# How Siemens Is Tackling the Smart Grid

Siemens (s SI), the German energy and engineering giant, has been slower to move into the smart grid than fellow competitors like GE and Swiss-based ABB (s ABB). But over the past year Siemens has seemed to be making up for lost time, announcing a flurry of new projects and partnerships, and saying that it wants to double its current growth rate in the smart grid sector to capture €6 billion ($8.48 billion) in global business over the next five years, compared to its current €1 billion ($1.41 billion) in estimated smart grid related revenues in the fiscal year ending Sept. 2009.

So how exactly does Siemens plan to generate all that money? Well, as with fellow giant energy conglomerate General Electric (s GE), it’s sometimes easier to point to what Siemens is not doing than what it is doing in industries where it has a broad and sprawling interest. Here are our takeaways for what Siemens is, and isn’t, doing for the smart grid.

1). Concentrating on end-to-end network infrastructure: Siemens is one of the few corporations out there that can lay claim to almost every share of the world’s current grid infrastructure, building everything from gas and wind turbines to high-voltage transmission cables to sensors and controls that monitor and manage the delivery of power to homes and businesses.

The company is taking a similar approach for the smart grid. Right now the company is working on transmission grid sensors and controls, as well as high-voltage direct current transmission lines that can carry power from massive offshore wind farms like the London Array or for other specialty applications, such as an underwater cable project it is building to carry power across the San Francisco Bay. Beyond the physical infrastructure of transmission, Siemens has also developed an open platform to manage the wholesale sale and delivery of power between utilities and grid operators (see Greentech Media).

Farther down into the distribution grid — the network of lower-voltage lines that carry power from substations into neighborhoods and to individual businesses and homes — Siemens is doing a number of projects with utilities including Texas’ Oncor, New York’s Consolidated Edison and New England’s Northeast Utilities. These projects combine grid sensors and control systems with communications and back-end software to manage it all.

2). Providing software to unify the pieces of the smart grid puzzle: One of Siemens’ most recent smart grid projects — a stimulus-funded distribution automation system being built for Kansas City Power & Light — helps highlight Siemens’ software-centric approach. There are a confusing array of different equipment, networking and other technology vendors supplying products for such projects, but Siemens would like to make sure it can provide utilities with a few key pieces of software to manage them all, Dave Pacyna, senior vice president of Siemens Energy’s North American transmission and distribution division, told us in an interview this week.

“The more time goes on, the more we’re convinced that all these applications being talked about — like demand response programs, like fault location services and applications, like microgrid control and operation — all these kinds of things are ultimately going to be most efficiently deployed when they can come through one or two common software platforms,” Pacyna said. Siemens already makes software to manage the complex network of transmission and distribution assets.

3). Find partners that can help fill in the gaps: Because Siemens is so large and has so many broad smart grid offerings, it needs to partner with some of the smaller firms to deliver the most advanced technology across the network. Pacyna told us he sees managing smart meter data as a key software platform for the smart grid, but Siemens doesn’t make that kind of software. Instead, Siemens is relying on eMeter, a well-funded startup with several large-scale contracts to help utilities manage their millions of new smart meters. Siemens also led a \$12.5 million investment in eMeter in 2008, and the two are now involved in several meter data management projects with European utilities.

Siemens recently announced a smart grid partnership and investment in BPL Global, a maker of smart distribution grid systems. Siemens will be using BPL’s technology to control distributed generation resources like rooftop solar panels, as well as allow utilities to directly power down loads at customers’ premises to better balance the grid’s flow of electricity.

Siemens is also working with startup Viridity Energy to combine Siemens’ decentralized energy management system with Viridity’s system for managing “virtual power plants,” a collection of loads and distributed generation resources at office parks, university campuses or other discrete entities. While Siemens has a thriving building energy management business, it hasn’t yet linked those technologies with its smart grid network management systems in a comprehensive way, and BPL and Viridity’s capabilities could be seen as ways to bridge that gap.

4). The smart meter is not the linchpin of the smart grid: Unlike GE, which has built up a substantial smart meter business, Siemens sold off its metering business to a private equity firm about seven years ago, and the business unit’s technology ended up as part of Landis+Gyr. Perhaps that’s why Siemens has de-emphasized the role of the smart meter in its smart grid literature, relegating its function to the term “intelligent billing” in comparison to the “Grid Intelligence” rubric it assigns to grid infrastructure and controls.

Rather than compete in the wholesale smart meter business, Siemens has partnered with Landis+Gyr to develop common standards to ensure their systems are interoperable, as well as with smart meter networking providers such as Silver Spring Networks. But as far as the meter’s role in the broader smart grid, “We would agree that while the smart meter is an important enabler to what most people want to achieve, it’s nothing more than an enabler,” Pacyna said.

However, Siemens does have a small smart metering business, called Automated Metering and Information System, or AMIS. Based on technology from VA Tech, an Austrian company Siemens bought in 2005, it’s being tested out by Austrian utility Energie AG in a 1,000-household pilot project which could grow to up to 400,000 customers by 2014. But Pacyna told us that Siemens has no plans to deploy or market the AMIS smart meter solution beyond its current narrow focus in Central Europe.

Image courtesy of Siemens.