Will Echelon Link Smart Meters & Smart Building Controls?

Echelon (s ELON) makes smart meter networks and building automation systems. Could it bring the two businesses together? On Wednesday, Echelon shipped its 2 millionth smart meter, adding recent contracts with a host of Danish utilities and partners to its big list of European clients — and, on the other side of the Atlantic, its contract with Duke Energy (s DUK). Duke CTO David Mohler has said he’d like to see smart grid systems link up with building automation systems that control air conditioners, lights, boilers and other energy-sucking devices. Could Echelon sync up its building networking standard LonWorks with its smart meter services?
While Michael Anderson, senior vice president of Echelon’s Networked Energy Services, i.e., smart meter business, wouldn’t comment on if Echelon’s was linking up buildings and smart meters just yet, he told us in a late-night Monday call from Helsinki, Finland: “The two technologies will come together very, very well. In the last six months it’s been nice to see customers approach us on this idea.”

If it happens, it’ll be about time. Smart grid analyst Jesse Berst sees a huge underserved market in linking new smart grid systems to the plethora of building automation systems sitting under-utilized in office buildings around the country.
Siemens (s SI), for one, has huge footprints in both the smart grid and the building automation worlds. General Electric (s GE) has similar smart grid depth, though it appears to be focused on homes and smart appliances rather than commercial buildings. Asian electronics giants such as Panasonic (s PC) also have links between the building and grid worlds, and Cisco (s CSCO) has its EnergyWise building control system, as well as smart grid projects with utilities including Duke Energy, that could link up someday.
Echelon occupies an unusual, hybrid position among these competitors. Compared to the shipment numbers from the “big five” smart meter makers Itron (s ITRI), Landis+Gyr, Elster, Sensus and General Electric, Echelon’s 2 million-meter milestone doesn’t make huge waves. On the other hand, that number doesn’t include the 27 million meters Italian utility Enel installed using Echelon-based technology.
Echelon’s choice of powerline carrier (PLC) communications for linking smart meters together has isolated it in North America, where wireless solutions have taken the lead, but put it right at home in Europe. Analysts point to various reasons, including the preponderance of apartment buildings in Europe — while wireless works well for American suburbs, it has trouble penetrating the yards of concrete that may separate apartment dwellers from their basement utility meter. French utility EDF wants PLC for its planned 35-million smart meter network. Spanish utility Iberdrola is working on a PLC standard, and so is China.
As for Echelon’s building network standard LonWorks, it’s one of many technologies in a field dominated by the likes of Honeywell, (s HON) Johnson Controls (JCI), Schneider Electric and Siemens. So far, the building systems industry hasn’t been linking their systems with utility smart grid deployments in any major way, though the federal government is developing standards for this eventuality. But in the absence of standards, the demand response industry has applied a mongrel of technologies to help utilities ride through peak power demand by turning down buildings’ power consumption, ranging from instant messaging-type systems to phone calls asking building managers to turn down air conditioners. LonWorks is likely inside some office building somewhere participating in a demand response program, but who knows how the message is being conveyed.