Wednesday, September 29, 2010

"China Wants Smart Grid, But Not Too Smart" (SI; GE)

From the WSJ's China Real Time Report blog:

Whoever figures out how much electricity China uses stands to make lots of money.

The country is in the process of adopting a smart electrical grid, including Advanced Metering Infrastructure, or AMI, which includes equipment like meters for residences and companies.

China needs to update aging equipment and better link power producers, who tend to be in the northwest, with users, who tend to be located in the coastal southeast. That need represents major business opportunities for foreign equipment suppliers like General Electric Co., Siemens AG and Alcatel-Lucent, who are lining up to help build out smart grid and AMI.

GE has estimated the market at $60 billion over the next decade.
The presence of so many opportunities, however, raises questions about how much sacrifice global technology companies are willing to make in order to grab them: As in other sectors, foreign participants hoping to gain access to China’s smart grid market may need to tailor their products for China, lower prices and risk having proprietary technology stolen by local competitors.

The aim is to design ways for the world’s No. 1 energy consumer to more intelligently use electricity by employing technology to control appliances and supply power only when and where it is needed. Think smart electrical meters in homes that are linked to power suppliers and able to alert customers and producers to expected usage surges, adjust pricing on the fly and control the start-up of devices like dishwashers to maximize efficiency.
But foreign suppliers should not think too smart, or too pricey, according to one prominent Chinese industry researcher.

Hu Xuehao, principal expert at China Electric Power Research Institute, says leading AMI technology being developed in the U.S. and Europe is often much more advanced than China requires at this point. “Our AMI development has to depend on demand,” he said.

In a spirited answer to a question about whether China would buy metering equipment from foreign suppliers, Hu told a regional smart grid conference Tuesday in Shanghai that China’s electrical network has the technological sophistication to run the most advanced products but doesn’t always need them....MORE