Monday, September 28, 2009

Stimulus Funds Speed Transformation Toward 'Smart Grid' (CSCO)

From the Wall Street Journal:
After struggling to sell cutting-edge products to utilities, technology companies are sensing better times ahead with the influx of $4.5 billion in federal stimulus funds for so-called smart-grid projects....

...North American utilities are expected to spend $10.75 billion on computer hardware, software and services related to the smart grid this year, up from $7.56 billion in 2008, according to research company IDC Energy Insights.

The smart-grid market "may be bigger than the whole Internet," said John Chambers, chief executive of networking giant Cisco.

Federal assistance "will accelerate the progress of projects [for many utilities] from pilots to full-scaled deployments," said Todd Arnold, senior vice president at Duke Energy Corp.

The Charlotte, N.C., company started installing advanced meters in Ohio last year as part of the utility's five-year, $1 billion smart-grid initiative.

Duke in August requested $200 million in federal funds to cover a quarter of the cost of installing two million advanced meters in Ohio and Indiana. The meters transmit readings wirelessly to utilities and customers and allow the creation of data portals to monitor energy use.

Ambient Corp. of Newton, Mass., started working with Duke in 2005, suggesting ways the utility might use Ambient's communications modules to scoop up data from smart meters to boost grid intelligence. But activity picked up only recently. Ambient last month wrote a letter to the DOE supporting Duke's smart-grid application and this month inked a deal to sell large numbers of modules to the utility, said John Joyce, Ambient's president.

The influx of stimulus dollars "is clearly significant for a firm like Ambient" because it stimulates investment in general and "will make us bigger" as utilities add projects, he said. Ambient had 2008 sales of $15 million but declined to give the value of its deal with Duke.

Competition for the stimulus grants has been fierce. The DOE last month received roughly 570 applications from utilities requesting as much as $14.6 billion in smart-grid funds -- more than three times the amount available. Grants can be as much as $200 million per project and represent as much as half of a project's cost....MORE