China electricity meter market ranks high for Echelon joint venture
Mainland market for advanced electricity readers attracts as governments slash buying
The mainland's advanced electricity meter market is the world's largest and most attractive, as austerity-induced delays plague tenders in many parts of the world, according to the chief of Echelon, a Silicon Valley-based developer of communication equipment for the power distribution sector.
But it was also highly competitive, with aggressive quarterly bidding for contracts, said Ron Sege, chairman of the San Diego-based firm, and a former president of United States-based network equipment maker 3Com.
"[The mainland] is the most attractive market in the world right now in terms of commitment to save energy and cut carbon footprint via the deployment of smart meters," he said.
"Not many nations have the combination of power shortages, power theft, and desire to improve grid reliability."
According to market researcher IMS Research, at the end of 2011, just under 18 per cent of the world's roughly 1.43 billion installed power meters were "smart", or communicating ones. This is forecast to double to 35 per cent by the end of 2016.
Smart-meter features include the detection of electricity theft, automated calculation of power bills based on time-of-day pricing, and the real-time monitoring of power supply to fix supply problems.
Time-of-day pricing was introduced in the residential sector in some southern Chinese regions last year. It encourages more even use of power during the day, allowing utilities to cut power rationing and costs by shifting peak demand to off-peak hours.
Echelon entered the mainland market last year by forming a 51 per cent-held venture with Jiangsu-based Holley Metering. The venture will serve the mainland and overseas markets.
Zhejiang Echelon Holley Technology obtained approval in October from power distribution monopoly State Grid Corp of China for its products, which allows it to bid in tenders for meters.
Sege said the mainland market, while competitive, was more stable than most - including Brazil, North America and Europe - where procurement tendering had been delayed due to economic tightening.
The venture has orders for 30,000 meters from a pilot installation project in Inner Mongolia autonomous region, and 1,000 meters in another pilot in Shanxi province.
It plans to build production facilities and export this year. Primary targets include Latin America, Eastern Europe, the Middle East and Russia.