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Page 2: Silver Spring Networks selected by CPFL >> By Jesse Berst
For instance, many people do not realize the extent of SSN's move into distribution automation. Just recently, SSN has developed a communications module for one of the industry's most advanced faulted circuit indicators. The Sentient Energy Master Monitor 2 (MM2) attaches easily to overhead power lines. Communicating over the SSN network, it provides real-time information on the state of power lines. The MM2 is one of the new-breed, low-cost sensors that scavenge power from the power line itself and can be easily installed just by "hot stick."
SSN has also upgraded its GridScape network management application to support not just smart meters, but all sorts of sensors and devices.
Even so, SilverLink's tight integration with SSN's many other offerings will make this a compelling service for utilities that don't want the expense of building, coding and staffing a 24x7 operations center. We think SilverLink's "manager of managers" motto will resonate with many utilities. “The speed and specificity of SilverLink insights enable utilities to save time and money by liberating them from generic reporting systems and expensive custom integrations," said Don Reeves, Senior Vice President of Smart Grid Services and Operations.
The next growth market?
It's important for SSN (and for other companies in the smart meter space) to make inroads into distribution automation. GTM Research predicts the U.S. distribution automation market will rise from $1.75 billion in 2010 to about $3 billion in 2015, outpacing smart meters in money spent. Meanwhile, the smart meter market has slowed. SSN currently connects to roughly 12 million smart meters in North America, with another 6 million under contract. But Pike Research predicts U.S. smart meter installations will decline sharply over the next two years before picking back up.
As a result, SSN and its rivals also need to increasingly sell outside the U.S. -- and SSN has begun doing just that. In New Zealand, SSN is deploying a platform for metering and distribution automation for 45,000 customers of WEL Networks. In Europe, SSN is involved in several important pilots, including the Ecoisland Partnership, which seeks to make the Isle of Wight energy self-sufficient by 2020. SSN is also part of the team working on an innovative project in Southeast England to make wind easier, faster, and cheaper to attach to the grid.
And now SSN is making noise in Latin America. Most leading U.S. firms have been targeting Brazil heavily for the past 18 months, and their efforts are beginning to pay
And SSN itself was just selected by CPFL Energia to build out a network for the Brazilian utility's commercial and industrial customers. (See Page 2 for the announcement.) Although the size of the initial rollout was unclear from the press release, the deal certainly has huge potential. CPFL Energia is a holding company that owns eight distribution utilities serving 569 municipalities in the States of Sao Paulo, Rio Grande do Sul, Parana and Minas Gerais. It is the country's largest private electric company.
As it seeks to expand, SSN is helped by what I consider the industry's top partnering program, one that gives SSN the ability to paint itself as a true smart grid platform.
Although the company is still not profitable, it creeps closer to that elusive goal each quarter. Perhaps it will get close enough to trigger its initial public offering, for which it filed way back in July 2011. Since then, the company has been waiting for market conditions to be just right (and for its financials to look just right) to pull the trigger. Although SSN has received nibbles from a few potential buyers, the company's aggressive entrepreneurial culture make it a poor fit for most of the big industrials. I predict SSN will either launch its IPO or withdraw it by the end of the year.
More on SSN…
Silver Spring Networks takes big leap forward with new Gen4 technology
Silver Spring Networks signs on for ComEd's 10-year smart grid expansion
From the SGN Research Marketplace…
Distribution Automation 2012-2016: Technologies and Strategies for a Digital Grid - With utilities investing significant capital into infrastructure, communications
Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry's oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.
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