The deal is focused around 600,000 smart meters in Sweden. But E.ON is one of the largest power and utility companies in the world and operates in 30 countries with 26 million customers, so clearly its a relationship with a lot of potential.

Ericsson competes with GE, Siemens, ABB and others to sell software, services and hardware to utilities and power companies. Increasingly utilities and power companies are interested in buying more data analytics tools as their networks are becoming IT networks that need to monitor, digest, and analyze data to run more efficiently. As global electricity grids add more clean energy (solar panels and wind turbines), and energy storage (battery farms), better data analytics and predictions tools will also be needed to keep the grid stable.

Some of the power gear vendors are turning to the big data startup leaders for partnerships around the latest analytics. For example, earlier this week Siemens announced that it’s working with data warehouse veteran Teradata.

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Teradata sells software that can pull together disparate data from different sources and make it available to be analyzed. The company already works with utilities Southern California Edison and Oklahoma Gas and Electric. Utilities can use Teradata’s software tools to analyze data around things like blackouts, power supply and demand, weather conditions, and energy efficiency programs to help them manage the grid better.

Siemens is one of the largest power grid technology suppliers in the world, and in recent years has been bulking up its grid software assets. That move has included acquiring venture capital-backed eMeter, which manages smart meter data, as well as partnering with some of the leading grid software companies.

The union between the big data player and the power grid gorilla shows how the power grid is slowly adopting the network technologies of the internet and other IT-based networks. With grid assets like smart meters and substations increasingly becoming connected, the power grid could be one of the largest “internet of things” type networks in the world.

And to manage those connected things, utilities will need to embrace the most cutting edge data analytics tools.

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That’s one of the reasons why some smart grid startups struggle and are sold off for smaller amounts than they or their investors had originally hoped, are forced to dramatically downsize, or eventually fold. There’s a chasm between when a startup launches and raises venture funding, and when a company reaches velocity with utility sales. That Valley of Death can take years of long utility sales cycles to cross, and many startups don’t make it through.

But as the smart grid industry matures, there’s players that have emerged on the other side of the Valley of Death that can help out the younger startups looking to develop innovation in the ecosystem. It’s one of the ways that real innovation can actually survive in a sector that is so conservative and slow moving.

Silver Spring Networks is one of these players. This week at Distributech, the massive power grid conference in San Diego, Silver Spring announced that it’s reselling startup AutoGrid System’s software, which helps utilities quickly deploy energy efficiency programs for its customers. To utilities that may not be familiar or comfortable with the two-year-old venture-backed startup, Silver Spring’s partnership gives AutoGrid some more weight.

Silver Spring, which itself was VC-backed and founded in 2002, works with a lot of startup and big company partners. It announced ten new partnerships at Distributech this week, and more than 30 of its partners are showing off tech at the conference this week.

For Silver Spring, working with the latest innovative startups is a good way to keep on the cutting edge and also see what is out there to either learn from or even acquire. Of course, this is a common practice in the internet ecosystem, where companies like Google, Facebook or Cisco, routinely keep an eye on the hot new VC-backed players. But the smart grid industry isn’t as mature and progressive, so this can be a relatively rare phenomenon.

The more traditional power grid firms are more commonly doing this now, too. Siemens, ABB, and GE all have various startup-focused initiatives. The older IT companies — like a Cisco or an Oracle — that are looking to get into the utility sector, naturally do this as well, as they’re used to doing it with their core IT divisions.

But more of these large key players are needed to take a more active role in shepherding and acquiring the most promising startups. It’ll be needed to keep innovation alive in the smart grid over the next few years.

If there aren’t success stories for these startups, they’ll be decidedly less innovation coming into the space. 2012 was a year that saw a smaller amount of venture capital deals for smart grid companies. According to a report from Mercom, there were 40 smart grid startup investment deals in 2012, compared to 50 deals in 2011. The overall funding by dollar amount was higher in 2012 than 2011, but that was skewed by a large fund raise from Alarm.com, which is more of a home automation and security company than a smart grid startup. There were only 66 investors that put money into smart grid startups in 2012, down from 92 investors in 2011.

If innovation doesn’t come from the younger startups, it’ll have to come from within the big power companies. But we all know how well most huge companies innovate.

Image courtesy of Shutterstock/Dusit.

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BuildingIQ, founded in 2009 with research from Australia’s national research group, optimizes building management systems with a predictive engine using real time data, such as the information from weather services and the power grid. The company also has machine learning algorithms that tweak the system to make the buildings efficient but without making them uncomfortable for tenants. Think of it like the Nest learning thermostat but for commercial buildings.

BuildingIQ’s system can also work with utilities’ demand response programs, or when a utility asks building managers to turn down their energy use at peak times of day (picture a scorching mid-Summer afternoon in Texas). It has partnered with Nevada Energy on a demand response program. BuildingIQ says it can deliver 20-to-30 percent reductions in energy use from the HVAC system.

Check out this video of BuildingIQ CEO Michael Zimmerman explaining how the system works

And me interviewing Zimmerman:

The full round came from Aster Capital — which is a group with funding from Schneider Electric, Alstom and Solvay — Siemens Financial Services (SFS VC) and Paladin Capital.

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The 161 MW wind farm, called the Spinning Spur Wind Project, has a capacity to power about 60,000 U.S homes, and is located in Oldham County, Texas. The project is being built by EDF Renewable Energy, uses turbines from Siemens, and utility SPS has contracted to buy the power.

Google has made 10 investments into clean power projects since 2010, including a wind farm in Iowa back in November (see photo below).

Google has a few reasons why it wants to invest in clean power. First it wants to use more clean power for its data centers, and plans to have about a third of the power for its data centers come directly from clean power.

In addition, Google says the equity investments in clean power offer a good return for a company with a large balance sheet. Google says “we believe that corporations can be an important new source of capital for the renewable energy sector.” In the 11th hour on New Year’s day, the fiscal cliff deal passed and included very important wind tax credits that make wind power project investment economical in the U.S.

Here’s a round up of Google’s clean power investments that I’ve published before and am republishing here:

• Iowa wind farm: Google recently put $75 million into a wind farm called Rippey Wind Farm, located in Greene County. The power will be bought by Central Iowa Power Cooperative (CIPCO).
• SolarCity rooftop solar fund. Google has created a $280 million fund with home solar installer SolarCity. This is Google’s largest investment in clean power to date, and its first in home rooftop solar.
• Solar panel projects in Sacramento Calif: Google put $94 million into four solar panel projects, which are being built by Recurrent Energy close to Sacramento, Calif. This was Google’s first investment in utility-scale grid-connected solar panel projects.
• Buying wind power from a utility directly to power a data center in Oklahoma: For the first time in September 2012, Google said it would buy clean energy from a utility to directly power one of its data centers in Oklahoma.
• Clean Power Finance. Google invested $75 million into a solar fund for startup Clean Power Finance. Clean Power Finance will use the money to support solar rooftop projects by third party installers.
• The world’s largest wind farm — in Oregon. Google is investing $100 million in the world’s largest wind farm, the 845 MW Shepherds Flat project under construction in Oregon.
• North Dakota wind farm. Google is investing $38.8 million into 169.5 MW worth of wind projects developed by NextEra Energy Resources in North Dakota.
• East Coast wind farm backbone. Google has invested part of the fund for an East Coast transmission line that is meant to link offshore wind farms, and which recently got an approved rate of return for the project at 12.59 percent.
• Wind power from Iowa wind farm. Google’s first deal for its subsidiary Google Energy — which can buy and sell power on the wholesale electricity markets — plans to buy wind power from 114 MW of wind energy via a wind farm in Iowa owned by NextEra Energy Resources.
• Wind power from Oklahoma wind farm. Google’s second deal via its subsidiary Google Energy is to buy 100 MW of power from a wind farm that’s under construction in Oklahoma by NextEra Energy Resources.
• BrightSource’s solar thermal project. Google invested $168 million into a solar thermal project being built by startup BrightSource Energy in California’s Mojave Desert.
• German solar project. Google is investing €3.5 million ($5 million USD) into a solar photovoltaic farm in Brandenburg an der Havel, Germany, which is near Berlin.
• Greentech startups (these are small investments). Google (through a combo of Google Ventures and Google.org) has invested in at least nine “greentech” startups, including battery maker ActaCell, electric vehicle maker Aptera, efficient car maker Next Autoworks, geothermal company Alta Rock, neighbor-to-neighbor car sharing company RelayRides, weather insurance company WeatherBill, smart grid company Silver Spring Networks, biofuel maker Cool Planet Biofuels, and efficient power gear conversion tech startup Transphorm.

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The Colorado company, founded in 2009, has engineered a generator that incorporates a circuit board design as one of its main components. A generator’s motor is made up of a rotating component called the rotor and a stationary part called the stator. In a typical generator today, both the rotor and the stator are made with iron wrapped with copper coils to create the magnetic field for producing mechanical energy, which will then be converted to electricity.

But what Boulder Wind Power has done is to engineer a different kind of stator by printing copper wires onto fiber glass and laminating layers of fiber glass together to create a stator that looks, and works, like a printed circuit board, said Andy Cukurs, the startup’s CEO. This design doesn’t use iron, but it does add a magnet to the whole generator to create that magnetic field. In the end, what  you get is a stator sandwiched between the magnet-lined rotor.

The printed circuit board design, Cukurs said, is “light weight, and it translates into cost savings because you don’t have to build a heavy foundation and tower. The wind industry uses weight as a proxy for cost.”

For example, a Boulder Wind Power generator for a 3 MW turbine would weight 40 percent less than more common generators, Cukurs said. If a wind tower weighs 200 metric tons, then the use of the startup’s generator can cut the weight by 6-10 metric tons, he added.

Next-gen magnets

The use of the magnets also sets the company’s technology apart. In fact, the startup’s generator design belongs to a class of technology called “direct drive permanent magnet,” which emerged in recent years to replace designs that create heavier and less efficient or reliable wind turbines. Major wind turbine makers such as Siemens and GE all have developed generators using direct-drive permanent magnets. But whether the technology can really deliver the savings remains a big debate.

The startup has built a 3 MW generator to show how its technology works. It’s close to signing its first deal to create a prototype for a customer, who will give the equipment a whirl and decide if it wants to place an order for more. Cukurs declined to name this potential customer. If all goes well with the deal, Boulder Wind Power will work on delivering the prototype by the end of 2013 or early 2014. Its first revenues could come in 2015.

The startup doesn’t plan to make and sell generators, however. Instead, it plans to make money mostly by licensing its technology.  This approach takes away the pressure of having to raise lots of money to build factories or dealing with multiple manufacturers to source various components. But the company does plan to sell the stators and will hire a manufacturer to make them.

But whether the direct-drive permanent magnet technology can really deliver on its technical promises remains a big debate. Wind turbine makers began introducing permanent generators in 2006, but this type of generators isn’t widely used, according to a report by the U.S. Geological Survey.

Permanent magnets made using rare earth elements are more powerful and efficient than those made with non-rare earth materials, but the use of rare earth also increases the costs. Most of the rare earth elements are produced in China, which curbed their exports in the past and caused a spike in their prices. Efforts to produce rare earth in other parts of the world have been underway in countries such as Malaysia and the U.S. by companies such as Colorado-based Molycorp.

Boulder Wind Power’s technology uses neodymium, a rare earth element, and it counts Molycorp as an investor. Cukurs said high pricing was an obstacle that prevented the wider adoption of permanent magnets in the past, but the prices have come down. Meanwhile, some companies are developing better-performing generators that won’t need rare earth at all.

Boulder Wind Power has raised $46.5 million in equity total from investors that also included New Enterprise Associates, and is looking at raising another round in 2014 if not sooner.

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The decision reflects the poor outlook for the solar market by an energy giant, which had previously raced to tackle various segments of the business — including manufacturing, equipment sales and power plant engineering and construction — in order to compete with its big nemesis, GE. But the growth of the global solar market hasn’t met expectations, Siemens said in a statement, adding that changes in government policies and slim profit margins are among the chief causes.

Siemens’ exit also likely means it will not be actively looking to invest in any more solar startups, for the time being. The company has poured money into startups by either buying an equity stake of the company or by acquiring products from them. Siemens has invested in North Carolina-based Semprius, which developed a new way of producing highly efficient solar cells, and solar energy equipment to use those cells. Siemens bought Israel-based solar thermal technology company, Solel, a few years back. Siemens also inked a supply deal with Enphase Energy, before Enphase did an IPO in March this year. Microinverters are attached to solar panels and convert the direct current produced by the solar panels to alternating current for transport through the grid.

UPDATE: The vice president of business development at Semprius, Russ Kanjorski, told us that Siemens has made clear to Semprius’s executives that its  decision doesn’t reflect its view of Semprius’s technology and business. “The decision also presents an opportunity for Semprius to bring in a new strategic investor as part of its expansion plans.  From an operational standpoint for Semprius, however, it remains business as usual,” Kanjorski said by email.

Siemens made its decision to leave the solar market at a time when many solar manufacturers have suffered big losses and filed for bankruptcy. But those falling prices are supposed to benefit companies that buy the solar equipment for engineering and building solar power plants. On the other hand, the solar plant development business is getting crowded because it’s attracting so many newcomers, like solar manufacturers who want outlets for their products.

The global solar market has faced a glut of solar panels for nearly two years now, and the plummeting prices for them have forced many manufacturers to file for bankruptcy. One of them, organic thin film developer Konarka Technologies, just found a buyer for its German subsidiary. Belelectric, which builds solar power plants with photovoltaic panels, on Monday said it will buy the subsidiary but didn’t disclose the price. Massachusetts-based Konarka filed for bankruptcy in June this year after struggling for years to commercialize its low-efficiency solar film technology.

Nearly 200 more in North America, Europe and Asia will likely disappear in the next few years, according to GTM Research. Nearly half of them will not be around – either because they went out of business or will be bought – in places of high production costs, such as the U.S. GE has scaled back its solar market ambition, too, and decided earlier this year to nix a plan to build a 400 MW solar panel factory.

Even countries with lower manufacturing costs aren’t immune. Just last week, SunPower said it would idle several solar cell and panel production lines in Philippines and let go about 900 employees worldwide. During that same week, Boston-based Satcon Technology, an inverter maker, filed for bankruptcy.

Other solar technologies aren’t faring so hot either. After inking gigawatts of contracts to sell electricity to utilities, particularly in California, solar thermal power plant developers aren’t winning many new contracts in the U.S. these days. Solar thermal technology uses mirrors to concentrate sunlight to generate steam and run turbine-generators. Before the Monday announcement, Siemens was in the business of building solar power plants using photovoltaic panels (with solar cells inside) and also solar thermal technology.

The German company said it will focus its renewable energy business on wind and hydropower instead. Siemens will continue to sell the equipment that makes up a solar power plant, though, such as steam turbines and machines to control a power plant or grid operations, but those products have always come from other business groups, not the solar and hydro division.

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