Echelon has been testing the waters of the Asian smart meter market with some key partnerships over the past few months. On Tuesday, it announced an expansion of that effort, with the launch of a new control module it will provide to partners serving China, South Korea, Thailand and Malaysia, aimed at expanding their reach from smart meters to a whole array of smart grid devices.
The idea is to give regional meter manufacturers a tool to hook their smart meters to devices likesolarpanels and battery inverters, grid sensors, plug-in vehicle chargers and other grid devices, all over Echelon’s grid networking and software infrastructure. Partners including Mitsubishi Electric Automation in Thailand, South Korea’s VIDCOM, Malaysia's Comintel, and existing partner China’s Holley Metering plan to use the technology, which will be available in the second half of 2012, Echelon reported.
It’s another step in the San Jose, Calif.-based company’s new strategy for making inroads into countries like China, India, Brazil and South Africa and other emerging smart grid markets in Latin America and Southeast Asia. These countries often have incumbent meter manufacturers that want to own future smart meter markets, and governments often impose mandates for local manufacturing.
That makes local partnerships essential for the big North American and European smart grid vendors trying to break into the next wave of smart grid deployments. The list of contenders includes the likes of Itron, Landis+Gyr, Elster, Trilliant and Silver Spring Networks, and of course the big four grid giants, Siemens, Schneider Electric, General Electric and ABB.
Echelon, on the other hand, has been licensing parts of its core technology to meter manufacturing partners like China’s Holley and Brazil’s ELO Sistemas Electronicos in hopes of driving future sales of equipment, software and services. Tuesday’s announcement expands those relationships to include Echelon’s control nodes, which are devices made to connect a host of devices, including smart meters, via a software platform that Echelon has opened to third-party developers.
Right now, Echelon’s newly announced Asian partners are looking to use the technology to pull grid power sensor data from the smart meters themselves -- a function made a bit easier by Echelon’s use of power lines to carry data, which opens up the power signal for analysis.
The idea of tying multiple smart grid systems into a single platform isn’t new. Smart grid startup and IPO hopeful Silver Spring Networks does home demand response and energy management, plug-in EV chargers and solar panel inverters via its smart meter network, for example.
But Echelon’s open approach could yield a wider selection of potential partners, even if only one company, grid fault detection sensor maker Tollgrade, has signed up so far. Echelon opens its system to software developers via a set of standards called the Open Smart Grid Protocol from the European Telecommunications Standards Institute (ETSI), which codifies a set of methods for linking multiple smart grid functions over powerline carrier networks.
Echelon has deployed tens of millions of PLC-connected smart meters in Europe, and has been vying with Landis+Gyr for top market share in the region. Its North American presence is currently limited to a single small meter deployment with Duke Energy in Cincinnati. But with U.S. smart meter deployments slowing down, and Europe’s smart meter deployment plans at risk from the continent’s ongoing economic crisis, the smart grid industry has been turning toward developing markets for future growth.
Price is going to be a huge challenge. In China, key government-controlled utilities like State Grid Corp. of China (SGCC) and Southern Grid want their smart meters to cost less than $50 apiece, which is much lower than the $150-and-up ranges seen in North America and the $100-and-up for European smart meter projects. India and Latin America are facing similar price points for mass residential deployments.
It’s going to be interesting to see how the smart grid giants compete against, and cooperate with, smaller and scrappier players in these markets. In China, meter makers like Ningbo Sanxing Electric, Wasion, Hi Sun Technology, Linyang Electronics and Holley are expected to dominate China's smart meter rollout, albeit with technology partnerships with semiconductor technology providers from the developed world. But we’ve also got contenders like Santa Cruz, Calif.-based startup Glen Canyon, which is promising to deliver its smart meters at a price of $25 apiece -- and has a 1.5-million-meter order from a Chinese partner to test its price point.
There’s no doubt that the rewards for contenders who can meet the market’s needs will be immense, however. China is going to need about 300 million smart meters over the next five years, according to government targets, and Brazil wants to deploy 65 million smart meters by the end of the decade.