“Smart grids” promise to solve many challenges facing today's electric grid infrastructures by providing better insights to, and enabling actions to address, areas that are key to maintaining grid health and stability at all levels, from generation to transmission & distribution to end-use. These will depend upon real-time collection and communication of a wide range of data throughout the grid, from measuring voltage and inductance levels in the T&D network, to time synchronization and equipment temperatures at substations, to smart meters and energy conservation in homes and businesses. Our recent report on this subject identified specific markets and opportunities for all these multiple sensing, monitoring, and control functions.
As in any evolving market, NanoMarkets expect to see increased consolidation and M&A activity at the intersections of smart grid & sensor functionalities — smart metering, outage management systems, SCADA, data computing & analytics, and feeder automation — as these proliferate within the broader evolution of the Internet-of-Things (IoT). This is especially likely as broad sensor manufacturers show keen interest in developing sensing solutions for smart grid applications, and as established companies from tangential industries (AT&T and Google, for example) seek to extend their reach into smart grids. At the same time, we also expect these advanced sensor technologies will expand the addressable market base, as suppliers seek avenues to cross-sell their products into other industries such as water, gas, transportation, and telecom.
In SCADA, for example, we see big players such as GE, Siemens, Alstom, and ABB concentrating on sensor opportunities that will give them an edge in the next generation of SCADA deployments. Toshiba, though a new player in SCADA, may also shake up the market with its end-to-end SCADA and distribution automation systems. Another notable trend is the arrival of new entrants bringing in their new technologies and taking away the share from traditional sensor suppliers, especially in the feeder line sensor and transformer monitoring markets.
Ten Smart Grid Sensor Companies to Watch
In our report, we examine a number of companies that are currently working at the intersection of smart grids and sensing capabilities & applications. Here's a snapshot of some of the leading firms' technologies and strategies in smart grids & sensors.
ABB
ABB has been active in products and projects for the smart grid, including associating with utilities. Among its activities include a joint development project with Fortum to design and install Europe’s first large-scale urban smart grid (at the Stockholm Royal Seaport). It also has been associated with Italian utility ACEA (Azienda Comunale Elettricità e Acque). Beyond its strong base in Europe and North America, ABB has a good presence in Asian markets such as China and India.
GE/Alstom
Separately they were already coming at the smart grid: GE in pretty much all areas (focusing on equipment monitoring, demand response, and distributions management systems), with Alstom strong in substation automation and network management products (agile protection relays, GPS time synchronization clocks, and intelligent fault detectors and analyzers). As with any large M&A, it will be interesting to see how product integration ultimately evolves and overlaps are mitigated (Alstom's e-terra and GE's PowerOn Fusion are essentially same products targeting the similar markets); but we expect GE may narrow its focus on demand response and network management solutions, allowing Alstom to continue to strengthen its substation and T&D products.
Siemens
Siemens' product range, as applied to smart grid applications, is strong in substation automation and equipment monitoring segments. Its participation in EU-funded multisensor research projects for building management and mobile applications could be a sign of its entry into the home automation market.
Schneider Electric
Schneider’s products help utilities manage grid revenue, power quality, and substation automation applications. Smart meters is a target market both with its PowerLogic offering and the firm's acquisition of solutions provider Televent (smart metering and distribution network management). Further, the firm's Intelligent Loop Automation reduces outage restoration time and costs.
Landis & Gyr
Earlier this year Landis & Gyr bought PowerSense, a small sensor firm spun out of Danish power utility Dong Energy a decade ago, which offers supervision and control systems for power distribution, including patented optical-based medium-voltage sensors for power cables, transformers, switch gear, and substations. It also pledged to acquire utility analytics company GRIDiant, whose technology correlates data from the smart grid network with other enterprise data, to bolster its advanced metering infrastructure (AMI) and distribution grid management offerings.
Toshiba
Though a new player in SCADA, Toshiba could well shake up the market with its advanced SCADA and EMS products, already having provided these to over 400 companies worldwide. It also is one of few firms to hold a high number of smart grid patents, and thus establish a broad base to improve on these technologies. Toshiba is working on a Micro Energy Management System (μEMS) eyeing the smart grid (Landis+Gyr is also involved in this project).
Eaton/Cooper Industries
Eaton’s acquisition of Cooper Industries in 2012 strengthened its products in power systems and the smart grid. Like others in this list, has partnered with utilities in smart grid demonstration projects, such as Portland General Electric’s Smart Grid Demonstration Project for which it is developing solutions to integrate renewable energy sources and demand-response.
Itron
Itron, an established player in smart metering, recently bundled its existing industry-leading capabilities in metering, communications, and data management into a single product offering called Itron Total, aiming to simplify the metering and Smart Grid monitoring process — potentially setting into motion a trend of manufacturing products that simplify, and not just perform, advanced metering and monitoring of Smart Grids. The company also leverages collaborations to enhance its product portfolio as well as taken its sensing systems to real-world applications; for example, EV charging partner ClipperCreek sells charging stations embedded with Itron revenue-grade metering hardware. Itron and Grid20/20 have collaborated to provide utilities with access to critical distribution optimization information to improve grid efficiencies.
Nest Lab’s flagship thermostat product, which learns a user’s habits over time and adjusts the home temperature accordingly, is already being used by roughly 1% of U.S. households. The company also has products to detect smoke and CO2. Google’s $3.2 billion acquisition of Nest clearly shows Google's broad interest in the Internet of Things, and more specifically in smart grid and home automation.
Lutron
Lutron’s range of products in energy conservation and home automation makes it a significant player in building energy management and demand response markets. The company has been associating with Siemens for developing building energy management solutions.
Moving Out, Moving In
Note that the “smart grid” has been a promised land for some time, especially in the gaze of grid networking companies. However, not everyone has the patience to align their technologies and strategies with this nascent market.
A few weeks ago Echelon sold its decade-old smart grid business, Networked Energy Services, to Austrian IT services provider S&T as it seeks greener pastures in the “Industrial Internet” portion of the IoT. Toward that end it also just acquired Lumewave, a maker of outdoor lighting controls and software, to bolster its own powerline carrier technology, ultimately strategizing to hook back into its building automation controls. (The smart-meter to smart-streetlight pathway is well trod: Silver Spring Networks has projects for networked streetlights in Europe, and ABB and Sensus have separate projects here in the U.S in California and Tennessee, respectively.)
And Ambient, which provides power quality monitoring and communications, recently filed for Chapter 11 bankruptcy. The company once had a major project with Duke Energy but reportedly has had difficulty following that up with other successes, though it is piloting a smart grid integration project with ConEd in New York. The company also could be a M&A prize, as it owns several dozen patents related to smart grids (more than a dozen in communication alone). Interestingly, Ambient has a stalking-horse arrangement with Ericsson, meaning the telecom behemoth could acquire it for $7.5 million if no other competing bids are received.
At the same time, electronics big-box chain Best Buy wants to get into the home automation game. It recently inked a partnership to sell Peq “smart home” services that connect various gadgets to a wireless ZigBee hub, touting benefits from energy savings (automated lighting and thermostat adjustments) to home security (sensors on doors and windows).
