What Cisco Can Learn From A Yello Strom Smart Grid Pilot


yellosmartmeterNetworking giant Cisco (s CSCO) could learn a whole lot from its partnership with German utility Yello Strom, which I once called the coolest utility in the world, and which focuses heavily on smart grid consumer hardware and the use of the Internet for the power grid. While Cisco included Yello Strom as a partner in its smart grid announcement last month, the networking company announced more details about a 70-home pilot project using Yello Strom’s sophisticated “Sparzähler” or smart meter this morning. If Cisco aims to some day develop a Linksys-based home energy management product, the project detailed today could provide some important information for that effort.

The trial will use an Internet Protocol-based connection and customers will use the Yello Sparzähler to monitor energy consumption in real-time, and hook up appliances to smart plugs to curb consumption during specific times of the day. Update: Cisco confirmed with us that the pilot will use the consumer’s home broadband network for the smart meter connection. While Cisco didn’t specify what type of IP-based network it would use for the pilot, Yello Strom commonly uses the consumer’s own home broadband connection to connect the Sparzahler to the smart grid, which is somewhat unusual in the utility world.

Using the home broadband connection can make the energy management set-up easier, the connection cheaper and help customers incorporate energy management into their everyday lives more quickly. On the other hand, when the broadband connection drops, the smart meter service goes out, too. Many utilities also want to keep control over their networks, partly so they can maintain a high level of security for smart grid services.

Yello Strom is also one of the only utilities I’ve heard of that has developed and sells its own sophisticated smart meters. In July Martin Vesper, Yello Strom’s executive director, told us that the company looked at the smart meters that were already available on the market, and found only tools that focused on helping energy efficiency from a utility perspective. Not seeing anything they liked, or anything that would get consumers excited, they developed their own, which looks like it would be at home in the window of an Apple (s APPL) store, is built off of Microsoft (s MSFT) Windows CE, and has both a small web server and client inside. Yello’s meter is a lot more sophisticated than other smart meters.

This unusual environment — a sophisticated, innovative smart meter, and potentially a home broadband connection — will be a very interesting environment within which Cisco can run a pilot program. It could enable Cisco to get an interesting perspective for how it could roll out any type of Linksys, broadband-based, home energy management product, which Cisco has actively been looking into. Back in June Cisco told us that for a trial with Duke Energy it could deploy its own consumer smart energy home hardware, which includes Linksys products and “homeplug” devices that transfer data via power lines.

From a brand recognition perspective, using gear made by Linksys, which Cisco acquired in 2003, could help consumers become more aware of home energy management tools and even ease them into the practice of buying the devices. Since a Linksys device would be more sophisticated than a common smart meter, and would likely use a home broadband connection, this pilot with Yello Strom could actually teach Cisco a whole lot in how home owners would use such a device.

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