China, soon to be the world’s biggest smart grid market, is planning to spend about $2.5 billion to $3 billion per year on a smart meter rollout over the next several years. Chinese meter makers like Ningbo Sanxing Electric, Wasion, Hi Sun Technology, Linyang Electronics and Holley Metering are expected to reap the greatest rewards, given the expectation that China’s government will favor domestic manufacturers in the rollout.
But that doesn’t mean that the technology inside those meters can’t be a target for foreign companies. Take STMicroelectronics, the Geneva, Switzerland-based semiconductor manufacturer that’s been making a big push into chipsets for smart meters and the communications systems that serve them.
ST has traditionally been strongest in European smart meter markets. But “recently, we have won China,” Carlo Bozotti, president and CEO, told an audience at a company presentation in New York City last month. According to a company transcript, Bozotti claimed that STMicroelectronics is the “leading supplier across the geographies in China, with our power line modems, with our controllers for these applications.”
Of course, having a lead in China’s present market isn’t the same thing as having the country’s future smart meter market locked down. China deployed roughly 12 million meters in the fourth quarter of 2011, but it is expected to need up to 300 million smart meters by 2016 or so. That kind of growth will provide plenty of room for competition.
In terms of STMicroelectronics’ current claimed lead in the China market, Bozotti is presumably referring to the powerline carrier (PLC) technology that’s expected to serve a majority of China’s smart meters, rather than the wireless technologies used mostly in North America.
ST is far from the only chipmaker with technology in that space. Norwood, Mass.-based Analog Devices is working with China’s Nanjing NARI, Milan, Italy-based Accent is working with Chinese PLC comms maker Topscomm, and Singapore-based Semitech is putting its PLC chips in meters built by LangFang Gao Shan, to name a few examples.
Some startups funded by outside-of-China venture capital are also breaking into the market. Shanghai-based Miartech, which raised $6 million from DFJ DragonFund in 2006 (PDF), and an investment from Intel in 2010, has been named one of three technologies to guide PLC standards for the country by State Grid Corp. of China, the country’s massive national utility.
San Jose, Calif.-based Echelon, which provides PLC smart meters for a good chunk of Europe’s smart meter deployments, is also making moves into China. Echelon and Holley Metering formed a joint venture in March which will see Echelon’s technology licensed to other meter vendors, as well as Holley.
That doesn’t mean that other communications networks aren’t involved, however. Backhaul networks that connect local smart meter networks to utility offices can be cellular, fiber or a variety of technologies. Glen Canyon, a Santa Cruz, Calif.-based startup that’s promising to sell millions of meters for $25 and under to China, is including 6LoWPAN wireless radios for connecting its meters in local mesh networks.
Then there are opportunities to link China’s smart meters to the utility customers, using technology. For example, STMicroelectronics announced last week that it’s working with Chinese meter maker Wasion to embed chips that can allow power customers to pay their bills with mobile phones.
The new meters, to be deployed in the massive (pop. 32 million) inland city of Chongqing, use ST’s near-field communications (NFC) technology to read the smart meters remotely, much like a security kiosk reads a swipe badge to open a door. The mobile device then sends the data via its 2G or 3G network to a financial back-end that completes the payment.
The ST-Wasion project provides a way to add the security and verification of mobile device payment to the business of paying for electricity. That’s an important consideration in developing economies like China, India, Brazil and others where “non-technical losses,” i.e., energy theft, can make up a significant portion of a utility’s expenses.
It also sounds a bit like using an NFC-enabled cell phone as the gateway between the meter and the wide world of cellular connectivity, a backhaul network device in the hand of the customer, so to speak. Of course, a metering device that only communicates via near-field radio waves to a cell phone that does all the heavy networking might not exactly earn the title “smart meter” in strict terms.
But then, it’s important to remember that China’s massive smart meter rollout may well look very different than what we’ve seen in North America and Europe so far. For the most part, that’s based on China’s demand for low price meters -- less than $50 apiece, compared to $150 and up in North America and $100 and up in Europe.
In other words, China’s smart meters will have to solve certain key problems for the country’s utility infrastructure, but at a price that could preclude some of the more advanced features, like power quality measurement or two-way home area connectivity.