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The WiMAX Smart Grid Is Here, Brought to You By Grid Net

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gridnetlogoThe wireless standard WiMAX might not be the sexiest of topics, but maybe the smart grid can lend it some buzz. This morning Grid Net, a startup that has developed smart grid software based on WiMAX, is officially launching itself, unveiling its software product and announcing Australian utility customer SP AusNet, as well as a whole host of partners including GE (s GE), Motorola (s MOT), Cisco (s CSCO), Intel (s INTC), and WiMAX service provider Clearwire.

While Grid Net is already three years old (when we’ve profiled them they were in so-called stealth mode) this is the first time that Grid Net is talking publicly about a paying utility customer and discussing its reseller program, through which it will work with third party sellers like GE to sell its software to utilities. GE is the first company to resell Grid Net’s smart meter software, bundled with GE’s own WiMAX-based smart meters, that have an Intel chip inside.

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 still relatively small — the equipment and device market in the fourth quarter of 2008 was $275 million, and the number of WiMAX subscribers is only at 3.9 million — but it’s set to grow to 85 million subscribers by the end of 2013.

Utilities and communications companies are investigating how WiMAX can play a role in their smart grid networks, and several high profile utilities have announced WiMAX smart grid pilot projects recently. Texas-based CenterPoint was one of the first utilities to test out GE’s WiMAX-based smart meters. National Grid will be testing out WiMAX gear provided by Alvarion, to connect smart meters and distribution automation devices to the utilities’ back office. Last month San Diego Gas & Electric (SDG&E) said it had applied for stimulus funds to build a smart grid wireless network that would include about 30 percent of its network built with WiMAX. And Southern California Edison (SCE) has also said it is looking at WiMAX for part of its smart grid network.

The biggest reason for using WiMAX for the smart grid is high bandwidth. SDG&E told us that WiMAX could be used around major grid assets, like substations, to collect a lot of data from phasor units, which monitor the reliability of the grid and collect information like voltage, current and frequency in real time. WiMAX could also be used to deliver services like mapping information and video tools for mobile workers, or provide video services for facility monitoring.

But another reason to use WiMAX on the smart grid is that WiMAX is an open standard that can benefit from the economies of scale created by participating companies. Grid Net says its partners include: GE, Landis+Gyr, Cisco, Motorola, Intel, Clearwire and Unwired Australia. This group is betting that the price point of WiMAX gear will 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.

John Steel, project director for SP AusNet, told us in an interview that open standards and interoperability (in contrast with a proprietary system) were a major reason why the Australian utility chose Grid Net’s smart meter software and the WiMAX standard. SP AusNet plans to build it’s own WiMAX network using Motorola hardware, using Unwired Australia’s wireless spectrum, and Steel says the network will cost some “hundreds of millions” of dollars to build. Steel says the main reason the utility wants to build its own network, and not work use the network of a WiMAX service provider, is both to maintain security of the network and because it will less expensive in the long run.

Grid Net has been backed by some of the big WiMAX industry players recently, too. Last week GE told us it had upped its investment in Grid Net, and Intel Capital has continued to fund the company as well. Other backers in Grid Net include Braemar Energy Ventures and Catamount Ventures.

Steel says that SP AusNet has already started construction on the 600,000 to 700,000 smart meter-connected networks and plans to have the network ready by 2013.