Trilliant is going where power demand is zooming and distribution automation and other smart grid concepts aren't yet as widespread.
The company -- which makes software and hardware for networking utilities, field equipment and their customers -- will expand into Asia. As part of the push, Taiwan's United Microelectronics, the second largest chipmaker-for-hire in the world, has become an investor in Trilliant and will serve as a strategic partner.
Asia currently is experiencing very rapid growth in demand for electricity, noted Eric Miller, senior vice president of solutions at Trilliant.
"Anything that can make it cheaper and easier will have a huge impact," he said.
While Asian utilities have been moving to modernize their grids, some regions could be particularly interesting. China, for instance, recently passed regulations that will require Chinese utilities, which are state-owned entities, to their reduce energy sales volume by 0.3 percent a year through efficiency gains. It doesn't sound like a lot, but that much energy could power 1 million U.S. homes for a year (California public utilities are encourage to cut power by 1.5 percent a year). China, however, also lacks demand response as we know it in the West. Blocks of power can be shut off, but the utilities don't manage power at specific meters. Many regions also rely on manual meter reading.
In India, energy theft remains a massive problem that could be ameliorated by smart grid technologies. Demand response should be a huge market in India, too: air conditioners account for a substantial share of the power consumed in large cities like Mumbai.
Technically, distribution automation and demand response aren't the same thing, but the lines between them are increasingly blurring. Utilities, after all, are investing in distribution automation equipment -- which lets them communicate across the grid and control assets remotely -- that will lay the foundation for demand management services. Overall, distribution automation will likely be the strongest smart grid segment over the next five years, according to David Leeds, senior manager of smart grid research at Greentech Media. Approximately $2.3 billion of distribution automation equipment -- voltage regulators, feeder switches, capacitor banks -- will get shipped in 2010, but the figure will rise to $5.6 billion by 2015, Leeds said.
Miller did not state what markets Trilliant would target first, but said there are near-term and longer-term opportunities. Miller noted that Asia is similar to the U.S. in that the power distributor is also the retailer.
The company competes directly against other infrastructure providers like Silver Spring Networks. So far, Trilliant has 1.8 million meters under control and has contracts in place to manage another 1.5 million. The company also announced that Stephen Specker, who recently retired as the CEO of the Electric Power Research Institute (EPRI), has joined Trilliant's board.
Specker said he recoils against the 'smart grid' label. There's already plenty of intelligence in the smart grid. Utilities are essentially building smarter grids.
If you're not too familiar with UMC, you might be in the relatively near future. The company is number two in the foundry market, right behind longtime rival TSMC. In 2009, UMC set aside $46 million to invest insolarand LED companies, following TSMC's announcement that it would invest $50 million in LEDs and solar. The Trilliant investment is UMC's first smart grid investment, so don't be surprised if TSMC counters.
Like TSMC, Samsung, LG, Panasonic and other Asian conglomerates, UMC has a massive manufacturing footprint and is adept at driving down the costs of components. Expect to see all of these companies line up with U.S. startups, which have technology and interesting ideas but lack factories, or enter into green markets on their own. Some of the interesting developments from 2010: TSMC investing $50 million in Stion, the maker of copper indium gallium selenide solar cells; Panasonic announcing an ambition to be the largest green electronics company in the world by 2018; and Samsung and LG quietly amassing LED manufacturing equipment.