Echelon's strategy in China gaining momentum

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Quick take: Echelon has taken a slightly different approach to certain overseas markets than many other smart meter vendors. Rather than sell under its own brand, it is sometimes content simply to sell the underlying technology. They make less per meter but they also risk less. The news below indicates the strategy is having some good early results, at least in China.

 

The news also has implications for other vendors. Chinese and other low-cost manufacturers have their eyes on the global smart meter market. They are finally getting their act together and producing equipment that is every bit as capable as that manufactured elsewhere. If you saw what happened to the price of solar panels and wind turbines when China targeted those sectors... then you have an idea what to expect in smart meter hardware. It may not be as devastating as it was in those other sectors, but hardware margins are sure to erode. – Jesse Berst

 

Echelon announced that its power line communications (PLC) technology and Control Operating System (COS) powered data concentrator module have been granted China State Grid approval through its joint venture Zhejiang Echelon Holley Technology Co. The joint venture has also received its first order for meter modules that incorporate Echelon's PLC technology for use in a 30,000 smart meter pilot deployment in Inner Mongolia and been selected for a pilot in Fuping county, located in the Shanxi province. The order is from Holley Metering Limited.

 

According to an Echelon press release (which you can real in full on page 2), the two projects represent significant opportunities for the partnership as Inner Mongolia is expected to add 10 million new smart meters over the next five years and the Shanxi province is targeting 10 million new smart meters over the next three years.

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And beyond those two projects, the Echelon Holley joint venture has also sold its communications modules that incorporate Echelon technology for use in 11,000 smart meters in smaller pilot projects at 10 sites in five provinces.

 

"Echelon's strategy of bringing our Energy Control Networking platform to China via our joint venture and local smart grid partners is starting to show results," said Ron Sege, chairman and CEO of Echelon. "This is part of our company's strategy to target growing markets and lay the groundwork for selling multi-application edge-of-the-grid solutions around the globe with great local partners such as Holley Metering."

 

More on Echelon's strategy…

Echelon's latest offering: a big score in Asia

Echelon's smart grid strategy coming into focus... and it is NOT aimed at the U.S.

Smart grid China gold rush begins: Echelon inks deal

 

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.

China's Leading Smart Meter Supplier, Holley Metering, Wins New Customers Based Upon Echelon Technology

Echelon Holley Receives China State Grid Approval; Inner Mongolia and Fuping Pilots Reinforce the Value of Echelon's Differentiated Energy Control Networking Platform

SAN JOSE, Calif., Oct. 8, 2012 -- Echelon Corporation(ELON) , a global leader in energy control networking for smart grid, smart city and smart building applications, today announced that it reached a significant milestone in a key targeted growth region, China. Echelon's power line communications (PLC) technology and Control Operating System (COS) powered data concentrator module have been granted China State Grid approval through its joint venture, Zhejiang Echelon Holley Technology Co., Ltd. The joint venture has also received from Holley Metering Limited its first order for meter modules that incorporate Echelon's PLC technology for use in a 30,000 smart meter pilot deployment in Inner Mongolia and been selected for a pilot in Fuping county, located in the Shanxi province. These two projects represent significant opportunities for the partnership; Inner Mongolia is expected to add 10 million new smart meters over the next five years and the Shanxi province is targeting 10 million new smart meters over the next three years.

The Inner Mongolia project started three years ago with other PLC technologies but, based upon the reputation of Echelon's PLC technology, Inner Mongolia has selected Echelon for this 30,000 unit deployment now that the Echelon Holley joint venture's meter module that incorporates Echelon's PLC technology has received State Grid certification. When the deployment is completed in January 2013, the utility has plans to expand to a larger scale.

The Fuping pilot is being managed by the local utility, part of the Shanxi provincial utility. The 1,000 meter pilot using Echelon PLC technology has delivered nearly a 100% read rate. Many more meters using the Echelon Holley joint venture communications modules will be installed over the next few months to expand this pilot. If the Fuping pilot performs well, it could expand to other cities or counties in the Shanxi province that are services by the Shanxi utility.

In addition to the Inner Mongolia and Fuping projects, the Echelon Holley joint venture has also sold its communications modules that incorporate Echelon technology for use in 11,000 smart meters in smaller pilot projects at 10 sites in five provinces.

"Echelon's strategy of bringing our Energy Control Networking platform to China via our joint venture and local smart grid partners is starting to show results," said Ron Sege, chairman and CEO of Echelon. "This is part of our company's strategy to target growing markets and lay the groundwork for selling multi-application edge-of-the-grid solutions around the globe with great local partners such as Holley Metering."

State-owned China State Grid Corporation, the world's largest grid operator and power distributor, has outlined and is aggressively delivering on its five year plan to upgrade China's electricity grid. State Grid promises reliability of no less than 99.9% and on-site response within 45 minutes to repair service in urban areas. To reach these goals, they created a rigorous suite of tests that vendors must pass in order to participate in the future State Grid project to upgrade its 120 million meter market over the next three years.

"With China State Grid approval and pilot underway, Echelon Holley is making significant strides in the Chinese smart grid market," said Jin Meixing, chairman of Holley Metering, a leading smart metering company in China.

About Echelon Corporation

Echelon Corporationis an energy control networking company, with the world's most widely deployed proven, open standard, multi-application platform, selling complete systems and embedded sub-systems for smart grid, smart city and smart building applications. Our platform is embedded in more than 100 million devices, 35 million homes, and 300,000 buildings and powers energy savings applications for smart grids, smart cities and smart buildings. We help our customers reduce operational costs, enhance satisfaction and safety, grow revenues and prepare for a dynamic future. More information about Echelon can be found at http://www.echelon.com .

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