With giant companies like GE (s GE) and Intel (s INTC), and startups like Grid Net, testing out how wireless technology WiMAX can be used to build out the smart grid, it was just a matter of time before the companies that make WiMAX network gear started moving in that direction, too. Last week in an interview with us, Ashish Sharma, vice president of corporate market development for one of the leading WiMAX network gear makers, Alvarion (s ALVR), told us that his company has done a couple of smart meter pilot projects using Alvarion’s WiMAX gear to collect energy data.
In those pilots, Alvarion’s WiMAX gear was used to collect data from the smart meters and connect it to a utility back office (called backhaul). Alvarion wouldn’t disclose the partners involved in the pilots, but spokeswoman Christine Buzzetta told us that the company hoped to disclose those partners in the next few months. Alvarion has also been working on WiMAX-based smart-grid devices that can help a utility regulate power and stop a power supply in the event of an emergency, said Sharma.
While these pilots might be some of the first where Alvarion has focused on enabling the smart grid, the Tel Aviv, Israel-based company has already sold its WiMAX broadband gear to utilities that want to offer its customers broadband access along with more traditional electricity and gas services. Alvarion has sold its WiMAX network gear for broadband services to utilities like ICE in Costa Rica and Elro in Denmark.
For those of you not familiar with WiMAX, it’s a high-speed wireless technology that service providers are using for the next generation of broadband services. It competes with a high-speed wireless technology being deployed by cell phone companies called Long Term Evolution, or LTE. The WiMAX market is currently relatively small — the equipment and device market in the fourth quarter of 2008 was $275 million, and the number of WiMAX subscribers hit 3.9 million — but it’s set to grow to 85 million subscribers by the end of 2013.
There is one major advantage to using WiMAX for adding digital intelligence to the power grid: WiMAX is an open standard that can benefit from the economies of scale created by participating companies like GE, Intel and Motorola. That means the price point of WiMAX gear is expected to come down dramatically if the technology gains traction. Ray Bell, CEO of smart-grid software maker Grid Net, told us that WiMAX chipsets currently cost around $36, but in a year they’ll be closer to $12, and in another six months they could hit $8 or even $6.
Critics of using WiMAX for the smart grid point out that currently there is no nationally deployed WiMAX network in the U.S. Clearwire and Sprint have been building out such a network, yet it’s been slow going. But Alvarion’s Sharma told us that he doesn’t think the smart grid’s use of WiMAX will be hindered by the lack of a national network. Instead, Sharma said, utilities have shown a preference for using and building private utility-owned networks for smart-grid deployments. Sharma said that the currently available public networks, like cellular networks, are not a good fit for the smart grid and private utility-owned WiMAX networks will be the leading way that WiMAX is used for the smart grid.
Startup Full Spectrum, which is building WiMAX-based networking gear for utilities, is betting on the same thing, and sells WiMAX gear for the point of the smart grid where power is distributed from generation to substation (not focusing on the collection point, like Alvarion.) Grid Net, which makes WiMAX-based smart-grid software, plans to sell to both utilities using private WiMAX networks and a national WiMAX network when it becomes available.