Huge electronics conglomerates in Japan and Korea — Sharp, Panasonic (s PC), Samsung, LG (s LG) — have long been leaders of gadget, battery and mobile innovation. China has also spent decades as the low-cost manufacturer always “just about to emerge” as the electronics innovator and massive purchaser. Now it’s these same companies and countries that are poised to have a very big impact on the global smart grid industry.
Last week at our smart grid bunker event, I had an interesting conversation with Pike Research founder Clint Wheelock who said he’s seen a growing interest from Korean electronics and communications companies in the U.S. smart grid market. Wheelock told me that Korean firms like LG Chem (which is supplying battery cells for the Chevy Volt) and Samsung SDI “have strong ambitions for the U.S. market. I believe they will soon begin business development discussions with utilities, if not already.”
Already a group of them — including LG, SK Telecom and KT — are building a domestic smart grid pilot on the island of Jeju, which is south of Seoul in South Korea. The companies told Reuters last November that they’re shooting for 30 percent share of the global smart grid industry.
KT, SK Telecom, and LG tend to spend a lot of money on R&D, taking risks and rolling out new products and services that are at the bleeding edge of technology. That can lead to some major innovations. The country’s leadership in the battery space could also instantaneously give it a leg up in energy storage for the smart grid. LG Chem competed directly with A123Systems (a AONE) for the Volt deal and won, and will no doubt be competing with A123Systems and other players in the grid storage market.
Last week it became clear that Japanese companies are also closely eying the U.S. smart grid market. Japanese firms, including Toshiba, Kyocera, Shimizu, Tokyo Gas Co., and Mitsubishi Heavy Industries, will spend $33.4 million on a smart grid project in Los Alamos and Albuquerque, New Mexico. Toshiba says it will install a 1-megawatt storage battery at the Los Alamos site, while Kyocera and Sharp will test smart home, energy management and load control technology.
The national Japanese newspaper The Yomiuri Shimbun reported this weekend that Japan’s Economy, Trade and Industry Ministry will try to get the International Electrotechnical Commission to adopt 26 Japanese standards to serve as global standards for the smart grid. The paper says “The move is aimed at catching up with the United States, which has taken the lead in developing technological global standards, according to sources.”
Then there’s China, which is clearly no longer the sleeping giant in electronics, particularly when it comes to building out a smart grid. New research out from ZPryme Research and Consulting last week reports that the Chinese government plans to spend $7.32 billion in stimulus funds on building out a smart grid — surpassing even the massive stimulus funds from the U.S. government — in order help manage the doubling of its electricity consumption over the next decade.
U.S. companies are flocking to China to try to get ready for the funds, much in the same way Korean and Japanese firms are stepping into the U.S. market. Last month General Electric (s GE) said it will partner with the City of Yangzhou, China, to build a smart grid “demonstration center” in the city of 4 million. Last year IBM (s IBM) said it signed an agreement with ENN Group, a Chinese energy provider, to form a joint venture focused on “intelligent energy,” and IBM told us it expects to generate a minimum of $400 million in smart grid revenues in China over the next four years. Hewlett-Packard (s HPQ), Cisco (s CSCO) and Accenture (s ACN), along with meter maker Itron (s ITRI) are all also developing smart grid-related business in China.
Image courtesy of kodama (home)’s photostream Flickr Creative Commons.