IBM’s lending and leasing branch, IBM Global financing has committed $2 billion to fund startups and utilities working on smart-grid and green technology projects. With this investment, it leaps to the front of a crowd of major corporations like Intel, AT&T, General Electric and others looking to get in on smart grid while the getting’s good.
IBM says the move is an attempt to give an additional boost to companies that will also qualify for some of the $4.5 billion in stimulus funds the government has set aside for overhauling the nation’s power grids. Most of the money will be provided as low-rate or deferred payment-plan loans or structured lines of credit, the company told Dow Jones VentureWire.
What’s in it for IBM? A healthy slice of what is already a $13 billion global market and a front-row seat as a maker of smart-meter components. Just two months ago, it struck a $3.2 million deal to provide 12,000 sensors (which send information from various appliances and devices to meters) for smart grid development in Australia.
With stakes like this heating up, IBM is not the only transnational corporation vying for even greater participation. In March, AT&T solidified its partnership with smart meter provider SmartSynch, granting the startup access to its wireless network for communication between 10,000 household meters and local utilities. As more consumers get interested in the idea of reviewing and adjusting their energy consumption from their mobile phones, the major carriers are lining up to get more involved. Verizon and T-Mobile (another partner of SmartSynch’s) have also made moves to connect utilities and smart meters.
T-mobile, in particular, just scored a deal last week with smart meter maker Echelon, and also announced its plans to create silicon SIM cards for meters that are more resistent to outdoor use. Similarly, Verizon has joined forces with Ambient, a close competitor of Silver Spring Networks, which has landed the business of major utilities like PG&E and Florida Power & Light.
Positioning themselves for a potential smart grid windfall has proved so important for these telecom companies that they have substantially dropped their monthly service fees for each meter, unlocking greater (and much less expensive) potential for residential smart metering (at higher prices, sticking with commercial smart meters is more feasible). Having more wireless networks open to them will allow utilities to take daily meter readings, and deploy, modify or terminate service remotely. Eventually, the plan is to support mobile applications that could let consumers go as far as turning down their home thermostats from any location on their phones.
Smart metering has also clearly caught the eye of Google, which recently announced its home energy monitoring system PowerMeter. The company says this tool will allow homeowners to see how much energy they are using, and how much it is costing them from their computers in real time. When it will become commercially available is still a question mark, but it’s perhaps the most salient example of a company with few ties to the space attempting to establish dominance before the stimulus funds work their magic.
Intel has also invested in metering initiatives through its venture arm Intel Capital, but its view of the space is perhaps the most expansive of all of these companies. Like the others, it is also working on unique interfaces for delivering energy consumption data to utilities and consumers alike — anticipating the ability to present this information on people’s living room television screens. With a long-standing history in cleantech, it has also expressed interest in smart buildings, but is perhaps most interested in influencing policy and developing smart grid standards that will effect the entire ecosystem of companies working in the area, according to Steve Eichenlaub, managing director of platform technologies and the cleantech sector.
When it comes to defining standards and helping utilities adapt, Intel is working through several far-reaching consortia, including the IEEE Standards Association and Gridwise — organizations that include Cisco Systems, General Electric Energy, Hewlett-Packard, Oracle and others of that caliber. There is a certain element of team work that runs through standards negotiations — Eichenlaub and others readily admit that no one is going to get ahead without the cooperation of everyone — though it is very clear that each player in the game has a goal to be met and a toehold to cling to.
It will be interesting to see going forward how this horse race plays out, and whether the deployment of stimulus funds will make as remarkable a difference for these companies and those they support as predicted. In the meantime, IBM, Intel and the other heavy-hitters seem pretty committed to loading the basis before the government steps up to bat.
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