and Markets. Of course, the definition of “smart” may be different than it is in the U.S.: with State Grid demanding such cheap meters, features like outage detection and remote disconnect may take a back seat to low cost. Glen Canyon, for example, hasn’t yet included remote disconnect features in the meters it’s building for the China market, though it could do so in the future -- though at an extra cost.
Glen Canyon (the startup) hasn’t announced deals in other countries yet. But Heibel said the company is active in India, where it’s designing meters with prepayment options, a popular feature in the developing world.
As for North America, Glen Canyon also makes meters in the ANSI-specified, round shape used in that market, with manufacturing in Sacramento, Calif., Heibel said. But he expressed confidence that Glen Canyon’s promise of a $25 ANSI meter -- about the same cost as an old-fashioned mechanical meter, and roughly one-sixth or less the cost of a typical North American smart meter -- will draw customers.
Of course, the four-month-old startup will have to answer a lot of questions from the utility industry to challenge metering giants Itron, Landis+Gyr, Sensus, Elster and General Electric on their home turf. For example, the company hasn’t yet earned IEC or ANSI certification for its meters, though it’s expecting that to happen in April, Peter Hillen, marketing director, told me.
Neither has Glen Canyon revealed how much money it has raised from Glen Canyon Partners or other investors. That’s important, because one of Glen Canyon’s promises is to deliver its smart meters to customers with no upfront cost, in exchange for a monthly fee.
“We’ll give them 1 million meters for free, and enter a five-year contract and deliver it as a service, for a monthly cost,” is how Heibel described this “virtual” smart metering business model. With Glen Canyon’s cloud-based meter management platform in place, theoretically a utility customer “doesn’t need any software, any hardware -- the capex is zero,” he said.
Similar smart-grid-as-a-service models are being rolled out by smart grid players like General Electric, SAIC and Lockheed Martin, but those are giant companies with deep pockets. Just how a newly launched startup plans to finance such a model remains to be seen, and Heibel didn’t get into details.
All in all, it’s a fascinating new development in the smart meter space. Heibel is a veteran of the business, having served as division manager of General Electric’s utility meter division before going on to lead firms that have found their way into the world’s biggest meter companies, including Metering Technology Corp. (bought by Echelon) and Main Street Communications (sold to Landis+Gyr). He’s also managed divisions and product lines at Landis+Gyr, Siemens and Digital Equipment Corp.