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MHT's Efrain Viscarolasaga: Preparing the smart grid for more power
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Utilities are moving quickly as billions in federal funds are focused on upgrading the nation’s electric infrastructure: “Smart grids” are coming. That means opportunity for a number of local companies.
The grand plan for smart grids is twofold: to provide utilities with a way to manage and monitor power distribution on the grid while offering new, more efficient services, and to provide consumers with the means to control and monitor their own power usage, down to the appliance level. The latter could be a year or two away, but utilities, traditionally known as “slow movers” in the business world, have been pushing forward at what Ember Corp. CEO Robert LeFort calls “rocket speed for them.”
This week, Boston-based chip maker Ember, which makes semiconductors using the Zigbee wireless standard for, among other things, automated electric meter readers, closed an $8 million round of funding that is expected to help the company maximize the growing opportunity in an intelligent power network.
The funding, which was provided by Polaris Venture Partners of Waltham, GrandBanks Capital of Newton, RRE Ventures of New York and others, is expected to help the 8-year-old company continue its penetration into the automated meter reader market and prepare it for a wider deployment of its chips in the near future.
Ember is shipping 10,000 units per month for use in the automated meter reader deployments in California and Texas through customers Itron Inc. of Washington and Landis & Gyr Inc. of Indiana. While those sales, and the company’s new funding, are expected to bring Ember to profitability, larger opportunities loom on the horizon where the smart grid is poised to become an over-arching communications network, according to LeFort.
“We are seeing nice growth from (automated readers), but I think where we see the real knee in the curve is when smart devices such as refrigerators, dishwashers and thermostats start moving into the home,” he said.
Mass. ‘green’ efforts
Earlier this week, local utilities were expected to file their own smart-grid proposals to Massachusetts officials under the Green Communities Act, signed by Gov. Deval Patrick last summer. In an announcement detailing its plan, National Grid proposed a program that would bring 15,000 smart meters to the Worcester area, while NStar proposed to roll out a two-way communications network between the utility and 3,000 of its customers in Newton and Hopkinton, allowing customers to see their energy consumption online through information gathered from meters every 15 seconds.
Other local technology companies are getting into the act. Power grid equipment maker American Superconductor Inc. of Devens has already partnered with National Grid on a smart grid and infrastructure modernization project on Long Island, while Newton-based Ambient Corp., which makes communications nodes that allow Internet protocol (IP) communications over power lines, has been working with North Carolina-based Duke Energy Corp. to roll out its gear in a pilot program in Cincinnati.
Executives from both firms said the opportunity in the industry is significant, with John Joyce, CEO of Ambient, saying the movement has driven a significant revenue increase for the company, which sold $2.5 million worth of equipment in 2007 and $12.5 million last year.
Nationwide, the smart grid movement is spreading, and an infusion of federal cash is expected to increase momentum. As part of the stimulus package, the Department of Energy has been allocated $4.5 billion for the modernization of the nation’s power grid, including smart grid applications. A report from analyst firm ABI Research this week said that while the funding is “not an order-of-magnitude game changer,” it will help speed smart grid deployments.
Joyce is more optimistic. “I think the stimulus money is going to do just that — stimulate the utilities to build out the nation’s power grids, because it suddenly improves their business model,” he said.
For Ember, the stimulus money represents a good push to the industry, the benefits of which the company — which sells to equipment makers rather than directly to utilities or electricity consumers — still has to wait to enjoy.
“The stimulus, so far, is only helpful to us emotionally, not financially, but we will probably see the benefits later this year or early next year,” said LeFort.
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